University of the Cordilleras COLLEGE OF LAW Baguio City

Atty. Stephanie Rachel P. Castro, Professor

TORTS AND DAMAGES

Case Digests

3rd Year Special Section

STUDENT NAME 1. PASCUA, JAYBEE D. 2. DAMPAG, JONELLA 3. APPAG, ANNIELYN 4. AGPAD, AMALIA 5. SANTUCAY, ANNABEL 6. ELAD, MARCIAL 7. GANO, JEVAN KLAIRE 8. URBANO-BALMEO, MAURYNE FE 9. LAURENA, AUGUSTU RAY ANTHONY 10. SANTOS, RYAN 11. VALDEZ, LUIGI 12. ATANACIO, ZINNIA FARICA MAY 13. LACMAA, FRECHIE 14. TAMANG, SWITLE MAE A. 15. URBANOZO, LAIRD DIONEL N. 16. DELA ROSA, JOHN ROME 17. BARCELON, FREDERICK 18. MANGANIP, WINNIE 19. TABUZO, MAE ABEGAIL 20. CASIL, LEO ANGELO 21. RODRIGUEZ-ARORONG, LALAINE 22. PUBLICO, LOVELI ANNE 23. BARONA, SHERIELYN 24. HIRANG, LEOMARIE 25. BALAGOT, JESSIE 26. BASUNGIT, ANTONIO 27. PIAGA, RICHARD 28. APIDCHOR, EMERSON 29. PACIO, MANUEL 30. BAYTAN, ROGELIO

DIGESTED CASES 1-8 9-16 17-24 25-32 33-41 42-50 51-59 60-68 69-77 78-86 87-95 96-104 105-113 114-122 123-131 132-139 140-149 150-158 159-167 168-176 177-185 186-190, 1, 1-3 4-12 13-21 22-30 31-39 40-48 49-57 58-67 68-76

TABLE OF CONTENTS I. QUASI-DELICT 1. NAGUIAT VS. NLRC, 269 SCRA 564(1997) 2. PNB VS. CA, ET AL. 83 SCRA 237 3. SILA VS. PERALTA, 110 PHIL 57 4. ALBENSON ENTERPRISES CORP. VS. CA, 217 SCRA 16(1993) 5. ELCANO AND ELCANO VS. HILL AND HILL, 77 SCRA 98 6. VIRATA VS OCHOA, 81 SCRA 472 7. ANDAMO VS. CA 191 SCRA 195 8. DULAY VS. CA, APRIL 31, 1995 9. WYLIE VS. RARANG, 209 SCRA 327 10. PHOENIX CONSTRUCTION, INC. VS IAC, 148 SCRA 353(1987) 11. QUISABA VS. STA INES-MELALE VENEER AND PLYWOOD, INC., 58 SCRA 771 12. GATCHALIAN VS. DELIM, 203 SCRA 126, 137 (1991) 13. TUPAS VS. CA, 193 SCRA 597, 602 (1991) 14. GILCHRIST VS. CUDDY, 29 PHIL. 542 (1915) 15. GELUZ VS. CA, 2 SCRA 802 (1961) 16. PNB VS. CA, 83 SCRA 237(1978) 17. NATL IRRIGATION ADMINISTRATION VS. IAC, 214 SCRA 35(1992) 18. PHILIP S. YU VS. HONORABLE CA, 217 SCRA 328(1993) 19. GILCHRIST VS. CUDDY, 24 PHIL 471 (1913) 20. ILOLILO COLD STORES CO. VS. MUNICIPAL COUNSEL, 24 PHIL 471 21. DE AYALA VS. BARRETTO, 33 PHIL 538 22. SANRAFAEL HOMEOWNERS ASSOCIATION, INC. VS. CITY OF MANILA, 46 SCRA 40 23. TAYLOR VS. MANILA ELECTRIC COMPANY, 16 PHIL 8 24. ALGARRA VS. SANDEJAS. 27 PHIL. 284 25. TAYAG, SR. VS. ALCANTARA, 98 SCRA 723 26. VERAGARA VS. CA, 154 SCRA 564 27. ANDAMO VS. IAC, 191 SCRA 195 28. PHIL. BANK OF COMMERCE VS. CA, 269 SCRA 695 29. RAKES VS. ATLANTIC GULF AND PACIFIC CO., 7 PHIL 359 30. BARREDO AND GARCIA VS. ALMARIO, 73 PHIL 607 31. DIANA AND DIANA VS. BATANGAS TRANSPORTATION CO., 93 PHIL 391 32. CARPIO VS. DAROJA, 180 SCRA 1 33. FAR EAST BANK AND TRUST CO. VS. CA, 240 SCRA 348 34. LIGHT RAIL TRANSIT AUTHORITY ET SL. VS. MARJORIE NATIVIDAD, ET AL., FEBRUARY 6, 2003 35. AIR FRANCE VS. CARRASCOSO, SEPTEMBER 28, 1966 36. LAYUGAN VS. IAP, 167 SCRA 363 37. VALENZUELA VS. CA, 253 SCRA 303 38. ST. FRANCIS HIGH SCHOOL VS. CA, 194 SCRA 341, 356-357(1991) 39. VALENZUELA VS. CA, 253 SCRA 303 40. ONG VS. METROPOLITAN WATER DISTRICT, 104 PHIL 398 41. CIVIL AERONAUTICS ADM. VS. CA, & ERNEST E. SIMKE, NOV. 8, 1998 42. FAR EASTERN SHIPPING COMPANY VS. CA, 297 SCRA 30 43. PEOPLE VS. RAMIREZ, 48 PHIL 204 44. ADZUARA VS. CA, 301 SCRA 657 45. MCKEE VS. IAC, 211 SCRA 517 46. MANILA ELECTRIC CO., VS. REMOQUILLO, 99 PHIL 117(1956)

47. BULILAN VS. COMMISSIO ON AUDIT, 285 SCRA 445(1998) 48. ASTUDILLO VS. MANILA ELECTRIC CO., 55 PHIL 427 49. NATL IRRIGATION ADMINISTRATION VS. IAC, 214 SCRA 35(1992) 50. UNITES STATES VS. CLEMENTE, 24 PHIL 178 51. VALENZUELA VS. CA, 253 SCRA 303, 1996 52. PLDT COMPANY, INC. VS. CA, G.R. 57079, SEPT. 29, 1989 53. PHILIPPINE NATIONAL RAILWAY VS. IAC, 217 SCRA 409(1993) 54. TAYLOR VS. MANILA ELECTRIC RAILROD AND LIGHT CO., 16 PHIL 8 55. JARCO MARKETING CORP. VS. HON. CA, G.R. 129792, DEC. 21, 1999 56. JULIAN DEL ROSARIO VS. MANILA ELECTRIC CO., 57 PHIL 478(1932) 57. FEDERICO YLARDE VS. EDGARDO AQUINO, 163 SCRA 697(1988) 58. FAR EASTERN SHIPPING CO. VS. CA, 297 SCRA 30(1998) 59. CULION ICE AND ELECTRIC CO. VS. PHIL. MOTORS CORP., 955 PHIL 129(1930) 60. E.M. WRIGHT VS. MANILA ELECTRIC R.R. & LIGHT CO., G.R. 7760(1914) 61. PRECIOLITA V. CORLISS VS. THE MANILA RAILROAD CO., 27 SCRA 674(1969) 62. VICTORINO CUSI & PILAR POBRE VS. PHIL. NATL RAILWAYS, G.R. L-29889, MAY 31, 1979 63. MARINDUQUE IRON MINES AGENTS, INC. VS. THE WORKMENS COMPENSATION COMMISSION, 99 PHIL 480 (1956) 64. CIPRIANO VS. CA, 263 SCRA 71(1996) 65. F.F CRUZ AND COM.,INC VA. CA, 164 SCRA 733(1988) 66. HONORIA DELGADO VDA. DE GRAGORIO VS. GO CHONG BING, 102 PHIL 556(1957) 67. SANITARY STEAM LAUNDRY, INC. VS. CA, 300 SCRA 20(1998) 68. VDA. DE GREGORIO VS. GO CHING BING, 102 PHIL 556(1957) 69. NEGROS NAVIGATIO CO., INC. VS. CA, G.R. 110398, NOV. 7, 1997 70. BENGUET ELECTRIC COOP., INC. VS. CA, G.R. 127326, DEC 23, 1999 71. MA-AO SUGAR CENTRAL CO. INC. VS. CA, G.R. 83491, AUG. 27, 1990 72. ROGELIO RAMOS VS. CA, G.R. 124354, DEC. 29, 1999 73. D.M. CONSUNJI, INC. VS. CA, G.R. 137873, APL 20, 2001 74. BATIQUIN VS. CA, 258 SCRA 334 (1996) 75. CEBU SHIPYARD AND ENGINEERING WORKS VS. WILLIAM LINES, G.R. 132607, MAY 5, 1999 76. GOTESCO INVESTMENT CORP. VS. CHATTO, 210 SCRA 18(1992) 77. DRA. ABDULIA RODRIGUEZ VS. CA, G.R. 121964, JUNE 17, 1997 78. WINDVALLEY SHIPPING CO. VS. CA, G.R. 119602, OCT 6, 2000 79. ESPIRITU VS. PHIL. POWER AND DEV. CO., G.R. L-3240-R, SEPT 20, 1949 80. RADIO COMMUNICATIONS OF THE PHILIPPINES INC. VS. CA, G.R. L-44748, AUG. 29, 1986 81. CUSTODIO VS. CA, 253 SCRA 483 82. CABIGAO VS. UNIV. OF THE EAST, C.A. G.R. 33554-R, AUG 224, 1973 83. DANGWA TRASPORTATION CO., INC. VS CA, 202 SCRA 575 84. LIGHT RAIL TRANSIT AUTHORITY VS. NATIVIDAD, G.R. 145804, FEB 6, 2003 85. HIDALGO ENTERPRISES VS. BALANDAN, 91 PHIL 488(1952) 86. ANDAMO VS. IAC, 191 SCRA 195 (1990) 87. ROMMAN ENTERPRISES, INC. VS. CA, G.R. 125018, APL 6, 2000 88. JULITA VDA. DE SEVERO VS. FELECIANO, 157 SCRA 446 (1988) 89. PHIL. BANK OF COMMERCE VS. CA, 269 SCRA 695(1997) 90. METROPOLITAN BANK & TRUST CO. VS. CA, 237 SCRA 761(1994) 91. PILIPINAS BANK OF COMMERCE VS. CA, 269 SCRA 695(1997)

92. TABACALERA INSURANCE CO. VS. NORTH FRONT SHIPPING SERVICES INC., 272 SCRA 572(1997) 93. BALIWAG TRANSIT, INC. VS CA, 256 SCRA 746(1996) 94. FABRE JR VS. CA, 259 SCRA 426 (1996) 95. REYES VS. SISTERS OF MERCY HOSPITAL, 341 SCRA 760(2000) 96. DR. NINEVETCH CUZ VS. CA, 282 SCRA 188(1997) 97. ROGELIO RAMOS VS. CA, G.R. 124354, DEC 29, 1999 98. GARCIA-RUEDA vs. PASCASIO, 278 SCRA 769 99. DOMINGA ROQUE vs. MAGTANGGOL C. GUNIGUNDO, 89 SCRA 178(1979) 100. RAYNERA vs. HICETA , G.R. No. 120027, April 21, 1999 101. PLDT vs. CA, G.R. No. L-57079, September 29, 1989 102. KIM vs. PHILIPPINE AERIAL TAXI CO., 58 Phil. 838 103. PHIL. COMMERCIAL INTL BANK vs. CA, G.R. No. 121413, Jan 29, 2001 104. NPC vs. COURT OF APPEALS, 222 SCRA 415 105. SOUTHEASTERN COLLEGE, INC. vs. CA, G.R. 126389, July 10, 1998 106. ILOCOS NORTE ELECTRIC COMPANY vs. CA, 179 SCRA 5(1989) 107. PLEASANTVILLE DEVT CORPORATION vs. CA, 253 SCRA 10(1996) 108. YOBIDO vs. COURT OF APPEALS, 281 SCRA 1(1997) 109. KRAMER, JR. vs. COURT OF APPEALS, 178 SCRA 518(1989) 110. RAYNERA vs. HICETA, 306 SCRA 102(1999) 111. PHIL. RABBIT BUS LINES, INC. vs. IAC, G.R. Nos. 66102-04, Aug 30, 1990 112. FILOMENO URBANO, vs. HON. IAC AND PEOPLE, G.R. No. 72964, January 7, 1988 113. GLAN PEOPLE'S LUMBER AND HARDWARE vs. IAC, G.R. 70493, May 18, 1989 114. ROGELIO ENGADA vs. HON. CA, G.R. No. 140698. June 20, 2003 115. PANTRANCO NORTH EXPRESS, INC. VS. MARICAR BAESA, G.R. NOS. 79050-51. NOVEMBER 14, 1989 116. LBC AIR CARGO, INC., VS. HON. CA. 241 SCRA 619(1995) 117. SAUDI ARABIAN AIRLINES vs. COURT OF APPEALS, 297 SCRA 469(1998) 118. GLOBE MACKAY CABLE AND RADIO CORP vs. THE HON. CA, 176 SCRA 778(1989) 119. LLORENTE vs. THE SANDIGANBAYAN, 202 SCRA 309(1991) 120. ARTURO VALENZUELA vs. THE HON. CA, G.R. No. 83122 (1990), 190 SCRA 1 121. AMONOY vs. GUTIERREZ, G.R. No. 140420. February 15, 2001 122. JOSUE ARLEGUI vs. HON. CA, G.R. No. 126437 , March 6, 2002 123. PETROPHIL CORP vs. CA, G.R. No. 122796, December 10, 2001 124. VIRGINIA M. ANDRADE vs. COURT OF APPEALS, G.R. 127932, 2001 125. UNI. OF THE EAST vs. JADER, G.R. No. 132344, Feb 17, 2000 126. GASHEM SHOOKAT BAKSH vs. HON. CA, G.R. No. 97336 Feb 19, 1993 127. MARILYN L. BERNARDO vs. NLRC, March 15, 1996 128. DRILON vs. COURT OF APPEALS, 270 SCRA 211(1997) 129. PONCE vs. LEGASPI, 208 SCRA 377(1992) 130. YASOA vs. RODENCIO ET. AL, G.R. No. 156339, October 6, 2004 131. PATRICIO vs. LEVISTE, G.R. No. L-51832 April 26, 1989 132. MARIA FORD VS COURT OF APPEALS, G.R. NO. 51171-72(1990) 133. ERLINDA ILUSIO VS ERLINDA BIDNER, G.R. No. 139789(2000) 134. BLAS OPLE VS. RUBEN TORRES, G.R. NO. 127685, JULY 23, 1998 135. AYER PRODUCTIONS PTY. VS. CAPULONG, G.R. No. 820380, APL 29, 1988 136. RODRIGO CONCEPCION VS CA, G.R. 120706, JAN 31, 2000 137. MVRS VS. ISLAMIC DAWAH COUNCIL, 396 SCRA 210(2003) 138. INTL SCHOOL ALLIANCE OF EDUCATORS VS. QUISUMBING AND INTERNATIONAL SCHOOL, G.R. 128846(2000)

139. BIBOSO VS. JUDGE OSMUNDO M. VILLANUEVA, 2001 140. PHIL. AEOLUS AUTO-MOTIVE UNITED CORP. VS. NLRC, G.R. 124617, 2000 141. OBRA VS CA, G.R. NO. 120852, OCTOBER 28, 1999 142. SERRANO VS NIRC, G.R. NO. 117040, JANUARY 27, 2000 143. ABERCA VS MAJ. GEN. FABIAN VER, G.R. NO. L-96866, APRIL 15, 1988 144. ALONZO VS CA, 241 SCRA 51, 1995 145. SAZON VS CA, 255 SCRA 692, 1996 146. BORJAL VS CA, G.R. NO. 126466, JANUARY 14, 1999 147. OCCENA VS ICAMINA, 181 SCRA 328(1990) 148. PEOPLE VS DEVARAS, 228 SCRA 482(1993) 149. PEOPLE VS BAYOTAS, 236 SCRA 239(1994) 150. VILLEGAS vs. COURT OF APPEALS, 217 SCRA 148(1997) 151. AVELINO CASUPANAN vs. MARIO LLAVORE LAROYA, G.R. 14539(1992) 152. RAFAEL REYES TRUCKING CORP. vs. PEOPLE, G.R. 129029(2000) 153. RUBEN MANIAGO vs. COURT OF APPEALS, G.R. 104392(1996) 154. TAMARGO vs. COURT OF APPEALS, 209 SCRA 518(1992) 155. LIBI VS IAC, 214 SCRA 16(1992) 156. ST. FRANCIS HIGH SCHOOL VS. CA, 194 SCRA 341(1991) 157. SOLIMAN VS.. TUAZON, 209 SCRA 47(1992) 158. JOSE S. AMADORA vs. COURT OF APPEALS, G.R. L-47745(1988) 159. PHIL. SCHOOL OF BUSINESS ADMINISTRATION VS. CA, 205 SCRA 729 160. ST. MARYS ACADEMY vs. WILLIAM CARPITANOS, Feb. 6, 2002, G.R. No. 143363. 161. VICTORY LINER, INC. vs.HEIRS OF ANDRES MALECDAN, December 27, 2002, G. R. No. 154278 162. MARTIN vs. COURT OF APPEALS, 205 SCRA 591(1992) 163. CARTICIANO v. NUVAL, September 28, 2000, G.R. No. 138054. 164. FGU INSURANCE CORPORATION VS.CA, 287 SCRA 719(1998) 165. PILIPINAS SHELL PETROLEUM CORP. vs. CA, 221 SCRA 389 (1993) 166. NPC vs. COURT OF APPEALS, 294 SCRA 209(1998) 167. FILAMER CHRISTIAN INSTITUTE vs. IAC, 212 SCRA 637(1992) 168. METRO MANILA TRANSIT CORP vs. CA, G.R. 141089(2002) 169. SANITARY STEAM LAUNDRY, INC. vs. CA, 300 SCRA 20(1998) 170. ERNESTO PLEYTO vs. MARIA D. LOMBOY, G.R. No. 148737. June 16, 2004 171. ERNESTO SYKI vs. SALVADOR BEGASA, G.R. No. 149149. October 23, 2003 172. FIGURACION VDA. DE MAGLANA, vs. CONSOLACION, G.R. No. 60506, August 6, 1992 173. CONRADO AGUILAR, SR. vs. COMMERCIAL SAVINGS BANK, G.R. No. 128705. June 29, 2001 174. EQUITABLE LEASING CORP. VS. LUCITA SUYON, G.R. 143360, 2002 175. 1ST MALAYAN LEASING AND FINANCE CORP vs. CA, 209 SCRA 660(1992) 176. NOSTRADAMUS VILLANUEVA VS. DOMINGO, GR NO. 144274. SEPT 20, 2004 177. ABELARDO LIM VS CA, G.R. 125817(2002) 178. CARPIO VS DOROJA, 180 SCRA 1(1989) 179. FRANCO VS IAC, 178 SCRA 331(198) 180. YONAHA VS CA, 255 SCRA 397(1996) 181. GUILATCO VS CITY OF DAGUPAN, G.R. 61516(1989) 182. PURITA MIRANDA VESTIL VS IAC, G.R. 74431(1989) 183. THE HOMEOWNERS ASSOCIATION OF EL DEPOSITO, BARRIO CORAZON DE JESUS, SAN JUAN RIZAL VS. LOOD, 47 SCRA 174 184. FARRALES VS CITY MAYOR OF BAGUIO, 44 SCRA 239

185. SANGALANG VS IAC, 1989 186. COCA-COLA BOTTLERS PHILIPPINES, INC., vs. CA, 227 SCRA 293(1993) 187. VIRGILIO M. DEL ROSARIO VS. CA, G.R. NO. 118325, JAN. 29, 1997 188. PHILIP S. YU VS. CA, G.R. NO. 86683 JANUARY 21, 1993 189. SO PING BUN vs. CA, G.R. No. 120554 September 21, 1999 190. GARCIA vs. CORONA, 321 SCRA 218(1999) II. DAMAGES 1. PEOPLE vs. BALLESTEROS, 285 SCRA 438(1998) 1. BARITUA vs. COURT OF APPEALS , 267 SCRA 331(1997) 2. HEIRS OF SIMEON BORLADO vs. COURT OF APPEALS, 363 SCRA 753 3. CUSTODIO vs. COURT OF APPEALS, 252 SCRA 483(1996) 4. PHILIPPINE RACING CLUB, vs. BONIFACIO, 109 SCRA 233 5. AUYONG HIAN vs. COURT OF TAX APPEALS, 59 SCRA 110 6. FAROLAN vs. SOLMAC MARKETING CORPORATION, 1991 7. SABA VS. COURT OF APPEALS, 189 SCRA 50(1990) 8. SPOUSES CRISTINO and BRIGIDA CUSTODIO vs. CA, 253 SCRA 483 9. CASTRO vs. ACRO TAXICAB CO., INC., 82 SCRA 369 10. PNOC SHIPPING AND TRANSPORT CORP. vs. HON. CA, 297 SCRA 402(1998) 11. INTEGRATED PACKAGING CORP vs. COURT OF APPEALS, 333 SCRA 170(2000) 12. KIERULF vs. COURT OF APPEALS, 269 SCRA 433; March 13, 1997 13. DEVELOPMENT BANK OF THE PHILIPPINES, vs.CA, (249 SCRA 331) (1995) 14. LUFTHANZA GERMAN AIRLINES VS. COURT OF APPEALS, 243 SCRA 600(1995) 15. BARZAGA, vs. COURT OF APPEALS, (258 SCRA105) (1997) 16. PEOPLE vs. GUTIERREZ , (258SCRA70) (1996) 17. GATCHALIAN V DELIM, 203 SCRA 126FELICIANO; October 21, 1991 18. RAAGAS vs TRAYA (22 SCRA 839) (1968) 19. FUENTES VS COURT OF APPEALS (323 PHIL 508) (1996) 20. SUMMA INSURANCE CORPORATION vs. CA (310 Phil. 367) (1996) 21. TALISAY SILAY V ASSOCIACION (247 SCRA 361) (1996) 22. DAYWALT vs. LA CORPORACION DE LOS PADRES AGUSTINOS RECOLETOS, 69 Phil 587 23. CHING vs. COURT OF APPEALS, (181 SCRA 455, January 11, 1990) 24. LUZON CONCRETE PRODUCTS, INC., vs. COURT OF APPEALS, (135 SCRA 455) 25. KAIRUZ vs. PACIO, 108 PHIL. 1097 26. ROGELIO E. RAMOS vs. CA, [G.R. No. 124354. December 29, 1999]. 27. SPS. RENATO S. ONG VS. CA, [G.R. NO. 117103. JANUARY 21, 1999] 28. MANZANARES vs. MORETA, (38 Phil 823) 29. GREGORIO PESTAO V. SPOUSES PAZ, G.R. NO. 139875 - DECEMBER 4, 2000 30. MONZON, vs. INTERMEDIATE APPELLATE COURT (169 SCRA 76 [1989]) 31. PEOPLE VS SUITOS, 220 SCRA 420(1993) 32. PEOPLE VS CORDERO, 263 SCRA 122(1996) 33. PEOPLE VS ARINGUE, 283 SCRA 291(1997) 34. PEOPLE VS GALVEZ, 355 SCRA 256(2001)

35. PLEYTO VS LOMBOY, G.R. NO. 148737, JUNE 16, 2004 36. PEOPLE VS MATARO, G.R. NO. 130378(2001) 37. PEOPLE VS NULLAN, 305 SCRA 679(1999) 38. PEOPLE VS LISTERIO, GR. NO. 122099, JULY 5, 2000 39. PEOPLE VS SANCHEZ, 313 SCRA 694(1999) 40. PEOPLE vs. EFREN MINDANAO, G.R. 123095, JULY 6, 2000 41. PEOPLE vs. VERDE, 302 SCRA 690(1999) 42. PEOPLE vs. Pedro Perreras, G.R. 139622, JULY 31, 2000 43. PEOPLE vs. UGANAP, G.R. 130605, JUNE 19, 2001 44. SMITH BELL DODWELL SHIPPING AGENCY CORP. vs. BORJA , G.R. 143008(2002) 45. PEOPLE vs. ELGER GUZMAN, G.R. 132750(2001) 46. PEOPLE vs. MAYOR ANTONIO L. SANCHEZ, G.R. 121039(2001) 47. PESTAO vs. Spouses SUMAYANG, G.R. 139875(2000) 48. CONSOLIDATED DAIRY PRODUCTS CO vs. COURT OF , 210 SCRA 810(1992) 49. ALGARRA VS. SANDEJAS, 27 PHIL. 284 50. QUIRANTE VS. IAC, G.R. 73886(1989) 51. AGUSTIN VS. CA, JUNE 6, 1990 52. BICARME VS. CA, JUNE 6, 1990 53. PEOPLE VS. BERGANTE, 286 SCRA 629(1998) 54. CRISMINA GARMENTS, INC., VS. CA, G.R. 12872(1999) 55. BAUTISTA VS. MANGALDAN RURAL BANK, INC., 230 SCRA 16(1994) 56. ZENITH INSURANCE CORPORATION. VS. CA, 185 SCRA 398(1990) 57. COMPAIA MARITIMA VS. ALLIED FREE WORKERS UNION, 77 SCRA 24 58. DEL ROSARIO VS COURT OF APPEALS, 267 SCRA 58(1997) 59. PEOPLE VS BUGAYONG, G.R.NO. 126518(1998) 60. ST. PETER MEMORIAL PARK, INC. VS CLEOFAS, 92 SCRA 389 61. EXPERT TRAVEL AND TOURS, INC. VS COURT OF APPEALS, G.R.N NO. 130030 62. J MARKETING CORPORATION VS SIA JR., 258 SCRA 580(1998) 63. INDUSTRIAL INSURANCE CO. VS PABLO BONDAD, G.R.NO. 136722(2000) 64. TRIPLE EIGHT INTEGRATED SERVICES INC. VS. NLRC, 299 SCRA 608(1998) 65. NESCITO C. HILARIO VS NLRC, 252 SCRA 555(1996) 66. ARCONA VS. COURT OF APPEALS, G.R. NO. 134784(2002) 67. GREGORIO FULE VS. COURT OF APPEALS, 286 SCRA 698(1998) 68. SUMALPONG, vs.COURT OF APPEALS, 268 SCRA 764(1997) 69. PRODUCERS BANK OF THE PHILS V CA (SPS CHUA), G.R. 111584(2001) 70. PRODUCERS BANK OF THE PHILS V CA (SPS CHUA), G.R. 111584, 96 PHIL 321 71. ABS-CBN V CA, G.R. 128690(1999) 72. NPC v. PHILIPP BROTHERS OCEANIC, 369 SCRA 629(2001) 73. GERALDEZ V. COURT OF APPEALS, 230 SCRA 320 (1994) 74. PEOPLE vs. CRISTOBAL, 252 SCRA 507(1996) 75. PEOPLE VS. MATRIMONIO, 215 SCRA 613(1992) 76. SARMIENTO VS. EMPLOYEES COMPENSATION COMMISSION, 161 SRCA 312

I.

QUASI-DELICT

1. NAGUIAT vs. NLRC FACTS: Clark Field Taxi, Inc. held a concessionaires contract with the Army Air Force Exchange Services for the operation of taxi services within Clark Air Base. Sergio Naguiat was the president of CFTI while Antolin Naguiat was its vice president. Like Naguiat Enterprises, Inc. which was a trading firm, it was also a family-owned corporation. Respondents were employed by the CFTI as taxicab drivers. They were required to pay a daily boundary fee of US$26.50 (for those on duty from 1AM-12N) or US$27 (for those on duty from 12N to 12 MN). Incidental expenses were maintained by the drivers (including gasoline expenses). Drivers worked 3-4 times a week depending on the availability of vehicles and earned no less than US$15.00 a day. In excess of that amount, they had to make cash deposits to the company which they could withdraw every fifteen days. AAFES was dissolved because of the phase-out of the military bases in Clark and the services of the respondents were officially terminated on November 26, 1991. AAFES Taxi Drivers Association, the drivers union, and CFTI held negotiations as regards separation benefits. They arrived at an agreement that the separated drivers would be given P500 for ever year as severance pay. Most of the drivers accepted this but some refused to do so. Those who did not accept the initial severance pay disaffiliated themselves with drivers union and through the National Organization of Workingmen, they filed a complaint against Sergio Naguiat under the name and style Naguiat Enterprises, AAFES and AAFES union. The labor arbiter ordered the petitioner to pay the drivers P1,200 for every year of service for humanitarian consideration, setting aside the earlier agreement between the CFTI and the drivers union. It also rejected the idea that the CFTI was forced to close it business due to great financial losses and lose opportunity since at the time of its closure it was profitably earning. The labor arbiter however did not award separation pay because to impose a monetary obligation to an employer whose profitable business was abruptly shot (sic) shot down by force majeure would be unfair and unjust. The NLRC modified the decision of the labor arbiter after respondents appealed by granting separation pay to the private respondents. It said that half of the monthly salary should be US$120 which should be paid in Philippine pesos. Naguiat Enterprieses should be joined with Sergio and Antolin Naguiat as jointly and severally liable. ISSUE: Whether or not there was corporate tort committed by the corporation and their respective officers? DECISION OF THE SUPREME COURT: No. Our jurisprudence is wanting as to the definite scope of "corporate tort." Essentially, "tort" consists in the violation of a right given or the omission of a duty imposed by law. Simply stated, tort is a breach of a legal duty. Article 283 of the Labor Code mandates the employer to grant separation pay to employees in case of closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, which is the condition obtaining at bar. CFTI failed to comply with this law-imposed duty or obligation. Consequently, its

stockholder who was actively engaged in the management or operation of the business should be held personally liable. 2. PNB vs. CA FACTS: Mrs. Tapnio had an export sugar quota of 1,000 piculs for the agricultural year 1956-1957 which she did not need. She agreed to allow Mr. Jacobo C. Tuazon to use said quota for the consideration of P2,500.00. This agreement was called a contract of lease of sugar allotment. At the time of the agreement, Mrs. Tapnio was indebted to the Philippine National Bank at San Fernando, Pampanga. Her indebtedness was known as a crop loan and was secured by a mortgage on her standing crop including her sugar quota allocation for the agricultural year corresponding to said standing crop. This arrangement was necessary in order that when Mrs. Tapnio harvests, the P.N.B., having a lien on the crop, may effectively enforce collection against her. Her sugar cannot be exported without sugar quota allotment Sometimes, however, a planter harvest less sugar than her quota, so her excess quota is utilized by another who pays her for its use. This is the arrangement entered into between Mrs. Tapnio and Mr. Tuazon regarding the former's excess quota for 1956-1957. Since the quota was mortgaged to the P.N.B., the contract of lease had to be approved by said Bank, The same was submitted to the branch manager at San Fernando, Pampanga. The latter required the parties to raise the consideration of P2.80 per picul or a total of P2,800.00 informing them that "the minimum lease rental acceptable to the Bank, is P2.80 per picul." In a letter addressed to the branch manager on August 10, 1956, Mr. Tuazon informed the manager that he was agreeable to raising the consideration to P2.80 per picul. He further informed the manager that he was ready to pay said amount as the funds were in his folder which was kept in the bank. When the branch manager of the Philippine National Bank at San Fernando recommended the approval of the contract of lease at the price of P2.80 per picul), whose recommendation was concurred in by the Vice-president of said Bank, J. V. Buenaventura, the board of directors required that the amount be raised to 13.00 per picul. This act of the board of directors was communicated to Tuazon, who in turn asked for a reconsideration thereof. On November 19, 1956, the branch manager submitted Tuazon's request for reconsideration to the board of directors with another recommendation for the approval of the lease at P2.80 per picul, but the board returned the recommendation unacted upon, considering that the current price prevailing at the time was P3.00 per picul. The parties were notified of the refusal on the part of the board of directors of the Bank to grant the motion for reconsideration. The matter stood as it was until February 22, 1957, when Tuazon wrote a letter (Exh. 10-Bank informing the Bank that he was no longer interested to continue the deal, referring to the lease of sugar quota allotment in favor of defendant Rita Gueco Tapnio. The result is that the latter lost the sum of P2,800.00 which she should have received from Tuazon and which she could have paid the Bank to cancel off her indebtedness,

The court below held, and in this holding we concur that failure of the negotiation for the lease of the sugar quota allocation of Rita Gueco Tapnio to Tuazon was due to the fault of the directors of the Philippine National Bank, The refusal on the part of the bank to approve the lease at the rate of P2.80 per picul which, as stated above, would have enabled Rita Gueco Tapnio to realize the amount of P2,800.00 which was more than sufficient to pay off her indebtedness to the Bank, and its insistence on the rental price of P3.00 per picul thus unnecessarily increasing the value by only a difference of P200.00. inevitably brought about the rescission of the lease contract to the damage and prejudice of Rita Gueco Tapnio in the aforesaid sum of P2,800.00. This decision of the of the trial court was affirmed by the Court of Appeals. ISSUE: Whether or not petitioner is liable for the damage caused due to the disapproval of the lease by the Board of Directors of petitioner. DECISION OF THE SUPREME COURT: YES. While petitioner had the ultimate authority of approving or disapproving the proposed lease since the quota was mortgaged to the Bank, the latter certainly cannot escape its responsibility of observing, for the protection of the interest of private respondents, that degree of care, precaution and vigilance which the circumstances justly demand in approving or disapproving the lease of said sugar quota. The law makes it imperative that every person "must in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith, 4 This petitioner failed to do. Certainly, it knew that the agricultural year was about to expire, that by its disapproval of the lease private respondents would be unable to utilize the sugar quota in question. In failing to observe the reasonable degree of care and vigilance which the surrounding circumstances reasonably impose, petitioner is consequently liable for the damages caused on private respondents. Under Article 21 of the New Civil Code, "any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage." The afore-cited provisions on human relations were intended to expand the concept of torts in this jurisdiction by granting adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to specifically provide in the statutes. A corporation is civilly liable in the same manner as natural persons for torts, because "generally speaking, the rules governing the liability of a principal or master for a tort committed by an agent or servant are the same whether the principal or master be a natural person or a corporation, and whether the servant or agent be a natural or artificial person. All of the authorities agree that a principal or master is liable for every tort which he expressly directs or authorizes, and this is just as true of a corporation as of a natural person, A corporation is liable, therefore, whenever a tortious act is committed by an officer or agent under express direction or authority from the stockholders or members acting as a body, or, generally, from the directors as the governing body." 3. SILVA vs. PERALTA FACTS: At the outbreak of the war in 1941, the defendant Esther Peralta she resided with her sister, Mrs. Pedro Pia, in Maco, Tagum, Mabini Davao. Saturnino Silva, then an American citizen and an officer of the United States Army and married to one Prescilla Isabel of Australia, had been ordered to sent to the Philippines during the enemy

occupation to help unite the guerillas in their fight for freedom. He was the commanding officer of the 130th Regiment general headquarters at Magugpo, Tagum, Davao. Sometime during the year 1944, Florence, a younger sister of the defendant, was accused of having collaborated with the enemy, and for this she was arrested, and accompanied by Esther, brought to Anibongan and later to the general headquarters at Magugpo for investigation that Silva first met Esther Florence was exonorated of the charges made against her and was ordered released, but with the advice that she should not return to Maco for the time being. Heeding such advice, Florence and her sister, appellee herein, went to live with the spouses Mr. and Mrs. Camilo Doctolero at Tipas, Magugpo, Davao. Silva started to frequent the house of the Doctoleros, and soon professed love for Esther. Having been made to believe that he was single, she accepted his marriage proposal; and the two were married on January 14, 1945 by one Father Cote on the occasion of a house blessing. No documents of marriage were prepared nor executed, allegedly because there were no available printed forms for the purpose. Hence, the lovers lived together as husband and wife. From the "marriage", a child, named Saturnino Silva, Jr., was born. On May 8, 1945, Silva sustained serious wounds in the battle of Ising, for which reason, he was transferred to Leyte, and later to the United States, he divorced Precilla Isabel and later, on May 9, 1948, contracted marriage with plaintiff Elenita Ledesma Silva. Upon his return to the Philippines, appellee Esther Peralta demanded support for their child, and, his refusal, instituted a suit for support in the Court of First Instance of Manila. Thereupon, the present action was filed against Esther, and another suit against her was instituted in Cotabato. The Trial Court awarded damages in favor of the defendant thus the plaintiffs-appellant appeal on both questions of fact and law from the decision of the Court of First Instance of Davao to the Supreme Court, the amount involved being more than P200,000.00. ISSUE: Whether or not damages awarded to appellee are a natural and direct consequence of Silva's deceitful maneuvers in making love to appellee, and inducing her to yield to his advances and live with him as his wife. DECISION OF THE SUPREME COURT: YES. It is to be noted that while the latter's liability was extra-contractual in origin, still, under the Civil Code in 1889, the damages resulting from a tort are measured in the same manner as those due from a contractual debtor in bad faith, since he must answer for such damages, whether he had forseen them or not, just as he must indemnify not only for damnum emergens but also for lacrum cessans, as required by Article 1106. Article 1002 of the 1889 Civil Code of Spain formulated no standard for measuring quasi-delictual damages, the article merely prescribing that the guilty party "shall be liable for the damages so done". This indefiniteness led modern civil law writers to hold that the standards set is articles 1106 and 1107, placed in the general rules on obligations, "rigen por igual para las contractuales y las extras contractuales, las pre establecidas y las que borten ex-lege de actos ilicitos". (Roces, Notes to Fisher)" Los Daos Civiles y su Reparacion,"(1927).

It is well to note in this connection, that Silva's act in hiding from appellee that he could not legally marry her, because, he allegedly have an Australian wife, was not mere negligence, but actual fraud (dolo) practiced upon the appellee. Consequently, he should stand liable for any and all damages arising therefrom, which include the expense of maintaining the offspring and the expenses of litigation to protect the child's right's and the loss of the mother's own earnings. This is a liability that flows even from Articles 1902 and 1107 (par. 2) of 1889 (Arts. 2176 and 2202 of the New Code). Art. 1902. Any person who by an act or omission causes damage to another by his fault or negligence shall be liable for the damage as done. Art. 1107. In case of fraud (dolo) the debtor shall be liable for all losses and damages which clearly arise from the failure to fulfill the obligation. 4. ALBENSON vs. CA FACTS: In September, October, and November 1980, petitioner Albenson Enterprises Corporation (Albenson for short) delivered to Guaranteed Industries, Inc. (Guaranteed for short) the mild steel plates which the latter ordered. As part payment thereof, Albenson was given Pacific Banking Corporation Check No. 136361 in the amount of P2,575.00 and drawn against the account of E.L. Woodworks. When presented for payment, the check was dishonored for the reason "Account Closed." Thereafter, petitioner Albenson, through counsel, traced the origin of the dishonored check. From the records of the Securities and Exchange Commission (SEC), Albenson discovered that the president of Guaranteed, the recipient of the unpaid mild steel plates, was one "Eugenio S. Baltao." Upon further inquiry, Albenson was informed by the Ministry of Trade and Industry that E.L. Woodworks, a single proprietorship business, was registered in the name of one "Eugenio Baltao". In addition, upon verification with the drawee bank, Pacific Banking Corporation, Albenson was advised that the signature appearing on the subject check belonged to one "Eugenio Baltao." After obtaining the foregoing information, Albenson, through counsel, made an extrajudicial demand upon private respondent Eugenio S. Baltao, president of Guaranteed, to replace and/or make good the dishonored check. Respondent Baltao, through counsel, denied that he issued the check, or that the signature appearing thereon is his. He further alleged that Guaranteed was a defunct entity and hence, could not have transacted business with Albenson. On February 14, 1983, Albenson filed with the Office of the Provincial Fiscal of Rizal a complaint against Eugenio S. Baltao for violation of Batas Pambansa Bilang 22. Submitted to support said charges was an affidavit of petitioner Benjamin Mendiona, an employee of Albenson. On September 5, 1983, Assistant Fiscal Ricardo Sumaway filed an information against Eugenio S. Baltao for Violation of Batas Pambansa Bilang 22. In filing said information, Fiscal Sumaway claimed that he had given Eugenio S. Baltao opportunity to submit controverting evidence, but the latter failed to do so and therefore, was deemed to have waived his right.

Respondent Baltao, claiming ignorance of the complaint against him, immediately filed with the Provincial Fiscal of Rizal a motion for reinvestigation, alleging that it was not true that he had been given an opportunity to be heard in the preliminary investigation conducted by Fiscal Sumaway, and that he never had any dealings with Albenson or Benjamin Mendiona, consequently, the check for which he has been accused of having issued without funds was not issued by him and the signature in said check was not his. On January 30, 1984, Provincial Fiscal Mauro M. Castro of Rizal reversed the finding of Fiscal Sumaway and exonerated respondent Baltao. He also instructed the Trial Fiscal to move for dismissal of the information filed against Eugenio S. Baltao. Fiscal Castro found that the signature in PBC Check No. 136361 is not the signature of Eugenio S. Baltao. Because of the alleged unjust filing of a criminal case against him for allegedly issuing a check which bounced in violation of Batas Pambansa Bilang 22, respondent Baltao filed before the Regional Trial Court of Quezon City a complaint for damages against herein petitioners Albenson Enterprises, Jesse Yap, its owner, and Benjamin Mendiona, its employee. Regional Trial Court petitioner to pay private respondent, among others, the sum of P100,000.00 as moral damages and attorney's fees in the amount of P100,000.00. Dissatisfied to the decision, they appealed the case before the court of Appeals but the Court of Appeals affirmed the said decision of the Trial Court with modification. ISSUE: Whether or not because of the malicious prosecution of criminal case filed by the petitioners against the private respondent, petitioner can be held liable for damages to private respondents based on Article 19, 20 and 21. DECISION OF THE SUPREME COURT: NO. The criminal complaint filed against private respondent after the latter refused to make good the amount of the bouncing check despite demand was a sincere attempt on the part of petitioners to find the best possible means by which they could collect the sum of money due them. A person who has not been paid an obligation owed to him will naturally seek ways to compel the debtor to pay him. It was normal for petitioners to find means to make the issuer of the check pay the amount thereof. In the absence of a wrongful act or omission or of fraud or bad faith, moral damages cannot be awarded and that the adverse result of an action does not per se make the action wrongful and subject the actor to the payment of damages, for the law could not have meant to impose a penalty on the right to litigate (Rubio vs. Court of Appeals, 141 SCRA 488 [1986]). Article 19, known to contain what is commonly referred to as the principle of abuse of rights, sets certain standards which may be observed not only in the exercise of one's rights but also in the performance of one's duties. These standards are the following: to act with justice; to give everyone his due; and to observe honesty and good faith. The law, therefore, recognizes the primordial limitation on all rights: that in their exercise, the norms of human conduct set forth in Article 19 must be observed. A right, though by itself legal because recognized or granted by law as such, may nevertheless become the source of some illegality. When a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be held responsible. Although the requirements of each provision is different, these three (3) articles are all related to each other. As the eminent Civilist Senator Arturo Tolentino puts it: "With this article

(Article 21), combined with articles 19 and 20, the scope of our law on civil wrongs has been very greatly broadened; it has become much more supple and adaptable than the Anglo-American law on torts. It is now difficult to conceive of any malevolent exercise of a right which could not be checked by the application of these articles" (Tolentino, 1 Civil Code of the Philippines 72). There is however, no hard and fast rule which can be applied to determine whether or not the principle of abuse of rights may be invoked. The question of whether or not the principle of abuse of rights has been violated, resulting in damages under Articles 20 and 21 or other applicable provision of law, depends on the circumstances of each case. (Globe Mackay Cable and Radio Corporation vs. Court of Appeals, 176 SCRA 778 [1989]). The elements of an abuse of right under Article 19 are the following: (1) There is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. Article 20 speaks of the general sanction for all other provisions of law which do not especially provide for their own sanction. Thus, anyone who, whether willfully or negligently, in the exercise of his legal right or duty, causes damage to another, shall indemnify his victim for injuries suffered thereby. Article 21 deals with acts contra bonus mores, and has the following elements: 1) There is an act which is legal; 2) but which is contrary to morals, good custom, public order, or public policy; 3) and it is done with intent to injure. Certainly, petitioners could not be said to have violated the aforestated principle of abuse of right. What prompted petitioners to file the case for violation of Batas Pambansa Bilang 22 against private respondent was their failure to collect the amount of P2,575.00 due on a bounced check which they honestly believed was issued to them by private respondent. 5. ELCANO vs. HILL FACTS: Reginald Hill was a married minor living and getting subsistence from his father, co-defendant Marvin. He killed Agapito Elcano, son of petitioners, for which he was criminally prosecuted. However, he was acquitted on the ground that his act was not criminal because of "lack of intent to kill, coupled with mistake." Subsequently, petitioners filed a civil action for recovery of damages against defendants, which the latter countered by a motion to dismiss. However the trial court dismissed the same. Hence this appeal. ISSUES: 1) Whether or not the action for recovery of damages against Reginald and Marvin Hill is barred by res judicata. 2) Whether or not there is vicarious liability on the part Reginalds father, Marvin. DECISION OF THE SUPREME COURT: NO.The acquittal of Reginald Hill in the criminal case has not extinguished his liability for quasi-delict, hence that acquittal is not a bar to the instant action against him.

There is need for a reiteration and further clarification of the dual character, criminal and civil, of fault or negligence as a source of obligation, which was firmly established in this jurisdiction in Barredo vs. Garcia (73 Phil. 607). In this jurisdiction, the separate individuality of a cuasi-delito or culpa aquiliana, under the Civil Code has been fully and clearly recognized, even with regard to a negligent act for which the wrongdoer could have been prosecuted and convicted in a criminal case and for which, after such a conviction, he could have been sued for civil liability arising from his crime. (p. 617, 73 Phil.) Notably, Article 2177 of the New Civil Code provides that: Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant. Consequently, a separate civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed, if he is actually charged also criminally, to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. In other words, the extinction of civil liability referred to in Par. (e) of Section 3, Rule 111, refers exclusively to civil liability founded on Article 100 of the Revised Penal Code, whereas the civil liability for the same act considered as a quasi-delict only and not as a crime is not extinguished even by a declaration in the criminal case that the criminal act charged has not happened or has not been committed by the accused. Marvin Hill vicariously liable. However, since Reginald has come of age, as a matter of equity, the formers liability is now merely subsidiary. Under Art. 2180, 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. In the case at bar, Reginald, although married, was living with his father and getting subsistence from him at the time of the killing. The joint and solidary liability of parents with their offending children is in view of the parental obligation to supervise minor children in order to prevent damage to third persons. On the other hand, the clear implication of Art. 399, in providing that a minor emancipated by marriage may not sue or be sued without the assistance of the parents is that such emancipation does not carry with it freedom to enter into transactions or do not any act that can give rise to judicial litigation. 6. VIRATA vs. OCHOA FACTS: Arsenio Virata died as a result of having been bumped while walking along Taft Avenue by a passenger jeepney driven by Maximo Borilla and registered in the name of Victoria Ochoa. An action for homicide through reckless imprudence was instituted against Maximo Borilla in the CFI of Rizal.

Atty. Francisco, the private prosecutor, made a reservation to file separately the civil action for damages against the driver for his criminal liability, which he later on withdrew and presented evidence on the damages. The Heirs of Arsenio Virata again reserved their right to institute a separate civil action. They commenced an action for damages based on quasi-delict against the driver Maximo Borilla and the registered owner of the vehicle, Victoria Ochoa. Private respondents filed a motion to dismiss on the ground that there is another action pending for the same cause. The CFI acquitted Borilla on the ground that he caused the injury by accident. The motion to dismiss was granted. ISSUE: Whether or not the Heirs of Arsenio Virata can prosecute an action for damages based on quasi-delict against Maximo Borilla and Victoria Ochoa, driver and owner, respectively on the passenger jeepney that bumped Arsenio Virata? DECISION OF THE SUPREME COURT: YES. In negligence cases, the aggrieved parties may choose between an action under the Revised Penal Code or of quasi-delict under Article 2176 of the Civil Code. What is prohibited by Article 2177 of the Civil Code is to recover twice for the same negligent act. In this case, the petitioners are not seeking to recover twice for the same negligent act. Before the Criminal Case was decided, they manifested in the said case that they were filing a separate civil action for damages against the owner and driver of the passenger jeepney based on quasi-delict. Acquittal from an accusation of criminal negligence, whether on reasonable doubt or not, shall not be a bar to a subsequent civil action, not for civil liability arising from criminal negligence, but for damages due to a quasi-delict or culpa aquiliana. The source of damages sought to be enforced in the Civil Case is quasi-delict, not an act or omission punishable by law. Under Art. 1157 of the Civil Code, quasi-delict and an act or omission punishable by law are two different sources of obligation. Moreover, for petitioners to prevail in the Civil Case, they have only to establish their cause of action by preponderance of evidence. 7. ANDAMO vs. IAC FACTS: Petitioner spouses Emmanuel and Natividad Andamo are the owners of a parcel of land situated in Biga (Biluso) Silang, Cavite which is adjacent to that of private respondent, Missionaries of Our Lady of La Salette, Inc., a religious corporation. Within the land of respondent corporation, waterpaths and contrivances, including an artificial lake, were constructed, which allegedly inundated and eroded petitioners' land, caused a young man to drown, damaged petitioners' crops and plants, washed away

costly fences, endangered the lives of petitioners and their laborers during rainy and stormy seasons, and exposed plants and other improvements to destruction. In July 1982, petitioners instituted a criminal action against Efren Musngi, Orlando Sapuay and Rutillo Mallillin, officers and directors of respondent corporation, for destruction by means of inundation under Article 324 of the Revised Penal Code. On February 22, 1983, petitioners filed a civil case for damages with prayer for the issuance of a writ of preliminary injunction against respondent corporation. Hearings were conducted including ocular inspections on the land. On April 26, 1984, the trial court issued an order suspending further hearings in the civil case until after judgment in the related Criminal Case. And later on dismissed the Civil Case for lack of jurisdiction, as the criminal case which was instituted ahead of the civil case was still unresolved.The decision was based on Section 3 (a), Rule III of the Rules of Court which provides that "criminal and civil actions arising from the same offense may be instituted separately, but after the criminal action has been commenced the civil action cannot be instituted until final judgment has been rendered in the criminal action." Petitioners appealed from that order to the Intermediate Appellate Court. On February 17, 1986, respondent Appellate Court affirmed the order of the trial court. A motion for reconsideration filed by petitioners was denied by the Appellate Court. ISSUE: Whether or not a corporation, which has built through its agents, waterpaths, water conductors and contrivances within its land, thereby causing inundation and damage to an adjacent land, can be held civilly liable for damages under Articles 2176 and 2177 of the Civil Code on quasi-delicts such that the resulting civil case can proceed independently of the criminal case DECISION OF THE SUPREME COURT: Yes. A careful examination of the complaint shows that the civil action is one under Articles 2176 and 2177 of the Civil Code on quasidelicts. All the elements of a quasidelict are present, to wit: (a) damages suffered by the plaintiff, (b) fault or negligence of the defendant, or some other person for whose acts he must respond; and (c) the connection of cause and effect between the fault or negligence of the defendant and the damages incurred by the plaintiff. The waterpaths and contrivances built by respondent corporation are alleged to have inundated the land of petitioners. There is therefore, an assertion of a causal connection between the act of building these waterpaths and the damage sustained by petitioners. Such action if proven constitutes fault or negligence which may be the basis for the recovery of damages. In the case of Samson vs. Dionisio, the Court applied Article 1902, now Article 2176 of the Civil Code and held that "any person who without due authority constructs a bank or dike, stopping the flow or communication between a creek or a lake and a river, thereby causing loss and damages to a third party who, like the rest of the residents, is entitled to the use and enjoyment of the stream or lake, shall be liable to the payment of an indemnity for loss and damages to the injured party.

While the property involved in the cited case belonged to the public domain and the property subject of the instant case is privately owned, the fact remains that petitioners' complaint sufficiently alleges that petitioners have sustained and will continue to sustain damage due to the waterpaths and contrivances built by respondent corporation. Indeed, the recitals of the complaint, the alleged presence of damage to the petitioners, the act or omission of respondent corporation supposedly constituting fault or negligence, and the causal connection between the act and the damage, with no pre-existing contractual obligation between the parties make a clear case of a quasi delict or culpa aquiliana. It must be stressed that the use of one's property is not without limitations. Article 431 of the Civil Code provides that "the owner of a thing cannot make use thereof in such a manner as to injure the rights of a third person." SIC UTERE TUO UT ALIENUM NON LAEDAS. Moreover, adjoining landowners have mutual and reciprocal duties which require that each must use his own land in a reasonable manner so as not to infringe upon the rights and interests of others. Although we recognize the right of an owner to build structures on his land, such structures must be so constructed and maintained using all reasonable care so that they cannot be dangerous to adjoining landowners and can withstand the usual and expected forces of nature. If the structures cause injury or damage to an adjoining landowner or a third person, the latter can claim indemnification for the injury or damage suffered. Article 2176 1of the Civil Code imposes a civil liability on a person for damage caused by his act or omission constituting fault or negligence. Article 2176, whenever it refers to "fault or negligence", covers not only acts "not punishable by law" but also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a separate civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed, (if the tortfeasor is actually charged also criminally), to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. The distinctness of quasi-delicta is shown in Article 21772 of the Civil Code. According to the Report of the Code Commission "the foregoing provision though at first sight startling, is not so novel or extraordinary when we consider the exact nature of criminal and civil negligence. The former is a violation of the criminal law, while the latter is a distinct and independent negligence, which is a "culpa aquiliana" or quasi-delict, of ancient origin, having always had its own foundation and individuality, separate from criminal negligence. 8. DULAY vs. CA FACTS: On December 7, 1988, an altercation between Benigno Torzuela and Atty. Napoleon Dulay occurred at the "Big Bang Sa Alabang," Alabang Village, Muntinlupa as a result of which Benigno Torzuela, the security guard on duty at the said carnival, shot and killed Atty. Napoleon Dulay.

Herein petitioner Maria Benita A. Dulay, widow of the deceased Napoleon Dulay, in her own behalf and in behalf of her minor children, filed an action for damages against Benigno Torzuela and herein private respondents Safeguard Investigation and Security Co., Inc., ("SAFEGUARD") and/or Superguard Security Corp. ("SUPERGUARD"), alleged employers of defendant Torzuela. Private respondent SUPERGUARD filed a Motion to Dismiss on the ground that the complaint does not state a valid cause of action. SUPERGUARD claimed that Torzuela's act of shooting Dulay was beyond the scope of his duties, and that since the alleged act of shooting was committed with deliberate intent (dolo), the civil liability therefor is governed by Article 100 of the Revised Penal Code, which states: Art. 100. Civil liability of a person guilty of a felony. Every person criminally liable for a felony is also civilly liable. Respondent SUPERGUARD further alleged that a complaint for damages based on negligence under Article 2176 of the New Civil Code, such as the one filed by petitioners, cannot lie, since the civil liability under Article 2176 applies only to quasioffenses under Article 365 of the Revised Penal Code. In addition, the private respondent argued that petitioners' filing of the complaint is premature considering that the conviction of Torzuela in a criminal case is a condition sine qua non for the employer's subsidiary liability. Respondent SAFEGUARD also filed a motion praying that it be excluded as defendant on the ground that defendant Torzuela is not one of its employees Petitioners opposed both motions, stating that their cause of action against the private respondents is based on their liability under Article 2180 of the New Civil Code, which provides: Art. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. 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 an industry. Respondent Judge Regino issued an order granting SUPERGUARD'S motion to dismiss and SAFEGUARD'S motion for exclusion as defendant. Petitioner appealed the same to the Court of Appeals but Court Appeals Eight Division affirmed the decision of the Regional Trial Court. ISSUE: Whether or not the civil action contemplated in Article 2177 is not applicable to acts committed with deliberate intent, but only applies to quasi-offenses under Article 365 of the Revised Penal Code. DECISION OF THE SUPREME COURT: NO. Contrary to the theory of private respondents, there is no justification for limiting the scope of Article 2176 of the Civil Code to acts or omissions resulting from negligence. Well-entrenched is the doctrine that article 2176 covers not only acts committed with negligence, but also acts which are voluntary and

intentional. As far back as the definitive case of Elcano v. Hill (77 SCRA 98 [1977]), this Court already held that: . . . Article 2176, where it refers to "fault or negligence," covers not only acts "not punishable by law" but also acts criminal in character; whether intentional and voluntary or negligent. Consequently, a separate civil action against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed, if he is actually charged also criminally, to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. In other words, the extinction of civil liability referred to in Par. (e) of Section 3, Rule 111, refers exclusively to civil liability founded on Article 100 of the Revised Penal Code, whereas the civil liability for the same act considered as quasi-delict only and not as a crime is not extinguished even by a declaration in the criminal case that the criminal act charged has not happened or has not been committed by the accused. Briefly stated, We here hold, in reiteration of Garcia, that culpa aquiliana includes voluntary and negligent acts which may be punishable by law. (Emphasis supplied) The same doctrine was echoed in the case of Andamo v. Intermediate Appellate Court (191 SCRA 195 [1990]), wherein the Court held: Article 2176, whenever it refers to "fault or negligence," covers not only acts criminal in character, whether intentional and voluntary or negligent. Consequently, a civil action lies against the offender in a criminal act, whether or not he is prosecuted or found guilty or acquitted, provided that the offended party is not allowed, (if the tortfeasor is actually also charged criminally), to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. [citing Virata v. Ochoa, 81 SCRA 472] (Emphasis supplied) Private respondents submit that the word "intentional" in the Andamo case is inaccurate obiter, and should be read as "voluntary" since intent cannot be coupled with negligence as defined by Article 365 of the Revised Penal Code. In the absence of more substantial reasons, this Court will not disturb the above doctrine on the coverage of Article 2176. Private respondents also contend that their liability is subsidiary under the Revised Penal Code; and that they are not liable for Torzuela's act which is beyond the scope of his duties as a security guard. It having been established that the instant action is not exdelicto, petitioners may proceed directly against Torzuela and the private respondents. Under Article 2180 of the New Civil Code as aforequoted, when an injury is caused by the negligence of the employee, there instantly arises a presumption of law that there was negligence on the part of the master or employer either in the selection of the servant or employee, or in supervision over him after selection or both (Layugan v. Intermediate Appellate Court, 167 SCRA 363 [1988]). The liability of the employer under Article 2180 is direct and immediate; it is not conditioned upon prior recourse against the negligent employee and a prior showing of the insolvency of such employee (Kapalaran Bus Lines v. Coronado, 176 SCRA 792 [1989]). Therefore, it is incumbent upon the private respondents to prove that they exercised the diligence of a good father of a family in the selection and supervision of their employee.

Since Article 2176 covers not only acts of negligence but also acts which are intentional and voluntary, it was therefore erroneous on the part of the trial court to dismiss petitioner's complaint simply because it failed to make allegations of attendant negligence attributable to private respondents. Cases 1-8 PASCUA, JAYBEE D. 9. WYLIE V. RARANG FACTS: Petitioners Wylie and Williams were the assistant administrative officer and commanding officer, respectively, of the US Naval base in Subic. Respondent Aurora Rarang was an employee in the Office of the Provost Marshal assigned as the merchandise control guard. Wylie, as one of his duties, supervised the publication of the Plan of the Day a daily publication that featured among others, an action line inquiry. On Feb. 3, 1978, an inquiry was published saying that confiscated goods were being consumed or used for personal benefit by the merchandise control inspector and that a certain Auring was, in herself, a disgrace to the office. Rarang, being the only person named Auring in the said office, went to press an action for damages against Wylie and Williams and the US Naval Base. (That Rarang was indeed the Auring mentioned in the inquiry was proven by the apology letter issued by Wylie for the inadvertent publication.)She alleged that the article constituted false, injurious, and malicious defamation and libel tending to impeach her honesty, virtue and reputation exposing her to public hatred, contempt and ridicule. Defendants alleged that (1) defendants acted in performance of their official functions as officers of the US Navy and are thus immune from suit (2) US Naval Base is immune from suit being an instrumentality of the US Government and (3) the RTC has no jurisdiction over the subject matter and the parties involved. Lower court ruling: defendants pay damages because acts were not official acts of the US government, but personal and tortious acts (which are not included in the rule that a sovereign country cant be sued without its consent). Suit against US Naval Base was dismissed. Defendants appealed the decision to the CA but the same was denied. ISSUE: Whether or not US officers who commit a crime or tortious act while discharging official functions are still covered by the principle of state immunity from suit. SC RULING: No. Our laws and, we presume, those of the United States do not allow the commission of crimes in the name of official duty. The general rule is that public officials can be held personally accountable for acts claimed to have been performed in connection with official duties where they have acted ultra vires or where there is showing of bad faith. Immunity from suit cannot institutionalize irresponsibility and non-accountability nor grant a privileged status not claimed by any other official of the Republic. Under Art. 2176 of the civil code, whoever by act or omission, causes damage to another, there being fault or negligence is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. Indeed the imputation of theft contained in the POD dated February 3, 1978 is defamation against the character and reputation of the private respondent. Petitioner

Wylie himself admitted that the Office of the Provost Marshal explicitly recommended the deletion of the name Auring if the article were published. The petitioners, however, were negligent because under their direction they issued the publication without deleting the name "Auring." Such act or omission is ultra vires and cannot be part of official duty. It was a tortious act which ridiculed the private respondent. The petitioners, alone, in their personal capacities are liable for the damages they caused the private respondent 10. PHOENIX CONSTRUCTION INC V IAC FACTS: 1:30 am, 15 November 1975 - Leonardo Dionisio, driving his Volkswagen car, was on his way home to Makati from a cocktails-and-dinner meeting with his boss where had taken "a shot or two" of liquor. He was crossing the intersection of General Lacuna and General Santos Streets at Bangkal, Makati, not far from his home, when his car headlights (in his allegation) suddenly failed. He switched his headlights on "bright" and thereupon a Ford dump truck looming some 21/2meters away from his car. The dump truck, owned and registered by Phoenix Construction Inc. was parked askew (partly blocking the way of oncoming traffic) on the right hand side of General Lacuna Street facing the oncoming traffic. There were neither lights nor any so-called "early warning" reflector devices set anywhere near the dump truck. The dump truck had earlier that evening been driven home by Carbonel, its regular driver. Dionisio claimed that he tried to avoid a collision by swerving his car to the left but it was too late and his car smashed into the dump truck. As a result of the collision, Dionisio suffered some physical injuries including some permanent facial scars, a "nervous breakdown" and loss of two gold bridge dentures.- Dionisio commenced an action for damages claiming that the legal and proximate cause of his injuries was the negligent manner in which Carbonel had parked the dump truck. Phoenix and Carbonel countered that the proximate cause of Dionisio's injuries was his own recklessness in driving fast at the time of the accident, while under the influence of liquor, without his headlights on and without a curfew pass. Phoenix also sought to establish that it had exercised due care in the selection and supervision of the dump truck driver. CFI RULING : ruled in favor of Dionisio IAC Ruling : affirmed TC but modified amounts. ISSUE: Whether or not last clear chance doctrine should be applied therefore exculpating Phoenix from paying any damages. SC RULING: NO- We hold that private respondent Dionisio's negligence was "only contributory," that the "immediate and proximate cause" of the injury remained the truck driver's "lack of due care" and that consequently respondent Dionisio may recover damages though such damages are subject to mitigation by the courts (Article2179, Civil Code of the Philippines). Phoenix and Carbonel also ask us to apply what they refer to as the "last clear chance" doctrine. The theory here of petitioners is that while the petitioner truck driver was negligent, private respondent Dionisio had the "last clear chance" of avoiding the accident and hence his injuries and that Dionisio having failed to take that "last clear chance" must bear his own injuries alone. The last clear chance doctrine of the common

law was imported into our jurisdiction by Picart vs. Smith but it is a matter for debate whether, or to what extent, it has found its way into the Civil Code of the Philippines. The historical function of that doctrine in the common law was to mitigate the harshness of another common law doctrine or rule-that of contributory negligence. The common law rule of contributory negligence prevented any recovery at all by a plaintiff who was also negligent, even if the plaintiff's negligence was relatively minor as compared with the wrongful act or omission of the defendant. The common law notion of last clear chance permitted courts to grant recovery to a plaintiff who had also been negligent provided that the defendant had the last clear chance to avoid the casualty and failed to do so. Accordingly, it is difficult to see what role, if any, the common law last clear chance doctrine has to play in a jurisdiction where the common law concept of contributory negligence as an absolute bar to recovery by the plaintiff, has itself been rejected, as it has been in A2179 CC- Is there perhaps a general concept of "last clear chance" that may be extracted from its common law matrix and utilized as a general rule in negligence cases in a civil law jurisdiction like ours? We do not believe so. Under Art. 2179, the task of a court, in technical terms, is to determine whose negligence-the plaintiff's or the defendant's-was the legal or proximate cause of the injury. That task is not simply or even primarily an exercise in chronology or physics, as the petitioners seem to imply by the use of terms like "last" or "intervening" or "immediate." The relative location in the continuum of time of the plaintiff's and the defendant's negligent acts or omissions, is only one of the relevant factors that may be taken into account. Of more fundamental importance is the nature of the negligent act or omission of each party and the character and gravity of the risks created by such actor omission for the rest of the community. The petitioners urge that the truck driver (and therefore his employer) should be absolved from responsibility for his own prior negligence because the unfortunate plaintiff failed to act with that increased diligence which had become necessary to avoid the peril precisely created by the truck driver's own wrongful act or omission, To accept this proposition is to come too close to wiping out the fundamental principle of law that a man must respond for the foreseeable consequences of his own negligent act or omission. Our law on quasi-delicts seeks to reduce the risks and burdens of living in society and to allocate them among the members of society. To accept the petitioners' proposition must tend to weaken the very bonds of society. CA decision is modified by reducing the aggregate amount of compensatory damages, loss of expected income and moral damages Dionisio is entitled to by 20% of such amount. 11. QUISABA VS. STA. INES-MELALE VENEER AND PLYWOOD, INC FACTS: Petitioner Jovito Quisaba was in the employ of the defendant Corporation for 18 years but was temporarily relieved as internal auditor due to his refusal to purchase logs for the companys plant as instructed by the companys Vice President, Robert Hyde which he claims to be inconsistent with his position as an internal auditor. Petitioner then filed a complaint with the CFI of Davao for moral damages, Exemplary damages, termination pay, and attorneys fees against the respondent corporation. Respondent filed their answer and moved to dismiss the complaint on the ground of lack of jurisdiction of the CFI asserting that the proper forum is the NLRC since it involves employer- employee relationship.

CFI : granted the motion to dismiss on the ground that the complaint basically involves an employer employee relationship. ISSUE: Whether a complaint for moral damages, exemplary damages, termination pay and attorneys fees, arising from an employers constructive dismissal of an employee, is exclusively cognizable by the regular courts of justice or by the National Labor Relations Commission. SC RULING: It is cognizable by the regular courts of justice. Although the acts complained seemingly appear to constitute matters involving employee-employer relations as Quisabas dismissal was the severance of a pre-existing employeremployee relation, his complaint is grounded not on his dismissal per se, as in fact he does not ask for reinstatement or backwages, but on the manner of his dismissal and the consequent effects of such dismissal. The right of the respondents to dismiss Quisaba should not be confused with the manner in which the right was exercised and the effects flowing therefrom. If the dismissal was done anti-socially or oppressively, as the complaint alleges, then the respondents violated article 1701 of the Civil Code which prohibits acts of oppression either capital or labor against the other, in Article 21, which makes the person liable for damages if he wilfully causes loss or injury to another in a manner that is contrary to morals, good custom or public policy, the sanction for which, by way of moral damages is provided in Article 2219 no. 10. ACCORDINGLY, the order of the lower court is set aside and this case is hereby ordedre remanded to the court a quo for further proceedings in accordance with the law. Costs against the private respondents. 12. GATCHALIAN V. DELIM FACTS: On July 11, 1973, petitioner Reynalda Gatchalian boarded as paying passenger a minibus owned by respondents. While the bus was running along the highway, a snapping sound was heard, and after a short while, the bus bumped a cement flower pot, turned turtle and fell into a ditch. The passengers were confined in the hospital, and their bills were paid by respondents spouse on July 14. Before Mrs. Delim left, she had the injured passengers sign an already prepared affidavit waiving their claims against respondents. Petitioner was among those who signed. Notwithstanding the said document, petitioner filed a claim to recover actual and moral damages for loss of employment opportunities, mental suffering and inferiority complex caused by the scar on her forehead. Respondents raised in defense force majeure and the waiver signed by petitioner. The trial court upheld the validity of the waiver and dismissed the complaint. The appellate court ruled that the waiver was invalid, but also that the petitioner is not entitled to damages. ISSUE: (1) Whether the respondent was negligent. (2) Whether the petitioner is entitled to actual and moral damages. SC RULING: (1) In case of death or injuries to passengers, a statutory presumption arises that the common carrier was at fault or had acted negligently "unless it proves that

it [had] observed extraordinary diligence as prescribed in Articles 1733 and 1755." To overcome this presumption, the common carrier must show to the court that it had exercised extraordinary diligence to present the injuries. The standard of extraordinary diligence imposed upon common carriers is considerably more demanding than the standard of ordinary diligence. 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 to all the circumstances". The records before the Court are bereft of any evidence showing that respondent had exercised the extraordinary diligence required by law. The obvious continued failure of respondent to look after the roadworthiness and safety of the bus, coupled with the driver's refusal or neglect to stop the mini-bus after he had heard once again the "snapping sound" and the cry of alarm from one of the passengers, constituted wanton disregard of the physical safety of the passengers, and hence gross negligence on the part of respondent and his driver. (2) At the time of the accident, she was no longer employed in a public school. Her employment as a substitute teacher was occasional and episodic, contingent upon the availability of vacancies for substitute teachers. She could not be said to have in fact lost any employment after and by reason of the accident. She may not be awarded damages on the basis of speculation or conjecture. Petitioner's claim for the cost of plastic surgery for removal of the scar on her forehead, is another matter. A person is entitled to the physical integrity of his or her body; if that integrity is violated or diminished, actual injury is suffered for which actual or compensatory damages are due and assessable. Petitioner Gatchalian is entitled to be placed as nearly as possible in the condition that she was before the mishap. A scar, especially one on the face of the woman, resulting from the infliction of injury upon her, is a violation of bodily integrity, giving rise to a legitimate claim for restoration to her conditio ante. Moral damages may be awarded where gross negligence on the part of the common carrier is shown. Considering the extent of pain and anxiety which petitioner must have suffered as a result of her physical injuries including the permanent scar on her forehead, we believe that the amount of P30,000.00 would be a reasonable award. Petitioner's claim for P1,000.00 as attorney's fees is in fact even more modest. 13. TUPAS VS. CA 14. GILCHRIST V. CUDDY FACTS: Cuddy was the owner of the film Zigomar. On April 24, He rented it to C. S. Gilchrist for a week for P125. A few days to the date of delivery, Cuddy sent the money back to Gilchrist. Cuddy then rented the film to Espejo and his partner Zaldarriaga for P350 for the week knowing that it was rented to someone else and that Cuddy accepted it because he was paying about three times as much as he had contracted with Gilchrist but they didn't know the identity of the other party. Gilchrist filed for injunction against these parties. The trial court and CA granted that there is a contract between Gilchrist and Cuddy.

ISSUE: Whether or not Espejo and his partner Zaldarriaga should be liable for damages though they do not know the identity of Gilchrist. SC RULING: YES. Judgment is affirmed, that Cuddy was liable in an action for damages for the breach of that contract, and there can be no doubt. The mere right to compete could not justify the appellants in intentionally inducing Cuddy to take away the appellee's contractual rights. Everyone has a right to enjoy the fruits and advantages of his own enterprise, industry, skill and credit. He has no right to be free from malicious and wanton interference, disturbance or annoyance. If disturbance or loss come as a result of competition, or the exercise of like rights by others, it is damnum absque injuria(loss without injury), unless some superior right by contract or otherwise is interfered with. Cuddy contract on the part of the appellants was a desire to make a profit by exhibiting the film in their theater. There was no malice beyond this desire; but this fact does not relieve them of the legal liability for interfering with that contract and causing its breach. Liability of the appellants arises from unlawful acts and not from contractual obligations, as they were under no such obligations to induce Cuddy to violate his contract with Gilchrist. So that if the action of Gilchrist had been one for damages, it would be governed by chapter 2, title 16, book 4 of the Civil Code. Article 1902 of that code provides that a person who, by act or omission, causes damages to another when there is fault or negligence, shall be obliged to repair the damage do done. There is nothing in this article which requires as a condition precedent to the liability of a tort-feasor that he must know the identity of a person to whom he causes damages. An injunction is a "special remedy" which was there issued by the authority and under the seal of a court of equity, and limited, as in order cases where equitable relief is sought, to cases where there is no "plain, adequate, and complete remedy at law," which "will not be granted while the rights between the parties are undetermined, except in extraordinary cases where material and irreparable injury will be done," which cannot be compensated in damages, and where there will be no adequate remedy, and which will not, as a rule, be granted, to take property out of the possession of one party and put it into that of another whose title has not been established by law . Irreparable injury does not meant such injury as is beyond the possibility of repair, or beyond possible compensation in damages, nor necessarily great injury or great damage, but that species of injury, whether great or small, that ought not to be submitted to on the one hand or inflicted on the other; and, because it is so large on the one hand, or so small on the other, is of such constant and frequent recurrence that no fair or reasonable redress can be had therefor in a court of law. Gilchrist was facing the immediate prospect of diminished profits by reason of the fact that the appellants had induced Cuddy to rent to them the film Gilchrist had counted upon as his feature film. It is quite apparent that to estimate with any decree of accuracy the damages which Gilchrist would likely suffer from such an event would be quite difficult if not impossible. So far as the preliminary injunction issued against the appellants is concerned, which prohibited them from exhibiting the Zigomar during the week which Gilchrist desired to exhibit it, we are of the opinion that the circumstances justified the issuance of that injunction in the discretion of the court. The remedy by injunction cannot be used to restrain a legitimate competition, though such competition would involve the violation of a contract.

15. GELUZ V. CA FACTS: Nita Villanueva came to know the defendant (Antonio Geluz) for the first time in 1948-- thru her aunt. In 1950, she became pregnant by her present husband before they were legally married. To conceal her pregnancy from her parent, she had herself aborted by defendant. After the marriage with the plaintiff, she again became pregnant. As she was employed in the COMELEC and her pregnancy proved to be inconvenient, she had herself aborted again by defendant in Oct 1953. Less than 2 years later, she again became pregnant. On February 21, 1955, she again repaired to the defendant's clinic. Nita was again aborted of a 2-month old foetus, in consideration of the sum of P50. It is the third and last abortion that constitutes plaintiffs basis in filing this action and award of damages. The CA and the trial court predicated the award of damages upon the provisions of the initial par. of Art. 2206 of the NCC. ISSUE: Whether or not there can be recovery for damages resulting to the death or abortion of an unborn child. SC RULING: This award, we believe, to be error for the said art., in fixing an award for the death of a person, does not cover the case of an unborn foetus that is not endowed w/ personality. Parents of unborn foetus cannot sue for damages on its behalf. A husband of a woman who voluntarily procured her abortion could not recover damages from the physician who caused the same. (1) Since an action for pecuniary damages on account of personal injury or death pertains primarily to the injured, no such right of action could derivatively accrue to the parents or heirs of an unborn child. In fact, even if a cause of action did accrue on behalf of the unborn child, the same was extinguished by its pre-natal death, since no transmission to anyone can take place from one that lacked juridical personality (or juridical capacity, as distinguished from capacity to act). It is no answer to invoke the provisional personality of a conceived child (conceptus pro nato habetur) under Article 40 of the Civil Code, because that same article expressly limits such provisional personality by imposing the condition that the child should be subsequently born alive: "provided it be born later with the condition specified in the following article." In the present case, there is no dispute that the child was dead when separated from its mother's womb. (2) This is not to say that the parents are not entitled to collect any damages at all. But such damages must be those inflicted directly upon them, as distinguished from the injury or violation of the rights of the deceased, his right to life and physical integrity. Because the parents cannot expect either help, support or services from an unborn child, they would normally be limited to moral damages for the illegal arrest of the normal development of the spes hominis that was the foetus, i.e., on account of distress and anguish attendant to its loss, and the disappointment of their parental expectations (Art. 2217, CC), as well as to exemplary damages, if the circumstances should warrant them (Art. 2230, CC). But in this case, there is no basis for an award of moral damages, evidently because the husband's indifference to the previous abortions clearly indicates that he was unconcerned with the frustration of his parental hopes and affection.

Art. 41. For civil purposes, the foetus is considered born if it is alive at the time it is completely delivered from the mother's womb. However, if the foetus had an intrauterine life of less than seven months, it is not deemed born if it dies within twentyfour hours after its complete delivery from the maternal womb. 16. PNB vs. CA FACTS: Plaintiff, Philamgen as surety, issued a bond in favor of Tapnio, to secure the latters obligation to PNB of the sum of P2371.79 plus 12% interest. Philamgen paid the said amount to PNB and seek indemnity from Tapnio. Tapnio refused to pay alleging that he was not liable to the bank because due to the negligence of the latter the contract of lease with Tuazon was rescind which amounts to P2, 800.Tapnio mortgage his standing crops and sugar quota to PNB. Tapnio agreed to lease the sugar quota, in excess of his need to Tuazon which was approved by the branch and vice president of the PNB in the amount of P2.80 per picul. However, the banks board of directors disapproved the lease, stating that the amount should be P3.00 per picul, its market value. Tuazon ask for reconsideration to the board which was not acted by the board, so the lease was not consummated resulting to the loss of P2,800, which could have been earned by Tapnio. The Trial court and CA ruled that the bank was liable to Tapnio. Thus, this petition. ISSUE: Whether or not PNB is liable to Tapnio. SC RULING: Yes, PNB is liable to Tapnio. PNB argue that it has a right both under its own Charter and under the Corporation Law, to approve or disapprove the said lease of sugar quota and in the exercise of that authority. The SC said that time is of the essence in the approval of the lease of sugar quota allotments, since the same must be utilized during the milling season. There was no proof that there was any other person at that time willing to lease the sugar quota allotment of private respondents for a price higher than P2.80 per picul. Also, Considering that all the accounts of Rita Gueco Tapnio with the Bank were secured by chattel mortgage on standing crops, assignment of leasehold rights and interests on her properties, and surety bonds and that she had apparently "the means to pay her obligation to the Bank, there was NO REASONABLE BASIS for the Board of Directors of petitioner to have rejected the lease agreement. While petitioner had the ultimate authority of approving or disapproving the proposed lease since the quota was mortgaged to the Bank, the latter certainly cannot escape its responsibility of observing, for the protection of the interest of private respondents. The law makes it imperative that every person "must in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and and good faith. Certainly, it knew that the agricultural year was about to expire, that by its disapproval of the lease private respondents would be unable to utilize the sugar quota in question. Under Article 21 of the New Civil Code, "any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage." This grants adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to specifically provide in the statutes. Cases 9-16

DAMPAG, JONELLA L. 17. NATIONAL IRRIGATION ADMINISTRATION VS. IAC FACTS: Private respondents Andres Ventura, Antonio Fajardo, Marcelo Fajardo ,Alfonso Ventura and Florentino Ventura are leasehold tenants of a parcel of the land consisting of about five (5) hectare of Riceland situated at sitio Dagat-dagatan,STO.Rosa,Nueva Ecija,Sometime in 1967,petitioner NIA constractedan irrigation canal on the property of Isabel and Virginia Tecson which passed through the private respondents landholding as said irrigation canal traverses the Cinco-cinco creek which abut said landholding.The irrigation canal has two (2)outlets which provide private respondents landholding with water coming from said canal and at the same time serve to drain the excess water of said landholdings. On February 13, 1975, private respondents filed a complaint per the abatement of nuisance with damages against pititioners NIA and or the administrator of the NIA alleging that the two outlet were with gates to regulate the flow of water from the canal to their landholdings which resulted to the inundation of said landholdings causing the power to sustain damages consisting in the destruction of the planted palay crops and also prevented them from planting on their landholdings. Ruling of the Trial Court: The court finds the complaint meritorious. However,since there were typhoons and plant pests that reduced the harvests of the plaintiffs and that there were benefits that accrued to the plaintiffs by reason of said irrigation canal, the civil liability of the defendant should naturally be reduced. Wherefore,judgment is hereby entered:1)Ordering the defendant to pay the plaintiffs the sum of 35,000.00 representing damages;2)Ordering defendant to pay 5,000.00 for attorneys fees and the cost of the suit. Not satisfied with said decision,petitioners elevated the matter to the appellate court which rendered a decision on Feb.27,1986 affirming in toto the decision of the trial court. Ruling of the Intermediate Appellate Court: It has been established that the plaintiffs landholdings were actually inundated. The testimonies by all the plaintiffs with respect to the amount of the loss they suffered were not impugned by any contradictory evidence of the defendant .To our mind,the testimonies are sufficient proof to make the grant of damages valid and proper.Besides, the amount awarded by the lower court is just and reasonable considering the circumstances of the case. ISSUE: The petitioners contended that the respondent appellate court erred in affirming the decision of the trial court because NIA is immune from suit for quasi-delict or tort, and assuming NIA could be sued, it is not liable for tort since it did not not act through a special agent as required under paragraph 6,Article 2180 of the civil code of the Philippines. RULING OF THE SUPREME COURT: Petitioners are in error. As correctly ruled by the court below the NIA is not immune from suit, by virtue of the express provision of P.D. 552.

A reading of section 2,sub-paragraph(j) of P.D. NO.552 amending R.A NO.3601 shows the granting to NIA the power to exercise all the powers of a corporation under the Corporation Law, insofar as they are not inconsistent with the provisions of this act. Paragraph 4 of said law also provide that petitioner NIA may sue and be sued in court for all kinds of an, actions ,whether contractual or quasi-contractual, in the recovery of compensation and damages as in the instant case considering that private respondents action is based on damages caused by the negligence of petitioners. This court had previously held that the NIA is a government agency with a juridical personality separate and distinct from the government. It is not mere agency of the government but a corporate body performing proprietary function as it has its own assets and liabilities as well as its own corporate powers to be exercised by a Board of Directors. Paragraph 6,Article 2180 states that: The state is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in Article 2176 shall be applicable. Article 2176:Whoever by acts or omission causes damage to another, there being fault or negligence,is obliged to pay for the damage done. Such fault or negligence, if here is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this chapter. Wherefore, this petition for review on certiorari is hereby denied for lack of merit. 18. YU VS.COURT OF APPEALS FACTS: Petitioner, the exclusive distributor of the House of Mayfair wall covering products in the Philippines, cried foul when his former dealer of the same goods, herein private respondent, purchased the merchandise from the house of Mayfair in England through FNF Trading in West Germany and sold said merchandise in the Philippines. Both the court of origin and the appellate court rejected petitioners thesis that private respondent was engaged in a sinister form of unfair competition within the context of Article 28 of the New Civil Code. Hence, the petition at bar. In the suit for injunction which petitioner filed before the RTC of the National Capital Judicial Region (Manila), petitioner pressed the idea that he was practically by-passed and that private respondent acted in correct with the FNF Trading in misleading Mayfair into believing that the goods ordered by the trading firm were intended for shipment to Nigeria although they were actually shipped to and sold in the Philippines. Private respondent professed ignorance of the exclusive contract in favor of the petitioner. Even then, private respondent responded by asserting that petitioners understanding with Mayfair is binding only between the parties thereto. Petitioner impressed before the lower court that he is seeking to enjoin the sale and distribution by private respondent of the same goods in the market. Ruling of the Trial Court: There is no privity of contract between the plaintiff and the defendant; that the controversy in this case arose from a breach of contract by the FNF Trading of Germany, for having shipped goods it has purchased from the house of

Mayfair to the Philippines; It appears to the court that to restrain the defendant from selling the goods it has ordered from the FNF Trading of Germany , would be without legal justification. Wherefore, the motion for the issuance of preliminary injunction for restrain the defendant from selling the goods it has ordered from the FNF trading of Germany is hereby Denied. The indifference of the trial court towards petitioners supplication occasioned the filing of a petition for review on certiorari with the CA. Ruling of the CA: the CA concurred with the trial court stating that petitioner was not able to demonstrate the unequivocal right which he sought to protect and that private respondent is a complete stranger vis-a-vis the covenant between petitioner and Mayfair. ISSUE: Did the respondent appellate court correctly agree with the lower court in disallowing the visit solicited by herein petitioner? RULING OF THE SUPREME COURT: Verily, injunction is the appropriate remedy to prevent a wrongful interference with contracts where the legal remedy is insufficient and the resulting injury is irreparable (Gilchrist VS. Cuddy, 29 Phil.542); 4-A Padilla, Civil Code Annotated, 1988 Ed; p.90). The liability of private respondent, if any, does not emanate from the four corners of the contract for undoubtedly, Unisia merchandising Co.,Inc. is not a party thereto but its accountability is . an independent act generative of civil liability? Wherefore, the petition is hereby Granted the decision of the CA are hereby reversed and set aside. Let this case be remanded to the court of origin for issuance of a preliminary injunction. 19. GILCHRIST VS. CUDDY FACTS: C.S Gilchrist, the plaintiff, proprietor of the Eagle Theater of Iloilo, contracted with E.A. Cuddy, one of the defendants, of manila, for a film entitled Zigomar or Eelskin, 3d series to be exhibite in his theater in Iloilo during the week beginning may 26,1913. Later, the defendants Espejo and Zaldarriaga,who were also operating a theater in Iloilo ,representing Pathe Freres, also obtained from Cuddy a contract for the exhibition of the film aforesaid in their theater in Iloilo during the same week. The plaintiff commenced this action against Cuddy and the defendants Espejo and Zaldarriaga for the specific performance of the contract with Cuddy. The complaint prays the court, by a mandatory injunction, order Cuddy to deliver , on the 24th of may,1913, is accordance with the aforesaid contract; the said film to the plaintiff Gilchrist, in accordance with the terms of the agreement, so that plaintiff can exhibit the same during the last week beginning may 26,1913, in the Eagle theater, in Iloilo; that the court issue a preliminary injunctions against the defendant Espejo and Zaldariaga prohibiting them from receiving, exhibiting, or using said film in Iloilo during the last week of may, 1913, or at any other time prior to the delivery to the plaintiff;

that, on the trial said injunction be maid perpetual and that Cuddy be ordered and commanded to specifically perform his contract with the plaintiff. Ruling of the Trial Court: The court entered an order which provided that Cuddy should not send said film Zigomar to the defendants Espejo and Zaldarriaga and that he should send its to the plaintiff, Gilchrist. Defendant Espejo and Zaldarriaga having received due notice of the issuance of the mandatory injunction and restraining order, appeared before the court and move that the court vacate such order prohibiting them from receiving and exhibiting the film. Ruling of the CA: The court sustained their objection and declined to dismiss the action as to them, the court denied the defendants the relief asked for and dismissed their claim for damages. They thereupon took an appeal from that order. ISSUE: Does the fact that the appellant did not know at the time the identity of the original lessee of the film militate against Gilchrist right to a preliminary injunction, although he appellants incurred civil liability for such interference? RULING OF THE SUPREME COURT: In the examination of the adjudicated cases, where in injunctions have been issued to restrain wrongful interference with contracts by strangers to such contracts, we have been unable to find any case where this prices question was involved , as in all of those cases which we have examined, the identity of both of contracting parties was known to the tort-feasors. We might say, however, that this fact does not seem to have been a controlling feature in those cases. There is nothing in section 164 of the code of civil procedure which indicates, even remotely, that before on injunction may issue restraining the wrongful interference with contracts by strangers ,the strangers must know the identity of both parties. In the case at bar, the only motive for the interference with the Gilchrist Cuddy contract on the part of the appellants was a desire to make a profit by exhibiting the film in their theater. There was no malice beyond this desire ; but this fact does not relieve them of the legal liability for interfering with the contract and causing its breach. It is therefore, clear under above authorities, that they were liable to Gilchrist for the damages caused by their acts, unless they are relieved from such liability by reason of the fact that they did not know at the time the identity of the original lessee of the film. 20. ILOILO COLD STORAGE CO. VS. MUNICIPAL COUNCIL FACTS: The plaintiff, upon authority granted by the defendant, constructed an ice and cold storage plant in the city of Iloilo. Sometime after the plant had been completed and was in operation, nearby residents made complaints to the defendant that the smoke from the plant was very injurious to their health and comfort. Thereupon the defendant appointed a committee to investigate and report upon the matters contained in said complaints. The committee reported that the complaints were well founded.

The defendant council then passed a resolution which reads in part as follows.that after the approval by the honorable provincial board of this resolution , a period of one month will be granted to the said entity , the Iloilo Ice and Cold storage company , in which to proceed with the elevation of said smokestacks, and if not done the municipal president will execute the order requiring the closing or suspension of operation of said establishment. Upon notice and after heaving, a preliminary injunction was issued. Subsequently thereto the dependent answered the allegations in the complaint and prays that it be absolved from the complaint and the plaintiff be declared to have no right to the remedy asked, and that the preliminary injunction issued I this case be set aside, with the cost against the plaintiff. The plaintiff demurred to this answered, and this answer, and this demurred was sustained. Ruling of the trial court: the defendant will amend his answer within 5 days or the injunction will be permanently granted as prayed for, with costs to the defendant. To this order the defendant excepted and not desiring to amend its answer, appealed to this court. ISSUE: Is the municipal council has the power to declare the plant of the petitioner a nuisance and abates. HELD: The municipal council is under section 39(j) of the municipal code, specifically empowered to declare and abate nuisances. A nuisance is according to Blackstone, anything that worketh hurt, inconvenience , or damage they arise from pursuing particular trades or industries in populous neighborhoods; from acts of public indecency ,keeping disorderly houses and houses of ill fame, gambling houses. Nuisances have been divided into 2 classes: nuisance per se and nuisance per accidens. Nuisance per se belong those which are unquestionably and under all circumstances, Nuisances, such as gambling houses of ill fame, etc. The number of nuisances are such because of particular facts and circumstances surrounding the otherwise harmless cause of the nuisance. In the present case it is certain that the ice factory of the plaintiff is not a nuisance per se. It is a legitimate industry, beneficial to the people and conducive to their health and comfort. If it be in fact a nuisance due to the manner of its operation, that question cannot determined by a mere resolution of the board. It is said that plaintiff cannot be compelled to build its smoke stock higher if said stock is in fact a nuisance for the reason that the stock was built under authority granted by the defendant and in accordance with the prescribe requirements. For the foregoing reason the order sustaining the plaintiff demurrer to the defendant answer is reversed. The record will be returned to the court when it came with

instructions to proceed with the trial of the cause in accordance with this openion. No costs will be allowed in this instance. So ordered order reversed. 21. DE AYALA VS. BARRETTO FACTS: This is a suit for a permanent injunction against the erection and operation of a combined brewery and ice plant on Calle General Solano in the city of Manila, on the ground that it will be a nuisance. From a judgment denying the relief prayed for, the plaintiffs have appealed. The twenty-two plaintiffs are either residents or property owners on Calle General Solano. Twelve of them are actual residents of the street and of these twelve, six are lessees of the property owned by other plaintiffs. General Solano has long been a fashionable residence street and the dwellings located upon it are large and expensive. At the present day, however, some of these residences are being used for other purposes. There are now upon this street a coal yard, a warehouse, and a cigarette factory, all very near the proposed location of the defendants brewery, and there are also a public school and a club on the street. ISSUE: Is Calle General Solano is a strictly residential street, and that the proposed plant to be operated will create such nuisance? HELD: Under these facts we do not think that it can be said with entire correctness that the street in question is a strictly residential street. That it is not purely a residence street is clear, and that there are numerous businesses near it in nearly every direction is also clear. There is no doubt that the appropriateness of the locality selected by the defendants as the site of their proposed plant must have considerable bearing upon the question whether the plant will create a nuisance. It appears that the locality in question is gradually being transformed from a fashionable residence district into an industrial center. We think that the preponderating weight of evidence is to the effect that the new brewery will be operated with a minimum of offense to nearby residents, and that in view of the semi-industrial character of the locality, what noise, etc., is produced, cannot be held to be unreasonable. It is possible that plaintiffs, or some of them, might prove damages by reason of property depreciation. But at all the events, this is not a proper case for the issuance of the extra-ordinary remedy of injunction. The judgment appealed from is affirmed, with costs against the appellants. SO ORDERED. 22. SAN RAFAEL HOME OWNERS ASSOCIATION INC. VS. CITY OF MANILA FACTS: Civil case no.65992 and civil case no. 66179, the first prohibition with preliminary injunction and the second for prohibition and mandamus with preliminary injunction were filed in the Court of first instance of Manila by the San Rafael Homeowners Association, Inc. and others. The respondents were the City of Manila and the members of the city officials. The petitioners sought to restrain the respondents from conducting a public bidding for the construction and establishment of an incinerator-thermal plant as a system of garbage and refuse disposal in the City of Manila on the ground that an incinerator is a nuisance per se. The records shows that since 1955 the City of Manila had been conducting studies on the problem of garbage

and refuse disposal. In 1961 a pilot composting plant was in operation at the North Harbor. On November 15,1965 city ordinance no. 5274 was enacted, Authorizing the establishment , equipping and construction of a garbage and refuse disposal plant and appropriating the sum of 15,000.00 for that purpose. The two cases were heard jointly, and from the decision of the court a quo dismissing them the petitioners brought an instant appeal. In their brief the petitioners cite numerous errors in the decision of the lower court. The main points, however are that the advertised bidding for an incinerator was in excess of the respondents authority because an incinerator is a nuisance per se and because its establishment would violate ordinance no. 5274, the City charter of Manila, the revised administrative code, an the local autonomy. ISSUE: Whether or not the argument of the petitioners that composting is better than incineration as a method of garbage and refuse disposal and that incineration will prove to be a nuisance is meritorious? HELD: It is, to our mind, entirely pointless to go into an academic discussion of the relative merits of the composting and the incineration methods of garbarge and refuse disposal for purposes of deciding whether or not at this stage prohibition should issue to stop the bidding called for by the respondents. The instant petitions for that purpose are premature. Certainly this court cannot and should not substitute its judgment this early for that of the respondents, and on a purely theoretical basis rule that the bids submitted should not be opened, or if opened should not be accepted, because not one of the plants therein offered to be established would serve the purpose envisaged and because, if so established, it would so pollute the environment as to constitute a nuisance. If and when such a result becomes a reality, or at least an imminent threat, that will be the time the petitioners may come to court .That they are not successful now will not preclude them from doing so, because a continuing nuisance calls for a continuing remedy. Wherefore, we find the present appeal to be without merit, and hereby affirm the judgment of the court a quo, with costs against the petitioners-appellants. Judgment affirmed. 23. TAYLOR VS. MANILA ELECTRIC RAILROAD AND LIGHT CO. FACTS: An action to recover damages for the loss of an eye and other injuries, instituted by David Taylor, a minor, by his father, his nearest relative. The defendant is a foreign corporation engaged in the operation of a street railway and an electric light system in the city of Manila.The plaintiff, David Taylor, was at the time when he received the injuries complained of,15 years of age. On the 30th of September , 1905 David together with his companion Manuel Claparols went to the companys premises and found some twenty or thirty brass fulminating caps scattered on the ground. They tried to break the cap with a stone and hammer but failed, so they opened one of the caps with a knife and finding that it was filed with a yellowish substance they lighted it with a match and explosion followed causing them more or less injuries and to the removal of the right eye of David. So this action arises and the trial court ruled in favor of the plaintiff. RULING OF THE LOWER COURT: The claim of the plaintiff shows that evidence in the record sufficiently establishes the contrary, and justifies the court in drawing the reasonable inference that the caps found on its premises were its property.Thus,

applying the provisions of the Articles 1089 of the Civil Code read together with articles 1902,1903, and 1908 of that Code, the company is liable for the damage which was occurred. Not satisfied with the decision of lower court, counsel for defendant and appellant rests his appeal strictly upon his contention that the facts proven at the trial do not establish the liability of the company under the provisions of these articles. ISSUE: Whether or not David is entitled to damages HELD: In the case at bar, we are satisfied that the plaintiff in this case had sufficient capacity and understanding to be sensible of the danger to which he exposed himself when he put the match to the contents of the cap; that he was sui juris in the sense that his age and his experience qualified him to understand and appreciate the necessity for the exercise of that degree of caution which would have avoided the injury resulted from his own deliberate act; and that the injury incurred by him must be held to have been the direct and immediate result of his own willful and reckless act, so that while it may be true that these injuries would not have been incurred but for the negligent act of the defendant in leaving the caps exposed on its premises, nevertheless plaintiffs own act was the proximate and principal cause of the accident which inflicted the injury .We think it is quite clear that the immediate cause of the explosion ,the accident which resulted in plaintiffs injury ,was his own act in putting a match to the contents of the cap, and that having contributed to the principal occurrence, as one of its determining factors, he can not recover. Twenty days after the date of this decision let judgment be entered reversing the judgment of the court below, without costs to either party in this instance, and 10 days thereafter let the record be returned to the court wherein it originated, where judgment will be entered in favor of the defendant for the costs in first instance and the complaint dismissed without day. SO ORDERED. Judgment reversed. 24. ALGARRA VS. SANDEJAS FACTS : Plaintiff received personal injuries as a result of defendants negligent act and was incapacitated for two months. Plaintiff was a commission agent, had about twenty regular customers, who purchased his wares in small quantities, necessitating regular and frequent deliveries. Being unable to attend to their wants during the two months he was incapacitated, his regular customers turned their trade to other competing agents. On recovering, he had lost all but four regular customers, whose purchases netted him about seven pesos per month. It took him four years to build up his patronage to its proportions at the time of the accident. At that time this trade netted him about fifty pesos per month. RULING OF THE LOWER COURT: Under this state of facts, the lower court, while recognizing the justness of the claim, refused to allow him anything for injury to his business due to his enforced absence therefrom, stating that the civil liability is almost always limited to indemnity for damage to the party aggrieved for the time during which he was incapacitated for work.

ISSUE: Whether this damage to his business can be so nearly ascertained as to justify a court in awarding any amount whatever HELD: When it is shown that a plaintiffs business is a going concern with a fairly steady average profit on the investment, it may be assumed that had the interruption to the business through defendants wrongful act not occurred, it would have continued producing this average income so long as is usual with things of that nature. When in addition to the previous average income of the business it is further shown what the reduced receipts of the business are immediately after the cause of the interruption has been removed , there can be no manner of doubt that a loss of profits has resulted from the wrongful act of the defendant. In the present case ,we not only have the value of plaintiffs business to him just prior to the accident, but we also have its value to him after the accident. At the trial, he testified that his wife had earned about 15 pesos during the 2 months that he was disabled. That this almost total destruction of his business was directly chargeable to defendants wrongful act there can be no manner of doubt; and the mere fact that the loss can not be ascertained with absolute accuracy, is no reason for denying plaintiffs claim altogether as it would be a reproach to the law if he could not recover damages at all. Wherefore ,the judgment of the lower court is set aside, and the plaintiff is awarded the following damages: ten pesos for medical expenses; one hundred pesos for the two months of his enforce absence from his business ; and two hundred and fifty pesos for the damage done to his business in the way of loss of profits ,or a total of three hundred and sixty pesos .No cost will be allowed in this instance. Judgment set aside, damages allowed. Cases 17-24 APPAG, ANNIELYN D. 25. TAYAG VS. ALCANTARA FACTS: Pedro Tayag, Sr. on his way home was riding a bicycle along Mcarthur Highway at Bo. San Rafael, Tarlac when he was bumped and hit by a Philippine Rabbit Bus bearing a body number 1107 and a plate number YL604PUB74 which was being driven by Romeo Villa. As a result, Pedro Tayag, Sr. suffered injuries which caused his instant death. The heirs of Pedro Tayag then filed a case against the bus company and the driver in a Civil Case No. 5114. Philippine Rabbit filed a motion to suspend the civil case on the ground that the criminal case against the driver is still pending. When the driver was acquitted on the criminal case, the bus company filed a motion to dismiss the civil case which was granted by the Hon. Judge Alcantara. This now led to the petition for certiorari by the plaintiff. ISSUE: Whether or not the Hon. Judge Alcantara acted without or in excess of his jurisdiction in dismissing the civil case.

HELD: Yes. Art. 31. When the civil action is based on an obligation not arising from the act or commission complained of as a felony. such civil action may proceed independently of the criminal proceedings and regardless of the result of the latter. All the essential averments for a quasi delictual action are present, namely: (1) an act or omission constituting fault or negligence on the part of private respondent; (2) damage caused by the said act or commission; (3) direct causal relation between the damage and the act or commission; and (4) no pre-existing contractual relation between the parties. The petitioners' cause of action being based on a quasi delict the acquittal of the driver, private respondent Romeo Villa, of the crime charged in Criminal Case No. 836 is not a bar to the prosecution of Civil Case No. 5114 for damages based on quasi-delict. In the light of the foregoing, We hold that respondent Judge acted with grave abuse of discretion amounting to lack of jurisdiction in dismissing Civil Case No. 5114. 26. VERGARA vs. CA, AMADEO AZARCON FACTS:Martin Belmonte was driving a truck belonging to Vicente Vergara when it rammed head-on to the store-residence of Amadeo Azarcon causing damage amounting to Php53,024.22. Vergara alleged that what happened was an act of God being that the cargo truck had mechanical problem in a way that the steering wheel refused to respond causing the driver to lost control. The trial court decided in favor of Amadeo Azarcon which was affirmed in too by the CA ordering Vergara and the insurance company to pay jointly and severally Amadeo Azarcon. Thus the appeal to the Supreme Court. ISSUE: Whether or not the trial court is correct in holding the owner Vergara liable for fault and negligence. HELD: Yes. It was established by competent evidence that the requisites of a quasi-delict are present in the case at bar. These requisites are: (1) damages to the plaintiff; (2) negligence, by act or omission, of which defendant, or some person for whose acts he must respond, was guilty; and (3) the connection of cause and effect between such negligence and the damages. Contrary to the claim of the petitioner, a mishap caused by defective brakes can not be considered as fortuitous in character. Certainly, the defects were curable and the accident preventable. Furthermore, the petitioner failed to adduce any evidence to overcome the disputable presumption of negligence on his part in the selection and supervision of his driver. 27. ANDAMO vs. IAC FACTS: Spouses Emmanuel and Natividad Andamo owned a land adjacent to the property of the Missionaries of Our Lady of La Salette, Inc. The missionaries constructed

in the property waterpaths, contrivances and artificial lake which inundated and eroded the property of the Andamos casuing the death of a man and damaged the crops therein and endangered the life of the workers of the Andamos. The Andamos then filed a criminal case against the missionaries then later on filed a civil case praying for preliminary injunction. The lower court, deciding on the opposition of the missionaries, suspended the further hearing on the civil case and then finally basing on Sec. 3, Rule 11 of Rules of Court dismissed the same for lack of jurisdiction since the criminal case was still unresolved. The appellate court affirmed the decision and denied the motion for reconsideration. Thus this appeal. ISSUE: Whether or not the dismissal of the civil case based on Sec. 3, Rule 11 of the Rules of Court was proper. HELD: It is not proper. Section 3 (a), Rule III of the Rules of Court which provides that "criminal and civil actions arising from the same offense may be instituted separately, but after the criminal action has been commenced the civil action cannot be instituted until final judgment has been rendered in the criminal action." A careful examination of the aforequoted complaint shows that the civil action is one under Articles 2176 and 2177 of the Civil Code on quasi-delicts. All the elements of a quasi-delict are present, to wit: (a) damages suffered by the plaintiff, (b) fault or negligence of the defendant, or some other person for whose acts he must respond; and (c) the connection of cause and effect between the fault or negligence of the defendant and the damages incurred by the plaintiff. In the case of Samson vs. Dionisio, the Court applied Article 1902, now Article 2176 of the Civil Code and held that "any person who without due authority constructs a bank or dike, stopping the flow or communication between a creek or a lake and a river, thereby causing loss and damages to a third party who, like the rest of the residents, is entitled to the use and enjoyment of the stream or lake, shall be liable to the payment of an indemnity for loss and damages to the injured party. WHEREFORE, the assailed decision dated February 17, 1986 of the then Intermediate Appellate Court affirming the order of dismissal of the Regional Trial Court of Cavite, Branch 18 (Tagaytay City) dated August 17, 1984 is hereby REVERSED and SET ASIDE. 28. PHILIPPINE BANK OF COMMERCE VS. CA FACTS: Rommelss Marketing Corporation ( RMC ) maintained 2 separate accounts with the Philippine Bank of Commerce in Pasig Branch. For one ( 1 ) years, the RMC has been entrusting funds in the amount of Php304,979.74 to Irene Yabut, the company secretary, for the purpose of depositing the said funds in the companys account under PBC. Unknown to the knowledge of the company, Irene Yabut has been depositing the funds in the account of his husband Cotas. When depositing, Yabut will fill-up the deposit slip with its duplicate where the original copy contains the name account number of her husband while the duplicate contains the companys account number but the name was left blank but still the teller validated the deposit slip. The RMC then filed an action to recover the money.

The trial court found PBC negligent ordering it together with the teller, Mabayad, to pay jointly and severally the following: 304,979.72 representing the lost deposit plus interest; 14% thereof as exemplary damages; and 25% of the total amount due as attorneys fees. The appellate court affirmed the decision of the RTC. Thus the present case at the Supreme Court. ISSUE: Whether or not PBC is liable for the lost deposits due to the negligent act of its teller Mabayad. HELD: Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasidelict and is governed by the provisions of this Chapter. In the case at bench, there is no dispute as to the damage suffered by the private respondent (plaintiff in the trial court) RMC in the amount of P304,979.74. It is in ascribing fault or negligence which caused the damage where the parties point to each other as the culprit. It was this negligence of Ms. Azucena Mabayad, coupled by the negligence of the petitioner bank in the selection and supervision of its bank teller, which was the proximate cause of the loss suffered by the private respondent, and not the latter's act of entrusting cash to a dishonest employee, as insisted by the petitioners. Furthermore, under the doctrine of "last clear chance" (also referred to, at times as "supervening negligence" or as "discovered peril"), petitioner bank was indeed the culpable party. This doctrine, in essence, states that where both parties are negligent, but the negligent act of one is appreciably later in time than that of the other, or when it is impossible to determine whose fault or negligence should be attributed to the incident, the one who had the last clear opportunity to avoid the impending harm and failed to do so is chargeable with the consequences thereof. The foregoing notwithstanding, it cannot be denied that, indeed, private respondent was likewise negligent in not checking its monthly statements of account. Had it done so, the company would have been alerted to the series of frauds being committed against RMC by its secretary. The damage would definitely not have ballooned to such an amount if only RMC, particularly Romeo Lipana, had exercised even a little vigilance in their financial affairs. This omission by RMC amounts to contributory negligence which shall mitigate the damages that may be awarded to the private respondent 23 under Article 2179 of the New Civil Code, to wit: . . . When the plaintiff's own negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendant's lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded. In view of this, we believe that the demands of substantial justice are satisfied by allocating the damage on a 60-40 ratio. Thus, 40% of the damage awarded by the respondent appellate court, except the award of P25,000.00 attorney's fees, shall be

borne by private respondent RMC; only the balance of 60% needs to be paid by the petitioners. The award of attorney's fees shall be borne exclusively by the petitioners. WHEREFORE, the decision of the respondent Court of Appeals is modified by reducing the amount of actual damages private respondent is entitled to by 40%. Petitioners may recover from Ms. Azucena Mabayad the amount they would pay the private respondent. Private respondent shall have recourse against Ms. Irene Yabut. In all other respects, the appellate court's decision is AFFIRMED. 29. RAKES vs. ATLANTIC GULF and PACIFIC CO. FACTS: M.H. Rakes who was under the employment of Atlantic Gulf and Pacific Company was at work transporting iron rails from the barge from the harbor to the companys yard in Manila. During the process, the track sagged, the tie broke, the car carrying the said iron rails either canted thus the rails slid off hitting the leg of Rakes causing it to be amputated. Rakes then filed an action against Atlantic for their negligence. The trial court decided in favor of Rakes ordering the Atlantic to pay Rakes the amount of Php5,000.00. The Atlantic then filed a petition alleging therein that the remedy for injuries through negligence lies only in a criminal action and the negligence of Rakes was the cause of his injury for having noticed the depression in the track he still continued his work and that he walked at the side of the car instead of along the boards. The appellate court affirmed the said decision. ISSUE: Whether or not the action of Rakes is considered negligent thus contributed to his injury exempting the Atlantic from any liability. HELD: Although the defendants negligence may have been the primary cause of the injury complained of, yet an action for such injury cannot be maintained if the proximate and immediate cause of the injury can be traced to the want of ordinary care and caution in the person injured; subject to this qualification, which has grown up in recent years (having been first enunciated in Davies vs. Mann, 10 M. & W., 546) that the contributory negligence of the party injured will not defeat the action if it be shown that the defendant might, by the exercise of reasonable care and prudence, have avoided the consequences of the injured partys negligence. Difficulty seems to be apprehended in deciding which acts of the injured party shall be considered immediate causes of the accident. The test is simple. Distinction must be between the accident and the injury, between the event itself, without which there could have been no accident, and those acts of the victim not entering into it, independent of it, but contributing under review was the displacement of the crosspiece or the failure to replace it. This produced the event giving occasion for damages that is, the shrinking of the track and the sliding of the iron rails. To this event, the act of the plaintiff in walking by the side of the car did not contribute, although it was an element of the damage which came to himself. Had the crosspiece been out of place wholly or partly thorough his act of omission of duty, the last would have been one of the determining causes of the event or accident, for which he would have been responsible. Where he contributes to the principal occurrence, as one of its determining factors, he cannot recover. Where, in conjunction with the occurrence, he contributes only to his own injury, he may recover the amount that the defendant responsible for the event

should pay for such injury, less a sum deemed a suitable equivalent for his own imprudence. Accepting, though with some hesitation, the judgment of the trial court, fixing the damage incurred by the plaintiff at 5,000 pesos, the equivalent of 2,500 dollars, United States money, we deduct therefrom 2,500 pesos, the amount fairly attributable to his negligence, and direct judgment to be entered in favor of the plaintiff for the resulting sum of 2,500 pesos, with cost of both instances, and ten days hereafter let the case be remanded to the court below for proper action. So ordered. 30. BARREDO and GARCIA vs. ALMARIO FACTS: A taxi cab owned by Fausto Barredo and was being driven by Pedro Fontanilla collided head-on to a carretela being guided by Pedro Dimapilis. The carretela was overturned inflicting injuries to the passenger Fausto Garcia who later on died because of the injury sustained in the collision. A criminal action was filed against Fontanilla in which he was convicted to an indeterminate sentence which was affirmed by the Court of Appeals. The parents of Faustino then filed a separate civil action against Barredo and Fontanilla where the trial court ruled in favor of the parents of Faustino. The appellate affirmed the decision stating therein that there is no proof that Barredo exercised the diligence f a good father of a family to prevent the damage. Thus this appeal to the Supreme Court where Barredo alleged that his liability is only subsidiary and as there has been no civil action against Fontanilla, the criminally liable person, Barredo cannot be held responsible. ISSUE: Whether or not Barredo is liable being the owner of the taxicab and making him responsible to the acts of his driver. HELD: ART. 1902. Any person who by an act or omission causes damage to another by his fault or negligence shall be liable for the damage so done. ART. 1903. The obligation imposed by the next preceding article is enforcible, not only for personal acts and omissions, but also for those of persons for whom another is responsible. The legal provisions, authors, and cases already invoked should ordinarily be sufficient to dispose of this case. But inasmuch as we are announcing doctrines that have been little understood in the past, it might not be inappropriate to indicate their foundations. Firstly, the Revised Penal Code in article 365 punishes not only reckless but also simple negligence. If we were to hold that articles 1902 to 1910 of the Civil Code refer only to fault or negligence not punished by law, according to the literal import of article 1093 of the Civil Code, the legal institution of culpa aquiliana would have very little scope and application in actual life. Death or injury to persons and damage to property through any degree of negligence even the slightest would have to be indemnified only through the principle of civil liability arising from a crime. Secondly, to find the accused guilty in a criminal case, proof of guilt beyond reasonable doubt is required, while in a civil case, preponderance of evidence is sufficient to make the defendant pay in damages. There are numerous cases of criminal negligence which can not be shown beyond reasonable doubt, but can be proved by a preponderance of

evidence. In such cases, the defendant can and should be made responsible in a civil action under articles 1902 to 1910 of the Civil Code. Otherwise, there would be many instances of unvindicated civil wrongs. Ubi jus ibi remedium. Thirdly, to 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 1903 of the Civil Code. At this juncture, it should be said that the primary and direct responsibility of employers and their presumed negligence are principles calculated to protect society. Workmen and employees should be carefully chosen and supervised in order to avoid injury to the public. It is the masters or employers who principally reap the profits resulting from the services of these servants and employees. It is but right that they should guarantee the latters careful conduct for the personnel and patrimonial safety of others. In the present case, we are asked to help perpetuate this usual course. But we believe it is high time we pointed out to the harm done by such practice and to restore the principle of responsibility for fault or negligence under articles 1902 et seq. of the Civil Code to its full rigor. It is high time we caused the stream of quasi-delict or culpa aquiliana to flow on its own natural channel, so that its waters may no longer be diverted into that of a crime under the Penal Code. This will, it is believed, make for the better safeguarding of private rights because it re- establishes an ancient and additional remedy, and for the further reason that an independent civil action, not depending on the issues, limitations and results of a criminal prosecution, and entirely directed by the party wronged or his counsel, is more likely to secure adequate and efficacious redress. In view of the foregoing, the judgment of the Court of Appeals should be and is hereby affirmed, with costs against the defendant- petitioner. 31. DIANA and DIANA vs. BATANGAS TRANSPORTATION CO. FACTS: Florencio Diana and some other passengers died while riding in Truck No. 14 owned Batangas Transportation Co. and being driven by Vivencio Bristol when it rammed into a ditch at Bay Laguna. Bristol was then charged with multiple homicide through reckless imprudence and was convicted thus ordering him and Batangas Transportation Co. to indemnify the heirs of the deceased. The heirs then filed a civil case to recover from the Batangas Transportation for the negligent act of their driver. A writ of execution was issued but Bristol was unable to comply with his obligation and the Batangas Transportation failed also to comply under its subsidiary liability. The lower court dismissed the civil case acting on the motion to dismiss of the Batangas Transporation basing it on Rule 8, Sec. 1 (d) of Rule of Court alleging that the criminal action for the same caus of action was still pending. The court of appeals did not take on the case on the ground that is poses merely a question of law.

ISSUE: Whether or not the dismissal of the civil action by the lower court under Rule 8 of the Rules of Court is correct. HELD: No its not correct. The requirements for the application of Rule 8, Sec. 1 (d) are: 1.) Identity of parties or at least such as representing the same interest in both actions. 2.) Identity of rights asserted and relief prayed for the relief being founded on the same facts. 3.) The identity on the two preceding particulars should be such that any judgment which may be rendered on the other action will be regardless of which party if successful, amount to res judicata in the action under consideration. Considering the distinguishing characteristics of the two cases, which involve two different remedies, it can hardly be said that there is identity of reliefs in both actions as to make the present case fall under the operation of Rule 8, section 1(d) of the Rules of Court. In other words, it is a mistake to say that the present action should be dismissed because of the pendency of another action between the same parties involving the same cause. Evidently, both cases involve different causes of action. In fact, when the Court of Appeals dismissed the action based on culpa aquiliana (civil case No. 8023), this distinction was stressed. It was there said that the negligent act committed by defendant's employee is not a quasi crime, for such negligence is punishable by law. What plaintiffs should have done was to institute an action under article 103 of the Revised Penal Code (CA-G.R. No. 3632-R). And this is what plaintiffs have done. To deprive them now of this remedy, after the conviction of defendant's employee, would be to deprive them altogether of the indemnity to which they are entitled by law and by a court decision, which injustice it is our duty to prevent. Wherefore, the order appealed from is reversed and the case is hereby remanded to the lower court for further proceedings. No pronouncement as to costs. 32. CARPIO vs. DOROJA FACTS: Edwin Ramires, while driving a passenger Fuso Jitney which was owned and operated by Eduardo Toribio, bumped Dionision Carpio while crossing the street which caused him a fractured left clavicle and other injuries. An action for reckless imprudence resulting to serious physical injuries was filed against Ramires where he pleaded guilty to the lower offense. He was then sentenced to suffer I month imprisonment and to indemnify Carpio in the amount of Php45.00 representing the can of tomatoes, Php200.00 which he paid in the hospital, and Php1,500.00 as attorneys fees. The civil aspect was appealed where the appellate court modified granting the victim to recover moral damages in the amount of Php5,000.00 at the same time affirming the other civil liabilities. A writ of execution was then served but the driver was insolvent thus Carpio moved for the imposition of the subsidiary liability of the owner-operator but the trial judge denied alleging that the appellate court made no mention of the subsidiary liability of the owner and that Carpio failed to raise the matter in his appeal.

ISSUE: Whether or not the denial for the writ of execution against the owner in performance of his subsidiary liability was proper. HELD: The present case is neither an action for culpa-contractual nor for culpaaquiliana. This is basically an action to enforce the civil liability arising from crime under Art. 100 of the Revised Penal Code. In no case can this be regarded as a civil action for the primary liability of the employer under Art. 2180 of the New Civil Code, i.e., action for culpa-aquiliana. The argument that the owner-operator cannot be held subsidiarily liable because the matter of subsidiary liability was not raised on appeal and in like manner, the appellate court's decision made no mention of such subsidiary liability is of no moment. As already discussed, the filing of a separate complaint against the operator for recovery of subsidiary liability is not necessary since his liability is clear from the decision against the accused. Such being the case, it is not indispensable for the question of subsidiary liability to be passed upon by the appellate court. Such subsidiary liability is already implied from the appellate court's decision. The position taken by the respondent appellate court that to grant the motion for subsidiary writ of execution would in effect be to amend its decision which has already become final and executory cannot be sustained. Compelling the owner-operator to pay on the basis of his subsidiary liability does not constitute an amendment of the judgment because in an action under Art. 103 of the Revised Penal Code, once all the requisites as earlier discussed are met, the employer becomes ipso facto subsidiarily liable, without need of a separate action. Such being the case, the subsidiary liability can be enforced in the same case where the award was given, and this does not constitute an act of amending the decision. It becomes incumbent upon the court to grant a motion for subsidiary writ of execution (but only after the employer has been heard), upon conviction of the employee and after execution is returned unsatisfied due to the employee's insolvency. WHEREFORE, the order of respondent court disallowing the motion for subsidiary writ of execution is hereby SET ASIDE. The Court a quo is directed to hear and decide in the same proceeding the subsidiary liability of the alleged owner-operator of the passenger jitney. Costs against private respondent. Cases 25-32 AGPAD, AMALIA B. 33. FAR EAST BANK AND TRUST COMPANY vs. CA, et al. FACTS: Luis Luna has a FAREASTCARD issued by Far East Bank and Trust Company. with a supplemental card issued to Clarita S. Luna. Clarita lost her credit card and informed Far East. She submitted an affidavit of loss. In cases of this nature, the bank would record the lost card, along with the principal card, as a "Hot Card" or "Cancelled Card" in its master file.

When Luis had lunch for a close friend at a restaurant in a hotel, the card was not honored then Luis was forced to pay in cash so he felt embarrassed. Luis Luna demanded from Far East the payment of damages. The vice-president of the bank, expressed the bank's apologies to Luis in a letter. A letter was also sent to the restaurant to assure that Luis was "very valued clients" of Far East. The hotel wrote back to say that the credibility of Luis had never been "in question." Still evidently feeling aggrieved Luis filed a complaint for damages. RTC found Far East liable and ordered to pay Luna. The CA affirmed the decision of the trial court. ISSUE: Whether or not this is an action for quasi-delict. HELD: No. The Court has not in the process overlooked another rule that a quasi-delict can be the cause for breaching a contract that might thereby permit the application of applicable principles on tort even where there is a pre-existing contract between the plaintiff and the defendant (Phil. Airlines vs. Court of Appeals, 106 SCRA 143; Singson vs. Bank of Phil. Islands, 23 SCRA 1117; and Air France vs. Carrascoso, 18 SCRA 155). This doctrine, unfortunately, cannot improve Luna's case for it can aptly govern only where the act or omission complained of would constitute an actionable tort independently of the contract. The test (whether a quasi-delict can be deemed to underlie the breach of a contract) can be stated thusly: Where, without a pre-existing contract between two parties, an act or omission can nonetheless amount to an actionable tort by itself, the fact that the parties are contractually bound is no bar to the application of quasi-delict provisions to the case. Here, Luna's damage claim is predicated solely on their contractual relationship; without such agreement, the act or omission complained of cannot by itself be held to stand as a separate cause of action or as an independent actionable tort. WHEREFORE, the appealed decision is MODIFIED by deleting the award of moral and exemplary damages to Luna; in its stead, Far East is ordered to pay an amount of P5,000.00 by way of nominal damages. 34. LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN vs. NAVIDAD FACTS: About half an hour past 7pm, Nicanor Navidad, then drunk, entered the EDSA LRT station. While Navidad was standing on the platform near the LRT tracks, Junelito Escartin, the security guard, employed by Prudent Security Agency, approached Navidad. A misunderstanding ensued that led to a fist fight. No evidence was adduced to indicate how the fight started or who, between the two, delivered the first blow or how Navidad later fell on the LRT tracks. When Navidad fell, an LRT train, operated by Rodolfo Roman, was coming in that struck him and killed him instantaneously. The widow of Nicanor, Marjorie Navidad, filed a complaint for damages against Junelito Escartin, Rodolfo Roman, the LRTA, the Metro Transit Organization, Inc., and Prudent for the death of her husband. Prudent denied liability and averred that it had exercised due diligence in the selection and supervision of its security guards.

Trial Court found in favor of Natividad and against Prudent Security and Junelito Escartin ordering the jointly and severally payment of actual damages , compensatory damages, indemnity for the death of Nicanor, moral damages, attorneys fees, and costs of suit. But the Court of Appeals exonerated Prudent from any liability for the death of Nicanor and, instead, held the LRTA and Roman jointly and severally liable. ISSUE: Whether or not Prudent Security is liable for negligence of its employee Escartin. HELD: No. If at all, that liability could only be for tort under the provisions of Article 2176 and related provisions, in conjunction with Article 2180, of the Civil Code. The premise, however, for the employers liability is negligence or fault on the part of the employee. Once such fault is established, the employer can then be made liable on the basis of the presumption juris tantum that the employer failed to exercise diligentissimi patris families in the selection and supervision of its employees. The liability is primary and can only be negated by showing due diligence in the selection and supervision of the employee, a factual matter that has not been shown. Absent such a showing, one might ask further, how then must the liability of the common carrier, on the one hand, and an independent contractor, on the other hand, be described? It would be solidary. A contractual obligation can be breached by tort and when the same act or omission causes the injury, one resulting in culpa contractual and the other in culpa aquiliana, Article 2194 of the Civil Code can well apply. In fine, a liability for tort may arise even under a contract, where tort is that which breaches the contract. Stated differently, when an act which constitutes a breach of contract would have itself constituted the source of a quasi-delictual liability had no contract existed between the parties, the contract can be said to have been breached by tort, thereby allowing the rules on tort to apply. There is nothing to link Prudent to the death of Nicanor, for the reason that the negligence of its employee, Escartin, has not been duly proven. WHEREFORE, the assailed decision of the appellate court is AFFIRMED with MODIFICATION as to award of damages and Rodolfo Roman is absolved from liability. 35. AIR FRANCE vs. CARRASCOSO et al. FACTS: Rafael Carrascoso, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for Lourdes. Air France, through its authorized agent, Philippine Air Lines, Inc., issued to a "first class" round trip airplane ticket for Carrascoso from Manila to Rome. From Manila to Bangkok, he travelled in "first class", but at Bangkok, the Manager of the airline forced him to vacate the "first class" seat because, in the words of the witness Ernesto G. Cuento, there was a "white man", who, the Manager alleged, had a "better right" to the seat. When asked to vacate his "first class" seat he refused, and told the Manager that his seat would be taken over his dead body; a commotion ensued, and, according to said Cuento, "many of the Filipino passengers got nervous in the tourist class; when they found out that Mr. Carrascoso was having a hot discussion with the manager, they came all across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white man" and he reluctantly gave his "first class" seat in the plane.

The CFI ordered Air France to pay Carrascoso moral damages, exemplary damages, and the difference in fare between first class and tourist class for the trip Bangkok-Rome. The CA affirmed the decision. ISSUE: WON moral damages could be recovered from AirFrance, granted that their employee was accused of the tortuous act. HELD: Yes. The responsibility of an employer for the tortious act of its employees need not be essayed. It is well settled in law. For the willful malevolent act of petitioner's manager, petitioner, his employer, must answer. Article 21 of the Civil Code says: ART. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. In parallel circumstances, we applied the foregoing legal precept; and, we held that upon the provisions of Article 2219 (10), Civil Code, moral damages are recoverable. Wherefore, the judgment of the Court of Appeals does not suffer from reversible error. We accordingly vote to affirm the same. 36. LAYUGAN vs. INTERMEDIATE APPELLATE COURT, et. Al. FACTS: While Pedro Layugan and companion were repairing the tire of their cargo truck which was parked along the right side of the National Highway, Godofredo Isidro truck driven recklessly by Daniel Serrano bumped them. As a result, Layugan was injured and hospitalized and spent P10, 000.00 and will incur more expenses for recuperating. He would be deprived of lifetime income of P70, 000.00 and has paid his lawyer P10, 000.00. Trial Court: Isidro was found liable. Intermediate Appellate Court: It reversed the decision of the trial court and dismissed the complaint, the third-party complaint, and the counter- claims of both appellants. ISSUE: Whether or not Isidro was liable by the negligence of Serrano. HELD: Yes. It is clear that the driver did not know his responsibilities because he apparently did not check his vehicle before he took it on the road. If he did he could have discovered earlier that the brake fluid pipe on the right was cut, and could have repaired it and thus the accident could have been avoided. Moreover, to our mind, the fact that the Isidro used to instruct his driver to be careful in his driving, that the driver was licensed, and the fact that he had no record of any accident, as found by the court, are not sufficient to destroy the finding of negligence of the Regional Trial Court given the facts established at the trial. Isidro or his mechanic, who must be competent, should have conducted a thorough inspection of his vehicle before allowing his driver to drive it. In the light of the circumstances obtaining in the case, we hold that Isidro failed to prove that the diligence of a good father of a family in the supervision of his employees which would exculpate him from solidary liability with his driver toLayugan. But even if we concede that the diligence of a good father of a family was observed by Isidro in the supervision of his driver, there is not an iota of evidence on record of the observance by

Isidro of the same quantum of diligence in the supervision of his mechanic, if any, who would be directly in charge in maintaining the road worthiness of his (Isidro's) truck. But that is not all. There is paucity of proof that Isidro exercised the diligence of a good father of a family in the selection of his driver, Daniel Serrano, as well as in the selection of his mechanic, if any, in order to insure the safe operation of his truck and thus prevent damage to others. Accordingly, the responsibility of Isidro as employer treated in Article 2180, paragraph 5, of the Civil Code has not ceased. Wherefore, decision of the trial court is hereby REINSTATED in toto. 37. VALENZUELA vs. C.A., et al. FACTS: At around 2:00 in the morning, Ma. Lourdes Valenzuela was driving from her restaurant to her home. She was travelling with a companion, Cecilia Ramon. 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 verified, 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 car driven by Richard Li and registered in the name of defendant Alexander Commercial, Inc. Valenzuela was thrown against the windshield of the car Li 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. 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. Court of Appeals found Li grossly negligent that there was ample basis from the evidence of record for the trial courts finding that the Valenzuelas car was properly parked at the right, beside the sidewalk when it was bumped by Lis car. ISSUE: Whether or not Valenzuela was guilty of contributory negligence. HELD: No. 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. 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." 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. 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. 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." It is the failure to observe that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury. We stressed, in Corliss vs. Manila Railroad Company, 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: Under 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. Lis obvious unpreparedness to cope with the situation confronting him on the night of the accident was clearly of his own making. Wherefore, the decision of the Regional Trial Court is reinstated. 38. ST. FRANCIS HIGH SCHOOL vs. C.A. FACTS: Ferdinand Castillo, then a freshman high school student, wanted to join a school picnic of another class. Ferdinand's parents, Dr. Romulo and Lilia 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, 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. He died. Trial court found the teachers failed to exercise the diligence required of them by law under the circumstances to guard against the harm they had foreseen but dismissed the complaint against the school. Court of Appeals found the teachers and the school liable. ISSUE: (A) Whether or not there was negligence attributable to the defendants. (B) Whether or not Art. 2180, in relation to Art. 2176 of the New Civil Code is applicable to the case at bar. HELD: (A) No. 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. (B) No. 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. 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 extracurricular activity. Wherefore, petitioners are not guilty of any fault or negligence, hence, no moral damages can be assessed against them. 39. VALENZUELA vs. C.A., et al., 253 SCRA 303, same(37) 40. ONG, et al. vs. METROPOLITAN WATER DISTRICT FACTS: Dominador Ong (14 years old) and his two brothers went to the swimming pool operated by MetropolitanWater District (MWD). After paying the entrance fee, the three proceeded to the small pool. Later, Dominador told his brothers that hell just be going to the locker room to drink a bottle of Coke. No one saw him returned. Later, one bather noticed someone at the bottom of the big pool and another notified the lifeguard in attendant (Abao), who immediately dove into the water. The body was later identified as Dominadors. He was attempted to be revived multiple times but of no avail. Lower court found that the action of plaintiffs is untenable and dismissed the complaint. ISSUE: Whether or not the death of minor Dominador Ong can be attributed to the negligence of Metropolitan and/or its employees. HELD: No. The existence of fault or negligence on the part of the employees is belied by the written statements of two witnesses. Nowhere in said statements do they state that the lifeguard was chatting with the security guard at the gate of the swimming pool or was reading a comic magazine when the alarm was given for which reason he failed to immediately respond to the alarm. On the contrary, what Ruben Ong particularly emphasized therein was that after the lifeguard heard the shouts for help, the latter immediately dived into the pool to retrieve the person under water who turned out to be his brother. There is sufficient evidence to show that Metropolitan has taken all necessary precautions to avoid danger to the lives of its patrons or prevent accident which may cause their death. Thus, it has been shown that the swimming pools are provided with a ring buoy, toy roof, towing line, oxygen resuscitator and a first aid medicine kit. The bottom of the pools is painted with black colors so as to insure clear visibility. There is on display in a conspicuous place within the area certain rules and regulations governing the use of the pools. Metropolitan employs six lifeguards who are all trained as they had taken a course for that purpose and were issued certificates of proficiency. These lifeguards work on schedule prepared by their chief and arranged in such a way as to have two guards at a time on duty to look after the safety of the bathers. There is a

male nurse and a sanitary inspector with a clinic provided with oxygen resuscitator. And there are security guards who are available always in case of emergency. The record also shows that after retrieving the body from the pool, lifeguard Abao immediately gave him manual artificial respiration. Soon thereafter, the nurse and sanitary inspector came with an oxygen resuscitator. When they found that the pulse of the boy was abnormal, the inspector immediately injected him with camphorated oil. When the manual artificial respiration proved ineffective they applied the oxygen resuscitator until its contents were exhausted. And while all these efforts were being made, they sent for Dr. Ayuyao but already dead. All of the foregoing shows all humanly possible under the circumstances to restore life to minor Ong was done and for that reason it is unfair to hold it liable for his death. We do not see how the doctrine of last clear chance may apply. As the doctrine usually is stated, a person who has the last clear chance or opportunity of avoiding an accident, notwithstanding the negligent acts of his opponent or the negligence of a third person which is imputed to his opponent, is considered in law solely responsible for the consequences of the accident. Since it is not known how minor Ong came into the big swimming pool and it being apparent that he went there without any companion in violation of one of the regulations of Metropolitan as regards the use of the pools, and it appearing that lifeguard Abanio responded to the call for help as soon as his attention was called to it and immediately after retrieving the body all efforts at the disposal of Metropolitan had been put into play in order to bring him back to life, it is clear that there is no room for the application of the doctrine now invoked by appellants to impute liability to Metropolitan. Wherefore, decision of the lower court is affirmed. 41. CIVIL AERONAUTICS ADMINISTRATION vs. COURT OF APPEALS, et al. FACTS: Ernest Simke is a naturalized Filipino citizen and the Honorary Consul General of Israel in the Philippines. One afternoon, he, with several other persons, went to the Manila International Airport to meet his future son-in-law. He and his group proceeded to the viewing deck or terrace of the airport. While walking on the terrace, Simke slipped over an elevation about four (4) inches high at the far end of the terrace. He fell on his back and broke his thigh bone. The next day, he was operated. CFI rendered in Simkes favor prompting petitioner to appeal to the Court of Appeals. The latter affirmed the trial court's decision. ISSUE: Whether or not there was negligent on the part of Civil Aeronautics. HELD: Yes. The inclination itself is an architectural anomaly for it is neither a ramp because a ramp is an inclined surface in such a way that it will prevent people or pedestrians from sliding. But if, it is a step then it will not serve its purpose, for pedestrian purposes.

The legal foundation of CAA's liability for quasi-delict can be found in Article 2176 of the Civil Code. As the CAA knew of the existence of the dangerous elevation which it claims though, was made precisely in accordance with the plans and specifications of the building for proper drainage of the open terrace, its failure to have it repaired or altered in order to eliminate the existing hazard constitutes such negligence as to warrant a finding of liability based on quasi-delict upon CAA. Contributory negligence under Article 2179 of the Civil Code contemplates a negligent act or omission on the part of the plaintiff, which although not the proximate cause of his injury, contributed to his own damage, the proximate cause of the plaintiffs own injury being the defendant's lack of due care. In the instant case, no contributory negligence can be imputed to the private respondent, considering the following test formulated in the early case of Picart v. Smith, 37 Phil. 809 (1918): The test by which to determine the existence of negligence in a particular case may be stated as follows: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent man would have used in the same situation? If not, then he is guilty of negligence. The law here in effect adopts the standard supposed to be supplied by the imaginary conduct of the discreet paterfamilias of the Roman law. The existence of the negligence in a given case is not determined by reference to the personal judgment of the actor in the situation before him. The law considers what would be reckless, blameworthy, or negligent in the man of ordinary intelligence and prudence and determines liability by that. The question as to what would constitute the conduct of a prudent man in a given situation must of course be always determined in the light of human experience and in view of the facts involved in the particular case. Abstract speculations cannot be here of much value but this much can be profitably said: Reasonable men-govern their conduct by the circumstances which are before them or known to them. They are not, and are not supposed to be omniscient of the future. Hence they can be expected to take care only when there is something before them to suggest or warn of danger. Could a prudent man, in the case under consideration, foresee harm as a result of the course actually pursued' If so, it was the duty of the actor to take precautions to guard against that harm. Reasonable foresight of harm, followed by the ignoring of the suggestion born of this prevision, is always necessary before negligence can be held to exist. Simke could not have reasonably foreseen the harm that would befall him, considering the attendant factual circumstances. Even if he had been looking where he was going, the step in question could not easily be noticed because of its construction. As the trial court found: In connection with the incident testified to, a sketch, shows a section of the floorings oil which plaintiff had tripped, This sketch reveals two pavements adjoining each other, one being elevated by four and one-fourth inches than the other. From the architectural standpoint the higher, pavement is a step. However, unlike a step commonly seen around, the edge of the elevated pavement slanted outward as one walks to one interior of the terrace. The length of the inclination between the edges of the two pavements is three inches. Obviously, plaintiff had stepped on the inclination because had his foot landed on the lower pavement he would not have lost his balance. The same sketch shows that both pavements including the inclined portion are tiled in red

cement, the lines of the tilings are continuous. It would therefore be difficult for a pedestrian to see the inclination especially where there are plenty of persons in the terrace as was the situation when plaintiff fell down. There was no warning sign to direct one's attention to the change in the elevation of the floorings. Wherefore, decision of lower court is affirmed. Cases 33-41 SANTUCAY, ANNABEL R. 42. FAR EASTERN SHIPPING COMPANY vs. CA FACTS: 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), arrived at the Port of Manila from Vancouver, British Columbia at about 7:00 o'clock in the morning. The vessel wasB 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) 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 bigchurch by the Tondo North Harbor) onehalf mile fromthe 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 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 to it.- After Gavino noticed that the anchor did not take hold ,he ordered the engines halfastern. Abellana, who was then on the pier a pron 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. Kavankov filed his sea protest. Gavino submitted his report to the Chief Pilot who referred the report to the Philippine Ports Authority. Abellana likewise submitted his report of the incident.- The rehabilitation of the damaged pier cost the Philippine Ports Authority the amount of P1,126,132.25. RULLING BY THE TRIAL COURT: 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 costs of suit. RULLING BY THE CA:Respondent appellate court affirmed the findings of the court a quo except that if found no employer-employee relationship existing between herein private

respondents Manila Pilots' Association (MPA) and Capt. Gavino. 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, 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. ISSUE: WON both the pilot and the master were negligent RULLING BY THE SC: YES.- The SC started by saying that in a collision between a stationary object and a moving object, there is a presumption of fault against the moving object (basedon common sense and logic). It then went on to determine who between the pilot and the master was negligent. PILOT - 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. He is an expert whos supposed to know the seabed, etc. that a master of a ship may not know because the pilot is familiar with the port. He is charged to perform his duties with extraordinary care because the safety of people and property on the vessel and on the dock are at stake.- Capt. Gavino was found to be negligent. The court found that his reaction time (4 minutes) to the anchor not holding ground and the vessel still going too fast was too slow. As an expert he shouldve been reacting quickly to any such happenings. MASTER - In compulsory pilotage, the pilot momentarily becomes the master of the vessel. The master, however may intervene or countermand the pilot if he deems there is danger to the vessel because of the incompetence of the pilot or if the pilot is drunk.- Based on Capt. Kavankovs testimony, he never sensed the any danger even when the anchor didnt hold and they were approaching the dock too fast. He blindly trusted the pilot. This is negligence on his part.He was right beside the pilot during the docking, so he could see and hear everything that the pilot was seeing and hearing.- The masters negligence translates to unseaworthiness of the vessel, and in turn means negligence on the part of FESC. CONCURRENT TORTFEASORS - 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, 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. 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 wrong doer is responsible for the entire result and is liable as though his acts were the sole cause of the injury.- 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 solidarily liable for the resulting damage under Article 2194 of the Civil Code. 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 Genral 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. 43. PEOPLE vs. PEDRO RAMIREZ FACTS: On the night of February 18, 1923, Bartolome Quiaoit invited Pedro Ramirez, the accused, Victoriano Ranga, the deceased, and Agustin Menor to hunt in the mount Balitok of the municipality of Nueva Era, Province of Ilocos Norte. The three proceeded to hunt, leaving Bartolome Quiaoit in a hut approximately 1 kilometer from the place where the act complained of took place. Upon the hunters having arrived at a place in mount Balitok, Pedro Ramirez, who was carrying the shotgun of Bartolome Quiaoit with a lantern, happened to hunt a deer, and then he told his companions to stay there and watch over the prey while he entered the forest to get it. Thus Victoriano Ranga and Agusto Menor were waiting when suddenly the report of the shotgun was heard hitting Victoriano Ranga in the eye and the right temple, who thereafter died on that night as a result of the wounds.chan

RULLING BY THE TRIAL COURT: Ramirez was sentenced by the Court of First Instance of Ilocos Norte, for the crime of homicide, to the penalty of fourteen years, eight months and one day of reclusion temporal, to indemnify the mother of the deceased in the sum of P500 and to pay the costs. ISSUE IN THE SC: Whether or not there existed no motive whatever for resentment on the part of the defendant against the offended party and had exercised all the necessary diligence to avoid every undesirable accident. RULLING BY THE SC: The defense alleges that the trial court must have solved the reasonable doubt in favor of the defendant. After considering carefully the evidence and all the circumstances of the case, we are of the opinion and so hold that the defendant is guilty of the crime of homicide through reckless imprudence, and must be punished under paragraph 1 of article 568 of the Penal Code. Wherefore the penalty of one year and one day of prision correccional, with the accessories prescribed by the law, must be imposed upon him, and with modification, the judgment appealed from is affirmed in all other respects, with the costs against the appellant. So ordered. 44. ADZUARA vs. COURT OF APPEALS FACTS OF THE CASE: On 17 December 1990, at half past 1:00 o'clock in the morning, Xerxes Adzuara y Dotimas, then a law student, and his friends Rene Gonzalo and Richard Jose were cruising in a 4-door Colt Galant sedan along the stretch of Quezon Avenue coming from the direction of EDSA towards Delta Circle at approximately 40 kilometers per hour.Upon reaching the intersection of 4th West Street their car collided with a Toyota Corona sedan owned and driven by Gregorio Martinez. Martinez had just attended a Loved Flock meeting with his daughter Sahlee and was coming from the eastern portion of Quezon Avenue near Delta Circle. He was then executing a U-turn at the speed of 5 kph at the north-west portion of Quezon Avenue going to Manila when the accident occurred. Sahlee Martinez sustained physical injuries which required confinement and medical attendance at the National Orthopaedic Hospital for five (5) days. Both petitioner and Martinez claimed that their lanes had green traffic lights although the investigating policeman Marcelo Sabido declared that the traffic light was blinking red and orange when he arrived at the scene of the accident an hour later. On 12 July 1991 petitioner was charged before the Regional Trial Court of Quezon City with reckless imprudence resulting in damage to property with less serious physical injuries under Art. 365 of the Revised Penal Code. On 11 December 1991, before the presentation of evidence, private complainant Martinez manifested his intention to institute a separate civil action for damages against petitioner. RULING BY THE TRIAL COURT: The Regional Trial Court of Quezon City, convicted Xerxes Adzuara after trial and sentenced him to suffer imprisonment of two (2) months and fifteen (15) days of arresto mayor and to pay a fine of P50,000.00, with subsidiary imprisonment in case of insolvency.

RULING BY THE COURT OF APPEALS: The Court of Appeals affirmed the decision of the trial court but deleted the fine of P50,000.00. ISSUE ON THE SC: What degree of care and vigilance then did the circumstances require at half past 1:00 o'clock in the morning along an almost deserted avenue. RULING BY THE SC: In the instant case, nothing on record shows that the facts were not properly evaluated by the court a quo. As such, we find no reason to disturb their findings. It bears to stress that the appreciation of petitioner's post-collision behavior serves only as a means to emphasize the finding of negligence which is readily established by the admission of petitioner and his friend Renato that they saw the car of Martinez making a U-turn but could not avoid the collision by the mere application of the brakes. Negligence is the want of care required by the circumstances. It is a relative or comparative, not an absolute, term and its application depends upon the situation of the parties and the degree of care and vigilance which the circumstances reasonably require. What degree of care and vigilance then did the circumstances require? At half past 1:00 o'clock in the morning along an almost deserted avenue, ordinary care and vigilance would suffice. This may consist of keeping a watchful eye on the road ahead and observing the traffic rules on speed, right of way and traffic light. The claim of petitioner that Martinez made a swift U-turn which caused the collision is not credible since a Uturn is done at a much slower speed to avoid skidding and overturning, compared to running straight ahead. Nonetheless, no evidence was presented showing skid marks caused by the car driven by Martinez if only to demonstrate that he was driving at a fast clip in negotiating the U-turn. On the other hand, the speed at which petitioner drove his car appears to be the prime cause for his inability to stop his car and avoid the collision. His assertion that he drove at the speed of 40 kph. is belied by Martinez who testified that when he looked at the opposite lane for any oncoming cars, he saw none; then a few seconds later, he was hit by Adzuara's car. The extent of the damage on the car of Martinez and the position of the cars after the impact further confirm the finding that petitioner went beyond the speed limit required by law and by the circumstances. It is a rule that a motorist crossing a thru-stop street has the right of way over the one making a U-turn. But if the person making a U-turn has already negotiated half of the turn and is almost on the other side so that he is already visible to the person on the thru-street, the latter must give way to the former. Petitioner was on the thru-street and had already seen the Martinez car.He should have stopped to allow Martinez to complete the U-turn having, as it were, the last clear chance to avoid the accident which he ignored. In fact, he never stopped. Rather, he claimed that on the assumption that he was negligent, the other party was also guilty of contributory negligence since his car had no lights on. The negligence of Martinez however has not been satisfactorily shown. Petitioner insists that the traffic light facing him at the intersection was green which only indicated that he had the right of way. But the findings of the court a quo on the matter countervail this stance, hence, we see no reason to disturb them. To weaken the evidence of the prosecution, petitioner assails the testimony of Martinez as being replete with inconsistencies. The records however reveal that these inconsistencies refer only to minor points which indicate veracity rather than

prevarication by the witness. They tend to bolster the probative value of the testimony in question as they erase any suspicion of being rehearsed. Finally, petitioner claims that the medical certificate presented by the prosecution was uncorroborated by actual testimony of the physician who accomplished the same and as such has no probative value insofar as the physical injuries suffered by Sahlee are concerned. Regretfully, we cannot agree. The fact of the injury resulting from the collision may be proved in other ways such as the testimony of the injured person. In the case at bar, Sahlee Martinez testified that her injuries as described in the medical certificate were caused by the vehicular accident of 17 December 1990. This declaration was corroborated by Gregorio. This, no less, is convincing proof. WHEREFORE, the petition is DENIED. The decision of the Court of Appeals of 22 November 1995 finding petitioner XERXES ADZUARA Y DOTIMAS guilty beyond reasonable doubt of the crime charged and sentencing him to suffer an imprisonment of two (2) months and fifteen (15) days of arresto mayor medium is AFFIRMED. Costs against petitioner. SO ORDERED. 45. MCKEE vs. IAC FACTS: To avoid hitting 2 boys who suddenly darted from the right side of the road and into the lane of the car, Jose Koh blew the horn of his car, swerved to the left and entered the lane of the truck. He attempted to return to his lane but before he could do so, he already collided with the cargo truck.-Truck and Ford collided in Pulong Pulo Bridge along MacArthur Highway. 3 people in the Ford escort died including the driver, Jose Koh. RULLING BY THE TRIAL COURT: The trial court dismissed petitioners' complaints in Civil Case No. 4477 and Civil Case No. 4478 of the then Court of First Instance (now Regional Trial Court) of Pampanga entitled "Carmen Dayrit Koh, Leticia Koh, Julieta Koh Tuquero, Araceli Koh McKee and Elizabeth Koh Turla vs. Jaime Tayag and Rosalinda Manalo," and "George McKee and Araceli Koh McKee vs. Jaime Tayag and Rosalinda Manalo," respectively, and granted the private respondents' counterclaim for moral damages, attorney's fees and litigation expenses. RULLING BY THE IAC: On 29 November 1983, respondent Court, by then known as the Intermediate Appellate Court, promulgated its consolidated decision in A.C.-G.R. CV Nos. 69040 and 69041,the dispositive portion of which reads: WHEREFORE, the decision appealed from it hereby reversed and set aside and another one is rendered, ordering defendants-appellees to pay plaintiffs-appellants. ISSUE: WON the owners of the cargo truck (Tayag and Manalo)are liable for the resulting damages RULLING BY THE SC: YES, The Court rules that it was the truck driver's negligence in failing to exert ordinary care to avoid the collision which was, in law, the proximate cause of the collision. As employers of the truck driver, Manalo and Tayag are, under Article 2180 of the Civil Code, directly and primarily liable for the resulting damages. The presumption that they are negligent flows from the negligence of their employee. That presumption, however, is only juris tantum, not juris et de jure. Their only possible

defense is that they exercised all the diligence of a good father of a family to prevent the damage. Article 2180 reads as follows: 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. 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 treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. The diligence of a good father referred to means the diligence in the selection and supervision of employees. The answers of the private respondents in Civil Cases Nos. 4477 and 4478 did not interpose this defense. Neither did they attempt to prove it. The diligence of a good father referred to means the diligence in the selection and supervision of employees. 60 The answers of the private respondents in Civil Cases Nos. 4477 and 4478 did not interpose this defense. Neither did they attempt to prove it. The respondent Court was then correct in its Decision of 29 November 1983 in reversing the decision of the trial court which dismissed Civil Cases Nos. 4477 and 4478. Its assailed Resolution of 3 April 1984 finds no sufficient legal and factual moorings. In the light of recent decisions of this Court, 61 the indemnity for death must, however, be increased from P12,000.00 to P50,000.00. WHEREFORE, the instant petition is GRANTED. The assailed Resolution of the respondent Court of 3 April 1984 is SET ASIDE while its Decision of 29 November 1983 in C.A.-G.R. CV Nos. 69040-41 is REINSTATED, subject to the modification that the indemnity for death is increased from P12,000.00 to P50,000.00 each for the death of Jose Koh and Kim Koh McKee. Costs against private respondents. SO ORDERED. 46. MANILA ELECTRIC COMPAN vs. REMOQUILLO FACTS: On August 22, 1950, Efren Magno went to the 3-story house of Antonio Pealoza, his stepbrother, located on Rodriguez Lanuza Street, Manila, to repair a media agua said to be in a leaking condition. The media agua was just below the window of the third story. Standing on said media agua, Magno received from his son thru that window a 3 X 6 galvanized iron sheet to cover the leaking portion, turned around and in doing so the lower end of the iron sheet came into contact with the electric wire of the Manila Electric Company (later referred to as the Company) strung parallel to the edge of the media agua and 2 1/2 feet from it, causing his death by electrocution. RULLING BY THE TRIAL COURT: After hearing, the trial court rendered judgment in favor to the respondents P10,000 as compensatory damages;P784 as actual damages,ryP2,000 as moral and exemplary damages; and P3,000 as attorneys fees, with costs.

RULLING BY THE COURT OF APPEALS: On appeal to the Court of Appeals, the latter affirmed the judgment with slight modification by reducing the attorneys fees from P3,000 to P1,000 with costs. ISSUE: WON Manila Electric is guilty of negligence. RULLING BY THE SC: NO- It was the victim who was guilty of negligence the liability of electric companies for damages or personal injury is governed by the rules of negligence, nevertheless such companies are not insurers of the safety of the public. Reasoning - The death of Magno was primarily caused by his own negligence, and in some measure by the too close proximity of the media agua to the electric wire of the company by reason of the violation of the original permit given by the city and the subsequent approval of said illegal construction of the media agua. Had the house owner followed the terms of the permit given him by the city for the construction of hismedia agua, the distance from the wires to the edge of said media agua would have been 3ft and 11 3/8inches.- The company cannot be expected to be always on the lookout for any illegal construction which reduces the distance between its wires and said construction, and to change the installation of its wires so as to preserve said distance.- The violation of the permit for the construction was not the direct cause of the accident. It merely contributed to it. The real cause of the accident or death was the reckless or negligent act of Magno himself. It is to be presumed that due to his age and experience he was qualified to do so. He had training and experience for the job. He could not have been entirely a stranger to electric wires and the danger lurking in them.- To hold the defendant liable in damages for the death of Magno, such supposed negligence of the company must have been the proximate and principal cause of the accident We realize that the stringing of wires of such high voltage (3,600 volts), un insulated and so close to houses is a constant source of danger, even death, especially to persons who having occasion to be near said wires, do not adopt the necessary precautions. But maybe, the City of Manila authorities and the electric company could get together and devise means of minimizing this danger to the public. Just as the establishment of pedestrian lanes in city thoroughfares may greatly minimize danger to pedestrians because drivers of motor vehicles may expect danger and slow down or even stop and take other necessary precaution upon approaching said lanes, so, a similar way may possibly be found. Since these high voltage wires cannot be properly insulated and at reasonable cost, they might perhaps be strung only up to the outskirts of the city where there are few houses and few pedestrians and there step-down to a voltage where the wires carrying the same to the city could be properly insulated for the better protection of the public. In view of all the foregoing, the appealed decision of the Court of Appeals is hereby reversed and the complaint filed against the Company is hereby dismissed. No costs. 47. BULILAN VS. COMMISSION OF AUDIT 48. ASTUDILLO vs. MANILA ELECTRIC COMPANY

FACTS: The district of Intramuros, Manila, is surrounded by a wall with openings at intervals for ingress or egress. One of these openings toward Manila Bay is known as the Santa Lucia Gate. Above the gate and between the wall and a street is a considerable space sodded with grass with the portion directly over the gate paved with stone. This has become a public place where persons come to stroll, to rest, and enjoy themselves. Near this place is an electric light pole with the corresponding wires. The pole was located close enough to the public place above described that a person by reaching his arm out of the full length would be able to hold of one of the wires. At about 6 oclock in the evening of August 14, 1923, a group of boys came to this place. One of these boys for some unknown reason, placing one foot on a projection reached out and grasped a charged electric wire. Death resulted almost instantly. This action was instituted by the mother of the deceased boy to recover damages from the electric company. RULLING BY THE TRIAL COURT: The trial court judgment was rendered in favor of the plaintiff and against the defendant for the sum of P15,000, and costs. ISSUE: WON the action should be dismissed due to thecontributory negligence of the plaintiffs RULING BY THE SC: NO- The death of the child was the result of fault and negligence in permitting hot water to flow through the public streets, there to endanger the lives of passers-by who were unfortunately enough to fall into it- The mother and her child had a perfect right to be on the principal street of Tacloban, Leyte, on the evening when the religious procession was held.- There was nothing abnormal in allowing the child to run along a few paces in advance of the mother. No one could foresee the coincidence of an automobile appearing and of a frightened child running and falling into a ditch filled with hot water. The contributory negligence of the child and her mother, if any, does not operate as a bar to recovery, but in its strictest sense could only result in reduction of the damages. We, therefore, conclude that the plaintiff is entitled to damages. But the evidence indicative of the true measure of those damages is sadly deficient. All that we know certainly is that the deceased was less than 20 years of age, a student, and working in the Ateneo de Manila, but at what wages we are not told. We are also shown that approximately P200 was needed to defray the travel and funeral expenses. As would happen in the case of a jury who have before them one of the parents, her position to life, and the age and sex of the child, varying opinions, have been disclosed in the court regarding the estimate of the damages with reference to the next of kin. Various sums have been suggested, beginning as low as P1,000 and extending as high as P5,000. A majority of the court finally arrived at the sum of P1,500 as appropriate damages in this case. The basis of this award would be the P1,000 which have been allowed in other cases for the death of young children without there having been tendered any special proof of the amount of damages suffered, in connection with which should be taken into account the more mature age of the boy in the case at bar, together with the particular expenses caused by his death. (Manzanares vs Moreta [1918], 38 Phil., 821; Bernal and Enverso vs. House and Tacloban Electric & Ice Plant [1930], 54 Phil., 327; Cuison vs. Norton & Harrison Co. [1930], p. 18, ante.) In the light of the foregoing, the various errors assigned by the appellant will in the main be overruled, but as above indicated, the judgment will be modified by allowing the

plaintiff to recover from the defendant the sum of P1,500, and the costs of both instances. 49. NATIONAL IRRIGATION ADMINISTRATION VS. IAC FACTS: Private respondents Andres Ventura, Antonio Fajardo, Marcelo Fajardo, Alfonso Ventura and Florentino Ventura are leasehold tenants situated in Nueava Ecija. In 1967, petitioner NIA constructed an irrigation canal on the property of Isabel and Virginia Tecson which passed through the private respondents landholdings as said canal traverses the Cinco Cinco creek which abuts the landholding. On Febuary 13,1975, private respondents filed a complaint for the abatement of the nuisance with damages against petitioners NIA in which the said canal resulted to the inundation of said landholdings causing damages in the destruction of the planted palay crops and also prevented them from planting on their landholdings, RULLING BY THE TRIAL COURT: The trial court finds the complaint meritorious ordering the defendants to pay for the damages and the cost of suit. RULLING BY THE APPELLATE COURT: Affirming in toto the decision of the trial court. ISSUE: W/N the petitioners are liable for the damages caused by their negligent act. RULING BY THE SC: With regards to petitioners contention that the respondent appellate court erred in awarding damages to prive respondents, we find the courts decision in accordance with the evidence and the law. As correctly held by the appelleate court: It has been established that the platiffs landholdings were actually inundated. The testimonies by all the plaintiffs with respect to the amount of the loss they suffered were not impugned by any contradictory evidences of the defendant. To our mind, these testimonies are sufficient proof to make the grant of damages valid and proper. Besides, the amount awarded by the lower court is but just and reasonable considering the circumstances of the case. WHEREFORE, this petition for review on certiorari is hereby DENIED for lack of merit. SO ORDERED. 50. UNITED STATES vs. CLEMENTE FACTS: That on the 17th day of June, 1912, in the city of Manila, Enrique Clemente, at the time being and acting as motorman of a street car No. 111 upon the line PasayCervantes of the Manila Electric Railroad and Light Company, a corporation duly organized and doing business in the city of Manila, Philippine Islands, and then and there directing and operating said street car, as the motorman thereof, upon and along Dakota Street in said city, and then and there being under the obligation as such motorman of said street car to conduct and direct the same with due care and caution, in order to avoid any accident which might occur to the vehicles and pedestrians who were passing upon and over said Dakota Street, with reckless imprudence and with

inexcusable negligence and in violation of the ordinance pertaining to the matter, conducted and directed said street car, without paying any attention to the pedestrians who were crossing said street of his lack of care and reckless negligence he directed and conducted street car No. 111 against and over the body and head of Juan Garcia, a child 3 years of age, who was then and there passing across the said Dakota Street, dragging the body of said child over said street-car track for a considerable distance, fracturing and destroying its skull and causing instant death. RULING BY THE TRIALCOURT: Enrique Clemente, not guilty as charged in the complaint of homicide through reckless negligence or rather through fearful negligence, but find him guilty of a violation of the regulations through imprudence and negligence, which resulted in the death of the child as alleged in the complaint, and sentence him to five months of arresto mayor, and to pay the costs of the action. RULING BY THE SC: We are aware that the crime of homicide through an act of simple negligence which violates an ordinance of regulation is not necessarily included in the crime of homicide through reckless negligence. The latter crime might possibly be committed without the violation of an ordinance or regulation. In that event it would not include the crime of homicide through an act of simple negligence which violates an ordinance or regulation. The courts have not yet gone so far as to hold that, where there is an acquittal of the greater crime and a conviction of a lesser crime not included in the greater and not charged in the information, an appeal from a conviction of the lesser crime opens the way to a conviction of the greater crime in the appellate court if the evidence is there found sufficient; nor has there been such holding in a case where two crimes, neither one included in the other, were charged in the same information, and an acquittal was had as to the higher and a conviction as to the lower. In the case at bar, however, we have both the higher and the lower degrees of the same crime charged in the information. We have, also, a case in which the commission of the homicide was accompanied by a violation of the ordinance, and in which, therefore, the crime of homicide through an act of negligence which violates an ordinance was included in the crime of homicide by an act of reckless negligence. This is a case where, as a matter of fact, the one was included in the other. Under the authorities, therefore, an appeal from a conviction of the lower grade opens the whole case for reconsideration by this court upon all the evidence, and requires us in the performance of our duty to pronounce such a judgment in the premises as in conscience we ought. The judgment of the court below is reversed, and the accused is hereby convicted of the crime of homicide committed through reckless negligence, and is hereby sentenced to one year and one day of prision correccional with the accessories provided by law, with costs. Cases 42-50 ELAD, MARCIAL A. 51. VALENZUELA vs COURT OF APPEALS FACTS: Ma. Lourdes Valenzuela was driving when she realized she had a flat tire. She parked along the sidewalk of Aurora Blvd., alighted from the car, put on her emergency

lights 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 car 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 defendant's car. Plaintiff's left leg was severed up to the middle of her thigh. She was confined in the hospital for twenty (20) days and was eventually fitted with an artificial leg. She filed a claim for damages against defendant. Lis alibi was that he was driving at 55kph when he was suddenly confronted with a speeding car coming from the opposite direction. He instinctively swerved to the right to avoid colliding with the oncoming vehicle, and bumped plaintiff's 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. Defendants counterclaimed for damage, alleging that plaintiff was the one who was reckless or negligent. The RTC found Li guilty of gross negligence; Alexander and Li solidarily liable. Later, the CA affirmed but absolved Alexander. ISSUES: 1. WON Li was grossly negligent in driving the company issued car. 2. WON Valenzuela was guilty of contributory negligence HELD: 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. It is the failure to observe that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury. We stressed, in Corliss vs. Manila Railroad Company, 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. We agree with the respondent court that Valenzuela was not guilty of contributory negligence. 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. Under the emergency rule adopted by this Court in Gan vs Court of Appeals, 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.

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. 52. PHIL. LONG DISTANCE TELEPHONE CO. vs COURT OF APPEALS FACTS: On July 30, 1968, the jeep of Esteban spouses ran over amound of earth and fell into an open trench, anexcavation allegedly undertaken by PLD T for theinstallation of its underground conduit system. Thecomplaint alleged that respondent Antonio Esteban failed to notice the open trench which was left uncovered because of the creeping darkness and the lack of any warning light or signs. Gloria Esteban allegedly sustained injuries on her arms, legs and face, leaving a permanent scar on her cheek, while the respondent husband suffered cut lips. In addition, the windshield of the jeep was shattered. PLDT, in its answer, denies liability on the contention that the injuries sustained by respondent spouses were the result of their own negligence and that the entity which should be held responsible, if at all, is L.R. Barte and Company, an independent contractor which undertook the said construction work. The R TC ruled in favor of Esteban spouses whereas the CA reversing the decision of the lower court and dismissing the complaint of respondent spouses. It held that respondent Esteban spouses were negligent and consequently absolved petitioner PLDT from the claim for damages. ISSUE: WON PLDT is liable to respondent Esteban spouses. HELD: The above findings clearly show that the negligence of respondent Antonio Esteban was not only contributory to his injuries and those of his wife but goes to the very cause of the occurrence of the accident, as one of its determining factors, and thereby precludes their right to recover damages. 30 The perils of the road were known to, hence appreciated and assumed by, private respondents. By exercising reasonable care and prudence, respondent Antonio Esteban could have avoided the injurious consequences of his act, even assuming arguendo that there was some alleged negligence on the part of petitioner. As opined in some quarters, the omission to perform a duty, such as the placing of warning signs on the site of the excavation, constitutes the proximate cause only when the doing of the said omitted act would have prevented the injury. Furthermore, respondent Antonio Esteban had the last clear chance or opportunity to avoid the accident, notwithstanding the negligence he imputes to petitioner PLDT. As a resident of Lacson Street, he passed on that street almost every day and had knowledge of the presence and location of the excavations there. It was his negligence that exposed him and his wife to danger; hence he is solely responsible for the consequences of his imprudence. 53. PHIL. NATIONAL RAILWAYS vs. INTERMIDIATE APPELATE COURT FACTS: The case arose from a collision of a passenger express train of defendant Philippine National Railways, (PNR) coming from San Fernando, La Union and bound for Manila and a passenger bus of Baliwag Transit, Inc. which was on its way to Hagonoy,

Bulacan, from Manila, but upon reaching the railroad crossing at Barrio Balungao, Calumpit, Bulacan at about 1:30 in the afternoon of August 10, 1974, got stalled and was hit by defendant's express train causing damages to plaintiff's bus and its passengers, eighteen (18) of whom died and fifty-three (53) others suffered physical injuries. Plaintiff alleging that the proximate cause of the collision was the negligence and imprudence of defendant PNR, and its locomotive engineer, Honorio Cirbado, in operating its passenger train in a busy intersection without any bars, semaphores, signal lights, flagman or switchman to warn the public of approaching train that would pass through the crossing, filed the instant action for Damages against defendants. The defendants, in their Answer traversed the material allegation of the Complaint and as affirmative defense alleged that the collision was caused by the negligence, imprudence and lack of foresight of plaintiff's bus driver, Romeo Hughes. The trial court held by imputing negligence on the part of the train engineer and his employer. CA affirmed. ISSUES: 1. WON, both drivers are negligent; that likewise which of said companies was negligent at said railroad intersection. 2. WON, BTI has exercised the diligence of a good father of the family in the selection and supervision of its employees. HELD: Contributory negligence may not be ascribed to the bus driver; it was evident that he had taken the necessary precautions before passing over the railway track; if the bus was hit, it was for reasons beyond the control of the bus driver because he had no place to go. The failure of the Philippine National Railways to put a cross bar, or signal light, flagman or switchman, or semaphores is evidence of negligence and disregard of the safety of the public, even if there is no law or ordinance requiring it, because public safety demands that said devices or equipments be installed, in the light of aforesaid jurisprudence. In the opinion of this Court the X sign or the presence of "STOP, LOOK, LISTEN" warnings would not be sufficient protection of the motoring public as well as the pedestrians, in the said intersection. Likewise, it was established that the weather condition was characterized with intermittent rain which should have prompted the train engineer to exercise extra precaution. Also, the train reached Calumpit, Bulacan ahead of scheduled arrival thereat, indicating that the train was travelling more than the normal speed of 30 kilometers per hour. If the train were really running at 30 kilometers per hour when it was approaching the intersection, it would probably not have travelled 190 meters more from the place of the accident (page 10, Brief for Petitioners). All of these factors, taken collectively, engendered the concrete and yes, correct conclusion that the train engineer was negligent who, moreover, despite the last opportunity within his hands vis-a-vis the weather condition including the presence of people near the intersection, could have obviated the impending collision had he slackened his speed and applied the brakes (Picart vs. Smith, 37 Phil. 809 [1918]). Concerning the exercise of diligence normally expected of an employer in the selection and supervision of its employees, respondent court expressed the view that PNR was remiss on this score since it allowed Honorio Cabardo, who finished only primary education and became an engineer only through sheer experience, to operate the

locomotive, not to mention the fact that such plea in avoidance was not asserted in the answer and was thus belatedly raised on appeal. 54. TAYLOR vs MANILA ELECTRIC RAILROAD AND LIGHT CO FACTS: The defendant is a foreign corporation engaged in the operation of a street railway and an electric light system in the city of Manila. The plaintiff, David Taylor, was at the time when he received the injuries complained of, 15 years of age. On September 30, 1905, plaintiff, with a boy named Manuel Claparols, 12, crossed the footbridge to the Isla del Provisor, to visit one Murphy, an employee of the defendant, who promised to make them a cylinder for a miniature engine. Upon inquiry that Mr.Murphy was not in his quarters, the boys, impelled apparently by youthful curiosity, spent some time in wandering about the company's premises. Here they found some 20 or 30 brass fulminating caps scattered on the ground. They opened one of the caps with a knife, and finding that it was filled with a yellowish substance they got matches, and David held the cap while Manuel applied a lighted match to the contents. An explosion followed, causing more or less serious injuries to all three. David was struck in the face by several particles of the metal capsule, one of which injured his right eye to such an extent as to necessitate its removal by the surgeons. No measures seems to have been adopted by the defendant company to prohibit or prevent visitors from entering and walking about its premises unattended, when they felt disposed so to do. The trial court's decision, awarding damages to the plaintiff, upon the provisions of article 1089 of the Civil Code read together with articles 1902, 1903, and 1908 of that code. ISSUE: WON the defendants negligence is the proximate cause of plaintiff's injuries. HELD: We are of opinion that under all the circumstances of this case the negligence of the defendant in leaving the caps exposed on its premises was not the proximate cause of the injury received by the plaintiff, which therefore was not, properly speaking, attributable to the negligence of the defendant, and, on the other hand, we are satisfied that plaintiffs action in cutting open the detonating cap and putting a match to its contents was the proximate cause of the explosion and of the resultant injuries inflicted upon the plaintiff, and that the defendant, therefore, is not civilly responsible for the injuries thus incurred. We are satisfied that the plaintiff in this case had sufficient capacity and understanding to be sensible of the danger to which he exposed himself when he put the match to the contents of the cap; that he was sui juris in the sense that his age and his experience qualified him to understand and appreciate the necessity for the exercise of that degree of caution which would have avoided the injury which resulted from his own deliberate act; and that the injury incurred by him must be held to have been the direct and immediate result of his own willful and reckless act, so that while it may be true that these injuries would not have been incurred but for the negligence act of the defendant in leaving the caps exposed on its premises, nevertheless plaintiff's own act was the proximate and principal cause of the accident which inflicted the injury. 55. JARCO MARKETING CORPORATION vs HON. COURT OF APPEALS

FACTS: Petitioner Jarco Marketing Corporation is the owner of Syvels Department Store, Makati City. On May 9, 1983, Criselda and Zhieneth were at the 2nd floor of Syvels Dept. Store. Criselda momentarily let go of her daughters hand to sign her credit card slip at the payment and verification counter. She suddenly felt a gust of wind and heard a loud thud. She looked behind her and saw her daughter on the floor, pinned by the gift wrapping counter. Zhieneth was crying and screaming for help. Criselda was able to ask people to help her and bring her daughter to the hospital. She was operated on immediately at the hospital. She died 14 days later, on the hospital bed. She was 6 years old. The cause of her death was attributed to the injuries she sustained. The Aguilars demanded from the petitioners the reimbursement of hospital and medical bills, and wake and funeral expenses. Petitioners refused to pay. So the Aguilars filed a complaint for damages. The trial court dismissed the complaint and counterclaim after finding that the preponderance of evidence favored petitioner. The Court of Appeals, however, decided in favor of private respondents and reversed the appealed judgment. It found that petitioners were negligent in maintaining a structurally dangerous counter. ISSUE: (1) whether the death of ZHIENETH was accidental or attributable to negligence; (2) In case of a finding of negligence, whether the same was attributable to private respondents for maintaining a defective counter or to CRISELDA and ZHIENETH for failing to exercise due and reasonable care while inside the store premises. HELD: Accident and negligence are intrinsically contradictory; one cannot exist with the other. Accident occurs when the person concerned is exercising ordinary care, which is not caused by fault of any person and which could not have been prevented by any means suggested by common prudence. The test in determining the existence of negligence is enunciated in the landmark case of Picart v. Smith, thus: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of negligence. We rule that the tragedy which befell ZHIENETH was no accident and that ZHIENETHs death could only be attributed to negligence.Without doubt, petitioner Panelo and another store supervisor were personally informed of the danger posed by the unstable counter. Yet, neither initiated any concrete action to remedy the situation nor ensure the safety of the stores employees and patrons as a reasonable and ordinary prudent man would have done. Thus, as confronted by the situation petitioners miserably failed to discharge the due diligence required of a good father of a family. Anent the negligence imputed to ZHIENETH, we apply the conclusive presumption that favors children below nine (9) years old in that they are incapable of contributory negligence. Even if we attribute contributory negligence to ZHIENETH and assume that she climbed over the counter, no injury should have occurred if we accept petitioners theory that the counter was stable and sturdy. For if that was the truth, a frail six-year old could not have caused the counter to collapse. CRISELDA too, should be absolved from any contributory negligence. At this precise moment, it was reasonable and usual for CRISELDA to let go of her child. Further, at the time ZHIENETH was pinned down by the counter, she was just a foot away from her mother; and the gift-wrapping counter was just four meters away from CRISELDA. The

time and distance were both significant. ZHIENETH was near her mother and did not loiter as petitioners would want to impress upon us. She even admitted to the doctor who treated her at the hospital that she did not do anything; the counter just fell on her. 56. JULIAN DEL ROSARIO vs MANILA ELECTRIC CO. FACTS: This action was instituted by Julian del Rosario for the purpose of recovering damages from Meralco for the death of his son, Alberto, resulting from a shock from a wire used by the defendant for the transmission of electricity. Aug 4, 1930, shortly after 2 oclock in the afternoon trouble developed in an overhead wire conducting electricity for lightning purposes in the City of Manila. The wire soon parted and one of the charged ends fell to the ground in shrubbery close to the way. The lightning company received a telephonic report of this incident at 2.25 p.m. and promised to send an inspector. At 4 p.m., the neighboring school turned out and as the children went home one of the boys, of the age 9 years, touched the wire with his hand and received a shock which resulted in his death. The CFI renders decision in favor of Manila Electric. Co. ISSUE: WON Manila Electric Co. is liable. HELD: We are of the opinion that the presumption of negligence on the part of the company from the breakage of this wire has been overcome, and the defendant is in our opinion responsible for the accident. Furthermore, when notice received at the Malabon station at 2.25pm, somebody should have been dispatched to the scene of the trouble at once, or other measures taken to guard the point of danger; but more than an hour and a half passed before anyone representing the company appeared on the scene, and in the meantime this child had been claimed as a victim. The circumstances that the boy who was killed touched the wire after one of his companions had warned him not to do so, did not relieve the company of responsibility, owing to his immature years and natural curiosity of a child to do something out of ordinary. 57. FEDERICO YLARDE vs EDGARDO AQUINO FACTS: Soriano was the school principal and Aquino was a teacher. The school was littered with concrete blocks. Teacher Banez started burying them. Aquino gathered 18 male pupils to help. He ordered them to dig but work wasnt finished. The following day, Aquino called 4 of the 18 pupils to continue. Aquino continued digging while the pupils remained inside the pit throwing out the loose soil. Aquino left the children to level the loose soil and borrowed a key from Banez. Aquino told the kids not to touch the stone. 3 of the 4 kids jumped into the pit. The remaining Abaga jumped on the concrete block causing it to slide down. The 2 kids were able to escape but student Ylarde sustained injuries. Three days later, he died. Parents filed suit against Aquino and Soriano. Lower court dismissed the case and CA affirmed and said child Ylarde was negligent. ISSUE: WON Aquino and Soriano can be held liable for damages.

HELD: As regards the principal, we hold that he cannot be made responsible for the death of the child Ylarde, he being the head of an academic school and not a school of arts and trades. This is in line with our ruling in Amadora vs. Court of Appeals, wherein this Court thoroughly discussed the doctrine that under Article 2180 of the Civil Code, it is only the teacher and not the head of an academic school who should be answerable for torts committed by their students. This Court went on to say that in a school of arts and trades, it is only the head of the school who can be held liable. From a review of the record of this case, it is very clear that private respondent Aquino acted with fault and gross negligence when he: (1) failed to avail himself of services of adult manual labourers and instead utilized his pupils aged ten to eleven to make an excavation near the one-ton concrete stone which he knew to be a very hazardous task; (2) required the children to remain inside the pit even after they had finished digging, knowing that the huge block was lying nearby and could be easily pushed or kicked aside by any pupil who by chance may go to the perilous area; (3) ordered them to level the soil around the excavation when it was so apparent that the huge stone was at the brink of falling; (4) went to a place where he would not be able to check on the children's safety; and (5) left the children close to the excavation, an obviously attractive nuisance. The negligent act of private respondent Aquino in leaving his pupils in such a dangerous site has a direct causal connection to the death of the child Ylarde. Left by them, it was but natural for the children to play around. Tired from the strenuous digging, they just had to amuse themselves with whatever they found. Driven by their playful and adventurous instincts and not knowing the risk they were facing three of them jumped into the hole while the other one jumped on the stone. Since the stone was so heavy and the soil was loose from the digging, it was also a natural consequence that the stone would fall into the hole beside it, causing injury on the unfortunate child caught by its heavy weight. Everything that occurred was the natural and probable effect of the negligent acts of private respondent Aquino. Needless to say, the child Ylarde would not have died were it not for the unsafe situation created by private respondent Aquino which exposed the lives of all the pupils concerned to real danger. 58. FAR EASTERN SHIPPING vs COURT OF APPEALS FACTS: M/V PAVLODAR was owned and operated by the Far Eastern Shipping Co.. It arrived at the port of Manila from Columbia. Capt. Abellana was tasked by Philippine Port Authority to supervise the berthing. Senen Gavino was assigned by Manila Pilots Association to conduct docking maneuvers for the safe berthing of the vessel to Berth 4. Gavino boarded the vessel with Victor Kavankov, the master vessel. The vessel then anchor and proceeded to the Manila International Port. The vessel reached the landmark and Gavino ordered the engine stopped. When the vessel was about 2,000 ft. from the pier, Gavino ordered the anchor dropped and the two shackles were dropped. However, the anchor did not take hold as expected and the speed of the vessel did not slacken causing a commotion to ensue. After Gavino noticed that the anchor did not take hold, he ordered the engines half- astern. Abellana, who was then at pier apron noticed the vessel was approaching fast. Gavino thereafter gave full- astern but before the right anchor and shackles could be dropped, the vessel rammed into the apron of the pier causing damage to the peir. The vessel sustained damage too. The PPA filed before the trial court for a sum of money against Far Eastern, Gavino and MPA. The trial

court renders decision in favor of PPA. The CA affirmed the findings of the court with modifications. ISSUE: WON, FESC, Gavino, and MPA are solidarily liable. HELD: 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- 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. 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 circumstances of the case, it may appear that one of them was culpable, and that the duty owed by them to the injured person was not the same. No actors 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. There is no contribution between the tortfeasors whose liability is solidary since both of them are liable for the total damage. As a general rule, the owners or those in possession and control of a vessel are liable for all natural and proximate damages caused to persons or property by reason of her negligent management or navigation. 59. CULION ICE, FISH AND ELECTRIC CO. vs PHIL. MOTORS CORPORATION FACTS: The plaintiff and defendant are domestic corporations; H.D. Cranston was the representative of the plaintiff. Plaintiff was the registered owner of the motor schooner Gwendoline, which was used in the fishing trade in the Philippine Islands. In January, 1925, Cranston decided, if practicable, to have the engine on the Gwendoline changed from a gasoline consumer to a crude oil burner. He therefore made known his desire to McLeod & Co., thru Mc Kellar, and was told that he might make inquiries of the Philippine Motors Corporations. Cranston had a conference with PMC thru Quest, its manager, who agreed to do the job, with the understanding that payment should be made upon completion of the work. As a result of the aforesaid interview, work of effecting the change in the engine was begun and conducted under the supervision of Quest. Quest then installed a new carburetor. The result of this experiment was satisfactory. In the course of the preliminary work upon the carburetor and its connections, it was observed that the carburetor was flooding; this was called to Quest's attention. After preliminary experiments and adjustments had been made, the boat was taken out into the bay for a trial run. The first part of the course was covered without any untoward development. As the boat was coming in from this run, the engine stopped, and connection again had to be made with the gasoline line to get a new start. After this had been done, the mechanic, switched to the tube connecting with the new mixture. A moment later a back fire occurred in the cylinder chamber. This caused a flame to shoot back into the carburetor, and instantly the carburetor and adjacent parts were covered

with a mass of flames, which the members of the crew were unable to subdue. They were therefore compelled, as the fire spread, to take to a boat, and their escape was safely affected, but the Gwendoline was reduced to a mere hulk. The salvage from, the wreck, when sold, brought only the sum of P150. The value of the boat, before the accident occurred, as the court found, was P10, 000 ISSUE: WON defendant is liable for the loss of the boat. HELD: The trial judge seems to have proceeded on the idea that, inasmuch as Quest had control of the Gwendoline during the experimental run, the defendant corporation was in the position of a bailee and that, as a consequence, the burden of proof was on the defendant to exculpate itself from responsibility by proving that the accident was not due to the fault of Quest. We are unable to accede to this point of view. Certainly, Quest was not in charge of the navigation of the boat on this trial run. His employment contemplated the installation of new parts in the engine only, and it seems rather strained to hold that the defendant corporation had thereby become bailee of the boat. As a rule workmen who make repairs on a ship in its owner's yard, or a mechanic who repairs a coach without taking it to his shop, are not bailees, and their rights and liabilities are determined by the general rules of law, under their contract. The true bailee acquires possession and what is usually spoken of as special property in the chattel bailed. As a consequence of such possession and special property, the bailee is given a lien for his compensation. These ideas seem to be incompatible with the situation now under consideration. But though defendant cannot be held liable in the supposition that the burden of proof had not been sustained by it in disproving the negligence of its manager, we are nevertheless of the opinion that the proof shows by a clear preponderance that the accident to the Gwendoline and the damages resulting there from are chargeable to the negligence or lack of skill of Quest. Cases 51-59 GANO, JEVAN KLAIRE L. 60. E. M. WRIGHT vs MANILA ELECTRIC R.R. & LIGHT CO. FACTS: This is an action brought to recover damages for injuries sustained in an accident which occurred in Caloocan on the night of August 8, 1909. The defendant is a corporation engaged in operating an electric street railway in the city of Manila and its suburbs, including the municipality of Caloocan. The plaintiff's residence in Caloocan fronts on the street along which defendant's tracks run, so that to enter his premises from the street plaintiff is obliged to cross defendant's tracks. On the night mentioned plaintiff drove home in a calesa and in crossing the tracks to enter his premises the horse stumbled, leaped forward, and fell, causing the vehicle with the rails, resulting in a sudden stop, threw plaintiff from the vehicle and caused the injuries complained of. It is admitted that the defendant was negligent in maintaining its tracks as described, but it is contended that the plaintiff was also negligent in that he was intoxicated to such an extent at the time of the accident that he was unable to take care of himself properly and that such intoxication was the primary cause of the accident.

Trial Court: both parties were negligent, but that the plaintiff's negligence was not as great as defendant's and under the authority of the case of Rakes vs. A. G. & P. Co. (7 Phil. Rep., 359) apportioned the damages and awarded plaintiff a judgment of P1,000. ISSUE: Whether or not the plaintiff was negligent. SC: No. As is clear from reading the opinion, no facts are stated therein which warrant the conclusion that the plaintiff was negligent. The conclusion that if he had been sober he would not have been injured is not warranted by the facts as found. It is impossible to say that a sober man would not have fallen from the vehicle under the conditions described. A horse crossing the railroad tracks with not only the rails but a portion of the ties themselves aboveground, stumbling by reason of the unsure footing and falling, the vehicle crashing against the rails with such force as to break a wheel, this might be sufficient to throw a person from the vehicle no matter what his condition; and to conclude that, under such circumstances, a sober man would not have fallen while a drunken man did, is to draw a conclusion which enters the realm of speculation and guesswork. It having been found that the plaintiff was not negligent, it is unnecessary to discuss the question presented by the appellant company with reference to the applicability of the case of Rakes vs. A. G. & P. Co., above; and we do not find facts in the opinion of the court below which justify a larger verdict than the one found. 61. PRECIOLITA V. CORLISS vs THE MANILA RAILROAD CO. FACTS: On the evening of Feb 21, 1957, at the railroad crossing in Balibago, Angeles, Pampanga, in front of the Clark Air Force Base, the jeep that Ralph W. Corliss was driving collided collided with a locomotive of defendant-appellee Manila Railroad Company. Before the locomotive, which had been previously inspected and found to be in good condition approached, the crossing, that is, about 300 meters away, the defendant blew the siren and repeated it in compliance with the regulations until he saw the jeep suddenly spurt and that although the locomotive was running between 20 and 25 kilometers an hour and although he had applied the brakes, the jeep was caught in the middle of the tracks. Trial court: Dismissed the complaint for recovery of damages filed by plaintiff-appellant, Preciolita V. Corliss. The lower court, after summarizing the evidence, concluded that the deceased "in his eagerness to beat, so to speak, the oncoming locomotive, took the risk and attempted to reach the other side, but unfortunately he became the victim of his own miscalculation." ISSUE: Wether or not the decision of the lower court is correct. SC: Yes. Mr. Justice Cardozo said that bear witness to the need for caution in framing standards of behavior that amount to rules of law.... Extraordinary situations may not wisely or fairly be subjected to tests or regulations that are fitting for the commonplace or normal." What Justice Cardozo announced would merely emphasize what was set forth earlier that each and every, case on questions of negligence is to be decided in accordance with

the peculiar circumstances that present themselves. There can be no hard and fast rule. There must be that observance of that degree of care, precaution, and vigilance which the situation demands. Thus defendant-appellee acted. It is undeniable then that no negligence can rightfully be imputed to it. What commends itself for acceptance is this conclusion arrived at by the lower court: "Predicated on the testimonies of the plaintiff's witnesses, on the knowledge of the deceased and his familiarity with the setup of the checkpoint, the existence of the tracks; and on the further fact that the locomotive had blown its siren or whistle, which was heard by said witnesses, it is clear that Corliss Jr. was so sufficiently warned in advance of the oncoming train that it was incumbent upon him to avoid a possible accident and this consisted simply in stopping his vehicle before the crossing and allowing the train to move on. A prudent man under similar circumstances would have acted in this manner. This, unfortunately, Corliss, Jr. failed to do." WHEREFORE, the decision of the lower court of November 29, 1962 dismissing the complaint, is affirmed. Without pronouncement as to costs. 62. VICTORINO CUSI and PILAR POBRE vs PHILIPPINE NATIONAL RAILWAYS FACTS: On the night of October 5, 1963, plaintiffs-appellees attended a birthday party inside the United Housing Subdivision in Paranaque, Rizal. After the party which broke up at about 11 o'clock that evening, the plaintiffs-appellees proceeded home in their Vauxhall car with Victorino Cusi at the wheel. Upon reaching the railroad tracks, finding that the level crossing bar was raised and seeing that there was no flashing red light, and hearing no whistle from any coming train, Cusi merely slackened his speed and proceeded to cross the tracks. At the same time, a train bound for Lucena traversed the crossing, resulting in a collision between the two. The impact threw the plaintiffsappellees out of their car which was smashed. One Benjamin Franco, who came from the same party and was driving a vehicle right behind them, rushed to their aid and brought them. to San Juan de Dios Hospital for emergency treatment. Victorino Cusi claimed that prior to the accident he was a successful businessman the Special Assistant to the Dolor Lopez Enterprises, the managing partner of Cusi and Rivera Partnership, the manager of his ricemill, and with substantial investments in other business enterprises. As a result of his injuries, he was unable to properly attend to his various business undertakings. On the other hand, his wife, Pilar, was a skilled music and piano teacher. After the accident, she lost the dexterity of her fingers forcing her to quit her profession. She also bore ugly scars on several parts of her body, and she suffered anxiety of a possible miscarriage being then five (5) months pregnant at the time of the accident. Court of First Instance: Ordered defendant-appellant to indemnify the plaintiffsappellees in the total amount of Two Hundred Thirty-Nine Thousand and Six Hundred Forty-Eight Pesos, and Seventy-Two Centavos (P239,648.72) for injuries received in a collision caused by the gross negligence of defendant-appellant, plus Ten Thousand Pesos (P10,000.00) as attorney's fees and expenses of litigation. ISSUE: Wether or not gross negligence of Victorino Cusi was the proximate cause of the collision.

SC: No.After a thorough perusal of the facts attendant to the case, this Court is in fun accord with the lower court. Plaintiff-appellee Victorino Cusi had exercised all the necessary precautions required of him as to avoid injury to -himself and to others. We find no need for him to have made a full stop; relying on his faculties of sight and hearing, Victorino Cusi had no reason to anticipate the impending danger. The record shows that the spouses Cusi previously knew of the existence of the railroad crossing, having stopped at the guardhouse to ask for directions before proceeding to the party. At the crossing, they found the level bar raised, no warning lights flashing nor warning bells ringing, nor whistle from an oncoming train. They safely traversed the crossing. On their return home, the situation at the crossing did not in the least change, except for the absence of the guard or flagman. Hence, on the same impression that the crossing was safe for passage as before, plaintiff-appellee Victorino Cusi merely slackened his speed and proceeded to cross the tracks, driving at the proper rate of speed for going over railroad crossings. Had defendant-appellant been successful in establishing that its locomotive driver blew his whistle to warn motorists of his approach to compensate for the absence of the warning signals, and that Victorino Cusi, instead of stopping or slackening his speed, proceeded with reckless speed and regardless of possible or threatened danger, then We would have been put in doubt as to the degree of prudence exercised by him and would have, in all probability, declared him negligent. But as the contrary was established, we remain convinced that Victorino Cusi had not, through his own negligence, contributed to the accident so as to deny him damages from the defendant-appellant. The only question that now remains to be resolved is the reasonableness of the amount awarded as damages to the plaintiffs- appellees. The following actual expenses and losses are fully substantiated: (a) Hospital bills of Mrs. Cusi from October, 1963 to May, 1964 in the amount of Thirteen Thousand Five Hundred Fifty Pesos and Five Centavos (P13,550.05); (b) Another hospital bill of Mrs. Cusi in 1965 in the amount of Three Thousand and One Pesos and Ninety Centavos (P3,001.90); (c) Doctor's fees for two surgical operations performed on Mrs. Cusi by one Dr. Manuel Rivera in the amount of One Thousand and Five Hundred Pesos (Pl,500.00); (d) Loss of Victorino's wrist watch valued at Two Hundred and Fifty Pesos (P250.00); (e) Loss of Pilar's half of her pair of demand earrings(l-carrats) valued at Two Thousand Seven Hundred and Fifty Pesos (P2,750,00); (f) Repair of the damaged Vauxhall car in the amount of Two Thousand Eight Hundred and Ninety Four Pesos and Seventy- Seven Centavos (P2,894.77). The total award of actual damages in the amount of Twenty Three Thousand Nine Hundred Forty-Six Pesos and Seventy-Two Centavos (P23,946.72) is, therefore, correct. The lower court awarded Twenty-One Thousand Six Hundred Pesos (P21,600.00) to Mrs. Cusi for loss of income for the three years that she was under constant medical treatment, and Fourteen Thousand Pesos (P14,000.00) for impairment of her earning capacity; and Forty Thousand Pesos (P 40,000.00) to Mr. Cusi for loss of income for the eight months that he was disabled and impairment of his earning capacity. We find the award reasonable. The records show that Mrs. Cusi, previously a skilled piano teacher averaging a monthly income of Six Hundred Pesos (P600.00), cannot now teach nor play the piano since the accident which resulted in the loss of the dexterity of her fingers;

likewise, Mr. Cusi cannot now vigorously attend to his businesses which previously netted him a monthly average income of Five Thousand Pesos (P5,000.00). As regards the award of Twenty Thousand Pesos (P20,000.00) for profits which Victorino Cusi failed to realize from a certain real estate transaction with the Dolor Lopez Enterprises, we affirm the same as the defendant-appellant has failed to present an iota of evidence to overcome plaintiffs-appellees' evidence credited by the lower court as to the certainty of the materialization of the stated transaction. The award of Seventy Thousand Pesos (P70,000.00) to Mrs. Cusi and Fifty Thousand Pesos (P50,000.00) to Victorino Cusi as moral damages is not excessive. In their own respective fields of endeavor, both were successful. Now they have to bear throughout their whole lifetime the humiliation wrought by their physical deformities which no doubt affected, and will continue to do so, their social lives, their financial undertakings, and even their mental attitudes. Likewise, the amount of Ten Thousand Pesos (P10,000.00) given as attorney's fees and expenses of litigation is not unreasonable. The total amount of damages awarded by the trial court should bear legal interest at 6% from the rendition of the j judgment, which was on March 26, 1968. WHEREFORE, the judgment of the lower court is hereby AFFIRMED with the modification that the total amount of damages shall bear legal interest at six per cent (6%) from the rendition of the decision dated March 26, 1968 63. MARINDUQUE IRON MINES AGENTS, INC., vs THE WORKMENS COMPENSATION COMMISSION FACTS: on August 23, 1951, at 6:chanry00 a.m. in Bo. Sumangga, Mogpog, Marinduque, the deceased Mamador together with other laborers of theRespondent-corporation, (Marinduque Iron Mines Agents Inc.) boarded a truck belonging to the latter, which was then driven by one Procopio Macunat, also employed by the corporation, and on its way to their place of work at the mine camp at Talantunan, while trying to overtake another truck on the company road, it turned over and hit a coconut tree, resulting in the death of said Mamador and injury to the others. Procopio Macunat was prosecuted, convicted and sentenced to indemnify the heirs of the deceased. (Criminal Case No. 1491). He has paid nothing however, to the latter. THE WORKMENS COMPENSATION COMMISSION: Confirming the referees award of compensation to the heirs of Pedro Mamador for his accidental death. ISSUE: wether or not violating the employers prohibition against laborers riding the haulage trucks would constitute negligence. SC: There is no doubt that mere riding on haulage truck or stealing a ride thereon is not negligence, ordinarily. It couldnt be, because transportation by truck is not dangerous per se. It is argued that there was notorious negligence in this particular instance because there was the employers prohibition. Does violation of this order constitute

negligence? Many courts hold that violation of a statute or ordinance constitutes negligence per se. Others consider the circumstances. However there is practical unanimity in the proposition that violation of a rule promulgated by a Commission or board is not negligence per se; chan roblesvirtualawlibrarybut it may be evidence of negligence. (C.J.S., Vol. 65, p. 427.) This order of the employer (prohibition rather) couldnt be of a greater obligation than the rule of a Commission or board. And the referee correctly considered this violation as possible evidence of negligence; chan roblesvirtualawlibrarybut it declared that under the circumstance, the laborer could not be declared to have acted with negligence. Correctly, it is believed, since the prohibition had nothing to do with personal safety of the riders. Such finding is virtually a finding of fact which we may not overrule in this certiorari proceeding. Nevertheless, even granting there was negligence, it surely was not notorious negligence, which we have interpreted to mean the same thing as gross negligence 3 implying conscious indifference to consequences pursuing a course of conduct which would naturally and probably result in injury utter disregard of consequences. (38 Am. Jur., 691) Getting or accepting a free ride on the companys haulage truck couldnt be gross negligence, because as the referee found, no danger or risk was apparent. There being no other material point raised in the petition for review, the award of compensation is hereby affirmed, with costs against Petitioner. 64. CIPRIANO and/or E.S. CIPRIANO ENTERPRISES vs. CA FACTS: In the afternoon of May 1, 1991, fire broke out at the Lambat restaurant, which petitioner also owned, adjoining his Mobilkote rustproofing shop. The fire destroyed both the shop and the restaurant, including private respondents Kia Pride. The car had been kept inside the building, allegedly to protect it from theft. Petitioner claimed that despite efforts to save the vehicle, there was simply not enough time to get it out of the building, unlike three other cars which had been saved because they were parked near the entrance of the garage. On May 8 1991, private respondent sent a letter to petitioner, demanding reimbursement for the value of the Kia Pride. In reply, petitioner denied liability on the ground that the fire was a fortuitous event. This prompted private respondent to bring this suit for the value of its vehicle and for damages against petitioner. Private respondent alleged that its vehicle was lost due to the negligence and imprudence of the petitioner, citing petitioners failure to register his business with the Department of Trade and Industry under P.D. No. 1572 and to insure it as required in the rules implementing the Decree. In his Answer, petitioner invoked Art. 1174 of the Civil Code and denied liability for the loss which he alleged was due to a fortuitous event. He later testified that he employed an electrician who regularly inspected the lighting in his restaurant and rustproofing shop. In addition, he claimed he had installed fire-fighting devices and that the fire was

an accident entirely independent of his will and devoid of any negligence on his part. He further averred that private respondents car was ready for release as early as afternoon of April 30, 1991, and that it was private respondents delay in claiming it that was the cause of the loss. RTC: The trial court sustained the private respondents contention that the failure of defendant to comply with P.D. No. 1572 is in effect a manifest act of negligence which renders defendant [petitioner herein] liable for the loss of the car even if the same was caused by fire, even as it ruled that the business of rustproffing is definitely covered by P.D. No. 1572. Since petitioner did not register his business and insure it, he must bear the cost of loss of his customers. As already noted, the court ordered petitioner to pay private respondent P252,155.00 with interest at 6% per annum from the filing of the case and attorneys fees in the amount of P10,000.00. CA: affirmed the decision of the RTC. The Court of Appeals ruled that the provisions of the Civil Code relied upon by the petitioner are not applicable to this case, and that the law applicable to the case is P.D. No. 1572, the purpose of which is to protect customers who entrust their properties to service and repair enterprises. ISSUE: Whether or not petitioner was required to insure his business and the vehicles received by him in the course of his business. Whether or not his failure to do so constituted negligence, rendering him liable for loss due to the risk required to be insured against. SC: We hold that both questions must be answered in the affirmative. We have already held that violation of a statutory duty is negligence per se. In F.F. Cruz and Co., Inc. v. Court of Appeals, we held the owner of a furniture shop liable for the destruction of the plaintiffs house in a fire which started in his establishment in view of his failure to comply with an ordinance which required the construction of a firewall. In Teague v. Fernandez, we stated that where the very injury which was intended to be prevented by the ordinance has happened, non-compliance with the ordinance was not only an act negligence, but also the proximate cause of the death. Indeed, the existence of a contract between petitioner and private respondent does not bar a finding of negligence under the principles of quasi-delict, as we recently held in Fabre v. Court of Appeals. Petitioner's negligence is the source of his obligation. He is not being held liable for breach of his contractual obligation due to negligence but for his negligence in not complying with a duty imposed on him by law. It is therefore immaterial that the loss occasioned to private respondent was due to a fortuitous event, since it was petitioners negligence in not insuring against the risk which was the proximate cause of the loss. Thus, P.D. No. 1572, 1 requires service and repair enterprises for motor vehicles, like that of petitioners to register with the Department of Trade and Industry. As condition for such registration or accreditation, Ministry Order No. 32 requires covered enterprises to secure insurance coverage. Rule III of this Order provides in pertinent parts 1- REQUIREMENTS FOR ACCREDITATION 1) Enterprises applying for original accreditation shall submit the following: 1.1. List of machineries/equipment/tools in useful condition;

1.2. List of certified engineers/accredited technicians mechanics with their personal data; 1.3. Copy of Insurance Policy of the shop covering the property entrusted by its customer for repair, service or maintenance together with a copy of the official receipt covering the full payment of premium; 1.4. Copy of Bond referred to under Section 7, Rule III of this Rules and Regulations; 1.5. Written service warranty in the form prescribed by the Bureau; 1.6. Certificate issued by the Securities and Exchange Commission and Articles of Incorporation or Partnership in case of corporation or partnership; 1.7. Such other additional documents which the Director may require from time to time. 1.8 - INSURANCE POLICY The insurance policy for the following risks like theft, pilferage, fire, flood and loss should cover exclusively the machines, motor vehicles, heavy equipment, engines, electronics, electrical, airconditioners, refrigerators, office machines and data processing equipment, medical and dental equipment, other consumer mechanical and industrial equipment stored for repair and/or service in the premises of the applicant. There is thus a statutory duty imposed on petitioner and it is for his failure to comply with this duty that he was guilty of negligence rendering him liable for damages to private respondent. While the fire in this case may be considered a fortuitous event,[ this circumstance cannot exempt petitioner from liability for loss. We think, however, that the Court of Appeals erred in sustaining the award of attorneys fees by the lower court. It is now settled that the reasons or grounds for an award of attorneys fees must be set forth in the decision of the court. They cannot be left to inference as the appellate court held in this case. The reason for this is that it is not sound policy to penalize the right to litigate. An award of attorneys fees, being an exception to this policy and limited to the grounds enumerated in the law,[ must be fully justified in the decision. It can not simply be inserted as an item of recoverable damages in the judgment of the court. Since in this case there is no justification for the award of attorneys fees in the decision of the trial court, it was error for the Court of Appeals to sustain such award. WHEREFORE, the decision, dated November 18, 1992, of the Court of Appeals is AFFIRMED, with the modification that the award of attorneys fees is DELETED. 65. F.F. CRUZ and CO., INC vs THE COURT OF APPEALS FACTS: The furniture manufacturing shop of petitioner in Caloocan City was situated adjacent to the residence of private respondents. Sometime in August 1971, private respondent Gregorio Mable first approached Eric Cruz, petitioner's plant manager, to request that a firewall be constructed between the shop and private respondents' residence. The request was repeated several times but they fell on deaf ears. In the early morning of September 6, 1974, fire broke out in petitioner's shop. Petitioner's employees, who slept in the shop premises, tried to put out the fire, but their efforts proved futile. The fire spread to private respondents' house. Both the shop and the house were razed to the ground. The cause of the conflagration was never discovered. The National Bureau of Investigation found specimens from the burned structures negative for the presence of inflammable substances.

Court of First Instance: the Court hereby renders judgment, in favor of plaintiffs, and against the defendant: 1. Ordering the defendant to pay to the plaintiffs the amount of P80,000.00 for damages suffered by said plaintiffs for the loss of their house, with interest of 6% from the date of the filing of the Complaint on January 23, 1975, until fully paid; 2. Ordering the defendant to pay to the plaintiffs the sum of P50,000.00 for the loss of plaintiffs' furnitures, religious images, silverwares, chinawares, jewelries, books, kitchen utensils, clothing and other valuables, with interest of 6% from date of the filing of the Complaint on January 23, 1975, until fully paid; 3. Ordering the defendant to pay to the plaintiffs the sum of P5,000.00 as moral damages, P2,000.00 as exemplary damages, and P5,000.00 as and by way of attorney's fees; 4. With costs against the defendant; 5. Counterclaim is ordered dismissed, for lack of merit. CA: affirmed the decision of the trial court but reduced the award of damages. The damages to be awarded to plaintiff should be reduced to P70,000.00 for the house and P50,000.00 for the furniture and other fixtures with legal interest from the date of the filing of the complaint until full payment. ISSUE: whether or not the doctrine of res ipsa loquitur is applicable in this cases SC: The facts of the case likewise call for the application of the doctrine, considering that in the normal course of operations of a furniture manufacturing shop, combustible material such as wood chips, sawdust, paint, varnish and fuel and lubricants for machinery may be found thereon. It must also be noted that negligence or want of care on the part of petitioner or its employees was not merely presumed. The Court of Appeals found that petitioner failed to construct a firewall between its shop and the residence of private respondents as required by a city ordinance; that the fire could have been caused by a heated motor or a lit cigarette; that gasoline and alcohol were used and stored in the shop; and that workers sometimes smoked inside the shop [CA Decision, p. 5; Rollo, p. 33.] Even without applying the doctrine of res ipsa loquitur, petitioner's failure to construct a firewall in accordance with city ordinances would suffice to support a finding of negligence. Even then the fire possibly would not have spread to the neighboring houses were it not for another negligent omission on the part of defendants, namely, their failure to provide a concrete wall high enough to prevent the flames from leaping over it. As it was the concrete wall was only 2-1/2 meters high, and beyond that height it consisted merely of galvanized iron sheets, which would predictably crumble and melt when subjected to intense heat. Defendant's negligence, therefore, was not only with respect to the cause of the fire but also with respect to the spread thereof to the neighboring houses. [Africa v. Caltex (Phil.), Inc., supra; Emphasis supplied.] In the instant case, with more reason should petitioner be found guilty of negligence since it had failed to construct a firewall between its property and private respondents' residence which sufficiently complies with the pertinent city ordinances. The failure to comply with an ordinance providing for safety regulations had been ruled by the Court

as an act of negligence [Teague v. Fernandez, G.R. No. L-29745, June 4, 1973, 51 SCRA 181.] The Court of Appeals, therefore, had more than adequate basis to find petitioner liable for the loss sustained by private respondents. 2. Since the amount of the loss sustained by private respondents constitutes a finding of fact, such finding by the Court of Appeals should not be disturbed by this Court [M.D. Transit & Taxi Co., Inc. v. Court of Appeals, G.R. No. L-23882, February 17, 1968, 22 SCRA 559], more so when there is no showing of arbitrariness. In the instant case, both the CFI and the Court of Appeals were in agreement as to the value of private respondents' furniture and fixtures and personal effects lost in the fire (i.e. P50,000.00). With regard to the house, the Court of Appeals reduced the award to P70,000.00 from P80,000.00. Such cannot be categorized as arbitrary considering that the evidence shows that the house was built in 1951 for P40,000.00 and, according to private respondents, its reconstruction would cost P246,000.00. Considering the appreciation in value of real estate and the diminution of the real value of the peso, the valuation of the house at P70,000.00 at the time it was razed cannot be said to be excessive. 3. While this Court finds that petitioner is liable for damages to private respondents as found by the Court of Appeals, the fact that private respondents have been indemnified by their insurer in the amount of P35,000.00 for the damage caused to their house and its contents has not escaped the attention of the Court. Hence, the Court holds that in accordance with Article 2207 of the Civil Code the amount of P35,000.00 should be deducted from the amount awarded as damages. Said article provides: Art. 2207. If the plaintiffs property has been insured, and he has received indemnity from the insurance company for the injury or loss arising out of the wrong or breach of contract complained of, the insurance company is subrogated to the rights of the insured against the wrongdoer or the person who violated the contract. If the amount paid by the insurance company does not fully cover the injury or loss, the aggrieved party shall be entitled to recover the deficiency from the person causing the loss or injury. (Emphasis supplied.] The law is clear and needs no interpretation. Having been indemnified by their insurer, private respondents are only entitled to recover the deficiency from petitioner. On the other hand, the insurer, if it is so minded, may seek reimbursement of the amount it indemnified private respondents from petitioner. This is the essence of its right to be subrogated to the rights of the insured, as expressly provided in Article 2207. Upon payment of the loss incurred by the insured, the insurer is entitled to be subrogated pro tanto to any right of action which the insured may have against the third person whose negligence or wrongful act caused the loss [Fireman's Fund Insurance Co. v. Jamila & Co., Inc., G.R. No. L-27427, April 7, 1976, 70 SCRA 323.] Under Article 2207, the real party in interest with regard to the indemnity received by the insured is the insurer [Phil. Air Lines, Inc. v. Heald Lumber Co., 101 Phil. 1031, (1957).] Whether or not the insurer should exercise the rights of the insured to which it had been subrogated lies solely within the former's sound discretion. Since the insurer is

not a party to the case, its identity is not of record and no claim is made on its behalf, the private respondent's insurer has to claim his right to reimbursement of the P35,000.00 paid to the insured. WHEREFORE, in view of the foregoing, the decision of the Court of Appeals is hereby AFFIRMED with the following modifications as to the damages awarded for the loss of private respondents' house, considering their receipt of P35,000.00 from their insurer: (1) the damages awarded for the loss of the house is reduced to P35,000.00; and (2) the right of the insurer to subrogation and thus seek reimbursement from petitioner for the P35,000.00 it had paid private respondents is recognized. 66. HONORIA DELGADO VDA. DE GREGORIO, ET AL., vs GO CHONG BING FACTS: On or before June 2, 1952, defendant was the owner of a truck. He had a driver and a cargador or driver's helper by the name of Francisco Rosomera. In the afternoon of June 2, 1952, defendant ordered Romera to drive his truck, with instructions to follow another track driven by his driver and help the latter in crossing Sumlog river which was then flooded, should it be unable to cross the river because of the flood. Romera at that time was not a licensed driver. He only had a student's permit, issued to him on March 31, 1952 (Exhibit "1"). The truck started from the town of Lupon at about 5:30 o'clock in the afternoon, driven by Romera. Some persons boarded the truck and among them was one policeman by the name of Venancio Orfanel. While the truck was on the way, it made a stop and then Orfanel took the wheel from Romera, while the latter stayed on the driver's left, reclined on a spare tire inside of the truck. As to the circumstances under which Orfanel was able to take hold of and drive the truck, there is some dispute and this matter will be taken up later in the decision. While the truck was being driven by Orfanel, with another truck ahead of it driven by defendant's driver it so happened that they came to a truck that was trying to park on the left side of the road. Romera suggested to Orfanel that he shift to low gear and Orfanel did so. But as they approached the parking truck, and in order to avoid colliding with it, Orfanel swerved the truck towards the right. It so happened that at that time two pedestrians were on the right side of the road, As the truck had swerved to the right and was proceeding to hit the said pedestrians, Romera told Orfanel to apply the brake, but Orfanel instead of doing so put his foot on the gasoline and the truck did not stop but went on and hit and run over one of the pedestrians, by the name of Quirico Gregorio. The plaintiffs appellants' in this action are Gregorio's widow and his children and of the accident, Orfanel was prosecuted for homicide with reckless imprudence. He pleaded guilty to the charge and was sentenced accordingly. Court of First Instance: absolved defendant from liability for the accidental death of Quirico Gregorio ISSUE: whether or not the defendant is liable. SC: We are of the belief that defendant's claim that Romera gave the wheel to the policeman for fear of, or out of respect for, the latter, has been proved by a preponderance of the evidence. The testimony of witness Dayo is not corroborated by any other testimony. As he testified that he was two meters behind Romera, he could not have noticed with exactness the circumstances under which the policeman was able

to get hold of the wheel and drive the truck and his testimony in that respect cannot be believed. We are, therefore, forced to the conclusion that the defendant's cargador, or Francisco Romera gave the wheel to Orfanel out of respect for the latter, who was a uniformed policeman and because he believed that the latter had both the ability and the authority to drive the truck, especially as he himself had only a student's permit and not a driver's license. The court a quo dismissed the action on the ground that as the death or accident was caused by an act or omission of a person who is not in any way related to the defendant, and as such act or omission was punishable by law, and as a matter of fact he had already been punished therefor, no civil liability should be imposed upon the defendant. Against this decision the plaintiffs have appealed to this Court, contending that when defendant permitted his cargador, who was not provided with a driver's license, to drive the truck, he thereby violated the provisions of the Revised Motor Vehicle Law (section 28., Act No. 3992), and that this constitutes negligence per se. (People vs. Santos, et al., CA-G.R. No. 1088-1089R.) But admitting for the sake of argument that the defendant had so violated the law, or may be deemed negligent in entrusting the truck to one who is not provided with a driver's license, it is clear that he may not be declared liable for the accident because his negligence was not the direct and proximate cause thereof. The leading case in this jurisdiction on negligence is that of Taylor vs. Manila Electric Railroad and Light Company, 16 Phil. 8. Negligence as a source of obligation both under the civil law and in American cases was carefully considered and it was held: We agree with counsel for appellant that under the Civil Code, as under the generally accepted doctrine in the United States, the plaintiff in an action such as that under consideration, in order to establish his right to a recovery, must establish by competent evidence: (1) Damages to the plaintiff. (2) Negligence by act or omission of which defendant personally, or some person for whose acts it must respond, was guilty. (3) The connection of cause and effect between the negligence and the damage. (Taylor vs. Manila Electric Railroad and Light Co., supra. p.15) In accordance with the decision of the Supreme Court of Spain, in order that a person may be held guilty for damage through negligence, it is necessary that there be an act or omission on the part of the person who is to be charged with the liability and that damage is produced by the said act or omission. In accordance with the fundamental principle of proof, that the burden thereof is upon the plaintiff, it is apparent that it is the duty of him who shall claim damages to establish their existence. The decisions of April 9, 1896, and March 18, July 6, and September 27, 1898, have especially supported the principle, the first setting forth in detail the necessary points of the proof, which are two: An Act or omission on the part of the person who is to be charged with the liability, and the production of the damage by said act or omission. This includes, by inference, the establishment of a relation of cause or effect between the act or the omission and the damage; the latter must be the direct result of one of the first two. As the decision of March 22, 1881, said, it is necessary that the damages result immediately and directly from an act performed culpably and wrongfully;

'necessarily presupposing, a legal ground for imputability. (Taylor vs. Manila Electric Railroad and Light Co., supra, p. 28.). It is evident that the proximate, immediate and direct cause of the death of the plaintiffs' intestate was the negligence of Orfanel, a uniformed policeman, who took the wheel of the truck from defendant's cargador, in spite of the protest of the latter. The reason for absolving the defendant therefor is not because the one responsible for the accident had already received indemnification for the accident, but because there is no direct and proximate causal connection between the negligence or violation of the law by the defendant to the death of the plaintiff's intestate. For the foregoing considerations, the judgment appealed from is hereby affirmed, without costs. 67. SANITARY STEAM LAUNDRY, INC vs COURT OF APPEALS FACTS: on August 31, 1980, a Mercedes Benz panel truck of petitioner Sanitary Steam Laundry collided with a Cimarron which caused the death of three persons and the injuries of several others. The passengers of the Cimarron were mostly employees of the Project Management Consultants, Inc. (PMCI). The Cimarron was owned by Salvador Salenga, father of one of the employees of PMCI. Driving the vehicle was Rolando Hernandez. The driver of the truck claimed that a jeepney in front of him suddenly stopped. He said he stepped on the brakes to avoid hitting the jeepney and that this caused his vehicle to swerve to the left and encroach on a portion of the opposite lane. As a result, his panel truck collided with the Cimarron on the north-bound lane. RTC: Rendered judgment for private respondents. CA: Affirmed the decision of the RTC ISSUE: Whether or not the driver of Cimarron was guilty of contributory negligence. SC: First of all, it has not been shown how the alleged negligence of the Cimarron driver contributed to the collision between the vehicles. Indeed, petitioner has the burden of showing a causal connection between the injury received and the violation of the Land Transportation and Traffic Code. He must show that the violation of the statute was the proximate or legal cause of the injury or that it substantially contributed thereto. Negligence, consisting in whole or in part, of violation of law, like any other negligence, is without legal consequence unless it is a contributing cause of the injury. Petitioner says that driving an overloaded vehicle with only one functioning headlight during nighttime certainly increases the risk of accident, that because the Cimarron had only one headlight, there was decreased visibility, and that the fact that the vehicle was overloaded and its front seat overcrowded decreased [its] maneuverability. However, mere allegations such as these are not sufficient to discharge its burden of proving clearly that such alleged negligence was the contributing cause of the injury. Furthermore, based on the evidence in this case, there was no way either driver could have avoided the collision.

68. HONORIA DELGADO VDA. DE GREGORIO, ET AL., vs GO CHONG BING FACTS: On or before June 2, 1952, defendant was the owner of a truck. He had a driver and a cargador or driver's helper by the name of Francisco Rosomera. In the afternoon of June 2, 1952, defendant ordered Romera to drive his truck, with instructions to follow another track driven by his driver and help the latter in crossing Sumlog river which was then flooded, should it be unable to cross the river because of the flood. Romera at that time was not a licensed driver. He only had a student's permit, issued to him on March 31, 1952 (Exhibit "1"). The truck started from the town of Lupon at about 5:30 o'clock in the afternoon, driven by Romera. Some persons boarded the truck and among them was one policeman by the name of Venancio Orfanel. While the truck was on the way, it made a stop and then Orfanel took the wheel from Romera, while the latter stayed on the driver's left, reclined on a spare tire inside of the truck. As to the circumstances under which Orfanel was able to take hold of and drive the truck, there is some dispute and this matter will be taken up later in the decision. While the truck was being driven by Orfanel, with another truck ahead of it driven by defendant's driver it so happened that they came to a truck that was trying to park on the left side of the road. Romera suggested to Orfanel that he shift to low gear and Orfanel did so. But as they approached the parking truck, and in order to avoid colliding with it, Orfanel swerved the truck towards the right. It so happened that at that time two pedestrians were on the right side of the road, As the truck had swerved to the right and was proceeding to hit the said pedestrians, Romera told Orfanel to apply the brake, but Orfanel instead of doing so put his foot on the gasoline and the truck did not stop but went on and hit and run over one of the pedestrians, by the name of Quirico Gregorio. The plaintiffs appellants' in this action are Gregorio's widow and his children and of the accident, Orfanel was prosecuted for homicide with reckless imprudence. He pleaded guilty to the charge and was sentenced accordingly. Court of First Instance: absolved defendant from liability for the accidental death of Quirico Gregorio ISSUE: whether or not the defendant is liable. SC: We are of the belief that defendant's claim that Romera gave the wheel to the policeman for fear of, or out of respect for, the latter, has been proved by a preponderance of the evidence. The testimony of witness Dayo is not corroborated by any other testimony. As he testified that he was two meters behind Romera, he could not have noticed with exactness the circumstances under which the policeman was able to get hold of the wheel and drive the truck and his testimony in that respect cannot be believed. We are, therefore, forced to the conclusion that the defendant's cargador, or Francisco Romera gave the wheel to Orfanel out of respect for the latter, who was a uniformed policeman and because he believed that the latter had both the ability and the authority to drive the truck, especially as he himself had only a student's permit and not a driver's license. The court a quo dismissed the action on the ground that as the death or accident was caused by an act or omission of a person who is not in any way related to the defendant, and as such act or omission was punishable by law, and as a matter of fact he had already been punished therefor, no civil liability should be imposed upon the defendant. Against this decision the plaintiffs have appealed to this Court, contending that when

defendant permitted his cargador, who was not provided with a driver's license, to drive the truck, he thereby violated the provisions of the Revised Motor Vehicle Law (section 28., Act No. 3992), and that this constitutes negligence per se. (People vs. Santos, et al., CA-G.R. No. 1088-1089R.) But admitting for the sake of argument that the defendant had so violated the law, or may be deemed negligent in entrusting the truck to one who is not provided with a driver's license, it is clear that he may not be declared liable for the accident because his negligence was not the direct and proximate cause thereof. The leading case in this jurisdiction on negligence is that of Taylor vs. Manila Electric Railroad and Light Company, 16 Phil. 8. Negligence as a source of obligation both under the civil law and in American cases was carefully considered and it was held: We agree with counsel for appellant that under the Civil Code, as under the generally accepted doctrine in the United States, the plaintiff in an action such as that under consideration, in order to establish his right to a recovery, must establish by competent evidence: (1) Damages to the plaintiff. (2) Negligence by act or omission of which defendant personally, or some person for whose acts it must respond, was guilty. (3) The connection of cause and effect between the negligence and the damage. (Taylor vs. Manila Electric Railroad and Light Co., supra. p.15) In accordance with the decision of the Supreme Court of Spain, in order that a person may be held guilty for damage through negligence, it is necessary that there be an act or omission on the part of the person who is to be charged with the liability and that damage is produced by the said act or omission. In accordance with the fundamental principle of proof, that the burden thereof is upon the plaintiff, it is apparent that it is the duty of him who shall claim damages to establish their existence. The decisions of April 9, 1896, and March 18, July 6, and September 27, 1898, have especially supported the principle, the first setting forth in detail the necessary points of the proof, which are two: An Act or omission on the part of the person who is to be charged with the liability, and the production of the damage by said act or omission. This includes, by inference, the establishment of a relation of cause or effect between the act or the omission and the damage; the latter must be the direct result of one of the first two. As the decision of March 22, 1881, said, it is necessary that the damages result immediately and directly from an act performed culpably and wrongfully; 'necessarily presupposing, a legal ground for imputability. (Taylor vs. Manila Electric Railroad and Light Co., supra, p. 28.). It is evident that the proximate, immediate and direct cause of the death of the plaintiffs' intestate was the negligence of Orfanel, a uniformed policeman, who took the wheel of the truck from defendant's cargador, in spite of the protest of the latter. The reason for absolving the defendant therefor is not because the one responsible for the accident had already received indemnification for the accident, but because there is no direct and proximate causal connection between the negligence or violation of the law by the defendant to the death of the plaintiff's intestate. For the foregoing considerations, the judgment appealed from is hereby affirmed, without costs.

Cases 60-68 URBANO-BALMEO, MAURYNE FE N. 69. NEGROS NAVIGATION VS CA FACTS: Private respondent Ramon Miranda purchased from the Negros Navigation Co. inc four special cabin tickets for his family who were going to Bacolod City to attend a family reunion boarding to Don Juan. Don Juan collided off the Tablas Straitin Mindoro, with the M/T Tacloban City, an oil tanker owned by the Philippine National Oil Company (PNOC). As a result the M/V Don Juan sank. Several of her passengers perished in the sea tragedy. The bodies of some of the victims were found and broughts shore, but the four members of private respondents families were never found. ISSUE: Whether or not the petitioners exercised the extraordinary diligence required? HELD: No, as with the Mecemas case, this Court found petitioner guilty of negligence in (1) allowing or tolerating the ship captain and crew members in playing mahjong during the voyage, (2) in failing to maintain the vessel seaworthy and (3) in allowing the ship to carry more passengers than it was allowed to carry. Also, the duty to exercise due diligence includes the duty to take passengers or cargoes that are within the carrying capacity of the vessel. 70. BENGUET ELECTRIC COOPERATIVE VS COURT OF APPEALS FACTS: For five (5) years up to the time of his death, Jose Bernardo managed a stall at the Baguio City meat market. On 14 January 1985 at around 7:50 in the morning, Jose together with other meat vendors went out of their stalls to meet a jeepney loaded with slaughtered pigs in order to select the meat they would sell for the day. Jose was the very first to reach the parked jeepney. Grasping the handlebars at the rear entrance of the vehicle, and as he was about to raise his right foot to get inside, Jose suddenly stiffened and trembled as though suffering from an epileptic seizure. Romeo Pimienta who saw Jose thought he was merely joking but noticed almost in disbelief that he was already turning black. In no time the other vendors rushed to Jose and they discovered that the antenna of the jeepney bearing the pigs had gotten entangled with an open electric wire at the top of the roof of a meat stall. Pimienta quickly got hold of a broom and pried the antenna loose from the open wire. But shortly after, Jose released his hold on the handlebars of the jeep only to slump to the ground. He died shortly in the hospital. Cause of his death was "cardio-respiratory arrest secondary to massive brain congestion with petheccial hemorrhage, brain bilateral pulmonary edema and congestion and endocardial petecchial hemorrhage and dilation (history of electrocution)." FIRST ISSUE: Wheter or not respondent should be awarded damages notwithstanding a clear showing that the electrocution and death of Jose Bernardo were directly attributable to the fault and negligence of jeepney owner Guillermo Canave, Jr.

FIRST HELD: The records of the case show that respondent court did not commit any reversible error in affirming the findings of the trial court that BENECO was solely responsible for the untimely death of Jose Bernardo through accidental electrocution. SECOND ISSUE: Whether or not the grant of moral damages and attorney's fees on the same ground of non-culpability is proper. SECOND HELD: It is settled that moral damages are not intended to enrich the complainant but to serve to obviate his/her spiritual suffering by reason of the culpable action of the defendant. Its award is aimed at the restoration of the spiritual status quo ante, and it must be commensurate to the suffering inflicted. As a result of the accidental death of Jose, his widow Caridad and their three (3) minor children had to scrounge for a living in order to keep their heads above water. Caridad had to depend on the generosity of her relatives which came intermittently and far between and augment whatever she received from them with her meager income from her small business. She must have agonized over the prospect of raising her three (3) small children all by herself given her unstable financial condition. For the foregoing reasons, we sustain the award of moral damages by respondent court except as to the amount thereof. In the instant case, we are of the opinion that moral damages in the amount of P50,000.00 are more in accord with the injury suffered by private respondent and her children. As for attorney's fees, we find no legal nor factual basis to overturn the ruling of respondent court on the matter; accordingly, the grant of P20,000.00 attorney's fees to private respondent Bernardo is adopted. 71. MA-AO SUGAR CENTRAL CO., INC. AND GUILLERMO ARANETA VS. COURT OF APPEALS FACTS: On March 22, 1980, Famoso was riding with a co-employee in the caboose or "carbonera" of Plymouth No. 12, a cargo train of the petitioner, when the locomotive was suddenly derailed. He and his companion jumped off to escape injury, but the train fell on its side, caught his legs by its wheels and pinned him down. He was declared dead on the spot. The claims for death and other benefits having been denied by the petitioner, the herein private respondent filed suit in the Regional Trial Court of Bago City. Judge Marietta Hobilla-Alinio ruled in her favor but deducted from the total damages awarded 25% thereof for the decedent's contributory negligence and the total pension of P41,367.60 private respondent and her children would be receiving from the SSS for the next five years. ISSUE: Whether or not the petitioners exercised the ordinary diligence required? HELD: No. Investigation of the accident revealed that the derailment of the locomotive was caused by protruding rails which had come loose because they were not connected and fixed in place by fish plates. Fish plates are described as strips of iron 8" to 12" long and 3 1/2" thick which are attached to the rails by 4 bolts, two on each side, to keep the rails aligned. Although they could be removed only with special equipment, the fish

plates that should have kept the rails aligned could not be found at the scene of the accident. It is possible that the fish plates were loosened and detached during its first trip and the rails were as a result already mis-aligned during the return trip. But the Court feels that even this was unlikely, for, as earlier noted, the fish plates were supposed to have been bolted to the rails and could be removed only with special tools. The fact that the fish plates were not found later at the scene of the mishap may show they were never there at all to begin with or had been been removed long before. At any rate, the absence of the fish plates - whatever the cause or reason - is by itself alone proof of the negligence of the petitioner. Res ipsa loquitur. The doctrine was described recently in Layugan v. Intermediate Appellate Court, thus: Where the thing which causes injury is shown to be under the management of the defendant, and the accident is such as in the ordinary course of things does not happen if those who have the management use proper care, it affords reasonable evidence, in the absence of an explanation by the defendant, that the accident arose from want of care. The petitioner also disclaims liability on the ground of Article 2176 of the Civil Code, contending it has exercised due diligence in the selection and supervision of its employees. The Court cannot agree. The record shows it was in fact lax in requiring them to exercise the necessary vigilance in maintaining the rails in good condition to prevent the derailments that sometimes happened "every hour." Obviously, merely ordering the brakemen and conductors to fill out prescribed forms reporting derailments - which reports have not been acted upon as shown by the hourly derailments - is not the kind of supervision envisioned by the Civil Code. 72. ROGELIO E. RAMOS vs. COURT OF APPEALS FACTS: Sometime in 1985, petitioner Erlinda Ramos, after seeking professional medical help, wasadvised to undergo an operation for the removal of a stone in her gall bladder (cholecystectomy).She was referred to Dr. Hosaka, a surgeon, who agreed to perform the operation on her. Theoperation was scheduled for June 17, 1985 at 9:00 in the morning at private respondent De LosSantos Medical Center (DLSMC). Since neither petitioner Erlinda nor her husband, petitioner Rogelio, knew of any anesthesiologist, Dr. Hosaka recommended to them the services of Dr.Gutierrez.Petitioner Erlinda was admitted to the DLSMC the day before the scheduled operation. By 7:30in the morning of the following day, petitioner Erlinda was already being prepared for operation.Upon the request of petitioner Erlinda, her sister-in-law, Herminda Cruz, who was then Dean of the College of Nursing at the Capitol Medical Center, was allowed to accompany her inside theoperating room At around 9:30 in the morning, Dr. Hosaka had not yet arrived so Dr. Gutierrez tried to get intouch with him by phone. ."By 10:00 in the morning, when Dr. Hosaka was still not around, petitioner Rogelio alreadywanted to pull out his wife from the operating room. He met Dr. Garcia, who remarked that hewas also tired of waiting for Dr. Hosaka. Dr. Hosaka finally arrived at

the hospital at around12:10 in the afternoon, or more than three (3)hours after the scheduled operation. Cruz, who was then still inside the operating room, heard about Dr. Hosakas arrival." Cruz noticed a bluish discoloration of Erlindas nailbeds on her left hand. She (Cruz) then heard Dr. Hosaka instruct someone to call Dr. Calderon, another anesthesiologist. When he arrived, Dr. Calderon attempted to intubate the patient. Cruz went out of the operating room to express her concern to petitioner Rogelio that Erlindas operation was not going well. Cruz quickly rushed back to the operating room and saw that the patient was still in trendelenburg position. At almost 3:00 in the afternoon, she saw Erlinda being wheeled to the Intensive Care Unit (ICU). The doctors explained to petitioner Rogelio that his wife had bronchospasm. Erlinda stayed in the ICU for a month. She was released from the hospital onlyfour months later or on November 15, 1985. Since the ill-fated operation, Erlinda remained in comatose condition until she died on August 3, 1999. ISSUES: 1. Whether or not dr. Orlino hosaka (surgeon) is liable for negligence; 2. Whether or not dr. Perfecta Gutierrez (anesthesiologist) is liable for negligence; and 3. Whether or not the hospital (delos santos medical center ) is liable for any act of negligence committed by their visiting consultant surgeon and anesthesiologist RULING: In the case at bar, the following issues were resolved as follows: 1) Dr. Hosaka's irresponsible conduct of arriving very late for the scheduled operation of petitioner Erlinda is violative, not only of his duty as a physician "to serve the interest of his patients with the greatest solicitude, giving them always his best talent and skill," but also of Article 19 of the Civil Code which requires a person, in the performance of his duties, to act with justice and give everyone his due. 2) Dr. Gutierrez claim of lack of negligence on her part is belied by the records of the case. It has beensufficiently established that she failed to exercise the standards of care in the administration of anesthesia on a patient. Dr. Gutierrez omitted to perform a thorough preoperative evaluation on Erlinda. Further, there is no cogent reason for the Court to reverse its finding that it was the faulty intubation on Erlinda that caused her comatose condition. There is no question that Erlinda became comatose after Dr. Gutierrez performed a medical procedure on her. 3)After a careful consideration of the arguments raised by DLSMC, the Court finds that respondent hospitals position on this issue is meritorious. There is no employeremployee relationship between DLSMC and Drs. Gutierrez and Hosaka which would hold DLSMC solidarily liable for the injury suffered by petitioner Erlinda under Article 2180 of the Civil Code. Further, no evidence was adduced to show that the injury suffered by petitioner Erlinda was due to a failure on the part of respondent DLSMC to provide for hospital facilities and staff necessary for her treatment. For these reasons, the Supreme Cord reverse the finding of liability on the part of DLSMC for the injury suffered by petitioner Erlinda 73. D.M. CONSUNJI INC. V COURT OF APPEALS AND MARIA J. JUEGO

FACTS: Around 1:30PM of November 2, 1990, Jose Juergo, a construction worker of D.M. Consunji Inc. fell 14 floors from the Renaissance Tower, Pasig City. He was immediately rushed to Rizal Medical Center in Pasig City. The attending physician, Dr. Errol de Yzo, pronounce Jose dead on arrival (DOA) at around 2:15PM. Jose Juergo, together with Jessie Jaluag and Delso Destajo, performing their work as carpenter at the elevator core of the 14th floor of Tower D, Renaissance Tower Building were on board a platform. Jose was crushed to death when the platform fell due to removal or looseness of the pin, which was merely inserted to the connecting points of the chain block and platform but without a safety lock. Luckily, Jessie and Delso jumped out of safety. PO3 Rogelio Villanueva of the Eastern Police District investigated the tragedy and filed report dated Nov. 25, 1990. Maria Juergo, Joses widow filed a complaint on May 9, 1991 for damages in the RTC and was rendered a favorable decision to receive support from DM Consunji amounting to P644,000. DM Consunji seeks reversal of the CA decision. ISSUE: Whether Maria Juergo can still claim damages with D.M. Consunji apart from the death benefits she claimed in the State Insurance Fund. HELD: The respondent is not precluded from recovering damages under the civil code. Maria Juergo was unaware of petitioners negligence when she filed her claim for death benefits from the State Insurance Fund. She filed the civil complaint for damages after she received a copy of the police investigation report and the Prosecutors Memorandum dismissing the criminal complaint against petitioners personnel. Supreme Court remanded to the RTC of Pasig City to determine whether the award decreed in its decision is more than that of the Employees Compensation Commission (ECC). Should the award decreed by the trial court be greater than that awarded by the ECC, payments already made to private respondent pursuant to the Labor Code shall be deducted there from. 74. BATIGUIN V CA FACTS: Dr. Batiquin performed a caesarian operation on a patient. Afterwards, she was found to be feverish. When the patient submitted herself to another surgery, she was found to have an ovarian cyst on the left and right side of the ovaries and a piece of rubber material was embedded on the right side of the uterus. HELD: Res ipsa Where the thing which causes the injury is shown to under the management of the defendant, and the accident is such as in the ordinary course of things does not happen if those who have the management used proper care, it affords reasonable evidence, in the absence of an explanation by the defendant, that the accident arose from ordinary want of care. All the requisites are present in this case. (1) The entire proceedings of the control of Dr. Batiquin. caesarian were under the exclusive

(2)The patient underwent no other operation which could habe caused the offending piece of rubber to appear in her uterus, it stands to reason that it could have only been a by-product of the caesarian section. RULE: Res ipsa Where the thing which causes injury is shown to be under the management of the Defendant, and the accident is such as in the ordinary course of things does not happen if those who have themanagement use proper care,it affords reasonable evidence, in the absence of an explanation by the defendant, that the accident arose from want of ordinary care. 75. CEBU SHIPYARD V WILLIAM FACTS: Cebu Shipyard and Engineering Works, Inc. repaired marine vessels while the Prudential is in the non-life insurance business. William Lines, Inc., the owner of M/V Manila City, a luxury passenger-cargo vessel, which caught fire and sank. At the time of the incident, subject vessel was insured with Prudential for P45M for hull and machinery. CSEW was insured for only Php 10 million for the ship repairers liability policy. They entered into a contract where negligence was the only factor that could make CSEW liable for damages. Moreover, liability of CSEW was limited to only Php 1 million for damages. The Hull Policy included an Additional Perils (INCHMAREE) Clause covering loss of or damage to the vessel through the negligence of, among others, ship repairmen. William brought Manila City to the dry dock of CSEW for repairs. The officers and cabin crew stayed at the ship while it was being repaired. After the vessel was transferred to the docking quay, it caught fire and sank, resulting to its total loss. William brought suit against CSEW alleging that it was through the latters negligence that the ship caught fire and sank. Prudential was impleaded as co-plaintiff after it had paid the value of insured items. It was subrogated to 45 million, or the value it claimed to indemnify. The trial court brought judgment against CSEW 45 million for the ship indemnity, 65 million for loss of income, and more than 13 million in other damages. The CA affirmed the TC decision. CSEW contended that the cause of the fire was due to Williams hot works on the said portion of the ship which they didnt ask CSEW permission for. Prudential, on the other hand, blamed the negligence of the CSEW workers in the instance when they didnt mind rubber insulation wire coming out of the airconditioning unit that was already burning. Hence this MFR. ISSUE: 1. WON CSEW had management and supervisory control of the ship at the time the fire broke out 2. WON the doctrine of res ipsa loquitur applies against the crew 3. WON Prudential has the right of subrogation against its own insured 4. WON the provisions limiting CSEWs liability for negligence to a maximum of Php 1 million are valid HELD: Yes. Yes. Yes. No. Petition denied.

1. The that factual findings by the CA are conclusive on the parties and are not reviewable by this Court. They are entitled to great weight and respect when the CA affirmed the factual findings arrived at by the trial court. The CA and the Cebu RTC are agreed that the fire which caused the total loss of subject M/V Manila City was due to the negligence of the employees and workers of CSEW. Furthermore, in petitions for review on certiorari, only questions of law may be put into issue. Questions of fact cannot be entertained. 2. For the doctrine of res ipsa loquitur to apply to a given situation, the following conditions must concur: (1) the accident was of a kind which does not ordinarily occur unless someone is negligent; and (2) that the instrumentality or agency which caused the injury was under the exclusive control of the person charged with negligence. The facts and evidence reveal the presence of these conditions. First, the fire would not have happened in the ordinary course of things if reasonable care and diligence had been exercised. Second, the agency charged with negligence, as found by the trial court and the CA and as shown by the records, is CSEW, which had control over subject vessel when it was docked for annual repairs. What is more, in the present case the trial court found direct evidence to prove that the workers didnt exercise due diligence in the care of subject vessel. The direct evidence substantiates the conclusion that CSEW was really negligent even without applying such doctrine. 3. Petitioner contends that Prudential is not entitled to be subrogated to the rights of William Lines, Inc., theorizing that (1) the fire which gutted M/V Manila City was an excluded risk and (2) it is a co-assured under the Marine Hull Insurance Policy. This was wrong. The one who caused the fire has already been adjudicated by the courts as CSEW. Upon proof of payment by Prudential to William Lines, Inc., the former was subrogated to the right of the latter to indemnification from CSEW. As aptly ruled by the Court of Appeals, the law says: Art. 2207. If the plaintiffs property has been insured, and he has received indemnity from the insurance company for the injury or loss arising out of the wrong or breach of contract complained of, the insurance company shall be subrogated to the rights of the insured against the wrongdoer or the person who has violated the contract. If the amount paid by the insurance company does not fully cover the injury or loss, the aggrieved party shall be entitled to recover the deficiency from the person causing the loss or injury. When Prudential paid the latter the total amount covered by its insurance policy, it was subrogated to the right of the latter to recover the insured loss from the liable party, CSEW. Petitioner theorizes further that there can be no right of subrogation as it is deemed a co-assured under the subject insurance policy with reliance on Clause 20 of the Work Order which states:

The insurance on the vessel should be maintained by the customer and/or owner of the vessel during the period the contract is in effect. Clause 20 of the Work Order in question is clear in the sense that it requires William Lines to maintain insurance on the vessel during the period of dry-docking or repair. However, the fact that CSEW benefits from the said stipulation does not automatically make it as a co-assured of William Lines. The intention of the parties to make each other a co-assured under an insurance policy is to be read from the insurance contract or policy itself and not from any other contract or agreement because the insurance policy denominates the beneficiaries of the insurance. The hull and machinery insurance procured by William Lines, Inc. from Prudential named only William Lines, Inc. as the assured. There was no manifestation of any intention of William Lines, Inc. to constitute CSEW as a co-assured under subject policy. The claim of CSEW that it is a co-assured is unfounded. Then too, in the Additional Perils Clause of the same Marine Insurance Policy, it is provided that this insurance also covers loss of or damage to vessel directly caused by the negligence of charterers and repairers who are not assured. As correctly pointed out by respondent Prudential, if CSEW were deemed a co-assured under the policy, it would nullify any claim of William Lines, Inc. from Prudential for any loss or damage caused by the negligence of CSEW. Certainly, no ship owner would agree to make a ship repairer a co-assured under such insurance policy; otherwise, any claim for loss or damage under the policy would be invalidated. 4. Although in this jurisdiction, contracts of adhesion have been consistently upheld as valid per se; as binding as an ordinary contract, the Court recognizes instances when reliance on such contracts cannot be favored especially where the facts and circumstances warrant that subject stipulations be disregarded. Thus, in ruling on the validity and applicability of the stipulation limiting the liability of CSEW for negligence to P1M only, the facts and circumstances vis-a-vis the nature of the provision sought to be enforced should be considered, bearing in mind the principles of equity and fair play. It is worthy to note that M/V Manila City was insured with Prudential for P45M. Upon thorough investigation by its hull surveyor, M/V Manila City was found to be beyond economical salvage and repair. The evaluation of the average adjuster also reported a constructive total loss. The said claim of William Lines, Inc., was then found to be valid and compensable such that Prudential paid the latter the total value of its insurance claim. Furthermore, it was ascertained that the replacement cost of the vessel, amounts to P55M. Considering the circumstances, it would unfair to limit the liability of petitioner to One Million Pesos only. To allow CSEW to limit its liability to P1M notwithstanding the fact that the total loss suffered by the assured and paid for by Prudential amounted to P45M would sanction the exercise of a degree of diligence short of what is ordinarily required because, then, it would not be difficult for petitioner to escape liability by the simple expedient of paying an amount very much lower than the actual damage suffered by William.

76. GOTESCO INVESTMENT CORPORATION VS CHATTO FACTS : Plaintiff Gloria E. Chatto, and her 15-year old daughter, Lina Delza E. Chatto went to see the movie "Mother Dear" at Superama I theater, owned by defendant Gotesco Investment Corporation.- Hardly ten (10) minutes after entering the theater, the ceiling of its balcony collapsed. The theater was plunged into darkness and pandemonium ensued.- Shocked and hurt, plaintiffs managed to crawl under the fallen ceiling. As soon as they were able to get outto the street they walked the nearby FEU Hospital where they were confined and treated for one (1) day.- The next day, they transferred to the UST hospital. Plaintiff Gloria Chatto was treated in said hospital from June 5 to June 19 and plaintiff Lina Delza Chatto from June 5 to 11.- Due to continuing pain in the neck, headache and dizziness, plaintiff went to Illinois, USA in July 1982 for further treatment. She was treated at the Cook county hospital in Chicago, Illinois. She stayed in the U.S. for about three (3) months during which time she had to return to the Cook County Hospital five (5) or, six (6)times.- Defendant tried to avoid liability by alleging that the collapse of the ceiling of its theater was done due to force majeure. It maintained that its theater did not suffer from any structural or construction defect.- The trial court awarded actual or compensatory and moral damages and attorney's fees to the plaintiffs.- Respondent Court found the appeal later filed to be without merit.- Its motion for reconsideration of the decision having been denied by the respondent Court, petitioner filed the petition in the SC. ISSUE WON the collapse of the ceiling was caused by Force majeure HELD: NO- Petitioner's claim that the collapse of the ceiling of the theater's balcony was due to Force majeure is not even founded on facts because its own witness, Mr. Jesus limong, admitted that "he could not give any reason why the ceiling collapsed." Having interposed it as a defense, it had the burden to prove that the collapse was indeed caused by force majeure. That Mr. Ong could not offer any explanation does not imply force majeure. The real reason why Mr. Ong could not explain the cause or reason is that either he did not actually conduct the investigation or that he is incompetent. He is not an engineer, but an architect who had not even passed the government's examination.- Verily, post incident investigation cannot beconsideredas material to the present proceedings.What is significant is the finding of the trial court, affirmed by the respondent Court, that the collapse was due to construction defects. There was no evidence offered to overturn this finding.- The building was constructed barely 4 years prior to the accident in question. It was not shown that any of the causes denominates as force majeure Obtained immediately before or at the time of the collapse of the ceiling. Such defects could have been easily discovered if only petitioner exercised due diligence and care in keeping and maintaining the premises. But as disclosed by the testimony of Mr. Ong, there was no adequate inspection of the premises before the date of the accident.- That the structural designs and plans of the building were duly approved by the City Engineer and the building permits and certificate of occupancy were issued do not at all prove that there were no defects in the construction, especially as regards the ceiling, considering that no testimony was offered to prove that it was ever inspected at all.- It is settled that: The owner or proprietor of a place of public amusement impliedly warrants that the premises appliances and amusement devices are safe for the purpose for which they are designed, the doctrine being subject to no other exception or qualification than that he does not contract against unknown defects

not discoverable by ordinary or reasonable means.- This implied warranty has given rise to the rule that: Where a patron of a theater or other place of public amusement is injured, and the thing that caused the injury is wholly and exclusively under the control and management of the defendant, and the accident is such as in the ordinary course of eventswould not have happened if proper care had been exercised, its occurrence raises a presumption or permits of an inference of negligence on the part of the defendant. 77. DRA. ABDULIA RODRIGUEZ, ET AL. VS COURT OF APPEALS, ET AL. FACTS: A fire broke out which caused the destruction of two apartment buildings owned by the appellants, and partially destroying a commercial building. The appellants alleged that because of the gross negligence and lack of due care of the workers of the defendants, the bunkhouse of the workers caught fire that spread rapidly and burnt the adjacent buildings. Appellants based their claim on a fire investigation report which stated that "the fire started at the generator and extended to the bunkhouse and spread among the combustible materials within the construction site." ISSUE: WON the appellants can invoke the doctrine of res ipsa loquitur? RULING: No. The trial court concluded that the fire could not have started at the generator after all the defendant's witnesses testified that the generator did not caught fire and a picture was presented showing that the bunkhouse was intact while the fire was raging. The trial court declared that "the fire was not caused by an instrumentality within the exclusive control of the defendants," which is one of the requisites for the application of res ipsa loquitur in the law of negligence. Cases 69-77 LAURENA, AUGUSTU RAY ANTHONY C. 78. WINDVALLEY SHIPPING CO. V CA FACTS: Sometime in February 1988, the Philippine Roxas, a vessel owned by Philippine President Lines, Inc., private respondent herein, arrived in Puerto Ordaz, Venezuela, to load iron ore. Mr. Ezzar del Valle Solarzano Vasquez, an official pilot of Venezuela, was designated by the harbour authorities in Puerto Ordaz to navigate the Philippine Roxas through the Orinoco River. While on transit, the Philippine Roxas experienced some vibrations when it entered the San Roque Channel at mile 172. The vessel proceeded on its way, with the pilot assuring the watch officer that the vibration was a result of the shallowness of the channel. Then, the Philippine Roxas ran stranded in the Orinoco River, thus obstructing the ingress and egress of vessels. As a result of the blockage, the Malandrinon, a vessel owned by herein petitioner Wildvalley Shipping Company, Ltd., was unable to sail out of Puerto Ordaz on that day. Wildvalley Shipping Company, Ltd. filed a suit with the Regional Trial Court of Manila against Philippine President Lines, Inc. and Pioneer Insurance Company (the underwriter/insurer of Philippine Roxas) for damages in the form of unearned profits, and interest thereon amounting to US $400,000.00 plus attorney's fees, costs, and

expenses of litigation. The complaint against Pioneer Insurance Company was dismissed in an Order dated November 7, 1988. The trial court rendered its decision on October 16, 1991 in favor of the petitioner, Wildvalley Shipping Co., Ltd. WHEREFORE, judgment is rendered for the plaintiff, ordering defendant Philippine President Lines, Inc. to pay to the plaintiff the sum of U.S. $259,243.43, as actual and compensatory damages, and U.S. $162,031.53, as expenses incurred abroad for its foreign lawyers, plus additional sum of U.S. $22,000.00, as and for attorney's fees of plaintiff's local lawyer, and to pay the cost of this suit. Defendant's counterclaim is dismissed for lack of merit. Both parties appealed: the petitioner appealing the non-award of interest with the private respondent questioning the decision on the merits of the case. C.A favored PPL. "WHEREFORE, finding defendant-appellant's appeal to be meritorious, judgment is hereby rendered reversing the Decision of the lower court. Plaintiff-appellant's Complaint is dismissed and it is ordered to pay defendant-appellant the amount of Three Hundred Twenty-three Thousand, Forty-two Pesos and Fifty-three Centavos (P323,042.53) as and for attorney's fees plus cost of suit. Plaintiff-appellant's appeal is DISMISSED. Petitioner filed a motion for reconsideration but the same was denied for lack of merit. ISSUE: Whether or not no fault of negligence can be attributed to the master nor the owner of the Philippine Roxas for the grounding of said vessel resulting in the blockage of the Rio Orinico. HELD: The petition is without merit. There being no contractual obligation, the private respondent is obliged to give only the diligence required of a good father of a family in accordance with the provisions of Article 1173 of the New Civil Code, thus: Art. 1173. The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place. When negligence shows bad faith, the provisions of articles 1171 and 2201, paragraph 2, shall apply. If the law or contract does not state the diligence which is to be observed in the performance, that which is expected of a good father of a family shall be required. The diligence of a good father of a family requires only that diligence which an ordinary prudent man would exercise with regard to his own property. This we have found private respondent to have exercised when the vessel sailed only after the "main engine, machineries, and other auxiliaries" were checked and found to be in good running condition; when the master left a competent officer, the officer on watch on the bridge with a pilot who is experienced in navigating the Orinoco River; when the master ordered the inspection of the vessel's double bottom tanks when the vibrations occurred anew. The doctrine of res ipsa loquitur does not apply to the case at bar because the circumstances surrounding the injury do not clearly indicate negligence on the part of the private respondent. For the said doctrine to apply, the following conditions must be met: (1) the accident was of such character as to warrant an inference that it would not have happened except for defendant's negligence; (2) the accident must have been caused by an agency or instrumentality within the exclusive management or control of

the person charged with the negligence complained of; and (3) the accident must not have been due to any voluntary action or contribution on the part of the person injured. As has already been held above, there was a temporary shift of control over the ship from the master of the vessel to the pilot on a compulsory pilotage channel. Thus, two of the requisites necessary for the doctrine to apply, i.e., negligence and control, to render the respondent liable, are absent. WHEREFORE, IN VIEW OF THE FOREGOING, the petition is DENIED and the decision of the Court of Appeals in CA G.R. CV No. 36821 is AFFIRMED. 79. ESPIRITU VS. PHILIPPINE POWER AND DEV. CO 80. RADIO COMMUNICATIONS OF THE PHIL. INC. V CA FACTS: 176 AS JR 1215PM 9 PAID MANDALUYONG JUL 22-66 LORETO DIONELA CABANGAN LEGASPI CITY WIRE ARRIVAL OF CHECK FER LORETO DIONELA-CABANGAN-WIRE ARRIVAL OF CHECK-PER 115 PM SA IYO WALANG PAKINABANG DUMATING KA DIYAN-WALA-KANG PADALA DITO KAHIT BULBUL MO The above letter is the main concern of Plaintiff-respondent Loreto Dionela. He alleges that petitioner added extraneous and libelous matters in the message sent to the private respondent. He said the defamatory words on the telegram sent to him not only wounded his feelings but also caused him undue embarrassment and affected adversely his business as well because other people have come to know of said defamatory words. Defendant corporation as a defense, alleges that the additional words in Tagalog was a private joke between the sending and receiving operators and that they were not addressed to or intended for plaintiff and therefore did not form part of the telegram and that the Tagalog words are not defamatory. The additional words in Tagalog were never noticed and were included in the telegram when delivered. The trial court ruled against the Radio Communications of the Philippines Stating that there is no question that the additional words in Tagalog are libelous. They clearly impute a vice or defect of the plaintiff. Whether or not they were intended for the plaintiff, the effect on the plaintiff is the same. Any person reading the additional words in Tagalog will naturally think that they refer to the addressee, the plaintiff. There is no indication from the face of the telegram that the additional words in Tagalog were sent as a private joke between the operators of the defendant. The liability of the defendant is predicated not only on Article 33 of the Civil Code of the Philippines but on the following articles of said Code: ART. 19.- Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.

ART. 20.-Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same. It follows that the plaintiff is entitled to damages and attorney's fees. The plaintiff is a businessman. The libelous Tagalog words must have affected his business and social standing in the community. The respondent appellate court confirmed trial courts decision. The proximate cause, therefore, resulting in injury to appellee, was the failure of the appellant to take the necessary or precautionary steps to avoid the occurrence of the humiliating incident now complained of. The company had not imposed any safeguard against such eventualities and this void in its operating procedure does not speak well of its concern for their clientele's interests. Negligence here is very patent. This negligence is imputable to appellant and not to its employees. ISSUES: 1. Whether or not Petitioner-employer should answer directly and primarily for the civil liability arising from the criminal act of its employee. 2. Whether or not the liability of petitioner-company-employer is predicated on Articles 19 and 20 of the Civil Code, Articles on Human Relations. RULING: Petitioner's contentions do not merit our consideration. The action for damages was filed in the lower court directly against respondent corporation not as an employer subsidiarily liable under the provisions of Article 1161 of the New Civil Code in relation to Art. 103 of the Revised Penal Code. The cause of action of the private respondent is based on Arts. 19 and 20 of the New Civil Code (supra). As well as on respondent's breach of contract thru the negligence of its own employees. Petitioner is a domestic corporation engaged in the business of receiving and transmitting messages. Everytime a person transmits a message through the facilities of the petitioner, a contract is entered into. Upon receipt of the rate or fee fixed, the petitioner undertakes to transmit the message accurately. There is no question that in the case at bar, libelous matters were included in the message transmitted, without the consent or knowledge of the sender. There is a clear case of breach of contract by the petitioner in adding extraneous and libelous matters in the message sent to the private respondent. As a corporation, the petitioner can act only through its employees. Hence the acts of its employees in receiving and transmitting messages are the acts of the petitioner. To hold that the petitioner is not liable directly for the acts of its employees in the pursuit of petitioner's business is to deprive the general public availing of the services of the petitioner of an effective and adequate remedy. In most cases, negligence must be proved in order that plaintiff may recover. However, since negligence may be hard to substantiate in some cases, we may apply the doctrine of RES IPSA LOQUITUR (the thing speaks for itself), by considering the presence of facts or circumstances surrounding the injury. WHEREFORE, premises considered, the judgment of the appellate court is hereby AFFIRMED. 81. CUSTODIO V CA

FACTS: The case is about the grant of an easement of right of way. The plaintiff owns a parcel of land with a two-door apartment and was able to acquire said property through a contract of sale with spouses Mamerto Rayos and Teodora Quintero as vendors. Said property may be described to be surrounded by other immovables pertaining to defendants. There are two possible passageways. The first passageway is approximately one meter wide and is about 20 meters distant from Mabasas residence to the main Street. The second passageway is about 3 meters in width and length from plaintiff Mabasas residence to the main Street. There were tenants of the palintiff occupying the premises. However, plaintiffs tenants vacated the apartment because there had been built an adobe fence in the first passageway making it narrower in width and even extended said fence in such a way that the entire passageway was enclosed. Trial court rendered a decision ordering defendants Custodios and Santoses to give plaintiff permanent access - ingress and egress, to the public street; Ordering the plaintiff to pay defendants Custodios and Santoses P8,000 as indemnity for the permanent use of the passageway. The parties are to shoulder their respective litigation expenses. The CA affirmed the judgment of the trial court with modification: WHEREFORE, the appealed decision of the lower court is hereby AFFIRMED WITH MODIFICATION only insofar as the herein grant of damages to plaintiffs-appellants. The Court hereby orders defendants-appellees to pay plaintiffs-appellants the sum of Sixty Five Thousand (P65,000) Pesos as Actual Damages, Thirty Thousand (P30,000) Pesos as Moral Damages, and Ten Thousand (P10,000) Pesos as Exemplary Damages. The rest of the appealed decision is affirmed to all respects. CA denied petitioners motion for reconsideration. ISSUE: Whether or not the award of damages is in correct order. RULING: We agree with petitioners that the Court of Appeals erred in awarding damages in favor of private respondents. The award of damages has no substantial legal basis. A reading of the decision of the Court of Appeals will show that the award of damages was based solely on the fact that the original plaintiff, Pacifico Mabasa, incurred losses in the form of unrealized rentals when the tenants vacated the leased premises by reason of the closure of the passageway. However, the mere fact that the plaintiff suffered losses does not give rise to a right to recover damages. To warrant the recovery of damages, there must be both a right of action for a legal wrong inflicted by the defendant, and damage resulting to the plaintiff therefrom. Wrong without damage, or damage without wrong, does not constitute a cause of action, since damages are merely part of the remedy allowed for the injury caused by a breach or wrong. There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. These situations are often called damnum absque injuria. In order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted from a

breach of duty which the defendant owed to the plaintiff - a concurrence of injury to the plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort damages is the premise that an individual was injured in contemplation of law. Thus, there must first be the breach of some duty and the imposition of liability for that breach before damages may be awarded; it is not sufficient to state that there should be tort liability merely because the plaintiff suffered some pain and suffering. Many accidents occur and many injuries are inflicted by acts or omissions which cause damage or loss to another but which violate no legal duty to such other person, and consequently create no cause of action in his favor. In such cases, the consequences must be borne by the injured person alone. The law affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong. In other words, in order that the law will give redress for an act causing damage, that act must be not only hurtful, but wrongful. There must be damnum et injuria. If, as may happen in many cases, a person sustains actual damage, that is, harm or loss to his person or property, without sustaining any legal injury, that is, an act or omission which the law does not deem an injury, the damage is regarded as damnum absque injuria. In the case at bar, although there was damage, there was no legal injury. Contrary to the claim of private respondents, petitioners could not be said to have violated the principle of abuse of right. In order that the principle of abuse of right provided in Article 21 of the Civil Code can be applied, it is essential that the following requisites concur: (1) The defendant should have acted in a manner that is contrary to morals, good customs or public policy; (2) The acts should be willful; and (3) There was damage or injury to the plaintiff. 82. CABIGAO VS. UNIVERSITY OF THE EAST, C.A. 83. DANGWA TRANSPORTATION CO. INC. V CA FACTS: This is a complaint for damages against petitioners for the death of Pedrito Cudiamat as a result of a vehicular accident. While petitioner Theodore M. Lardizabal was driving a passenger bus belonging to petitioner corporation in a reckless and imprudent manner and without due regard to traffic rules and regulations and safety to persons and property, it ran over its passenger, Pedrito Cudiamat. However, instead of bringing Pedrito immediately to the nearest hospital, the said driver, in utter bad faith and without regard to the welfare of the victim, first brought his other passengers and cargo to their respective destinations before banging said victim to the Lepanto Hospital where he died. Petitioners alleged that they had observed and continued to observe the extraordinary diligence required in the operation of the transportation company and the supervision of the employees, even as they add that they are not absolute insurers of the safety of the public at large. Further, it was alleged that it was the victim's own carelessness and negligence which gave rise to the subject incident. Trial court rendered decision: IN VIEW OF ALL THE FOREGOING, judgment is hereby pronounced that Pedrito Cudiamat was negligent, which negligence was the proximate cause of his death. Nonetheless, defendants in equity, are hereby ordered to pay the

heirs of Pedrito Cudiamat the sum of P10,000.00 which approximates the amount defendants initially offered said heirs for the amicable settlement of the case. No costs. CA set aside the decision of the trial court and rendered judgment: The sum of Thirty Thousand (P30,000.00) Pesos by way of indemnity for death of the victim Pedrito Cudiamat; The sum of Twenty Thousand (P20,000.00) by way of moral damages; The sum of Two Hundred Eighty Eight Thousand (P288,000.00) Pesos as actual and compensatory damages; The costs of this suit. Petitioners' motion for reconsideration was denied by the CA. ISSUE: Whether or not petitioners are negligent and liable for the damages claimed. RULING: It cannot be said that the deceased in negligence. It is the duty of common carriers of passengers, including common carriers by railroad train, streetcar, or motorbus, to stop their conveyances a reasonable length of time in order to afford passengers an opportunity to board and enter, and they are liable for injuries suffered by boarding passengers resulting from the sudden starting up or jerking of their conveyances while they are doing so. Further, even assuming that the bus was moving, the act of the victim in boarding the same cannot be considered negligent under the circumstances. As clearly explained in the testimony of the aforestated witness for petitioners, Virginia Abalos, th bus had "just started" and "was still in slow motion" at the point where the victim had boarded and was on its platform. It is not negligence per se, or as a matter of law, for one attempt to board a train or streetcar which is moving slowly. An ordinarily prudent person would have made the attempt board the moving conveyance under the same or similar circumstances. The fact that passengers board and alight from slowly moving vehicle is a matter of common experience both the driver and conductor in this case could not have been unaware of such an ordinary practice. The victim herein, by stepping and standing on the platform of the bus, is already considered a passenger and is entitled all the rights and protection pertaining to such a contractual relation. Hence, it has been held that the duty which the carrier passengers owes to its patrons extends to persons boarding cars as well as to those alighting therefrom. Common carriers, from the nature of their business and reasons of public policy, are bound to observe extraordinary diligence for the safety of the passengers transported by the according to all the circumstances of each case. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence very cautious persons, with a due regard for all the circumstances. It has also been repeatedly held that in an action based on a contract of carriage, the court need not make an express finding of fault or negligence on the part of the carrier in order to hold it responsible to pay the damages sought by the passenger. By contract of carriage, the carrier assumes the express obligation to transport the passenger to his destination safely and observe extraordinary diligence with a due regard for all the circumstances, and any injury that might be suffered by the passenger is right away attributable to the fault or negligence of the carrier. This is an exception to the general

rule that negligence must be proved, and it is therefore incumbent upon the carrier to prove that it has exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code. With respect to the award of damages, an oversight was, however, committed by respondent Court of Appeals in computing the actual damages based on the gross income of the victim. The rule is that the amount recoverable by the heirs of a victim of a tort is not the loss of the entire earnings, but rather the loss of that portion of the earnings which the beneficiary would have received. In other words, only net earnings, not gross earnings, are to be considered, that is, the total of the earnings less expenses necessary in the creation of such earnings or income and minus living and other incidental expenses. 84. LIGHT RAIL TRANSIT AUTHORITY V MARJORIE NAVIDAD FACTS: On 14 October 1993, Nicanor Navidad, while drunk, entered the EDSA LRT station after purchasing a token for his fare. While Navidad was standing on the platform near the LRT tracks, Junelito Escartin, the security guard assigned to the area approached Navidad. A misunderstanding between the two led to a fist fight. No evidence, however, was adduced to indicate how the fight started or who, between the two, delivered the first blow or how Navidad later fell on the LRT tracks. At the exact moment that Navidad fell, an LRT train, operated by petitioner Rodolfo Roman, was coming in. Navidad was struck by the moving train, and he was killed instantaneously. Thereafter, the widow of Nicanor, herein respondent Marjorie Navidad, along with her children, filed a complaint for damages against Junelito Escartin, Rodolfo Roman, the LRTA, the Metro Transit Organization, Inc., and Prudent for the death of her husband. LRTA and Roman filed a counterclaim against Navidad and a cross-claim against Escartin and Prudent. Prudent, in its answer, denied liability and averred that it had exercised due diligence in the selection and supervision of its security guards. The LRTA and Roman presented their evidence while Prudent and Escartin, instead of presenting evidence, filed a demurrer contending that Navidad had failed to prove that Escartin was negligent in his assigned task. The trial court rendered its decision; WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants Prudent Security and Junelito Escartin ordering the latter to pay jointly and severally the plaintiffs. The complaint against defendants LRTA and Rodolfo Roman are dismissed for lack of merit. The compulsory counterclaim of LRTA and Roman are likewise dismissed. Prudent appealed to the Court of Appeals. The appellate court promulgated its now assailed decision exonerating Prudent from any liability for the death of Nicanor Navidad and, instead, holding the LRTA and Roman jointly and severally. The appellate court ratiocinated that while the deceased might not have then as yet boarded the train, a contract of carriage thereto had already existed when the victim entered the place where passengers were supposed to be after paying the fare and getting the corresponding token therefor. In exempting Prudent from liability, the court stressed that there was nothing to link the security agency to the death of Navidad. It said that Navidad failed to show that Escartin inflicted fist blows upon the victim and the evidence merely established the fact of death of Navidad by reason of his having been hit by the train owned and managed by the LRTA and operated at the time by Roman. The appellate court denied petitioners motion for reconsideration.

ISSUE: Whether or not LRTA and are liable for the death of Nicanor Navidad based on a common carriage contract. RULING: The law requires common carriers to carry passengers safely using the utmost diligence of very cautious persons with due regard for all circumstances. Such duty of a common carrier to provide safety to its passengers so obligates it not only during the course of the trip but for so long as the passengers are within its premises and where they ought to be in pursuance to the contract of carriage. The statutory provisions render a common carrier liable for death of or injury to passengers (a) through the negligence or wilful acts of its employees or b) on account of wilful acts or negligence of other passengers or of strangers if the common carriers employees through the exercise of due diligence could have prevented or stopped the act or omission. In case of such death or injury, a carrier is presumed to have been at fault or been negligent, and by simple proof of injury, the passenger is relieved of the duty to still establish the fault or negligence of the carrier or of its employees and the burden shifts upon the carrier to prove that the injury is due to an unforeseen event or to force majeure. In the absence of satisfactory explanation by the carrier on how the accident occurred, which petitioners, according to the appellate court, have failed to show, the presumption would be that it has been at fault, an exception from the general rule that negligence must be proved. The foundation of LRTAs liability is the contract of carriage and its obligation to indemnify the victim arises from the breach of that contract by reason of its failure to exercise the high diligence required of the common carrier. In the discharge of its commitment to ensure the safety of passengers, a carrier may choose to hire its own employees or avail itself of the services of an outsider or an independent firm to undertake the task. In either case, the common carrier is not relieved of its responsibilities under the contract of carriage. Should Prudent be made likewise liable? If at all, that liability could only be for tort under the provisions of Article 2176 and related provisions, in conjunction with Article 2180, of the Civil Code. The premise, however, for the employers liability is negligence or fault on the part of the employee. Once such fault is established, the employer can then be made liable on the basis of the presumption juris tantum that the employer failed to exercise diligentissimi patris families in the selection and supervision of its employees. The liability is primary and can only be negated by showing due diligence in the selection and supervision of the employee, a factual matter that has not been shown. Absent such a showing, one might ask further, how then must the liability of the common carrier, on the one hand, and an independent contractor, on the other hand, be described? It would be solidary. A contractual obligation can be breached by tort and when the same act or omission causes the injury, one resulting in culpa contractual and the other in culpa aquiliana, Article 2194 of the Civil Code can well apply. In fine, a liability for tort may arise even under a contract, where tort is that which breaches the contract. Stated differently, when an act which constitutes a breach of contract would have itself constituted the source of a quasi-delictual liability had no contract existed between the parties, the contract can be said to have been breached by tort, thereby allowing the rules on tort to apply. The award of nominal damages in addition to actual damages is untenable. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or

invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. It is an established rule that nominal damages cannot co-exist with compensatory damages. 85. HIDALGO ENTERPRISES V BALADAN FACTS: Petitioner Hidalgo Enterprises, Inc. was the owner of an ice-plant factory in whose premises were installed two tanks full of water, nine feet deep, for cooling purposes of its engine. While the factory compound was surrounded with fence, the tanks themselves were not provided with any kind of fence or top covers. The wide gate entrance is continually open where anyone can pass through it. There was no guard assigned on the gate. At about noon of April 16, 1948, plaintiff's son, Mario Balandan, an 8year old boy, while playing with and in company of other boys of his age entered the factory premises through the gate, to take a bath in one of said tanks and while bathing, Mario sank to the bottom of the tank, only to be fished out later, already a cadaver, having been died of drowning. The Court of Appeals, and the Court of First Instance of Laguna, took the view that the petitioner maintained an attractive nuisance (the tanks), and neglected to adopt the necessary precautions to avoid accidents to persons entering its premises. It applied the doctrine of attractive nuisance, of American origin, recognized in this Jurisdiction in Taylor vs. Manila Electric 16 Phil., 8. The doctrine may be stated, in short, as follows: One who maintains on his premises dangerous instrumentalities or appliances of a character likely to attract children in play, and who fails to exercise ordinary care to prevent children from playing therewith or resorting thereto, is liable to a child of tender years who is injured thereby, even if the child is technically a trespasser in the premises. The principle reason for the doctrine is that the condition or appliance in question although its danger is apparent to those of age, is so enticing or alluring to children of tender years as to induce them to approach, get on or use it, and this attractiveness is an implied invitation to such children. ISSUE: Whether or not the body of water like swimming pool or water tank an attractive nuisance in order to claim damages for the injury or death suffered by a child. RULING: The attractive nuisance doctrine generally is not applicable to bodies of water, artificial as well as natural, in the absence of some unusual condition or artificial feature other than the mere water and its location. The reason why a swimming pool or pond or reservoir of water is not considered an attractive nuisance was lucidly explained by the Indiana Appellate Court as follows: Nature has created streams, lakes and pools which attract children. Lurking in their waters is always the danger of drowning. Against this danger children are early instructed so that they are sufficiently presumed to know the danger; and if the owner of private property creates an artificial pool on his own property, merely duplicating the work of nature without adding any new danger, . . . (he) is not liable because of having created an "attractive nuisance." Anderson vs. ReithRiley Const. Co., N. E., 2nd, 184, 185; 112 Ind. App., 170. Therefore, as petitioner's tanks are not classified as attractive nuisance, the question whether the petitioner had taken reasonable precautions become immaterial. 86. ANDAMO V IAC

FACTS: Petitioner spouses Emmanuel and Natividad Andamo are the owners of a parcel of land adjacent to that of private respondent, Missionaries of Our Lady of La Salette, Inc., a religious corporation. The corporations waterpaths and contrivances, including an artificial lake, were constructed, which allegedly inundated and eroded petitioners' land, caused a young man to drown, damaged petitioners' crops and plants, washed away costly fences, endangered the lives of petitioners and their laborers during rainy and stormy seasons, and exposed plants and other improvements to destruction. Petitioners instituted a criminal action against Efren Musngi, Orlando Sapuay and Rutillo Mallillin, officers and directors of respondent corporation, for destruction by means of inundation under Article 324 of the Revised Penal Code. And later on, petitioners filed another action against respondent Corporation for damages with prayer for the issuance of a writ of preliminary injunction before the same court. Respondent corporation filed its answer to the complaint and opposition to the issuance of a writ of preliminary injunction. The trial court issued the disputed order dismissing the Civil Case for lack of jurisdiction, as the criminal case which was instituted ahead of the civil case was still unresolved. Said order was anchored on the provision of Section 3 (a), Rule III of the Rules of Court which provides that "criminal and civil actions arising from the same offense may be instituted separately, but after the criminal action has been commenced the civil action cannot be instituted until final judgment has been rendered in the criminal action. Petitioners appealed from that order to the Intermediate Appellate Court. IAC affirmed the questioned order of the trial court. A motion for reconsideration was also denied. ISSUE: Whether a corporation, which has built through its agents, waterpaths, water conductors and contrivances within its land, thereby causing inundation and damage to an adjacent land, can be held civilly liable for damages under Articles 2176 and 2177 of the Civil Code on quasi-delicts such that the resulting civil case can proceed independently of the criminal case. RULING: The petitioners have a valid point. A careful examination of the aforequoted complaint shows that the civil action is one under Articles 2176 and 2177 of the Civil Code on quasi-delicts. All the elements of a quasi-delict are present, to wit: (a) damages suffered by the plaintiff, (b) fault or negligence of the defendant, or some other person for whose acts he must respond; and (c) the connection of cause and effect between the fault or negligence of the defendant and the damages incurred by the plaintiff. Clearly, from petitioner's complaint, the waterpaths and contrivances built by respondent corporation are alleged to have inundated the land of petitioners. There is therefore, an assertion of a causal connection between the act of building these waterpaths and the damage sustained by petitioners. Such action if proven constitutes fault or negligence which may be the basis for the recovery of damages. It must be stressed that the use of one's property is not without limitations. Article 431 of the Civil Code provides that "the owner of a thing cannot make use thereof in such a manner as to injure the rights of a third person." SIC UTERE TUO UT ALIENUM NON LAEDAS. Moreover, adjoining landowners have mutual and reciprocal duties which require that each must use his own land in a reasonable manner so as not to infringe upon the rights and interests of others. Although we recognize the right of an owner to build structures on his land, such structures must be so constructed and maintained

using all reasonable care so that they cannot be dangerous to adjoining landowners and can withstand the usual and expected forces of nature. If the structures cause injury or damage to an adjoining landowner or a third person, the latter can claim indemnification for the injury or damage suffered. Article 2176 of the Civil Code imposes a civil liability on a person for damage caused by his act or omission constituting fault or negligence. Article 2176, whenever it refers to "fault or negligence", covers not only acts "not punishable by law" but also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a separate civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed, (if the tortfeasor is actually charged also criminally), to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. The distinctness of quasi-delicta is shown in Article 2177 of the Civil Code, which states: Article 2177. Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant. According to the Report of the Code Commission "the foregoing provision though at first sight startling, is not so novel or extraordinary when we consider the exact nature of criminal and civil negligence. The former is a violation of the criminal law, while the latter is a distinct and independent negligence, which is a "culpa aquiliana" or quasidelict, of ancient origin, having always had its own foundation and individuality, separate from criminal negligence. Such distinction between criminal negligence and "culpa extra-contractual" or "cuasi-delito" has been sustained by decisions of the Supreme Court of Spain. Cases 78-86 SANTOS, RYAN G. 87. REMMAN ENTERPRISES, INC. vs. COURT OF APPEALS FACTS: EMMAN ENTERPRISES, INC. (REMMAN), and CRISPIN E. LAT are adjoining landowners in Barangay Bugtong Na Pulo, Lipa City. The land of Lat containing an area of 1.8 hectares is agricultural and planted mostly with fruit trees while REMMAN occupies a land area of fifteen (15) hectares six (6) hectares of which are devoted to its piggery business. REMMAN's land is one and a half (1) meters higher in elevation than that of respondent Lat. Sometime in July 1984 Lat noticed that REMMAN's waste disposal lagoon was already overflowing and inundating one-fourth (1/4) of Lat's plantation. He made several representations with REMMAN but they fell on deaf ears. On 14 March 1985, after almost one (1) hectare of Lat's plantation was already inundated with water containing pig manure, as a result of which the trees growing on the flooded portion started to wither and die, Lat filed a complaint for damages with preliminary mandatory injunction against REMMAN. Lat alleged that the acidity of the soil in his plantation increased

because of the overflow of the water heavy with pig manure from REMMAN's piggery farm. REMMAN denied all the allegations of Lat and raised as an affirmative defense that measures such as the construction of additional lagoons were already adopted to contain the waste water coming from its piggery to prevent any damage to the adjoining estates. RTC DECISION: After conducting an ocular inspection and evaluating the evidence of both parties the Regional Trial Court found that indeed REMMANs waste disposal lagoon overflowed with the contaminated water flooding one (1) hectare of Lat's plantation. The waste water was ankle-deep and caused death and destruction to one (1) jackfruit tree, fifteen (15) coconut trees, one hundred twenty-two (122) coffee trees, and an unspecified number of mango trees, bananas and vegetables. As a consequence, the trial court ordered REMMAN to indemnify Lat P186,975.00 for lost profits for three (3) crop years and P30,000.00 as attorney's fees SC RULING: REMMAN argues that its liability for the damages suffered by Lat was not clearly established. We disagree. During the ocular inspection conducted by the lower court where representatives of both parties were present, it was established that the waste water containing pig manure was continuously flowing from REMMAN's piggery farm to Lat's plantation. The water was ankle-deep and flooded one (1) hectare of Lat's plantation. The overflow of the "acidic, malodorous and polluted water" continued from June 1984 to March 1985 thus destroying one (1) jackfruit tree, fifteen (15) coconut trees, one hundred an twenty-two (122) coffee trees, and an unspecified number of mango trees, bananas and vegetables. In addition, the appellate court found that there was indeed negligence on the part of REMMAN which directly caused the damage to the plantation of Lat. Thus -novero x x x Negligence was clearly established. It is uncontroverted that the land of appellee was flooded on account of the overflow of acidic, malodorous and polluted water coming from the adjacent piggery farm of appellant sometime in May 1984. This resulted in the impairment of the productivity of appellee's land as well as the eventual destruction and death of several fruit trees, such as coconuts, coffee, jackfruits, bananas and other plants x x x x Appellant cannot avoid liability because their negligence was the proximate cause of the damage. Appellee's property was practically made a catch-basin of polluted water and other noxious substances emptying from appellant's piggery which could have been prevented had it not been for the negligence of appellant arising from its: (a) failure to monitor the increases in the level of water in the lagoons before, during and after the heavy downpours which occurred during the rainy months of 1984; (b) failure to augment the existing lagoons prior to the incident, notwithstanding the fact that at the time of the flooding, the piggery had grown to a capacity of 11,000 heads, and considering that it was reasonably forseeable that the existing waste disposal facilities were no longer adequate to accomodate the increasing volume of waste matters in such a big farm; and more importantly, (c) the repeated failure to comply with their promise to appellee REMMAN contends that the damages allegedly sustained by Lat have not been satisfactorily established.

We a not convinced. The factual findings of the court a quo rightly support its conclusions on this respect Coming now to the issue of damages, We find appellant's allegations not well-taken. Appellant contends that actual and compensatory damages require evidentiary proof, and there being no evidence presented as to the necessity of the award for damages, it was erroneous for the lower court to have made such award. It must be remembered that after the ocular inspection, the court a quo rendered an inventory of dead and rotten trees and plants found in appellee's property. Appellee also testified on the approximate annual harvest and fair market value thereof. Significantly, no opposition or controverting evidence was presented by appellant on the matter. Hence, appellant is bound thereby and cannot now be heard to complain. As correctly held by the court a quo: An ocular inspection has been conducted by the trial court. The inventory of the trees damaged and the itemized valuation placed therein by private respondent after the ocular inspection which is not rebutted by the petitioner, is the more accurate indicator of the said amount prayed for as damages. If the valuation is indeed unreasonable, petitioner should present controverting evidence of the fair market value of the crops involved. The trial court held that the private respondent himself had been subjected to extensive cross and re-cross examination by the counsel for the petitioner on the amount of damages 88. JULITA T. VDA. DE SEVERO vs. FELICIANO FACTS: This case treated as a special civil action for certiorari was originally filed as a petition for review by way of appeal on certiorari seeking to set aside the order of the then Court of First Instance of Samar, Branch V, in Calbayog City dated April 6, 1976 dismissing Civil Case No. 522-CC entitled "Julita T. Vda, de Severo, et al., versus Luningning Feliciano Go, et al.' for lack of jurisdiction. The antecedents of the case are as follows: The late Ricardo Severo was an employee of herein private respondents Luningning Feliciano Go and Joaquin Go, first as baker of 'Joni's Cakes and Pastries," an enterprise owned by respondents located at 1634 P. Guevarra Street, Santa Cruz, Manila and finally, as driver-mechanic from 1961 up to February 16, 1972. On the latter date, unidentified armed men forcibly took away and/or carnapped the car owned by respondents and driven by Ricardo Severo who, in his efforts to resist the carnappers, was shot and killed by the latter. Up to now, the parties responsible for Severo's death have not been Identified nor apprehended. On September 18, 1974, herein petitioners, the widow and minor children of Ricardo Severo, filed an action against respondents-employers before the trial court for "Death Compensation and Damages" in the total amount of P74,500.00 TRIAL COURT RULING: The respondent court, acting on the latest motion to dismiss, issued an order dated April 6, 1976 stating that petitioners' cause of action falls within the purview of the Workmen's Compensation Act and the proper forum was the Workmen's Compensation Commission. It declared itself without jurisdiction following

Our ruling in the case of Robles vs. Yap Wing, L-20442, October 4, 1971, 41 SCRA 267, to wit: The Court after a careful consideration of the grounds in the defendants' motion, and considering the allegation of the complaint describing their main cause of action, which is a claim for death compensation and damages, is of the opinion and so holds that this Court has no jurisdiction to hear and decide the case. The plaintiffs' right to relief being derived on an accident resulting in death of Ricardo Severo, an employee of the defendants, while engaged in the performance of the task assigned to him, this Court is devoid of statutory competence to pass upon the subject matter of the plaintiffs' claim, as of the time the cause of action accrue, falls within the purview of the Workmen's Compensation Act as amended and, therefore, the proper form (sic) was the Workmen's Compensation Commission, thru its regional offices under the Department of Labor, a body empowered to act upon all claims for compensation for death, injury or sickness. Thus our Supreme Court in the case of Ciriaco Robles vs. Yap Wing, No. L-20442, Oct. 4, 1971 ruled: Before the enactment of Republic Act No. 722(Amending Act. No. 3228), which took effect on June 20, 1952, claims for compensation under the Workmen's Compensation Act were cognizable by the regular courts, but since then, as provided in Section 46 thereof as amended, 'the Workmen's Compensation shall have jurisdiction to hear and decide claims for compensation under the Workmen's Compensation Act, subject to appeal to the Supreme Court. ... In relation to this, Section 5 of the Act provides that the rights and remedies granted by this Act to an employee by reason of a personal injury entitling him to compensation shall exclude all other rights and remedies accruing to an employee, his personal representatives, dependents or nearest of kin against the employer under the Civil Code or other laws, because of said injury. SC RULING: The petition is impressed with merit. The ruling in the case of Robles vs. Yap Wing, supra, that the action of the injured employee or that of his heirs in case of his death is restricted to seeking the limited compensation provided under the Workmen's Compensation Act relied upon by the trial court, no longer controls. We have abandoned the same in the recent case of Ysmael Maritime Corporation vs. Hon. Celso Avelino, G.R. No. L-43674, promulgated on June 30, 1987, citing the case of Floresca vs. Philex Mining Company, L-30642, April 30, 1985, 136 SCRA 141. We stated thus. In the recent case of Floresca vs. Philex Mining Company, L-30642, April 30, 1985, 136 SCRA 141, involving a complaint for damages for the death of five miners in a cave-in on June 28, 1967, this Court was confronted with three divergent opinions on the exclusivity rule as presented by several amici curiae. One view is that the injured employee or his heirs, in case of death, may initiate an action to recover damages (not compensation under the Workmen's Compensation Act) with the regular courts on the basis of negligence of the employer pursuant to the Civil Code. Another view, as enunciated in the Robles case, is that the remedy of an employee for work connected injury or accident is exclusive in accordance with Section 5 of the WCA. A third view is that the action is selective and the employee of his heirs have a choice of availing themselves of the benefits under the WCA or of suing in the regular courts under the Civil Code for higher damages from the employer by reason of his negligence. But once the election has been exercised, the employee or his heirs are no longer free to opt for the other remedy. In other words, the employee cannot pursue both actions simultaneously. This latter view was adopted by the majority in the Floresca case,

reiterating as main authority its earlier decision in Pacana vs. Cebu Autobus Company, L25382, April 30, 1982, 32 SCRA 442. In so doing, the Court rejected the doctrine of exclusivity of the rights and remedies granted by the WCA as laid down in the Robles case 89. PHILIPPINE BANK OF COMMERCE, vs. COURT OF APPEALS FACTS: Challenged in this petition for review is the Decision dated February 28, 1991 1 rendered by public respondent Court of Appeals which affirmed the Decision dated November 15, 1985 of the Regional Trial Court, National Capital Judicial Region, Branch CLX (160), Pasig City, in Civil Case No. 27288 entitled "Rommel's Marketing Corporation, etc. v. Philippine Bank of Commerce, now absorbed by Philippine Commercial and Industrial Bank." The case stemmed from a complaint filed by the private respondent Rommel's Marketing Corporation (RMC for brevity), represented by its President and General Manager Romeo Lipana, to recover from the former Philippine Bank of Commerce (PBC for brevity), now absorbed by the Philippine Commercial International Bank, the sum of P304,979.74 representing various deposits it had made in its current account with said bank but which were not credited to its account, and were instead deposited to the account of one Bienvenido Cotas, allegedly due to the gross and inexcusable negligence of the petitioner bank RTC JUDGMENT: RMC demanded from petitioner bank the return of its money, but as its demand went unheeded, it filed a collection suit before the Regional Trial Court of Pasig, Branch 160. The trial court found petitioner bank negligent and ruled as follows: WHEREFORE, judgment is hereby rendered sentencing defendant Philippine Bank of Commerce, now absorbed by defendant Philippine Commercial & Industrial Bank, and defendant Azucena Mabayad to pay the plaintiff, jointly and severally, and without prejudice to any criminal action which may be instituted if found warranted: 1. The sum of P304,979.72, representing plaintiffs lost deposit, plus interest thereon at the legal rate from the filing of the complaint; 2. A sum equivalent to 14% thereof, as exemplary damages; 3. A sum equivalent to 25% of the total amount due, as and for attorney's fees; and 4. Costs. SC RULING: Our law on quasi-delicts states: Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. There are three elements of a quasi-delict: (a) damages suffered by the plaintiff; (b) fault or negligence of the defendant, or some other person for whose acts he must respond; and (c) the connection of cause and effect between the fault or negligence of the defendant and the damages incurred by the plaintiff.

In the case at bench, there is no dispute as to the damage suffered by the private respondent (plaintiff in the trial court) RMC in the amount of P304,979.74. It is in ascribing fault or negligence which caused the damage where the parties point to each other as the culprit. Negligence is the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent and reasonable man would do. The seventy-eight (78)-year-old, yet still relevant, case of Picart v. Smith, provides the test by which to determine the existence of negligence in a particular case which may be stated as follows: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of negligence. The law here in effect adopts the standard supposed to be supplied by the imaginary conduct of the discreet paterfamilias of the Roman law. The existence of negligence in a given case is not determined by reference to the personal judgment of the actor in the situation before him. The law considers what would be reckless, blameworthy, or negligent in the man of ordinary intelligence and prudence and determines liability by that. ON THE DOCTRINE OF LAST CLEAR CHANCE AND THE CONCEPT OF PROXIMATE CAUSE: Proximate cause is determined on the facts of each case upon mixed considerations of logic, common sense, policy and precedent. Vda. de Bataclan v. Medina, reiterated in the case of Bank of the Phil. Islands v. Court of Appeals, defines proximate cause as "that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred. . . ." In this case, absent the act of Ms. Mabayad in negligently validating the incomplete duplicate copy of the deposit slip, Ms. Irene Yabut would not have the facility with which to perpetrate her fraudulent scheme with impunity. Apropos, once again, is the pronouncement made by the respondent appellate court, to wit: . . . . Even if Yabut had the fraudulent intention to misappropriate the funds entrusted to her by plaintiff, she would not have been able to deposit those funds in her husband's current account, and then make plaintiff believe that it was in the latter's accounts wherein she had deposited them, had it not been for bank teller Mabayad's aforesaid gross and reckless negligence. The latter's negligence was thus the proximate, immediate and efficient cause that brought about the loss claimed by plaintiff in this case, and the failure of plaintiff to discover the same soon enough by failing to scrutinize the monthly statements of account being sent to it by appellant bank could not have prevented the fraud and misappropriation which Irene Yabut had already completed when she deposited plaintiff's money to the account of her husband instead of to the latter's accounts. Furthermore, under the doctrine of "last clear chance" (also referred to, at times as "supervening negligence" or as "discovered peril"), petitioner bank was indeed the culpable party. This doctrine, in essence, states that where both parties are negligent, but the negligent act of one is appreciably later in time than that of the other, or when it is impossible to determine whose fault or negligence should be attributed to the incident, the one who had the last clear opportunity to avoid the impending harm and failed to do so is chargeable with the consequences thereof. Stated differently, the rule would also mean that an antecedent negligence of a person does not preclude the

recovery of damages for the supervening negligence of, or bar a defense against liability sought by another, if the latter, who had the last fair chance, could have avoided the impending harm by the exercise of due diligence. Here, assuming that private respondent RMC was negligent in entrusting cash to a dishonest employee, thus providing the latter with the opportunity to defraud the company, as advanced by the petitioner, yet it cannot be denied that the petitioner bank, thru its teller, had the last clear opportunity to avert the injury incurred by its client, simply by faithfully observing their self-imposed validation procedure 90. METROPOLITAN BANK AND TRUST COMPANY vs. COURT OF APPEALS FACTS: This petition for certiorari seeks to annul the decision of respondent Court of Appeals dated October 29, 1992 in CA GR CV No. 26571 affirming the decision of the Regional Trial Court of Lipa, Batangas Branch XIII for damages, and the Resolution dated November 11, 1993 denying petitioner's motion for reconsideration of the aforesaid decision. The case emanated from a dispute between the Rural Bank of Padre Garcia, Inc. (RBPG) and Metropolitan Bank and Trust Company (MBTC) relative to a credit memorandum dated April 5, 1982 from the Central Bank in the amount of P304,000.00 in favor of RBPG. The records show that Isabel Katigbak is the president and director of RBPG, owning 65% of the shares thereof. Metropolitan Bank and Trust Company (MBTC) is the rural bank's depository bank, where Katigbak maintains current accounts with MBTC's main office in Makati as well as its Lipa City branch. On April 6, 1982, MBTC received from the Central Bank a credit memo dated April 5, 1982 that its demand deposit account was credited with P304,000.00 for the account of RBPG, representing loans granted by the Central Bank to RBPG. On the basis of said credit memo, Isabel Katigbak issued several checks against its account with MBTC in the total amount of P300,000.00, two (2) of which (Metrobank Check Nos. 0069 and 0070) were payable to Dr. Felipe C. Roque and Mrs. Eliza Roque for P25,000.00 each. Said checks issued to Dr. and Mrs. Roque were deposited by the Roques with the Philippine Banking Corporation, Novaliches Branch in Quezon City. When these checks were forwarded to MBTC on April 12, 1982 for payment (six (6) days from receipt of the Credit Memo), the checks were returned by MBTC with the annotations "DAIF TNC" (Drawn Against Insufficient Funds Try Next Clearing) so they were redeposited on April 14, 1982. These were however again dishonored and returned unpaid for the following reason: "DAIF TNC NO ADVICE FROM CB." SC RULING: On October 29, 1992, the Court of Appeals rendered a decision affirming that of the trial court, except for the deletion of the award of temperate damages, the reduction of moral damages from P500,000.00 to P50,000.00 in favor of RBPG and P100,000.00 for Isabel Katigbak and P50,000.00, as attorney's fees. Plaintiffs-appellees filed a motion for reconsideration of the decision, questioning the deletion of the award of temperate damages and the reduction of the award of moral damages and attorney's fees. The motion was denied.

The damage to private respondents' reputation and social standing entitles them to moral damages. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury. Temperate or moderate damages which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty. Temperate damages may be allowed in cases where from the nature of the case, definite proof of pecuniary loss cannot be adduced, although the court is convinced that there has been such loss. The appellate court, however, justified its deletion when MBTC reasoned out that the amount of P50,000.00 is not part of the relief prayed for in the complaint, aside from the fact that the amount allegedly suffered by Mrs. Katigbak is susceptible of proof. Moral and temperate damages which are not susceptible of pecuniary estimation are not awarded to penalize the petitioner but to compensate the respondents for injuries suffered as a result of the former's fault and negligence, taking into account the latter's credit and social standing in the banking community, particularly since this is the very first time such humiliation has befallen private respondents. The amount of such losses need not be established with exactitude, precisely due to their nature. The carelessness of petitioner bank, aggravated by the lack of promptness in repairing the error and the arrogant attitude of the bank officer handling the matter, justifies the grant of moral damages, which are clearly not excessive and unconscionable. 91. PHILIPPINE BANK OF COMMERCE, vs. COURT OF APPEALS, same (89) 92. TABACALERA INSURANCE CO. vs. NORTH FRONT SHIPPING SERVICES, INC. FACTS: ABACALERA INSURANCE CO., Prudential Guarantee & Assurance, Inc., and New Zealand Insurance Co., Ltd., in this petition for review on certiorari, assail the 22 December 1994 decision of the Court of Appeals and its Resolution of 16 February 1995 which affirmed the 1 June 1993 decision of the Regional Trial Court dismissing their complaint for damages against North Front Shipping Services, Inc. On 2 August 1990, 20,234 sacks of corn grains valued at P3,500,640.00 were shipped on board North Front 777, a vessel owned by North Front Shipping Services, Inc. The cargo was consigned to Republic Flour Mills Corporation in Manila under Bill of Lading No. 001and insured with the herein mentioned insurance companies. The vessel was inspected prior to actual loading by representatives of the shipper and was found fit to carry the merchandise. The cargo was covered with tarpaulins and wooden boards. The hatches were sealed and could only be opened by representatives of Republic Flour Mills Corporation. The vessel left Cagayan de Oro City on 2 August 1990 and arrived Manila on 16 August 1990. Republic Flour Mills Corporation was advised of its arrival but it did not immediately commence the unloading operations. There were days when unloading had to be stopped due to variable weather conditions and sometimes for no apparent reason at all. When the cargo was eventually unloaded there was a shortage of 26.333 metric tons. The remaining merchandise was already moldy, rancid and

deteriorating. The unloading operations were completed on 5 September 1990 or twenty (20) days after the arrival of the barge at the wharf of Republic Flour Mills Corporation in Pasig City. Precision Analytical Services, Inc., was hired to examine the corn grains and determine the cause of deterioration. A Certificate of Analysis was issued indicating that the corn grains had 18.56% moisture content and the wetting was due to contact with salt water. The mold growth was only incipient and not sufficient to make the corn grains toxic and unfit for consumption. In fact the mold growth could still be arrested by drying. Republic Flour Mills Corporation rejected the entire cargo and formally demanded from North Front Shipping Services, Inc., payment for the damages suffered by it. The demands however were unheeded. The insurance companies were perforce obliged to pay Republic Flour Mills Corporation P2,189,433.40. TRIAL COURT RULING: The court below dismissed the complaint and ruled that the contract entered into between North Front Shipping Services, Inc., and Republic Flour Mills Corporation was a charter-party agreement. As such, only ordinary diligence in the care of goods was required of North Front Shipping Services, Inc. The inspection of the barge by the shipper and the representatives of the shipping company before actual loading, coupled with the Permit to Sail issued by the Coast Guard, sufficed to meet the degree of diligence required of the carrier. On the other hand, the Court of Appeals ruled that as a common carrier required to observe a higher degree of diligence North Front 777 satisfactorily complied with all the requirements hence was issued a Permit to Sail after proper inspection. Consequently, the complaint was dismissed and the motion for reconsideration rejected. The charter-party agreement between North Front Shipping Services, Inc., and Republic Flour Mills Corporation did not in any way convert the common carrier into a private carrier. We have already resolved this issue with finality in Planters Products, Inc. v. Court of Appeals thus A 'charter-party' is defined as a contract by which an entire ship, or some principal part thereof, is let by the owner to another person for a specified time or use; a contract of affreightment by which the owner of a ship or other vessel lets the whole or a part of her to a merchant or other person for the conveyance of goods, on a particular voyage, in consideration of the payment of freight x x x x Contract of affreightment may either be time charter, wherein the vessel is leased to the charterer for a fixed period of time, or voyage charter, wherein the ship is leased for a single voyage. In both cases, the charter-party provides for the hire of the vessel only, either for a determinate period of time or for a single or consecutive voyage, the ship owner to supply the ship's store, pay for the wages of the master of the crew, and defray the expenses for the maintenance of the ship. Upon the other hand, the term 'common or public carrier' is defined in Art. 1732 of the Civil Code. The definition extends to carriers either by land, air or water which hold themselves out as ready to engage in carrying goods or transporting passengers or both for compensation as a public employment and not as a casual occupation

SC RULING: In fine, we find that the carrier failed to observe the required extraordinary diligence in the vigilance over the goods placed in its care. The proofs presented by North Front Shipping Services, Inc., were insufficient to rebut the prima facie presumption of private respondent's negligence, more so if we consider the evidence adduced by petitioners. It is not denied by the insurance companies that the vessel was indeed inspected before actual loading and that North Front 777 was issued a Permit to Sail. They proved the fact of shipment and its consequent loss or damage while in the actual possession of the carrier. Notably, the carrier failed to volunteer any explanation why there was spoilage and how it occurred. On the other hand, it was shown during the trial that the vessel had rusty bulkheads and the wooden boards and tarpaulins bore heavy concentration of molds. The tarpaulins used were not new, contrary to the claim of North Front Shipping Services, Inc., as there were already several patches on them, hence, making it highly probable for water to enter. Laboratory analysis revealed that the corn grains were contaminated with salt water. North Front Shipping Services, Inc., failed to rebut all these arguments. It did not even endeavor to establish that the loss, destruction or deterioration of the goods was due to the following: (a) flood, storm, earthquake, lightning, or other natural disaster or calamity; (b) act of the public enemy in war, whether international or civil; (c) act or omission of the shipper or owner of the goods; (d) the character of the goods or defects in the packing or in the containers; (e) order or act of competent public authority.This is a closed list. If the cause of destruction, loss or deterioration is other than the enumerated circumstances, then the carrier is rightly liable therefor. However, we cannot attribute the destruction, loss or deterioration of the cargo solely to the carrier. We find the consignee Republic Flour Mills Corporation guilty of contributory negligence. It was seasonably notified of the arrival of the barge but did not immediately start the unloading operations. No explanation was proffered by the consignee as to why there was a delay of six (6) days. Had the unloading been commenced immediately the loss could have been completely avoided or at least minimized. As testified to by the chemist who analyzed the corn samples, the mold growth was only at its incipient stage and could still be arrested by drying. The corn grains were not yet toxic or unfit for consumption. For its contributory negligence, Republic Flour Mills Corporation should share at least 40% of the loss. 93. BALIWAG TRANSIT, INC. vs. COURT OF APPEALS FACTS: This is a petition for certiorari to review the Decision 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.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. She underwent an operation for partial hip prosthesis. 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. 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.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. SC RULING: 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 coemployee. 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. 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. 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. 94. FABRE, JR. vs. COURT OF APPEALS FACTS: This is a petition for review on certiorari of the decision of the Court of Appeals in CA-GR No. 28245, dated September 30, 1992, which affirmed with modification the decision of the Regional Trial Court of Makati, Branch 58, ordering petitioners jointly and severally to pay damages to private respondent Amyline Antonio, and its resolution which denied petitioners motion for reconsideration for lack of merit. Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982 model Mazda minibus. They used the bus principally in connection with a bus service for school children which they operated in Manila. The couple had a driver, Porfirio J. Cabil, whom they hired in 1981, after trying him out for two weeks. His job was to take school children to and from the St. Scholasticas College in Malate, Manila. On November 2, 1984 private respondent Word for the World Christian Fellowship Inc. (WWCF) arranged with petitioners for the transportation of 33 members of its Young Adults Ministry from Manila to La Union and back in consideration of which private respondent paid petitioners the amount of P3,000.00. The group was scheduled to leave on November 2, 1984, at 5:00 oclock in the afternoon. However, as several members of the party were late, the bus did not leave the Tropical Hut at the corner of Ortigas Avenue and EDSA until 8:00 oclock in the evening. Petitioner Porfirio Cabil drove the minibus. The usual route to Caba, La Union was through Carmen, Pangasinan. However, the bridge at Carmen was under repair, so that petitioner Cabil, who was unfamiliar with the area (it being his first trip to La Union), was forced to take a detour through the town of Ba-ay in Lingayen, Pangasinan. At 11:30 that night, petitioner Cabil came upon a sharp curve on the highway, running on a south to east direction, which he described as siete. The road was slippery because it was raining, causing the bus, which was running at the speed of 50 kilometers per hour, to skid to the left road shoulder. The

bus hit the left traffic steel brace and sign along the road and rammed the fence of one Jesus Escano, then turned over and landed on its left side, coming to a full stop only after a series of impacts. The bus came to rest off the road. A coconut tree which it had hit fell on it and smashed its front portion. Several passengers were injured. Private respondent Amyline Antonio was thrown on the floor of the bus and pinned down by a wooden seat which came off after being unscrewed. It took three persons to safely remove her from this position. She was in great pain and could not move. The driver, petitioner Cabil, claimed he did not see the curve until it was too late. He said he was not familiar with the area and he could not have seen the curve despite the care he took in driving the bus, because it was dark and there was no sign on the road. He said that he saw the curve when he was already within 15 to 30 meters of it. He allegedly slowed down to 30 kilometers per hour, but it was too late. The Lingayen police investigated the incident the next day, November 3, 1984. On the basis of their finding they filed a criminal complaint against the driver, Porfirio Cabil. The case was later filed with the Lingayen Regional Trial Court. Petitioners Fabre paid Jesus Escano P1,500.00 for the damage to the latters fence. On the basis of Escanos affidavit of desistance the case against petitioners Fabre was dismissed. Amyline Antonio, who was seriously injured, brought this case in the RTC of Makati, Metro Manila. As a result of the accident, she is now suffering from paraplegia and is permanently paralyzed from the waist down. During the trial she described the operations she underwent and adduced evidence regarding the cost of her treatment and therapy. Immediately after the accident, she was taken to the Nazareth Hospital in Ba-ay, Lingayen. As this hospital was not adequately equipped, she was transferred to the Sto. Nio Hospital, also in the town of Ba-ay, where she was given sedatives. An xray was taken and the damage to her spine was determined to be too severe to be treated there. She was therefore brought to Manila, first to the Philippine General Hospital and later to the Makati Medical Center where she underwent an operation to correct the dislocation of her spine. RTC RULING: No convincing evidence was shown that the minibus was properly checked for travel to a long distance trip and that the driver was properly screened and tested before being admitted for employment. Indeed, all the evidence presented have shown the negligent act of the defendants which ultimately resulted to the accident subject of this case. Accordingly, it gave judgment for private respondents holding: Considering that plaintiffs Word for the World Christian Fellowship, Inc. and Ms. Amyline Antonio were the only ones who adduced evidence in support of their claim for damages, the Court is therefore not in a position to award damages to the other plaintiffs. WHEREFORE, premises considered, the Court hereby renders judgment against defendants Mr. & Mrs. Engracio Fabre, Jr. and Porfirio Cabil y Jamil pursuant to articles 2176 and 2180 of the Civil Code of the Philippines and said defendants are ordered to pay jointly and severally to the plaintiffs

CA RULING: he Court of Appeals sustained the trial courts finding that petitioner Cabil failed to exercise due care and precaution in the operation of his vehicle considering the time and the place of the accident. The Court of Appeals held that the Fabres were themselves presumptively negligent. Hence, this petition. Petitioners raise the following ISSUES: I. Whether or not petitioners were negligent. II. Whether or not petitioners were liable for the injuries suffered by private respondents. III. Whether or not damages can be awarded and in the positive, up to what extent. SC RULING: As common carriers, the Fabres were bound to exercise extraordinary diligence for the safe transportation of the passengers to their destination. This duty of care is not excused by proof that they exercised the diligence of a good father of the family in the selection and supervision of their employee. As Art. 1759 of the Code provides: Common carriers are liable for the death of or injuries to passengers through the negligence or wilful acts of the formers 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 does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees. The same circumstances detailed above, supporting the finding of the trial court and of the appellate court that petitioners are liable under Arts. 2176 and 2180 for quasi delict, fully justify finding them guilty of breach of contract of carriage under Arts. 1733, 1755 and 1759 of the Civil Code. Secondly, we sustain the award of damages in favor of Amyline Antonio. However, we think the Court of Appeals erred in increasing the amount of compensatory damages because private respondents did not question this award as inadequate.To the contrary, the award of P500,000.00 for compensatory damages which the Regional Trial Court made is reasonable considering the contingent nature of her income as a casual employee of a company and as distributor of beauty products and the fact that the possibility that she might be able to work again has not been foreclosed. In fact she testified that one of her previous employers had expressed willingness to employ her again. With respect to the other awards, while the decisions of the trial court and the Court of Appeals do not sufficiently indicate the factual and legal basis for them, we find that they are nevertheless supported by evidence in the records of this case. Viewed as an action for quasi delict, this case falls squarely within the purview of Art. 2219(2) providing for the payment of moral damages in cases of quasi delict. On the theory that petitioners are liable for breach of contract of carriage, the award of moral damages is authorized by Art. 1764, in relation to Art. 2220, since Cabils gross negligence amounted to bad faith. Amyline Antonios testimony, as well as the testimonies of her father and co-passengers, fully establish the physical suffering and mental anguish she endured as a result of the injuries caused by petitioners negligence.

The award of exemplary damages and attorneys fees was also properly made. However, for the same reason that it was error for the appellate court to increase the award of compensatory damages, we hold that it was also error for it to increase the award of moral damages and reduce the award of attorneys fees, inasmuch as private respondents, in whose favor the awards were made, have not appealed. As above stated, the decision of the Court of Appeals can be sustained either on the theory of quasi delict or on that of breach of contract. The question is whether, as the two courts below held, petitioners, who are the owners and driver of the bus, may be made to respond jointly and severally to private respondent. We hold that they may be. In Dangwa Trans. Co. Inc. v. Court of Appeals, on facts similar to those in this case, this Court held the bus company and the driver jointly and severally liable for damages for injuries suffered by a passenger. Again, in Bachelor Express, Inc. v. Court of Appeals a driver found negligent in failing to stop the bus in order to let off passengers when a fellow passenger ran amuck, as a result of which the passengers jumped out of the speeding bus and suffered injuries, was held also jointly and severally liable with the bus company to the injured passengers. The same rule of liability was applied in situations where the negligence of the driver of the bus on which plaintiff was riding concurred with the negligence of a third party who was the driver of another vehicle, thus causing an accident. In Anuran v. Buo, Batangas Laguna Tayabas Bus Co. v. Intermediate Appellate Court,and Metro Manila Transit Corporation v. Court of Appeals] the bus company, its driver, the operator of the other vehicle and the driver of the vehicle were jointly and severally held liable to the injured passenger or the latters heirs. The basis of this allocation of liability was explained in Viluan v. Court of Appeals, thus: Nor should it make any difference that the liability of petitioner [bus owner] springs from contract while that of respondents [owner and driver of other vehicle] arises from quasi-delict. As early as 1913, we already ruled in Gutierrez vs. Gutierrez, 56 Phil. 177, that in case of injury to a passenger due to the negligence of the driver of the bus on which he was riding and of the driver of another vehicle, the drivers as well as the owners of the two vehicles are jointly and severally liable for damages. Some members of the Court, though, are of the view that under the circumstances they are liable on quasi-delict. It is true that in Philippine Rabbit Bus Lines, Inc. v. Court of Appeals this Court exonerated the jeepney driver from liability to the injured passengers and their families while holding the owners of the jeepney jointly and severally liable, but that is because that case was expressly tried and decided exclusively on the theory of culpa contractual. As this Court there explained: The trial court was therefore right in finding that Manalo [the driver] and spouses Mangune and Carreon [the jeepney owners] were negligent. However, its ruling that spouses Mangune and Carreon are jointly and severally liable with Manalo is erroneous. The driver cannot be held jointly and severally liable with the carrier in case of breach of the contract of carriage. The rationale behind this is readily discernible. Firstly, the contract of carriage is between the carrier and the passenger, and in the event of contractual liability, the carrier is exclusively responsible therefore to

the passenger, even if such breach be due to the negligence of his driver (see Viluan v. The Court of Appeals, et al., G.R. Nos. L-21477-81, April 29, 1966, 16 SCRA 742) 95. REYES, vs. SISTERS OF MERCY HOSPITAL FACTS: This is a petition for review of the decision of the Court of Appeals in CA-G.R. CV No. 36551 affirming the decision of the Regional Trial Court, Branch IX, Cebu City which dismissed a complaint for damages filed by petitioners against respondents. The facts are as follows: Petitioner Leah Alesna Reyes is the wife of the late Jorge Reyes. The other petitioners, namely, Rose Nahdja, Johnny, Lloyd, and Kristine, all surnamed Reyes, were their children. Five days before his death on January 8, 1987, Jorge had been suffering from a recurring fever with chills. After he failed to get relief from some home medication he was taking, which consisted of analgesic, antipyretic, and antibiotics, he decided to see the doctor. On January 8, 1987, he was taken to the Mercy Community Clinic by his wife. He was attended to by respondent Dr. Marlyn Rico, resident physician and admitting physician on duty, who gave Jorge a physical examination and took his medical history. She noted that at the time of his admission, Jorge was conscious, ambulatory, oriented, coherent, and with respiratory distress. Typhoid fever was then prevalent in the locality, as the clinic had been getting from 15 to 20 cases of typhoid per month.Suspecting that Jorge could be suffering from this disease, Dr. Rico ordered a Widal Test, a standard test for typhoid fever, to be performed on Jorge. Blood count, routine urinalysis, stool examination, and malarial smear were also made. After about an hour, the medical technician submitted the results of the test from which Dr. Rico concluded that Jorge was positive for typhoid fever. As her shift was only up to 5:00 p.m., Dr. Rico indorsed Jorge to respondent Dr. Marvie Blanes. Dr. Marvie Blanes attended to Jorge at around six in the evening. She also took Jorges history and gave him a physical examination. Like Dr. Rico, her impression was that Jorge had typhoid fever. Antibiotics being the accepted treatment for typhoid fever, she ordered that a compatibility test with the antibiotic chloromycetin be done on Jorge. Said test was administered by nurse Josephine Pagente who also gave the patient a dose of triglobe. As she did not observe any adverse reaction by the patient to chloromycetin, Dr. Blanes ordered the first five hundred milligrams of said antibiotic to be administered on Jorge at around 9:00 p.m. A second dose was administered on Jorge about three hours later just before midnight. At around 1:00 a.m. of January 9, 1987, Dr. Blanes was called as Jorges temperature rose to 41C. The patient also experienced chills and exhibited respiratory distress, nausea, vomiting, and convulsions. Dr. Blanes put him under oxygen, used a suction machine, and administered hydrocortisone, temporarily easing the patients convulsions. When he regained consciousness, the patient was asked by Dr. Blanes whether he had a previous heart ailment or had suffered from chest pains in the past. Jorge replied he did not.After about 15 minutes, however, Jorge again started to vomit, showed restlessness, and his convulsions returned. Dr. Blanes re-applied the emergency measures taken before and, in addition, valium was administered. Jorge, however, did not respond to the treatment and slipped into cyanosis, a bluish or

purplish discoloration of the skin or mucous membrane due to deficient oxygenation of the blood. At around 2:00 a.m., Jorge died. He was forty years old. The cause of his death was Ventricular Arrythemia Secondary to Hyperpyrexia and typhoid fever. On June 3, 1987, petitioners filed before the Regional Trial Court of Cebu City a complaint for damages against respondents Sisters of Mercy, Sister Rose Palacio, Dr. Marvie Blanes, Dr. Marlyn Rico, and nurse Josephine Pagente. On September 24, 1987, petitioners amended their complaint to implead respondent Mercy Community Clinic as additional defendant and to drop the name of Josephine Pagente as defendant since she was no longer connected with respondent hospital. Their principal contention was that Jorge did not die of typhoid fever.Instead, his death was due to the wrongful administration of chloromycetin. They contended that had respondent doctors exercised due care and diligence, they would not have recommended and rushed the performance of the Widal Test, hastily concluded that Jorge was suffering from typhoid fever, and administered chloromycetin without first conducting sufficient tests on the patients compatibility with said drug. They charged respondent clinic and its directress, Sister Rose Palacio, with negligence in failing to provide adequate facilities and in hiring negligent doctors and nurse TRIAL COURT RULING: On September 12, 1991, the trial court rendered its decision absolving respondents from the charges of negligence and dismissing petitioners action for damages. The trial court likewise dismissed respondents counterclaim, holding that, in seeking damages from respondents, petitioners were impelled by the honest belief that Jorges death was due to the latters negligence. Petitioners brought the matter to the Court of Appeals. On July 31, 1997, the Court of Appeals affirmed the decision of the trial court. Hence this petition. Petitioners raise the following assignment of errors: ISSUES: I. The honorable court of appeals committed a reversible error when it ruled that the doctrine of res ipsa loquitur is not applicable in the instant case. II. The honorable court of appeals committed reversible error when it made an unfounded assumption that the level of medical practice is lower in iligan city. III. The honorable court of appeals gravely erred when it ruled for a lesser standard of care and degree of diligence for medical practice in iligan city when it appreciate[d] no doctors negligence in the treatment of jorge reyes. SC RULING: In the present case, there is no doubt that a physician-patient relationship existed between respondent doctors and Jorge Reyes. Respondents were thus dutybound to use at least the same level of care that any reasonably competent doctor would use to treat a condition under the same circumstances. It is breach of this duty which constitutes actionable malpractice. As to this aspect of medical malpractice, the determination of the reasonable level of care and the breach thereof, expert testimony is essential. Inasmuch as the causes of the injuries involved in malpractice actions are determinable only in the light of scientific knowledge, it has been recognized that expert testimony is usually necessary to support the conclusion as to causation.
Res Ipsa Loquitur

There is a case when expert testimony may be dispensed with, and that is under the doctrine of res ipsa loquitur. As held in Ramos v. Court of Appeals: Although generally, expert medical testimony is relied upon in malpractice suits to prove that a physician has done a negligent act or that he has deviated from the standard medical procedure, when the doctrine of res ipsa loquitor is availed by the plaintiff, the need for expert medical testimony is dispensed with because the injury itself provides the proof of negligence. The reason is that the general rule on the necessity of expert testimony applies only to such matters clearly within the domain of medical science, and not to matters that are within the common knowledge of mankind which may be testified to by anyone familiar with the facts. Ordinarily, only physicians and surgeons of skill and experience are competent to testify as to whether a patient has been treated or operated upon with a reasonable degree of skill and care. However, testimony as to the statements and acts of physicians and surgeons, external appearances, and manifest conditions which are observable by any one may be given by non-expert witnesses. Hence, in cases where the res ipsa loquitur is applicable, the court is permitted to find a physician negligent upon proper proof of injury to the patient, without the aid of expert testimony, where the court from its fund of common knowledge can determine the proper standard of care. Where common knowledge and experience teach that a resulting injury would not have occurred to the patient if due care had been exercised, an inference of negligence may be drawn giving rise to an application of the doctrine of res ipsa loquitur without medical evidence, which is ordinarily required to show not only what occurred but how and why it occurred. When the doctrine is appropriate, all that the patient must do is prove a nexus between the particular act or omission complained of and the injury sustained while under the custody and management of the defendant without need to produce expert medical testimony to establish the standard of care. Resort to res ipsa loquitor is allowed because there is no other way, under usual and ordinary conditions, by which the patient can obtain redress for injury suffered by him. Thus, courts of other jurisdictions have applied the doctrine in the following situations: leaving of a foreign object in the body of the patient after an operation, injuries sustained on a healthy part of the body which was not under, or in the area, of treatment, removal of the wrong part of the body when another part was intended, knocking out a tooth while a patients jaw was under anesthetic for the removal of his tonsils, and loss of an eye while the patient was under the influence of anesthetic, during or following an operation for appendicitis, among others. Petitioners asserted in the Court of Appeals that the doctrine of res ipsa loquitur applies to the present case because Jorge Reyes was merely experiencing fever and chills for five days and was fully conscious, coherent, and ambulant when he went to the hospital. Yet, he died after only ten hours from the time of his admission. This contention was rejected by the appellate court. Petitioners now contend that all requisites for the application of res ipsa loquitur were present, namely: (1) the accident was of a kind which does not ordinarily occur unless someone is negligent; (2) the instrumentality or agency which caused the injury was under the exclusive control of the person in charge; and (3) the injury suffered must not have been due to any voluntary action or contribution of the person injured.

The contention is without merit. We agree with the ruling of the Court of Appeals. In the Ramos case, the question was whether a surgeon, an anesthesiologist, and a hospital should be made liable for the comatose condition of a patient scheduled for cholecystectomy In that case, the patient was given anesthesia prior to her operation. Noting that the patient was neurologically sound at the time of her operation, the Court applied the doctrine of res ipsa loquitur as mental brain damage does not normally occur in a gallblader operation in the absence of negligence of the anesthesiologist. Taking judicial notice that anesthesia procedures had become so common that even an ordinary person could tell if it was administered properly, we allowed the testimony of a witness who was not an expert. In this case, while it is true that the patient died just a few hours after professional medical assistance was rendered, there is really nothing unusual or extraordinary about his death. Prior to his admission, the patient already had recurring fevers and chills for five days unrelieved by the analgesic, antipyretic, and antibiotics given him by his wife. This shows that he had been suffering from a serious illness and professional medical help came too late for him. Respondents alleged failure to observe due care was not immediately apparent to a layman so as to justify application of res ipsa loquitur. The question required expert opinion on the alleged breach by respondents of the standard of care required by the circumstances. Furthermore, on the issue of the correctness of her diagnosis, no presumption of negligence can be applied to Dr. Marlyn Rico. As held in Ramos: . . . . Res ipsa loquitur is not a rigid or ordinary doctrine to be perfunctorily used but a rule to be cautiously applied, depending upon the circumstances of each case. It is generally restricted to situations in malpractice cases where a layman is able to say, as a matter of common knowledge and observation, that the consequences of professional care were not as such as would ordinarily have followed if due care had been exercised. A distinction must be made between the failure to secure results, and the occurrence of something more unusual and not ordinarily found if the service or treatment rendered followed the usual procedure of those skilled in that particular practice. It must be conceded that the doctrine of res ipsa loquitur can have no application in a suit against a physician or a surgeon which involves the merits of a diagnosis or of a scientific treatment. The physician or surgeon is not required at his peril to explain why any particular diagnosis was not correct, or why any particular scientific treatment did not produce the desired result.
Specific Acts of Negligence

We turn to the question whether petitioners have established specific acts of negligence allegedly committed by respondent doctors. Petitioners contend that: (1) Dr. Marlyn Rico hastily and erroneously relied upon the Widal test, diagnosed Jorges illness as typhoid fever, and immediately prescribed the administration of the antibiotic chloromycetin; and (2) Dr. Marvie Blanes erred in ordering the administration of the second dose of 500 milligrams of chloromycetin barely three hours after the first was given.Petitioners presented the testimony of Dr. Apolinar Vacalares, Chief Pathologist of the Northern Mindanao Training Hospital, Cagayan de Oro City, who performed an autopsy on the body of Jorge Reyes. Dr. Vacalares testified that, based on his findings during the autopsy, Jorge Reyes did not die of typhoid fever but of shock undetermined, which could be due to allergic reaction or chloromycetin overdose. We are not persuaded.

First. While petitioners presented Dr. Apolinar Vacalares as an expert witness, we do not find him to be so as he is not a specialist on infectious diseases like typhoid fever.Furthermore, although he may have had extensive experience in performing autopsies, he admitted that he had yet to do one on the body of a typhoid victim at the time he conducted the postmortem on Jorge Reyes. It is also plain from his testimony that he has treated only about three cases of typhoid fever. He is thus not qualified to prove that Dr. Marlyn Rico erred in her diagnosis. Both lower courts were therefore correct in discarding his testimony, which is really inadmissible. In Ramos, the defendants presented the testimony of a pulmonologist to prove that brain injury was due to oxygen deprivation after the patient had bronchospasms triggered by her allergic response to a drug,] and not due to faulty intubation by the anesthesiologist. As the issue was whether the intubation was properly performed by an anesthesiologist, we rejected the opinion of the pulmonologist on the ground that he was not: (1) an anesthesiologist who could enlighten the court about anesthesia practice, procedure, and their complications; nor (2) an allergologist who could properly advance expert opinion on allergic mediated processes; nor (3) a pharmacologist who could explain the pharmacologic and toxic effects of the drug allegedly responsible for the bronchospasms. Second. On the other hand, the two doctors presented by respondents clearly were experts on the subject. They vouched for the correctness of Dr. Marlyn Ricos diagnosis. Dr. Peter Gotiong, a diplomate whose specialization is infectious diseases and microbiology and an associate professor at the Southwestern University College of Medicine and the Gullas College of Medicine, testified that he has already treated over a thousand cases of typhoid fever. According to him, when a case of typhoid fever is suspected, the Widal test is normally used,and if the 1:320 results of the Widal test on Jorge Reyes had been presented to him along with the patients history, his impression would also be that the patient was suffering from typhoid fever.As to the treatment of the disease, he stated that chloromycetin was the drug of choice. He also explained that despite the measures taken by respondent doctors and the intravenous administration of two doses of chloromycetin, complications of the disease could not be discounted. As regards Dr. Vacalares finding during the autopsy that the deceaseds gastrointestinal tract was normal, Dr. Rico explained that, while hyperplasia in the payers patches or layers of the small intestines is present in typhoid fever, the same may not always be grossly visible and a microscope was needed to see the texture of the cells. Respondents also presented the testimony of Dr. Ibarra T. Panopio who is a member of the Philippine and American Board of Pathology, an examiner of the Philippine Board of Pathology, and chief pathologist at the MetroCebu Community Hospital, Perpetual Succor Hospital, and the Andres Soriano Jr. Memorial Medical Center. He stated that, as a clinical pathologist, he recognized that the Widal test is used for typhoid patients, although he did not encourage its use because a single test would only give a presumption necessitating that the test be repeated, becoming more conclusive at the second and third weeks of the disease. He corroborated Dr. Gotiongs testimony that the danger with typhoid fever is really the possible complications which could develop like perforation, hemorrhage, as well as liver and cerebral complications.As regards the 1:320 results of the Widal test on Jorge Reyes, Dr. Panopio stated that no additional information could be obtained from a higher ratio.He also agreed with Dr. Gotiong that hyperplasia in the payers patches may be microscopic.

Indeed, the standard contemplated is not what is actually the average merit among all known practitioners from the best to the worst and from the most to the least experienced, but the reasonable average merit among the ordinarily good physicians.Here, Dr. Marlyn Rico did not depart from the reasonable standard recommended by the experts as she in fact observed the due care required under the circumstances. Though the Widal test is not conclusive, it remains a standard diagnostic test for typhoid fever and, in the present case, greater accuracy through repeated testing was rendered unobtainable by the early death of the patient. The results of the Widal test and the patients history of fever with chills for five days, taken with the fact that typhoid fever was then prevalent as indicated by the fact that the clinic had been getting about 15 to 20 typhoid cases a month, were sufficient to give upon any doctor of reasonable skill the impression that Jorge Reyes had typhoid fever. Dr. Rico was also justified in recommending the administration of the drug chloromycetin, the drug of choice for typhoid fever. The burden of proving that Jorge Reyes was suffering from any other illness rested with the petitioners. As they failed to present expert opinion on this, preponderant evidence to support their contention is clearly absent. Third. Petitioners contend that respondent Dr. Marvie Blanes, who took over from Dr. Rico, was negligent in ordering the intravenous administration of two doses of 500 milligrams of chloromycetin at an interval of less than three hours. Petitioners claim that Jorge Reyes died of anaphylactic shockor possibly from overdose as the second dose should have been administered five to six hours after the first, per instruction of Dr. Marlyn Rico. As held by the Court of Appeals, however: That chloromycetin was likewise a proper prescription is best established by medical authority. Wilson, et. al., in Harrisons Principle of Internal Medicine, 12th ed. write that chlorampenicol (which is the generic of chloromycetin) is the drug of choice for typhoid fever and that no drug has yet proven better in promoting a favorable clinical response. Chlorampenicol (Chloromycetin) is specifically indicated for bacterial meningitis, typhoid fever, rickettsial infections, bacteriodes infections, etc. (PIMS Annual, 1994, p. 211) The dosage likewise including the first administration of five hundred milligrams (500 mg.) at around nine oclock in the evening and the second dose at around 11:30 the same night was still within medically acceptable limits, since the recommended dose of chloromycetin is one (1) gram every six (6) hours. (cf. Pediatric Drug Handbook, 1st Ed., Philippine Pediatric Society, Committee on Therapeutics and Toxicology, 1996). The intravenous route is likewise correct. (Mansser, ONick, Pharmacology and Therapeutics) Even if the test was not administered by the physician-on-duty, the evidence introduced that it was Dra. Blanes who interpreted the results remain uncontroverted. (Decision, pp. 16-17) Once more, this Court rejects any claim of professional negligence in this regard. .... As regards anaphylactic shock, the usual way of guarding against it prior to the administration of a drug, is the skin test of which, however, it has been observed: Skin testing with haptenic drugs is generally not reliable. Certain drugs cause nonspecific histamine release, producing a weal-and-flare reaction in normal individuals. Immunologic activation of mast cells requires a polyvalent allergen, so a negative skin test to a univalent haptenic drug does not rule out anaphylactic sensitivity to that drug. (Terr, Anaphylaxis and Urticaria in Basic and Clinical Immunology, p. 349) What all this means legally is that even if the deceased suffered from an

anaphylactic shock, this, of itself, would not yet establish the negligence of the appelleephysicians for all that the law requires of them is that they perform the standard tests and perform standard procedures. The law cannot require them to predict every possible reaction to all drugs administered. The onus probandi was on the appellants to establish, before the trial court, that the appellee-physicians ignored standard medical procedure, prescribed and administered medication with recklessness and exhibited an absence of the competence and skills expected of general practitioners similarly situated. Fourth. Petitioners correctly observe that the medical profession is one which, like the business of a common carrier, is affected with public interest. Moreover, they assert that since the law imposes upon common carriers the duty of observing extraordinary diligence in the vigilance over the goods and for the safety of the passengers, physicians and surgeons should have the same duty toward their patients.They also contend that the Court of Appeals erred when it allegedly assumed that the level of medical practice is lower in Iligan City, thereby reducing the standard of care and degree of diligence required from physicians and surgeons in Iligan City. The standard of extraordinary diligence is peculiar to common carriers. The Civil Code provides: Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to the circumstances of each case. . . . The practice of medicine is a profession engaged in only by qualified individuals. It is a right earned through years of education, training, and by first obtaining a license from the state through professional board examinations. Such license may, at any time and for cause, be revoked by the government. In addition to state regulation, the conduct of doctors is also strictly governed by the Hippocratic Oath, an ancient code of discipline and ethical rules which doctors have imposed upon themselves in recognition and acceptance of their great responsibility to society. Given these safeguards, there is no need to expressly require of doctors the observance of extraordinary diligence. As it is now, the practice of medicine is already conditioned upon the highest degree of diligence. And, as we have already noted, the standard contemplated for doctors is simply the reasonable average merit among ordinarily good physicians. That is reasonable diligence for doctors or, as the Court of Appeals called it, the reasonable skill and competence . . . that a physician in the same or similar locality . . . should apply. Cases 87-95 VALDEZ, LUIGI E. 96. DR. NINEVETCH CRUZ vs. COURT OF APPEALS FACTS: On March 22, 1991, prosecution witness, Rowena Umali De Ocampo, accompanied her mother to the Perpetual Help Clinic and General Hospital situated in Balagtas Street, San Pablo City, Laguna. They arrived at the said hospital at around 4:30 in the afternoon of the same day. Prior to March 22, 1991, Lydia was examined by the

petitioner who found a "myoma" in her uterus, and scheduled her for a hysterectomy operation on March 23, 1991. Because of the untidy state of the clinic, Rowena tried to persuade her mother not to proceed with the operation. The following day, before her mother was wheeled into the operating room, Rowena asked the petitioner if the operation could be postponed. The petitioner called Lydia into her office and the two had a conversation. Lydia then informed Rowena that the petitioner told her that she must be operated on as scheduled. Dr. Ercillo went out of the operating room and instructed them to buy tagamet ampules which Rowena's sister immediately bought. An hour later, Dr. Ercillo came out again this time to ask them to buy blood for Lydia. They bought type "A" blood from the St. Gerald Blood Bank and the same was brought by the attendant into the operating room. After the lapse of a few hours, the petitioner informed them that the operation was finished. Some thirty minutes after, Lydia was brought out of the operating room in a stretcher and the petitioner asked Rowena and the other relatives to buy additional blood for Lydia. Unfortunately, they were not able to comply with petitioner's order as there was no more type "A" blood available in the blood bank. Thereafter, a person arrived to donate blood which was later transfused to Lydia. Rowena then noticed her mother, who was attached to an oxygen tank, gasping for breath. Apparently the oxygen supply had run out and Rowena's husband together with the driver of the accused had to go to the San Pablo District Hospital to get oxygen. Lydia was given the fresh supply of oxygen as soon as it arrived. But at around 10:00 o'clock P.M. she went into shock and her blood pressure dropped to 60/50. Lydia's unstable condition necessitated her transfer to the San Pablo District Hospital so she could be connected to a respirator and further examined. The transfer to the San Pablo District Hospital was without the prior consent of Rowena nor of the other relatives present who found out about the intended transfer only when an ambulance arrived to take Lydia to the San Pablo District Hospital. Upon Lydia's arrival at the San Pablo District Hospital, she was wheeled into the operating room and the petitioner and Dr. Ercillo re-operated on her because there was blood oozing from the abdominal incision. The attending physicians summoned Dr. Bartolome Angeles, head of the Obstetrics and Gynecology Department of the San Pablo District Hospital. However, when Dr. Angeles arrived, Lydia was already in shock and possibly dead as her blood pressure was already 0/0. While the petitioner was closing the abdominal wall, the patient died. Thus, on March 24, 1991, at 3:00 o'clock in the morning, Lydia Umali was pronounced dead. Her death certificate states "shock" as the immediate cause of death and "Disseminated Intravascular Coagulation (DIC)" as the antecedent cause. RULINGS: MTCC: In convicting the petitioner, the MTCC found the following circumstances as sufficient basis to conclude that she was indeed negligent in the performance of the operation: . . . , the clinic was untidy, there was lack of provision like blood and oxygen to prepare for any contingency that might happen during the operation. The manner and the fact that the patient was brought to the San Pablo District Hospital for reoperation indicates that there was something wrong in the manner in which Dra. Cruz conducted the operation. There was no showing that before the operation, accused Dra. Cruz had conducted a cardio pulmonary clearance or any typing of the blood of the patient. It was

(sic) said in medical parlance that the "the abdomen of the person is a temple of surprises" because you do not know the whole thing the moment it was open (sic) and surgeon must be prepared for any eventuality thereof. The patient (sic) chart which is a public document was not presented because it is only there that we could determine the condition of the patient before the surgery. The court also noticed in Exh. "F-1" that the sister of the deceased wished to postpone the operation but the patient was prevailed upon by Dra. Cruz to proceed with the surgery. The court finds that Lydia Umali died because of the negligence and carelessness of the surgeon Dra. Ninevetch Cruz because of loss of blood during the operation of the deceased for evident unpreparedness and for lack of skill, the reason why the patient was brought for operation at the San Pablo City District Hospital. As such, the surgeon should answer for such negligence. With respect to Dra. Lina Ercillo, the anaesthesiologist, there is no evidence to indicate that she should be held jointly liable with Dra. Cruz who actually did the operation. RTC: The RTC reiterated the abovementioned findings of the MTCC and upheld the latter's declaration of "incompetency, negligence and lack of foresight and skill of appellant (herein petitioner) in handling the subject patient before and after the operation." CA: . . . While we may grant that the untidiness and filthiness of the clinic may not by itself indicate negligence, it nevertheless shows the absence of due care and supervision over her subordinate employees. Did this unsanitary condition permeate the operating room? Were the surgical instruments properly sterilized? Could the conditions in the OR have contributed to the infection of the patient? Only the petitioner could answer these, but she opted not to testify. This could only give rise to the presumption that she has nothing good to testify on her defense. Anyway, the alleged "unverified statement of the prosecution witness" remains unchallenged and unrebutted. Likewise undisputed is the prosecution's version indicating the following facts: that the accused asked the patient's relatives to buy Tagamet capsules while the operation was already in progress; that after an hour, they were also asked to buy type "A" blood for the patient; that after the surgery, they were again asked to procure more type "A" blood, but such was not anymore available from the source; that the oxygen given to the patient was empty; and that the son-in-law of the patient, together with a driver of the petitioner, had to rush to the San Pablo City District Hospital to get the muchneeded oxygen. All these conclusively show that the petitioner had not prepared for any unforeseen circumstances before going into the first surgery, which was not emergency in nature, but was elective or pre-scheduled; she had no ready antibiotics, no prepared blood, properly typed and cross-matched, and no sufficient oxygen supply. Moreover, there are a lot of questions that keep nagging Us. Was the patient given any cardio-pulmonary clearance, or at least a clearance by an internist, which are standard requirements before a patient is subjected to surgery. Did the petitioner determine as part of the pre-operative evaluation, the bleeding parameters of the patient, such as bleeding time and clotting time? There is no showing that these were done. The petitioner just appears to have been in a hurry to perform the operation, even as the family wanted a postponement to April 6, 1991. Obviously, she did not prepare the patient; neither did she get the family's consent to the operation. Moreover, she did not prepare a medical chart with instructions for the patient's care. If she did all these, proof

thereof should have been offered. But there is none. Indeed, these are overwhelming evidence of recklessness and imprudence. ISSUE BEFORE THE SC: Whether or not petitioner's conviction of the crime of reckless imprudence resulting in homicide, arising from an alleged medical malpractice, is supported by the evidence on record. SC RULING: Whether or not a physician has committed an "inexcusable lack of precaution" in the treatment of his patient is to be determined according to the standard of care observed by other members of the profession in good standing under similar circumstances bearing in mind the advanced state of the profession at the time of treatment or the present state of medical science. In the recent case of Leonila Garcia-Rueda v. Wilfred L. Pascasio, et al., this Court stated that in accepting a case, a doctor in effect represents that, having the needed training and skill possessed by physicians and surgeons practicing in the same field, he will employ such training, care and skill in the treatment of his patients. He therefore has a duty to use at least the same level of care that any other reasonably competent doctor would use to treat a condition under the same circumstances. It is in this aspect of medical malpractice that expert testimony is essential to establish not only the standard of care of the profession but also that the physician's conduct in the treatment and care falls below such standard. Further, inasmuch as the causes of the injuries involved in malpractice actions are determinable only in the light of scientific knowledge, it has been recognized that expert testimony is usually necessary to support the conclusion as to causation. Immediately apparent from a review of the records of this case is the absence of any expert testimony on the matter of the standard of care employed by other physicians of good standing in the conduct of similar operations. The prosecution's expert witnesses in the persons of Dr. Floresto Arizala and Dr. Nieto Salvador, Jr. of the National Bureau of Investigation (NBI) only testified as to the possible cause of death but did not venture to illuminate the court on the matter of the standard of care that petitioner should have exercised. All three courts below bewail the inadequacy of the facilities of the clinic and its untidiness; the lack of provisions such as blood, oxygen, and certain medicines; the failure to subject the patient to a cardio-pulmonary test prior to the operation; the omission of any form of blood typing before transfusion; and even the subsequent transfer of Lydia to the San Pablo Hospital and the reoperation performed on her by the petitioner. But while it may be true that the circumstances pointed out by the courts below seemed beyond cavil to constitute reckless imprudence on the part of the surgeon, this conclusion is still best arrived at not through the educated surmises nor conjectures of laymen, including judges, but by the unquestionable knowledge of expert witnesses. For whether a physician or surgeon has exercised the requisite degree of skill and care in the treatment of his patient is, in the generality of cases, a matter of expert opinion. 30 The deference of courts to the expert opinion of qualified physicians stems from its realization that the latter possess unusual technical skills which laymen in most instances are incapable of intelligently evaluating. Expert testimony should have been offered to prove that the circumstances cited by the courts below are constitutive of conduct falling below the standard of care employed by other physicians in good standing when performing the same operation. It must be remembered that when the qualifications of a physician are admitted, as in the instant case, there is an inevitable presumption that in proper cases he takes the necessary precaution and employs the

best of his knowledge and skill in attending to his clients, unless the contrary is sufficiently established. This presumption is rebuttable by expert opinion which is so sadly lacking in the case at bench. Even granting arguendo that the inadequacy of the facilities and untidiness of the clinic; the lack of provisions; the failure to conduct pre-operation tests on the patient; and the subsequent transfer of Lydia to the San Pablo Hospital and the reoperation performed on her by the petitioner do indicate, even without expert testimony, that petitioner was recklessly imprudent in the exercise of her duties as a surgeon, no cogent proof exists that any of these circumstances caused petitioner's death. Thus, the absence of the fourth element of reckless imprudence: that the injury to the person or property was a consequence of the reckless imprudence. In litigations involving medical negligence, the plaintiff has the burden of establishing appellant's negligence and for a reasonable conclusion of negligence, there must be proof of breach of duty on the part of the surgeon as well as a causal connection of such breach and the resulting death of his patient. This Court has no recourse but to rely on the expert testimonies rendered by both prosecution and defense witnesses that substantiate rather than contradict petitioner's allegation that the cause of Lydia's death was DIC which, as attested to by an expert witness, cannot be attributed to the petitioner's fault or negligence. The probability that Lydia's death was caused by DIC was unrebutted during trial and has engendered in the mind of this Court a reasonable doubt as to the petitioner's guilt. Thus, her acquittal of the crime of reckless imprudence resulting in homicide. While we condole with the family of Lydia Umali, our hands are bound by the dictates of justice and fair dealing which hold inviolable the right of an accused to be presumed innocent until proven guilty beyond reasonable doubt. Nevertheless, this Court finds the petitioner civilly liable for the death of Lydia Umali, for while a conviction of a crime requires proof beyond reasonable doubt, only a preponderance of evidence is required to establish civil liability. The petitioner is a doctor in whose hands a patient puts his life and limb. For insufficiency of evidence this Court was not able to render a sentence of conviction but it is not blind to the reckless and imprudent manner in which the petitioner carried out her duties. A precious life has been lost and the circumstances leading thereto exacerbated the grief of those left behind. The heirs of the deceased continue to feel the loss of their mother up to the present time and this Court is aware that no amount of compassion and commiseration nor words of bereavement can suffice to assuage the sorrow felt for the loss of a loved one. Certainly, the award of moral and exemplary damages in favor of the heirs of Lydia Umali are proper in the instant case. WHEREFORE, premises considered, petitioner DR. NINEVETCH CRUZ is hereby ACQUITTED of the crime of reckless imprudence resulting in homicide but is ordered to pay the heirs of the deceased Lydia Umali the amount of FIFTY THOUSAND PESOS (P50,000.00) as civil liability, ONE HUNDRED THOUSAND PESOS (P100,000.00) as moral damages, and FIFTY THOUSAND PESOS (P50,000.00) as exemplary damages. Let a copy of this decision be furnished to the Professional Regulation Commission (PRC) for appropriate action.

97. ROGELIO E. RAMOS vs. COURT OF APPEALS FACTS: Erlinda Ramos had occasional complaints of discomfort due to pains allegedly caused by the presence of a stone in her gall bladder. Because the discomforts somehow interfered with her normal ways, she sought professional advice. She was advised to undergo an operation for the removal of a stone in her gall bladder. She underwent a series of examinations which included blood and urine tests which indicated she was fit for surgery. At around 7:30 A.M. of June 17, 1985 and while still in her room, she was prepared for the operation by the hospital staff. At around 10:00 A.M., Rogelio E. Ramos was "already dying [and] waiting for the arrival of the doctor" even as he did his best to find somebody who will allow him to pull out his wife from the operating room. At about 12:15 P.M., Herminda Cruz, who was inside the operating room with the patient, heard somebody say that "Dr. Hosaka is already here." She then saw people inside the operating room "moving, doing this and that, [and] preparing the patient for the operation". She then saw Dr. Gutierrez intubating the hapless patient. She thereafter noticed bluish discoloration of the nailbeds of the left hand of the hapless Erlinda even as Dr. Hosaka approached her. She then heard Dr. Hosaka issue an order for someone to call Dr. Calderon, another anesthesiologist. After Dr. Calderon arrived at the operating room, she saw this anesthesiologist trying to intubate the patient. The patient's nailbed became bluish and the patient was placed in a trendelenburg position a position where the head of the patient is placed in a position lower than her feet which is an indication that there is a decrease of blood supply to the patient's brain. Immediately thereafter, she went out of the operating room, and she told Rogelio E. Ramos "that something wrong was . . . happening". Dr. Calderon was then able to intubate the patient. At almost 3:00 P.M. of that fateful day, she saw the patient taken to the Intensive Care Unit (ICU). About two days thereafter, Rogelio E. Ramos was able to talk to Dr. Hosaka. The latter informed the former that something went wrong during the intubation. Reacting to what was told to him, Rogelio reminded the doctor that the condition of his wife would not have happened, had he looked for a good anesthesiologist. Erlinda Ramos stayed at the ICU for a month. About four months thereafter or on November 15, 1985, the patient was released from the hospital. During the whole period of her confinement, she incurred hospital bills amounting to P93,542.25 which is the subject of a promissory note and affidavit of undertaking executed by Rogelio E. Ramos in favor of DLSMC. Since that fateful afternoon of June 17, 1985, she has been in a comatose condition. She cannot do anything. She cannot move any part of her body. She cannot see or hear. She is living on mechanical means. She suffered brain damage as a result of the absence of oxygen in her brain for four to five minutes. After being discharged from the hospital, she has been staying in their residence, still needing constant medical attention, with her husband Rogelio incurring a monthly expense ranging from P8,000.00 to P10,000.00. She was also diagnosed to be suffering from "diffuse cerebral parenchymal damage". RULINGS: RTC: After considering the evidence from both sides, the Regional Trial Court rendered judgment in favor of petitioners, to wit:

After evaluating the evidence as shown in the finding of facts set forth earlier, and applying the aforecited provisions of law and jurisprudence to the case at bar, this Court finds and so holds that defendants are liable to plaintiffs for damages. The defendants were guilty of, at the very least, negligence in the performance of their duty to plaintiffpatient Erlinda Ramos. On the part of Dr. Perfecta Gutierrez, this Court finds that she omitted to exercise reasonable care in not only intubating the patient, but also in not repeating the administration of atropine (TSN, August 20, 1991, pp. 5-10), without due regard to the fact that the patient was inside the operating room for almost three (3) hours. For after she committed a mistake in intubating [the] patient, the patient's nailbed became bluish and the patient, thereafter, was placed in trendelenburg position, because of the decrease of blood supply to the patient's brain. The evidence further shows that the hapless patient suffered brain damage because of the absence of oxygen in her (patient's) brain for approximately four to five minutes which, in turn, caused the patient to become comatose. On the part of Dr. Orlino Hosaka, this Court finds that he is liable for the acts of Dr. Perfecta Gutierrez whom he had chosen to administer anesthesia on the patient as part of his obligation to provide the patient a good anesthesiologist', and for arriving for the scheduled operation almost three (3) hours late. On the part of DLSMC (the hospital), this Court finds that it is liable for the acts of negligence of the doctors in their "practice of medicine" in the operating room. Moreover, the hospital is liable for failing through its responsible officials, to cancel the scheduled operation after Dr. Hosaka inexcusably failed to arrive on time. In having held thus, this Court rejects the defense raised by defendants that they have acted with due care and prudence in rendering medical services to plaintiff-patient. For if the patient was properly intubated as claimed by them, the patient would not have become comatose. And, the fact that another anesthesiologist was called to try to intubate the patient after her (the patient's) nailbed turned bluish, belie their claim. Furthermore, the defendants should have rescheduled the operation to a later date. This, they should have done, if defendants acted with due care and prudence as the patient's case was an elective, not an emergency case. WHEREFORE, and in view of the foregoing, judgment is rendered in favor of the plaintiffs and against the defendants. Accordingly, the latter are ordered to pay, jointly and severally, the former the following sums of money, to wit: 1) the sum of P8,000.00 as actual monthly expenses for the plaintiff Erlinda Ramos reckoned from November 15, 1985 or in the total sum of P632,000.00 as of April 15, 1992, subject to its being updated; 2) the sum of P100,000.00 as reasonable attorney's fees;

3) the sum of P800,000.00 by way of moral damages and the further sum of P200,000,00 by way of exemplary damages; and, 4) the costs of the suit.

SO ORDERED. CA: The appellate court rendered a Decision, dated 29 May 1995, reversing the findings of the trial court. The decretal portion of the decision of the appellate court reads: WHEREFORE, for the foregoing premises the appealed decision is hereby REVERSED, and the complaint below against the appellants is hereby ordered DISMISSED. The counterclaim of appellant De Los Santos Medical Center is GRANTED but only insofar as appellees are hereby ordered to pay the unpaid hospital bills amounting to P93,542.25, plus legal interest for justice must be tempered with mercy. SO ORDERED. ISSUE BEFORE THE SC: Whether or not the doctrine of Res Ipsa Loquitur is applicable to the instant case. SC RULING: We find the doctrine of res ipsa loquitur appropriate in the case at bar. As will hereinafter be explained, the damage sustained by Erlinda in her brain prior to a scheduled gall bladder operation presents a case for the application of res ipsa loquitur. In the present case, Erlinda submitted herself for cholecystectomy and expected a routine general surgery to be performed on her gall bladder. On that fateful day she delivered her person over to the care, custody and control of private respondents who exercised complete and exclusive control over her. At the time of submission, Erlinda was neurologically sound and, except for a few minor discomforts, was likewise physically fit in mind and body. However, during the administration of anesthesia and prior to the performance of cholecystectomy she suffered irreparable damage to her brain. Thus, without undergoing surgery, she went out of the operating room already decerebrate and totally incapacitated. Obviously, brain damage, which Erlinda sustained, is an injury which does not normally occur in the process of a gall bladder operation. In fact, this kind of situation does not in the absence of negligence of someone in the administration of anesthesia and in the use of endotracheal tube. Normally, a person being put under anesthesia is not rendered decerebrate as a consequence of administering such anesthesia if the proper procedure was followed. Furthermore, the instruments used in the administration of anesthesia, including the endotracheal tube, were all under the exclusive control of private respondents, who are the physicians-in-charge. Likewise, petitioner Erlinda could not have been guilty of contributory negligence because she was under the influence of anesthetics which rendered her unconscious. Considering that a sound and unaffected member of the body (the brain) is injured or destroyed while the patient is unconscious and under the immediate and exclusive control of the physicians, we hold that a practical administration of justice dictates the application of res ipsa loquitur. Upon these facts and under these circumstances the Court would be able to say, as a matter of common knowledge and observation, if negligence attended the management and care of the patient. Moreover, the liability of the physicians and the hospital in this case is not predicated upon an alleged failure to secure the desired results of an operation nor on an alleged lack of skill in the diagnosis or treatment as in fact no operation or treatment was ever performed on Erlinda. Thus, upon all these initial determination a case is made out for the application of the doctrine of res ipsa loquitur.

Nonetheless, in holding that res ipsa loquitur is available to the present case we are not saying that the doctrine is applicable in any and all cases where injury occurs to a patient while under anesthesia, or to any and all anesthesia cases. Each case must be viewed in its own light and scrutinized in order to be within the res ipsa loquitur coverage. Having in mind the applicability of the res ipsa loquitur doctrine and the presumption of negligence allowed therein, the Court now comes to the issue of whether the Court of Appeals erred in finding that private respondents were not negligent in the care of Erlinda during the anesthesia phase of the operation and, if in the affirmative, whether the alleged negligence was the proximate cause of Erlinda's comatose condition. Corollary thereto, we shall also determine if the Court of Appeals erred in relying on the testimonies of the witnesses for the private respondents. In sustaining the position of private respondents, the Court of Appeals relied on the testimonies of Dra. Gutierrez, Dra. Calderon and Dr. Jamora. In giving weight to the testimony of Dra. Gutierrez, the Court of Appeals rationalized that she was candid enough to admit that she experienced some difficulty in the endotracheal intubation of the patient and thus, cannot be said to be covering her negligence with falsehood. The appellate court likewise opined that private respondents were able to show that the brain damage sustained by Erlinda was not caused by the alleged faulty intubation but was due to the allergic reaction of the patient to the drug Thiopental Sodium (Pentothal), a short-acting barbiturate, as testified on by their expert witness, Dr. Jamora. On the other hand, the appellate court rejected the testimony of Dean Herminda Cruz offered in favor of petitioners that the cause of the brain injury was traceable to the wrongful insertion of the tube since the latter, being a nurse, was allegedly not knowledgeable in the process of intubation. In so holding, the appellate court returned a verdict in favor of respondents physicians and hospital and absolved them of any liability towards Erlinda and her family. In view of the evidence at hand, we are inclined to believe petitioners' stand that it was the faulty intubation which was the proximate cause of Erlinda's comatose condition. Proximate cause has been defined as that which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces injury, and without which the result would not have occurred. An injury or damage is proximately caused by an act or a failure to act, whenever it appears from the evidence in the case, that the act or omission played a substantial part in bringing about or actually causing the injury or damage; and that the injury or damage was either a direct result or a reasonably probable consequence of the act or omission. It is the dominant, moving or producing cause. Applying the above definition in relation to the evidence at hand, faulty intubation is undeniably the proximate cause which triggered the chain of events leading to Erlinda's brain damage and, ultimately, her comatosed condition. Private respondents themselves admitted in their testimony that the first intubation was a failure. This fact was likewise observed by witness Cruz when she heard respondent Dra. Gutierrez remarked, "Ang hirap ma-intubate nito, mali yata ang pagkakapasok. O lumalaki ang tiyan." Thereafter, witness Cruz noticed abdominal

distention on the body of Erlinda. The development of abdominal distention, together with respiratory embarrassment indicates that the endotracheal tube entered the esophagus instead of the respiratory tree. In other words, instead of the intended endotracheal intubation what actually took place was an esophageal intubation. During intubation, such distention indicates that air has entered the gastrointestinal tract through the esophagus instead of the lungs through the trachea. Entry into the esophagus would certainly cause some delay in oxygen delivery into the lungs as the tube which carries oxygen is in the wrong place. That abdominal distention had been observed during the first intubation suggests that the length of time utilized in inserting the endotracheal tube (up to the time the tube was withdrawn for the second attempt) was fairly significant. Due to the delay in the delivery of oxygen in her lungs Erlinda showed signs of cyanosis. 66 As stated in the testimony of Dr. Hosaka, the lack of oxygen became apparent only after he noticed that the nailbeds of Erlinda were already blue. However, private respondents contend that a second intubation was executed on Erlinda and this one was successfully done. We do not think so. No evidence exists on record, beyond private respondents' bare claims, which supports the contention that the second intubation was successful. Assuming that the endotracheal tube finally found its way into the proper orifice of the trachea, the same gave no guarantee of oxygen delivery, the hallmark of a successful intubation. In fact, cyanosis was again observed immediately after the second intubation. Proceeding from this event (cyanosis), it could not be claimed, as private respondents insist, that the second intubation was accomplished. Even granting that the tube was successfully inserted during the second attempt, it was obviously too late. As aptly explained by the trial court, Erlinda already suffered brain damage as a result of the inadequate oxygenation of her brain for about four to five minutes. The above conclusion is not without basis. Scientific studies point out that intubation problems are responsible for one-third (1/3) of deaths and serious injuries associated with anesthesia. Nevertheless, ninety-eight percent (98%) or the vast majority of difficult intubations may be anticipated by performing a thorough evaluation of the patient's airway prior to the operation. As stated beforehand, respondent Dra. Gutierrez failed to observe the proper pre-operative protocol which could have prevented this unfortunate incident. Had appropriate diligence and reasonable care been used in the pre-operative evaluation, respondent physician could have been much more prepared to meet the contingency brought about by the perceived anatomic variations in the patient's neck and oral area, defects which would have been easily overcome by a prior knowledge of those variations together with a change in technique. In other words, an experienced anesthesiologist, adequately alerted by a thorough pre-operative evaluation, would have had little difficulty going around the short neck and protruding teeth. Having failed to observe common medical standards in pre-operative management and intubation, respondent Dra. Gutierrez' negligence resulted in cerebral anoxia and eventual coma of Erlinda. We now determine the responsibility of respondent Dr. Orlino Hosaka as the head of the surgical team. As the so-called "captain of the ship," it is the surgeon's responsibility to see to it that those under him perform their task in the proper manner. Respondent Dr. Hosaka's negligence can be found in his failure to exercise the proper authority (as the "captain" of the operative team) in not determining if his anesthesiologist observed proper anesthesia protocols. In fact, no evidence on record exists to show that respondent Dr. Hosaka verified if respondent Dra. Gutierrez properly intubated the patient. Furthermore, it does not escape us that respondent Dr. Hosaka had scheduled

another procedure in a different hospital at the same time as Erlinda's cholecystectomy, and was in fact over three hours late for the latter's operation. Because of this, he had little or no time to confer with his anesthesiologist regarding the anesthesia delivery. This indicates that he was remiss in his professional duties towards his patient. Thus, he shares equal responsibility for the events which resulted in Erlinda's condition. We now discuss the responsibility of the hospital in this particular incident. The unique practice (among private hospitals) of filling up specialist staff with attending and visiting "consultants," who are allegedly not hospital employees, presents problems in apportioning responsibility for negligence in medical malpractice cases. However, the difficulty is only more apparent than real. In the first place, hospitals exercise significant control in the hiring and firing of consultants and in the conduct of their work within the hospital premises. Doctors who apply for "consultant" slots, visiting or attending, are required to submit proof of completion of residency, their educational qualifications; generally, evidence of accreditation by the appropriate board (diplomate), evidence of fellowship in most cases, and references. These requirements are carefully scrutinized by members of the hospital administration or by a review committee set up by the hospital who either accept or reject the application. This is particularly true with respondent hospital. After a physician is accepted, either as a visiting or attending consultant, he is normally required to attend clinico-pathological conferences, conduct bedside rounds for clerks, interns and residents, moderate grand rounds and patient audits and perform other tasks and responsibilities, for the privilege of being able to maintain a clinic in the hospital, and/or for the privilege of admitting patients into the hospital. In addition to these, the physician's performance as a specialist is generally evaluated by a peer review committee on the basis of mortality and morbidity statistics, and feedback from patients, nurses, interns and residents. A consultant remiss in his duties, or a consultant who regularly falls short of the minimum standards acceptable to the hospital or its peer review committee, is normally politely terminated. In other words, private hospitals, hire, fire and exercise real control over their attending and visiting "consultant" staff. While "consultants" are not, technically employees, a point which respondent hospital asserts in denying all responsibility for the patient's condition, the control exercised, the hiring, and the right to terminate consultants all fulfill the important hallmarks of an employer-employee relationship, with the exception of the payment of wages. In assessing whether such a relationship in fact exists, the control test is determining. Accordingly, on the basis of the foregoing, we rule that for the purpose of allocating responsibility in medical negligence cases, an employer-employee relationship in effect exists between hospitals and their attending and visiting physicians. This being the case, the question now arises as to whether or not respondent hospital is solidarily liable with respondent doctors for petitioner's condition. The basis for holding an employer solidarily responsible for the negligence of its employee is found in Article 2180 of the Civil Code which considers a person accountable not only for his own acts but also for those of others based on the former's responsibility under a relationship of patria potestas. Such responsibility ceases when the persons or entity concerned prove that they have observed the diligence of a good father of the family to prevent damage. In other words, while the burden of proving

negligence rests on the plaintiffs, once negligence is shown, the burden shifts to the respondents (parent, guardian, teacher or employer) who should prove that they observed the diligence of a good father of a family to prevent damage. In the instant case, respondent hospital, apart from a general denial of its responsibility over respondent physicians, failed to adduce evidence showing that it exercised the diligence of a good father of a family in the hiring and supervision of the latter. It failed to adduce evidence with regard to the degree of supervision which it exercised over its physicians. In neglecting to offer such proof, or proof of a similar nature, respondent hospital thereby failed to discharge its burden under the last paragraph of Article 2180. Having failed to do this, respondent hospital is consequently solidarily responsible with its physicians for Erlinda's condition. Based on the foregoing, we hold that the Court of Appeals erred in accepting and relying on the testimonies of the witnesses for the private respondents. Indeed, as shown by the above discussions, private respondents were unable to rebut the presumption of negligence. Upon these disquisitions we hold that private respondents are solidarily liable for damages under Article 2176 of the Civil Code. We now come to the amount of damages due petitioners. The trial court awarded a total of P632,000.00 pesos (should be P616,000.00) in compensatory damages to the plaintiff, "subject to its being updated" covering the period from 15 November 1985 up to 15 April 1992, based on monthly expenses for the care of the patient estimated at P8,000.00. At current levels, the P8000/monthly amount established by the trial court at the time of its decision would be grossly inadequate to cover the actual costs of home-based care for a comatose individual. The calculated amount was not even arrived at by looking at the actual cost of proper hospice care for the patient. What it reflected were the actual expenses incurred and proved by the petitioners after they were forced to bring home the patient to avoid mounting hospital bills. And yet ideally, a comatose patient should remain in a hospital or be transferred to a hospice specializing in the care of the chronically ill for the purpose of providing a proper milieu adequate to meet minimum standards of care. In the instant case for instance, Erlinda has to be constantly turned from side to side to prevent bedsores and hypostatic pneumonia. Feeding is done by nasogastric tube. Food preparation should be normally made by a dietitian to provide her with the correct daily caloric requirements and vitamin supplements. Furthermore, she has to be seen on a regular basis by a physical therapist to avoid muscle atrophy, and by a pulmonary therapist to prevent the accumulation of secretions which can lead to respiratory complications. Given these considerations, the amount of actual damages recoverable in suits arising from negligence should at least reflect the correct minimum cost of proper care, not the cost of the care the family is usually compelled to undertake at home to avoid bankruptcy. However, the provisions of the Civil Code on actual or compensatory damages present us with some difficulties. Well-settled is the rule that actual damages which may be claimed by the plaintiff are those suffered by him as he has duly proved. The Civil Code provides:

Art. 2199. 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. Such compensation is referred to as actual or compensatory damages. Our rules on actual or compensatory damages generally assume that at the time of litigation, the injury suffered as a consequence of an act of negligence has been completed and that the cost can be liquidated. However, these provisions neglect to take into account those situations, as in this case, where the resulting injury might be continuing and possible future complications directly arising from the injury, while certain to occur, are difficult to predict. In these cases, the amount of damages which should be awarded, if they are to adequately and correctly respond to the injury caused, should be one which compensates for pecuniary loss incurred and proved, up to the time of trial; and one which would meet pecuniary loss certain to be suffered but which could not, from the nature of the case, be made with certainty. In other words, temperate damages can and should be awarded on top of actual or compensatory damages in instances where the injury is chronic and continuing. And because of the unique nature of such cases, no incompatibility arises when both actual and temperate damages are provided for. The reason is that these damages cover two distinct phases. As it would not be equitable and certainly not in the best interests of the administration of justice for the victim in such cases to constantly come before the courts and invoke their aid in seeking adjustments to the compensatory damages previously awarded temperate damages are appropriate. The amount given as temperate damages, though to a certain extent speculative, should take into account the cost of proper care. In the instant case, petitioners were able to provide only home-based nursing care for a comatose patient who has remained in that condition for over a decade. Having premised our award for compensatory damages on the amount provided by petitioners at the onset of litigation, it would be now much more in step with the interests of justice if the value awarded for temperate damages would allow petitioners to provide optimal care for their loved one in a facility which generally specializes in such care. They should not be compelled by dire circumstances to provide substandard care at home without the aid of professionals, for anything less would be grossly inadequate. Under the circumstances, an award of P1,500,000.00 in temperate damages would therefore be reasonable. Petitioner Erlinda Ramos was in her mid-forties when the incident occurred. She has been in a comatose state for over fourteen years now. The burden of care has so far been heroically shouldered by her husband and children, who, in the intervening years have been deprived of the love of a wife and a mother. Meanwhile, the actual physical, emotional and financial cost of the care of petitioner would be virtually impossible to quantify. Even the temperate damages herein awarded would be inadequate if petitioner's condition remains unchanged for the next ten years. We recognized, in Valenzuela that a discussion of the victim's actual injury would not even scratch the surface of the resulting moral damage because it would be highly speculative to estimate the amount of emotional and moral pain, psychological damage

and injury suffered by the victim or those actually affected by the victim's condition. 84 The husband and the children, all petitioners in this case, will have to live with the day to day uncertainty of the patient's illness, knowing any hope of recovery is close to nil. They have fashioned their daily lives around the nursing care of petitioner, altering their long term goals to take into account their life with a comatose patient. They, not the respondents, are charged with the moral responsibility of the care of the victim. The family's moral injury and suffering in this case is clearly a real one. For the foregoing reasons, an award of P2,000,000.00 in moral damages would be appropriate. Finally, by way of example, exemplary damages in the amount of P100,000.00 are hereby awarded. Considering the length and nature of the instant suit we are of the opinion that attorney's fees valued at P100,000.00 are likewise proper. Our courts face unique difficulty in adjudicating medical negligence cases because physicians are not insurers of life and, they rarely set out to intentionally cause injury or death to their patients. However, intent is immaterial in negligence cases because where negligence exists and is proven, the same automatically gives the injured a right to reparation for the damage caused. Established medical procedures and practices, though in constant flux are devised for the purpose of preventing complications. A physician's experience with his patients would sometimes tempt him to deviate from established community practices, and he may end a distinguished career using unorthodox methods without incident. However, when failure to follow established procedure results in the evil precisely sought to be averted by observance of the procedure and a nexus is made between the deviation and the injury or damage, the physician would necessarily be called to account for it. In the case at bar, the failure to observe pre-operative assessment protocol which would have influenced the intubation in a salutary way was fatal to private respondents' case. WHEREFORE, the decision and resolution of the appellate court appealed from are hereby modified so as to award in favor of petitioners, and solidarily against private respondents the following: 1) P1,352,000.00 as actual damages computed as of the date of promulgation of this decision plus a monthly payment of P8,000.00 up to the time that petitioner Erlinda Ramos expires or miraculously survives; 2) P2,000,000.00 as moral damages, 3) P1,500,000.00 as temperate damages; 4) P100,000.00 each as exemplary damages and attorney's fees; and, 5) the costs of the suit. SO ORDERED. 98 GARCIA-RUEDA vs. PASCASIO FACTS: Florencio V. Rueda, husband of petitioner Leonila Garcia-Rueda, underwent surgical operation at the UST hospital for the removal of a stone blocking his ureter. He was attended by Dr. Domingo Antonio, Jr. who was the surgeon, while Dr. Erlinda Balatbat-Reyes was the anaesthesiologist. Six hours after the surgery, however, Florencio died of complications of "unknown cause," according to officials of the UST Hospital. Not satisfied with the findings of the hospital, petitioner requested the National Bureau of Investigation (NBI) to conduct an autopsy on her husband's body. Consequently, the

NBI ruled that Florencio's death was due to lack of care by the attending physician in administering anaesthesia. Pursuant to its findings, the NBI recommended that Dr. Domingo Antonio and Dr. Erlinda Balatbat-Reyes be charged for Homicide through Reckless Imprudence before the Office of the City Prosecutor. The case was initially assigned to Prosecutor Antonio M. Israel, who had to inhibit himself because he was related to the counsel of one of the doctors. As a result, the case was re-raffled to Prosecutor Norberto G. Leono who was, however, disqualified on motion of the petitioner since he disregarded prevailing laws and jurisprudence regarding preliminary investigation. The case was then referred to Prosecutor Ramon O. Carisma, who issued a resolution recommending that only Dr. Reyes be held criminally liable and that the complaint against Dr. Antonio be dismissed. The case took another perplexing turn when Assistant City Prosecutor Josefina Santos Sioson, in the "interest of justice and peace of mind of the parties," recommended that the case be re-raffled on the ground that Prosecutor Carisma was partial to the petitioner. Thus, the case was transferred to Prosecutor Leoncia R. Dimagiba, where a volte face occurred again with the endorsement that the complaint against Dr. Reyes be dismissed and instead, a corresponding information be filed against Dr. Antonio. Petitioner filed a motion for reconsideration, questioning the findings of Prosecutor Dimagiba. Pending the resolution of petitioner's motion for reconsideration regarding Prosecutor Dimagiba's resolution, the investigative "pingpong" continued when the case was again assigned to another prosecutor, Eudoxia T. Gualberto, who recommended that Dr. Reyes be included in the criminal information of Homicide through Reckless Imprudence. While the recommendation of Prosecutor Gualberto was pending, the case was transferred to Senior State Prosecutor Gregorio A. Arizala, who resolved to exonerate Dr. Reyes from any wrongdoing, a resolution which was approved by both City Prosecutor Porfirio G. Macaraeg and City Prosecutor Jesus F. Guerrero. ISSUE BEFORE THE SC: Whether or not there was negligence on the part of the atteding physicians. SC RULING: "Probable cause is a reasonable ground of presumption that a matter is, or may be, well founded, such a state of facts in the mind of the prosecutor as would lead a person of ordinary caution and prudence to believe, or entertain an honest or strong suspicion, that a thing is so." The term does not mean actual and positive cause nor does it import absolute certainty. It is merely based on opinion and reasonable belief. Thus, a finding of probable cause does not require an inquiry into whether there is sufficient evidence to procure a conviction. It is enough that it is believed that the act or omission complained of constitutes the offense charged. Precisely, there is a trial for the reception of evidence of the prosecution in support of the charge. In the instant case, no less than the NBI pronounced after conducting an autopsy that there was indeed negligence on the part of the attending physicians in administering the anaesthesia. The fact of want of competence or diligence is evidentiary in nature, the veracity of which can best be passed upon after a full-blown trial for it is virtually impossible to ascertain the merits of a medical negligence case without extensive investigation, research, evaluation and consultations with medical experts. Clearly, the City Prosecutors are not in a competent position to pass judgment on such a technical

matter, especially when there are conflicting evidence and findings. The bases of a party's accusation and defenses are better ventilated at the trial proper than at the preliminary investigation. A word on medical malpractice or negligence cases. In its simplest terms, the type of lawsuit which has been called medical malpractice or, more appropriately, medical negligence, is that type of claim which a victim has available to him or her to redress a wrong committed by a medical professional which has caused bodily harm. In order to successfully pursue such a claim, a patient must prove that a health care provider, in most cases a physician, either failed to do something which a reasonably prudent health care provider would have done, or that he or she did something that a reasonably prudent provider would not have done; and that that failure or action caused injury to the patient. Hence, there are four elements involved in medical negligence cases: duty, breach, injury and proximate causation. Evidently, when the victim employed the services of Dr. Antonio and Dr. Reyes, a physician-patient relationship was created. In accepting the case, Dr. Antonio and Dr. Reyes in effect represented that, having the needed training and skill possessed by physicians and surgeons practicing in the same field, they will employ such training, care and skill in the treatment of their patients. They have a duty to use at least the same level of care that any other reasonably competent doctor would use to treat a condition under the same circumstances. The breach of these professional duties of skill and care, or their improper performance, by a physician surgeon whereby the patient is injured in body or in health, constitutes actionable malpractice. Consequently, in the event that any injury results to the patient from want of due care or skill during the operation, the surgeons may be held answerable in damages for negligence. Moreover, in malpractice or negligence cases involving the administration of anaesthesia, the necessity of expert testimony and the availability of the charge of res ipsa loquitur to the plaintiff; have been applied in actions against anaesthesiologists to hold the defendant liable for the death or injury of a patient under excessive or improper anaesthesia. Essentially, it requires two-pronged evidence: evidence as to the recognized standards of the medical community in the particular kind of case, and a showing that the physician in question negligently departed from this standard in his treatment. Another element in medical negligence cases is causation which is divided into two inquiries: whether the doctor's actions in fact caused the harm to the patient and whether these were the proximate cause of the patient's injury. Indeed here, a causal connection is discernible from the occurrence of the victim's death after the negligent act of the anaesthesiologist in administering the anesthesia, a fact which, if confirmed, should warrant the filing of the appropriate criminal case. To be sure, the allegation of negligence is not entirely baseless. Moreover, the NBI deduced that the attending surgeons did not conduct the necessary interview of the patient prior to the operation. It appears that the cause of the death of the victim could have been averted had the proper drug been applied to cope with the symptoms of malignant hyperthermia. Also, we cannot ignore the fact that an antidote was readily available to counteract whatever

deleterious effect the anaesthesia might produce. Why these precautionary measures were disregarded must be sufficiently explained. 99. DOMINGA ROQUE vs. MAGTANGGOL C. GUNIGUNDO FACTS: On July 23, 1974 respondent Gunigundo received a copy of the order in the said case dismissing it on the grounds of laches and prior judgment. On August 22 or the last day of the reglementary period within which to appeal or file a motion for new trial he filed, through an associate, a motion for an extension of fifteen days or up to September 6 within which to file a motion for reconsideration. The motion was granted but Gunigundo was not able to file the motion for reconsideration. Instead, on the last day, September 6, he sent by registered mail a motion for a second extension of ten days. On September 16, the last day of the second extension sought by him, he filed a motion for a third extension of forty-eight hours. The motion for reconsideration was mailed on September 18, 1974, the last day of the third extension. The trial court denied the second and third motions for extension on the ground that the order of dismiss was already final It also denied Gunigundo's motion for reconsideration of the orders denying his motions for extension. Gunigundo then filed in the Court of Appeals a petition for certiorari and mandamus wherein he assailed the orders denying his motions for extension. He prayed that the lower court be directed to resolve his motion for reconsideration. The Court of Appeals dismissed his petition (Roque vs. Court of First Instance, CA-G.R. No. SP-04431, November 27, 1975). It applied the ruling that the filing of a motion for extension of the period to file the record on appeal does not suspend the period for appeal. On September 6, 1976, the spouses Dominga Roque and Jose G. Zaplan two of the eight plaintiffs in Civil Case No. 3826-M, filed in this Court a joint affidavit charging Atty. Gunigundo with gross negligence in not seasonably filing the motion for reconsideration and in not perfecting an appeal from the trial court's order of dismissal. After the submission of respondent's answer, the case was referred to the Solicitor General for investigation, report and recommendation. In June 1978 or during the pendency of the case in the Solicitor General's office, the complaining spouses made a volte-facie. They executed an affidavit of desistance before Atty. Rosario R. Rapanut, a senior attorney in the Citizens Legal Assistance Office. They alleged that their complaint for disbarment was due to a misunderstanding. They affirmed that respondent Gunigundo was not negligent in handling their case. ISSUE BEFORE THE SC: Whether or not the lawyer, through his own fault, is liable for damages. SC RULING: In this case, had the respondent been more conscientious or experienced, he could have easily avoided the loss of his client's right to appeal by filing the motion for reconsideration within the thirty-day period. He could have even withdrawn from the case with his clients' consent and required them to get another lawyer to perfect their appeal. However, the fact that the complaints and their six co-plaintiffs lost the right to appeal would not necessarily mean that they were damaged. The lower court's order of

dismissal has in its favor the presumption of validity or correctness. Indeed, an examination of that order discloses that the trial court painstakingly studied the motion to dismiss and carefully rationalized its order. If found that the action was filed more than forty years after the disputed land was registered in the name of defendants' predecessor-in-interest. Where a judgment became final through the fault of the lawyer who did not appeal therefrom, that fact alone is not a sufficient ground for the losing party to recover damages from his lawyer since the action for damages rests "on the unsubstantiated and arbitrary supposition of the injustice of the decision which became final through the fault and negligence" of the lawyer (Heridia vs. Salinas, 10 Phil. 157, 162. See Ventanilla vs. Centeno, 110 Phil. 811, where the lawyer who failed to perfect an appeal was ordered to pay his client two hundred pesos as nominal damages). In view of the foregoing and considering complainants' affidavit of desistance in this case, drastic disciplinary action against the respondent is not warranted. But he is admonished to exercise care and circumspection in attending to the affairs of his clients. A repetition of the same irregularity will be treated with more severity. A copy of this decision should be attached to respondent's personal record. 100. RAYNERA vs. HICETA FACTS: On March 23, 1989, at about 2:00 in the morning, Reynaldo Raynera was on his way home. He was riding a motorcycle traveling on the southbound lane of East Service Road, Cupang, Muntinlupa. The Isuzu truck was travelling ahead of him at 20 to 30 kilometers per hour. The truck was loaded with two (2) metal sheets extended on both sides, two (2) feet on the left and three (3) feet on the right. There were two (2) pairs of red lights, about 35 watts each, on both sides of the metal plates. The asphalt road was not well lighted. At some point on the road, Reynaldo Raynera crashed his motorcycle into the left rear portion of the truck trailer, which was without tail lights. Due to the collision, Reynaldo sustained head injuries and truck helper Geraldino D. Lucelo rushed him to the Paraaque Medical Center. Upon arrival at the hospital, the attending physician, Dr. Marivic Aguirre, pronounced Reynaldo Raynera dead on arrival. On May 12, 1989, the heirs of the deceased demanded from respondents payment of damages arising from the death of Reynaldo Raynera as a result of the vehicular accident. The respondents refused to pay the claims. On September 13, 1989, petitioners filed with the Regional Trial Court, Manila a complaint for damages against respondents owner and driver of the Isuzu truck. In their complaint against respondents, petitioners sought recovery of damages for the death of Reynaldo Raynera caused by the negligent operation of the truck-trailer at nighttime on the highway, without tail lights. In their answer filed on April 4, 1990, respondents alleged that the truck was travelling slowly on the service road, not parked improperly at a dark portion of the road, with no tail lights, license plate and early warning device.

RULINGS: RTC: On December 19, 1991, the trial court rendered decision in favor of petitioners. It found respondents Freddie Hiceta and Jimmy Orpilla negligent in view of these circumstances: (1) the truck trailer had no license plate and tail lights; (2) there were only two pairs of red lights, 50 watts each, on both sides of the steel plates; and (3) the truck trailer was improperly parked in a dark area. The trial court held that respondents negligence was the immediate and proximate cause of Reynaldo Rayneras death, for which they are jointly and severally liable to pay damages to petitioners. The trial court also held that the victim was himself negligent, although this was insufficient to overcome respondents negligence. The trial court applied the doctrine of contributory negligence and reduced the responsibility of respondents by 20% on account of the victims own negligence. The dispositive portion of the lower courts decision reads as follows: All things considered, the Court is of the opinion that it is fair and reasonable to fix the living and other expenses of the deceased the sum of P54,000.00 a year or about P4,500.00 a month (P150.00 p/d) and that, consequently, the loss or damage sustained by the plaintiffs may be estimated at P1,674,000.00 for the 31 years of Reynaldo Rayneras life expectancy. Taking into account the cooperative negligence of the deceased Reynaldo Raynera, the Court believes that the demand of substantial justice are satisfied by allocating the damages on 80-20 ratio. Thus, P1,337,200.00 shall be paid by the defendants with interest thereon, at the legal rate, from date of decision, as damages for the loss of earnings. To this sum, the following shall be added: (a) P33,412.00, actually spent for funeral services, interment and memorial lot; (b) P20,000.00 as attorneys fees; (c) cost of suit. SO ORDERED. CA: After due proceedings, on April 28, 1995, the Court of Appeals rendered decision setting aside the appealed decision. The appellate court held that Reynaldo Rayneras bumping into the left rear portion of the truck was the proximate cause of his death, and consequently, absolved respondents from liability. ISSUES BEFORE THE SC: A. Whether or not respondents were negligent. B. Whether such negligence was the proximate cause of the death of Reynaldo Raynera. SC RULING: The Court finds no reason to disturb the factual findings of the Court of Appeals. Negligence is the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something, which a prudent and reasonable man would not do.

Proximate cause is that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred. During the trial, it was established that the truck had no tail lights. The photographs taken of the scene of the accident showed that there were no tail lights or license plates installed on the Isuzu truck. Instead, what were installed were two (2) pairs of lights on top of the steel plates, and one (1) pair of lights in front of the truck. With regard to the rear of the truck, the photos taken and the sketch in the spot report proved that there were no tail lights. Despite the absence of tail lights and license plate, respondents truck was visible in the highway. It was traveling at a moderate speed, approximately 20 to 30 kilometers per hour. It used the service road, instead of the highway, because the cargo they were hauling posed a danger to passing motorists. In compliance with the Land Transportation Traffic Code (Republic Act No. 4136) respondents installed 2 pairs of lights on top of the steel plates, as the vehicles cargo load extended beyond the bed or body thereof. We find that the direct cause of the accident was the negligence of the victim. Traveling behind the truck, he had the responsibility of avoiding bumping the vehicle in front of him. He was in control of the situation. His motorcycle was equipped with headlights to enable him to see what was in front of him. He was traversing the service road where the prescribed speed limit was less than that in the highway. Traffic investigator Cpl. Virgilio del Monte testified that two pairs of 50-watts bulbs were on top of the steel plates, which were visible from a distance of 100 meters. Virgilio Santos admitted that from the tricycle where he was on board, he saw the truck and its cargo of iron plates from a distance of ten (10) meters. In light of these circumstances, an accident could have been easily avoided, unless the victim had been driving too fast and did not exercise due care and prudence demanded of him under the circumstances. Virgilio Santos testimony strengthened respondents defense that it was the victim who was reckless and negligent in driving his motorcycle at high speed. The tricycle where Santos was on board was not much different from the victims motorcycle that figured in the accident. Although Santos claimed the tricycle almost bumped into the improperly parked truck, the tricycle driver was able to avoid hitting the truck. It has been said that drivers of vehicles who bump the rear of another vehicle are presumed to be the cause of the accident, unless contradicted by other evidence. The rationale behind the presumption is that the driver of the rear vehicle has full control of the situation as he is in a position to observe the vehicle in front of him. We agree with the Court of Appeals that the responsibility to avoid the collision with the front vehicle lies with the driver of the rear vehicle. Consequently, no other person was to blame but the victim himself since he was the one who bumped his motorcycle into the rear of the Isuzu truck. He had the last clear chance of avoiding the accident.

WHEREFORE, we DENY the petition for review on certiorari and AFFIRM the decision of the Court of Appeals in CA-G. R. CV No. 35895, dismissing the amended complaint in Civil Case No. 89-50355, Regional Trial Court, Branch 45, Manila. No costs. SO ORDERED. 101. PLDT vs. COURT OF APPEALS FACTS: This case had its inception in an action for damages instituted in the former Court of First Instance of Negros Occidental by private respondent spouses against petitioner Philippine Long Distance Telephone Company (PLDT, for brevity) for the injuries they sustained in the evening of July 30, 1968 when their jeep ran over a mound of earth and fell into an open trench, an excavation allegedly undertaken by PLDT for the installation of its underground conduit system. The complaint alleged that respondent Antonio Esteban failed to notice the open trench which was left uncovered because of the creeping darkness and the lack of any warning light or signs. As a result of the accident, respondent Gloria Esteban allegedly sustained injuries on her arms, legs and face, leaving a permanent scar on her cheek, while the respondent husband suffered cut lips. In addition, the windshield of the jeep was shattered. PLDT, in its answer, denies liability on the contention that the injuries sustained by respondent spouses were the result of their own negligence and that the entity which should be held responsible, if at all, is L.R. Barte and Company (Barte, for short), an independent contractor which undertook the construction of the manhole and the conduit system. Accordingly, PLDT filed a third-party complaint against Barte alleging that, under the terms of their agreement, PLDT should in no manner be answerable for any accident or injuries arising from the negligence or carelessness of Barte or any of its employees. In answer thereto, Barte claimed that it was not aware nor was it notified of the accident involving respondent spouses and that it had complied with the terms of its contract with PLDT by installing the necessary and appropriate standard signs in the vicinity of the work site, with barricades at both ends of the excavation and with red lights at night along the excavated area to warn the traveling public of the presence of excavations. RULINGS: RTC: On October 1, 1974, the trial court rendered a decision in favor of private respondents, the decretal part of which reads: IN VIEW OF THE FOREGOING considerations the defendant Philippine Long Distance Telephone Company is hereby ordered (A) to pay the plaintiff Gloria Esteban the sum of P20,000.00 as moral damages and P5,000.00 exemplary damages; to plaintiff Antonio Esteban the sum of P2,000.00 as moral damages and P500.00 as exemplary damages, with legal rate of interest from the date of the filing of the complaint until fully paid. The defendant is hereby ordered to pay the plaintiff the sum of P3,000.00 as attorney's fees. (B) The third-party defendant is hereby ordered to reimburse whatever amount the defendant-third party plaintiff has paid to the plaintiff. With costs against the defendant.

CA: On September 25, 1979, the Special Second Division of the Court of Appeals rendered a decision in said appealed case, with Justice Corazon Juliano Agrava as ponente, reversing the decision of the lower court and dismissing the complaint of respondent spouses. It held that respondent Esteban spouses were negligent and consequently absolved petitioner PLDT from the claim for damages. ISSUES BEFORE THE SC: Whether or not the accident which befell private respondents was due to the lack of diligence of respondent Antonio Esteban and not imputable to negligent omission on the part of petitioner PLDT. SC RULING: Such findings were reached after an exhaustive assessment and evaluation of the evidence on record, as evidenced by the respondent court's resolution of January 24, 1980 which we quote with approval: First. Plaintiff's jeep was running along the inside lane of Lacson Street. If it had remained on that inside lane, it would not have hit the ACCIDENT MOUND. Exhibit B shows, through the tiremarks, that the ACCIDENT MOUND was hit by the jeep swerving from the left that is, swerving from the inside lane. What caused the swerving is not disclosed; but, as the cause of the accident, defendant cannot be made liable for the damages suffered by plaintiffs. The accident was not due to the absence of warning signs, but to the unexplained abrupt swerving of the jeep from the inside lane. That may explain plaintiff-husband's insistence that he did not see the ACCIDENT MOUND for which reason he ran into it. Second. That plaintiff's jeep was on the inside lane before it swerved to hit the ACCIDENT MOUND could have been corroborated by a picture showing Lacson Street to the south of the ACCIDENT MOUND. It has been stated that the ditches along Lacson Street had already been covered except the 3 or 4 meters where the ACCIDENT MOUND was located. Exhibit B-1 shows that the ditches on Lacson Street north of the ACCIDENT MOUND had already been covered, but not in such a way as to allow the outer lane to be freely and conveniently passable to vehicles. The situation could have been worse to the south of the ACCIDENT MOUND for which reason no picture of the ACCIDENT MOUND facing south was taken. Third. Plaintiff's jeep was not running at 25 kilometers an hour as plaintiff-husband claimed. At that speed, he could have braked the vehicle the moment it struck the ACCIDENT MOUND. The jeep would not have climbed the ACCIDENT MOUND several feet as indicated by the tiremarks in Exhibit B. The jeep must have been running quite fast. If the jeep had been braked at 25 kilometers an hour, plaintiff's would not have been thrown against the windshield and they would not have suffered their injuries. Fourth. If the accident did not happen because the jeep was running quite fast on the inside lane and for some reason or other it had to swerve suddenly to the right and had to climb over the ACCIDENT MOUND, then plaintiff-husband had not exercised the diligence of a good father of a family to avoid the accident. With the drizzle, he should not have run on dim lights, but should have put on his regular lights which should have made him see the ACCIDENT MOUND in time. If he was running on the outside lane at 25 kilometers an hour, even on dim lights, his failure to see the ACCIDENT MOUND in time to brake the car was negligence on his part. The ACCIDENT MOUND was relatively

big and visible, being 2 to 3 feet high and 1-1/2 feet wide. If he did not see the ACCIDENT MOUND in time, he would not have seen any warning sign either. He knew of the existence and location of the ACCIDENT MOUND, having seen it many previous times. With ordinary precaution, he should have driven his jeep on the night of the accident so as to avoid hitting the ACCIDENT MOUND. The above findings clearly show that the negligence of respondent Antonio Esteban was not only contributory to his injuries and those of his wife but goes to the very cause of the occurrence of the accident, as one of its determining factors, and thereby precludes their right to recover damages. The perils of the road were known to, hence appreciated and assumed by, private respondents. By exercising reasonable care and prudence, respondent Antonio Esteban could have avoided the injurious consequences of his act, even assuming arguendo that there was some alleged negligence on the part of petitioner. The presence of warning signs could not have completely prevented the accident; the only purpose of said signs was to inform and warn the public of the presence of excavations on the site. The private respondents already knew of the presence of said excavations. It was not the lack of knowledge of these excavations which caused the jeep of respondents to fall into the excavation but the unexplained sudden swerving of the jeep from the inside lane towards the accident mound. As opined in some quarters, the omission to perform a duty, such as the placing of warning signs on the site of the excavation, constitutes the proximate cause only when the doing of the said omitted act would have prevented the injury. It is basic that private respondents cannot charge PLDT for their injuries where their own failure to exercise due and reasonable care was the cause thereof. It is both a societal norm and necessity that one should exercise a reasonable degree of caution for his own protection. Furthermore, respondent Antonio Esteban had the last clear chance or opportunity to avoid the accident, notwithstanding the negligence he imputes to petitioner PLDT. As a resident of Lacson Street, he passed on that street almost everyday and had knowledge of the presence and location of the excavations there. It was his negligence that exposed him and his wife to danger, hence he is solely responsible for the consequences of his imprudence. Moreover, we also sustain the findings of respondent Court of Appeals in its original decision that there was insufficient evidence to prove any negligence on the part of PLDT. We have for consideration only the self-serving testimony of respondent Antonio Esteban and the unverified photograph of merely a portion of the scene of the accident. The absence of a police report of the incident and the non-submission of a medical report from the hospital where private respondents were allegedly treated have not even been satisfactorily explained. As aptly observed by respondent court in its aforecited extended resolution of January 24, 1980 (a) There was no third party eyewitness of the accident. As to how the accident occurred, the Court can only rely on the testimonial evidence of plaintiffs themselves, and such evidence should be very carefully evaluated, with defendant, as the party being charged, being given the benefit of any doubt. Definitely without ascribing the same motivation to plaintiffs, another person could have deliberately engineered a similar accident in the hope and expectation that the Court can grant him substantial moral and exemplary damages from the big corporation that defendant is. The statement is made only to stress the disadvantageous position of defendant which

would have extreme difficulty in contesting such person's claim. If there were no witness or record available from the police department of Bacolod, defendant would not be able to determine for itself which of the conflicting testimonies of plaintiffs is correct as to the report or non-report of the accident to the police department. A person claiming damages for the negligence of another has the burden of proving the existence of such fault or negligence causative thereof. The facts constitutive of negligence must be affirmatively established by competent evidence. Whosoever relies on negligence for his cause of action has the burden in the first instance of proving the existence of the same if contested, otherwise his action must fail. WHEREFORE, the resolutions of respondent Court of Appeals, dated March 11, 1980 and September 3,1980, are hereby SET ASIDE. Its original decision, promulgated on September 25,1979, is hereby REINSTATED and AFFIRMED. SO ORDERED. 102. KIM vs. PHILIPPINE AERIAL TAXI CO. FACTS: On the Morning of September 4, 1931, the plaintiff herein bought, in Manila, a passenger ticket for a flight to Iloilo in one of the defendant company's hydroplanes starting from Madrigal Field in Pasay. Inasmuch as the engine of the plane Mabuhay, in which he was to take the flight, was not working satisfactorily, the said plaintiff had to wait for some time. While the engine was being tested, the plaintiff saw how it was started by turning the propeller repeatedly and how the man who did it ran away from it each time in order not to be caught by the said propeller. Before the plane Mabuhay was put in condition for the flight, the plane Taal arrived and it was decided to have the plaintiff make the flight therein. The plaintiff and his companion were carefully carried from the beach to the plane, entering the same by the rear or tail end, and were placed in their seats to which they were strapped. Later, they were shown how the straps could be tightened or loosened in case of accident and were instructed further not to touch anything in the plane. After an uneventful flight, the plane landed on the waters of Guimaras Strait, in front of Iloilo, and taxied toward the beach until its pontoons struck bottom, when the plane stopped. the pilot shut off the gasoline feed pipe, permitting the engine, however, to continue to function until all the gasoline was drained from the feed pipe and carburetor. This operation was necessary in accordance with the established practice of aviation in order to avoid danger of fire which would exist if the pipes and carburetor remained full of gasoline, and to prevent the sudden cooling of the engine which might cause serious damage, especially to the valves. What really happened was that at the moment the pontoons touched bottom and while the pilot was signalling to the banca, the plaintiff unfastened the straps around him and, not even waiting to put on his hat, climbed over the door to the lower wing, went down the ladder to the pontoon and walked along the pontoon toward the revolving propeller. The propeller first grazed his forehead and, as he threw up his arm, it was caught by the revolving blades thereof and so injured that it had be amputated. ISSUE BEFORE THE SC: Whether or not the defendant entity has complied with its contractual obligation to carry the plaintiff-appellant Teh Le Kim safe and sound to his destination.

SC RULING: The contract entered into by the plaintiff Teh Le Kim and the defendant entity Philippine Aerial Taxi Co., Inc., was that upon payment of the price of the passage, which the carrier had received, the latter would carry the former by air in one of its hydroplanes and put him, safe and sound, on the beach at Iloilo. After an uneventful flight, the hydroplane, which carried the plaintiff and his companion, arrived at the Iloilo beach, as usual, with nothing more left to do but to take the plaintiff and his companion, safe and sound, ashore. In order to do this, it was necessary to wait for the propeller to stop, turn the rear or tail end of the plane towards the shore, take the passengers out by the aforesaid rear or tail end thereof, place them in a banca and take them ashore. By sheer common sense, the plaintiff ought to know that a propeller, be it that of a ship or of an aeroplane, is dangerous while in motion and that to approach it is to run the risk of being caught and injured thereby. He ought to know furthermore that inasmuch as the plane was on the water, he had to wait for a banca to take him ashore. Notwithstanding the shouts and warning signals given him from the shore by the representatives of the consignee firm, the plaintiff herein, not being a man of ordinary prudence, hastily left the cabin of the plane, walked along one of the pontoons and directly into the revolving propeller, while the banca which was to take him ashore was still some distance away and the pilot was instructing the boatman to keep it at a safe distance from the plane. Under such circumstances, it is not difficult to understand that the plaintiff-appellant acted with reckless negligence in approaching the propeller while it was still in motion, and when the banca was not yet in a position to take him. That the plaintiff-appellant's negligence alone was the direct cause of the accident, is so clear that it is not necessary to cite authoritative opinions to support the conclusion that the injury to his right arm and the subsequent amputation thereof were due entirely and exclusively to his own imprudence and not to the slightest negligence attributable to the defendant entity or to its agents. Therefore, he alone should suffer the consequences of his act. Wherefore, not finding any error in the judgment appealed from, it is hereby affirmed in toto, with the costs against the appellant. So ordered. 103. PHILIPPINE COMMERCIAL INTERNATIONAL BANK vs. COURT OF APPEALS FACTS: These consolidated petitions involve several fraudulently negotiated checks. The original actions a quo were instituted by Ford Philippines to recover from the drawee bank, CITIBANK, N.A. (Citibank) and collecting bank, Philippine Commercial International Bank (PCIBank) [formerly Insular Bank of Asia and America], the value of several checks payable to the Commissioner of Internal Revenue, which were embezzled allegedly by an organized syndicate. On October 19, 1977, the plaintiff Ford drew and issued its Citibank Check No. SN-04867 in the amount of P4,746,114.41, in favor of the Commissioner of Internal Revenue as payment of plaintiffs percentage or manufacturer's sales taxes for the third quarter of 1977. The aforesaid check was deposited with the degendant IBAA (now PCIBank) and was subsequently cleared at the Central Bank. Upon presentment with the defendant Citibank, the proceeds of the check was paid to IBAA as collecting or depository bank. The proceeds of the same Citibank check of the plaintiff was never paid to or received by the payee thereof, the Commissioner of Internal Revenue.

As a consequence, upon demand of the Bureau and/or Commissioner of Internal Revenue, the plaintiff was compelled to make a second payment to the Bureau of Internal Revenue of its percentage/manufacturers' sales taxes for the third quarter of 1977 and that said second payment of plaintiff in the amount of P4,746,114.41 was duly received by the Bureau of Internal Revenue. It has been duly established that for the payment of plaintiff's percentage tax for the last quarter of 1977, the Bureau of Internal Revenue issued Revenue Tax Receipt No. 18747002, dated October 20, 1977, designating therein in Muntinlupa, Metro Manila, as the authorized agent bank of Metrobanl, Alabang branch to receive the tax payment of the plaintiff. On December 19, 1977, plaintiff's Citibank Check No. SN-04867, together with the Revenue Tax Receipt No. 18747002, was deposited with defendant IBAA, through its Ermita Branch. The latter accepted the check and sent it to the Central Clearing House for clearing on the samd day, with the indorsement at the back "all prior indorsements and/or lack of indorsements guaranteed." Thereafter, defendant IBAA presented the check for payment to defendant Citibank on same date, December 19, 1977, and the latter paid the face value of the check in the amount of P4,746,114.41. Consequently, the amount of P4,746,114.41 was debited in plaintiff's account with the defendant Citibank and the check was returned to the plaintiff. In a letter dated February 28, 1980 by the Acting Commissioner of Internal Revenue addressed to the plaintiff - supposed to be Exhibit "D", the latter was officially informed, among others, that its check in the amount of P4, 746,114.41 was not paid to the government or its authorized agent and instead encashed by unauthorized persons, hence, plaintiff has to pay the said amount within fifteen days from receipt of the letter. Upon advice of the plaintiff's lawyers, plaintiff on March 11, 1982, paid to the Bureau of Internal Revenue, the amount of P4,746,114.41, representing payment of plaintiff's percentage tax for the third quarter of 1977. As a consequence of defendant's refusal to reimburse plaintiff of the payment it had made for the second time to the BIR of its percentage taxes, plaintiff filed on January 20, 1983 its original complaint before this Court. On December 24, 1985, defendant IBAA was merged with the Philippine Commercial International Bank (PCI Bank) with the latter as the surviving entity. Defendant Citibank maintains that: the payment it made of plaintiff's Citibank Check No. SN-04867 in the amount of P4,746,114.41 "was in due course", it merely relied on the clearing stamp of the depository/collecting bank, the defendant IBAA that "all prior indorsements and/or lack of indorsements guaranteed", and the proximate cause of plaintiff's injury is the gross negligence of defendant IBAA in indorsing the plaintiff's Citibank check in question. It is admitted that on December 19, 1977 when the proceeds of plaintiff's Citibank Check No. SN-048867 was paid to defendant IBAA as collecting bank, plaintiff was maintaining a checking account with defendant Citibank. Although it was not among the stipulated facts, an investigation by the National Bureau of Investigation (NBI) revealed that Citibank Check No. SN-04867 was recalled by Godofredo Rivera, the General Ledger Accountant of Ford. He purportedly needed to hold back the check because there was an error in the computation of the tax due to the

Bureau of Internal Revenue (BIR). With Rivera's instruction, PCIBank replaced the check with two of its own Manager's Checks (MCs). Alleged members of a syndicate later deposited the two MCs with the Pacific Banking Corporation. Ford, with leave of court, filed a third-party complaint before the trial court impleading Pacific Banking Corporation (PBC) and Godofredo Rivera, as third party defendants. But the court dismissed the complaint against PBC for lack of cause of action. The course likewise dismissed the third-party complaint against Godofredo Rivera because he could not be served with summons as the NBI declared him as a "fugitive from justice. RULINGS: RTC: On June 15, 1989, the trial court rendered its decision, as follows: "Premises considered, judgment is hereby rendered as follows: "1. Ordering the defendants Citibank and IBAA (now PCI Bank), jointly and severally, to pay the plaintiff the amount of P4,746,114.41 representing the face value of plaintiff's Citibank Check No. SN-04867, with interest thereon at the legal rate starting January 20, 1983, the date when the original complaint was filed until the amount is fully paid, plus costs; "2. On defendant Citibank's cross-claim: ordering the cross-defendant IBAA (now PCI Bank) to reimburse defendant Citibank for whatever amount the latter has paid or may pay to the plaintiff in accordance with next preceding paragraph; "3. The counterclaims asserted by the defendants against the plaintiff, as well as that asserted by the cross-defendant against the cross-claimant are dismissed, for lack of merits; and "4. With costs against the defendants. SO ORDERED." CA: On March 27, 1995, the appellate court issued its judgment as follows: "WHEREFORE, in view of the foregoing, the court AFFIRMS the appealed decision with modifications. The court hereby renderes judgment: 1. Dismissing the complaint in Civil Case No. 49287 insofar as defendant Citibank N.A. is concerned; 2. Ordering the defendant IBAA now PCI Bank to pay the plaintiff the amount of P4,746,114.41 representing the face value of plaintiff's Citibank Check No. SN-04867, with interest thereon at the legal rate starting January 20, 1983, the date when the original complaint was filed until the amount is fully paid; 3. Dismissing the counterclaims asserted by the defendants against the plaintiff as well as that asserted by the cross-defendant against the cross-claimant, for lack of merits. Costs against the defendant IBAA (now PCI Bank).

IT IS SO ORDERED." ISSUE BEFORE THE SC: Whether or not the the collecting bank's negligence is the proximate cause of the loss it incurred. SC RULING: Citibank Check No. SN-04867 was deposited at PCIBank through its Ermita Branch. It was coursed through the ordinary banking transaction, sent to Central Clearing with the indorsement at the back "all prior indorsements and/or lack of indorsements guaranteed," and was presented to Citibank for payment. Thereafter PCIBank, instead of remitting the proceeds to the CIR, prepared two of its Manager's checks and enabled the syndicate to encash the same. On record, PCIBank failed to verify the authority of Mr. Rivera to negotiate the checks. The neglect of PCIBank employees to verify whether his letter requesting for the replacement of the Citibank Check No. SN-04867 was duly authorized, showed lack of care and prudence required in the circumstances. Furthermore, it was admitted that PCIBank is authorized to collect the payment of taxpayers in behalf of the BIR. As an agent of BIR, PCIBank is duty bound to consult its principal regarding the unwarranted instructions given by the payor or its agent. As aptly stated by the trial court, to wit: "xxx. Since the questioned crossed check was deposited with IBAA [now PCIBank], which claimed to be a depository/collecting bank of BIR, it has the responsibility to make sure that the check in question is deposited in Payee's account only. As agent of the BIR (the payee of the check), defendant IBAA should receive instructions only from its principal BIR and not from any other person especially so when that person is not known to the defendant. It is very imprudent on the part of the defendant IBAA to just rely on the alleged telephone call of the one Godofredo Rivera and in his signature considering that the plaintiff is not a client of the defendant IBAA." It is a well-settled rule that the relationship between the payee or holder of commercial paper and the bank to which it is sent for collection is, in the absence of an argreement to the contrary, that of principal and agent.22 A bank which receives such paper for collection is the agent of the payee or holder.23 Even considering arguendo, that the diversion of the amount of a check payable to the collecting bank in behalf of the designated payee may be allowed, still such diversion must be properly authorized by the payor. Otherwise stated, the diversion can be justified only by proof of authority from the drawer, or that the drawer has clothed his agent with apparent authority to receive the proceeds of such check. Citibank further argues that PCI Bank's clearing stamp appearing at the back of the questioned checks stating that ALL PRIOR INDORSEMENTS AND/OR LACK OF INDORSEMENTS GURANTEED should render PCIBank liable because it made it pass through the clearing house and therefore Citibank had no other option but to pay it. Thus, Citibank had no other option but to pay it. Thus, Citibank assets that the proximate cause of Ford's injury is the gross negligence of PCIBank. Since the questione dcrossed check was deposited with PCIBank, which claimed to be a

depository/collecting bank of the BIR, it had the responsibility to make sure that the check in questions is deposited in Payee's account only. Indeed, the crossing of the check with the phrase "Payee's Account Only," is a warning that the check should be deposited only in the account of the CIR. Thus, it is the duty of the collecting bank PCIBank to ascertain that the check be deposited in payee's account only. Therefore, it is the collecting bank (PCIBank) which is bound to scruninize the check and to know its depositors before it could make the clearing indorsement "all prior indorsements and/or lack of indorsement guaranteed". In Banco de Oro Savings and Mortgage Bank vs. Equitable Banking Corporation,24 we ruled: "Anent petitioner's liability on said instruments, this court is in full accord with the ruling of the PCHC's Board of Directors that: 'In presenting the checks for clearing and for payment, the defendant made an express guarantee on the validity of "all prior endorsements." Thus, stamped at the back of the checks are the defedant's clear warranty: ALL PRIOR ENDORSEMENTS AND/OR LACK OF ENDORSEMENTS GUARANTEED. Without such warranty, plaintiff would not have paid on the checks.' No amount of legal jargon can reverse the clear meaning of defendant's warranty. As the warranty has proven to be false and inaccurate, the defendant is liable for any damage arising out of the falsity of its representation." Lastly, banking business requires that the one who first cashes and negotiates the check must take some percautions to learn whether or not it is genuine. And if the one cashing the check through indifference or othe circumstance assists the forger in committing the fraud, he should not be permitted to retain the proceeds of the check from the drawee whose sole fault was that it did not discover the forgery or the defect in the title of the person negotiating the instrument before paying the check. For this reason, a bank which cashes a check drawn upon another bank, without requiring proof as to the identity of persons presenting it, or making inquiries with regard to them, cannot hold the proceeds against the drawee when the proceeds of the checks were afterwards diverted to the hands of a third party. In such cases the drawee bank has a right to believe that the cashing bank (or the collecting bank) had, by the usual proper investigation, satisfied itself of the authenticity of the negotiation of the checks. Thus, one who encashed a check which had been forged or diverted and in turn received payment thereon from the drawee, is guilty of negligence which proximately contributed to the success of the fraud practiced on the drawee bank. The latter may recover from the holder the money paid on the check. Having established that the collecting bank's negligence is the proximate cause of the loss, we conclude that PCIBank is liable in the amount corresponding to the proceeds of Citibank Check No. SN-04867. WHEREFORE, the assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 25017 are AFFIRMED. PCIBank, know formerly as Insular Bank of Asia and America, is declared solely responsible for the loss of the proceeds of Citibank Check No SN 04867 in the amount P4,746,114.41, which shall be paid together with six percent (6%) interest

thereon to Ford Philippines Inc. from the date when the original complaint was filed until said amount is fully paid. However, the Decision and Resolution of the Court of Appeals in CA-G.R. No. 28430 are MODIFIED as follows: PCIBank and Citibank are adjudged liable for and must share the loss, (concerning the proceeds of Citibank Check Numbers SN 10597 and 16508 totalling P12,163,298.10) on a fifty-fifty ratio, and each bank is ORDERED to pay Ford Philippines Inc. P6,081,649.05, with six percent (6%) interest thereon, from the date the complaint was filed until full payment of said amount.1wphi1.nt Costs against Philippine Commercial International Bank and Citibank N.A. SO ORDERED. 104. NPC vs. COURT OF APPEALS FACTS: This present controversy traces its beginnings to four (4) separate complaints 2 for damages filed against the NPC and Benjamin Chavez before the trial court. The plaintiffs therein, now private respondents, sought to recover actual and other damages for the loss of lives and the destruction to property caused by the inundation of the town of Norzagaray, Bulacan on 26-27 October 1978. The flooding was purportedly caused by the negligent release by the defendants of water through the spillways of the Angat Dam (Hydroelectric Plant). In said complaints, the plaintiffs alleged, inter alia, that: 1) defendant NPC operated and maintained a multi-purpose hydroelectric plant in the Angat River at Hilltop, Norzagaray, Bulacan; 2) defendant Benjamin Chavez was the plant supervisor at the time of the incident in question; 3) despite the defendants' knowledge, as early as 24 October 1978, of the impending entry of typhoon "Kading," they failed to exercise due diligence in monitoring the water level at the dam; 4) when the said water level went beyond the maximum allowable limit at the height of the typhoon, the defendants suddenly, negligently and recklessly opened three (3) of the dam's spillways, thereby releasing a large amount of water which inundated the banks of the Angat River; and 5) as a consequence, members of the household of the plaintiffs, together with their animals, drowned, and their properties were washed away in the evening of 26 October and the early hours of 27 October 1978. In their Answers, the defendants, now petitioners, alleged that: 1) the NPC exercised due care, diligence and prudence in the operation and maintenance of the hydroelectric plant; 2) the NPC exercised the diligence of a good father in the selection of its employees; 3) written notices were sent to the different municipalities of Bulacan warning the residents therein about the impending release of a large volume of water with the onset of typhoon "Kading" and advise them to take the necessary precautions; 4) the water released during the typhoon was needed to prevent the collapse of the dam and avoid greater damage to people and property; 5) in spite of the precautions undertaken and the diligence exercised, they could still not contain or control the flood that resulted and; 6) the damages incurred by the private respondents were caused by a fortuitous event or force majeure and are in the nature and character of damnum absque injuria. By way of special affirmative defense, the defendants averred that the NPC cannot be sued because it performs a purely governmental function. RULINGS: RTC: The lower court rendered its decision on 30 April 1990 dismissing the complaints "for lack of sufficient and credible evidence."

CA: In its joint decision promulgated on 19 August 1991, the Court of Appeals reversed the appealed decision and awarded damages in favor of the private respondents. The dispositive portion of the decision reads: CONFORMABLY TO THE FOREGOING, the joint decision appealed from is hereby REVERSED and SET ASIDE, and a new one is hereby rendered: 1. In Civil Case No. SM-950, ordering defendants-appellees to pay, jointly and severally, plaintiffs-appellants, with legal interest from the date when this decision shall become final and executory, the following: A. Actual damages, to wit: 1) Gaudencio C. Rayo, Two Hundred Thirty One Thousand Two Hundred Sixty Pesos (P231,260.00); 2) Bienvenido P. Pascual, Two Hundred Four Thousand Five Hundred Pesos (P204.500.00); 3) Tomas Manuel, One Hundred Fifty Five Thousand Pesos (P155,000.00); 4) Pedro C. Bartolome, One Hundred Forty Seven Thousand Pesos (P147,000.00);. 5) Bernardino Cruz, One Hundred Forty Three Thousand Five Hundred Fifty Two Pesos and Fifty Centavos (P143,552.50); 6) Jose Palad, Fifty Seven Thousand Five Hundred Pesos (P57,500.00); 7) Mariano S. Cruz, Forty Thousand Pesos (P40,000.00); 8) Lucio Fajardo, Twenty nine Thousand Eighty Pesos (P29,080.00); and B. Litigation expenses of Ten Thousand Pesos (P10,000.00); 2. In Civil case No. SM-951, ordering defendants-appellees to pay jointly and severally, plaintiff-appellant, with legal interest from the date when this decision shall have become final and executory, the following : A. Actual damages of Five Hundred Twenty Thousand Pesos (P520,000.00);. B. Moral damages of five hundred Thousand Pesos (P500,000.00); and. C. Litigation expenses of Ten Thousand Pesos (P10,000.00);. 3. In Civil Case No. SM-953, ordering defendants-appellees to pay, jointly and severally, with legal interest from the date when this decision shall have become final and executory; A. Plaintiff-appellant Angel C. Torres: 1) Actual damages of One Hundred Ninety Nine Thousand One Hundred Twenty Pesos (P199,120.00); 2) Moral Damages of One Hundred Fifty Thousand Pesos (P150,000.00); B. 1) 2) C. 1) 2) D. Plaintiff-appellant Norberto Torres: Actual damages of Fifty Thousand Pesos (P50,000.00); Moral damages of Fifty Thousand Pesos (P50,000.00); Plaintiff-appellant Rodelio Joaquin: Actual damages of One Hundred Thousand Pesos (P100,000.00); Moral damages of One Hundred Thousand Pesos (P100,000.00); and Plaintifsf-appellants litigation expenses of Ten Thousand Pesos (P10,000.00);

4. In Civil case No. SM-1247, ordering defendants-appellees to pay, jointly and severally, with legal interest from the date when this decision shall have become final and executory : A. Plaintiffs-appellants Presentacion Lorenzo and Clodualdo Lorenzo: 1) Actual damages of Two Hundred Fifty Six Thousand Six Hundred Pesos (P256,600.00); 2) Moral damages of Fifty Thousand Pesos (P50,000.00); B. 1) 2) C. 1) D. Plaintiff-appellant Consolacion Guzman : Actual damages of One Hundred forty Thousand Pesos (P140,000.00); Moral damages of Fifty Thousand Pesos (P50,000.00); Plaintiff-appellant Virginia Guzman : Actual damages of Two Hundred Five Hundred Twenty Pesos (205,520.00); and Plaintiffs-appellants litigation expenses of Ten Thousand Pesos (10,000.00).

In addition, in all the four (4) instant cases, ordering defendants-appellees to pay, jointly and severally, plaintiffs-appellants attorney fees in an amount equivalent to 15% of the total amount awarded. No pronouncement as to costs. The foregoing judgment is based on the public respondent's conclusion that the petitioners were guilty of: . . . a patent gross and evident lack of foresight, imprudence and negligence . . . in the management and operation of Angat Dam. The unholiness of the hour, the extent of the opening of the spillways, And the magnitude of the water released, are all but products of defendants-appellees' headlessness, slovenliness, and carelessness. The resulting flash flood and inundation of even areas (sic) one (1) kilometer away from the Angat River bank would have been avoided had defendants-appellees prepared the Angat Dam by maintaining in the first place, a water elevation which would allow room for the expected torrential rains. This conclusion, in turn, is anchored on its findings of fact, to wit: As early as October 21, 1978, defendants-appellees knew of the impending onslaught of and imminent danger posed by typhoon "Kading". For as alleged by defendantsappellees themselves, the coming of said super typhoon was bannered by Bulletin Today, a newspaper of national circulation, on October 25, 1978, as "Super Howler to hit R.P." The next day, October 26, 1978, said typhoon once again merited a headline in said newspaper as "Kading's Big Blow expected this afternoon" (Appellee's Brief, p. 6). Apart from the newspapers, defendants-appellees learned of typhoon "Kading' through radio announcements (Civil Case No. SM-950, TSN, Benjamin Chavez, December 4, 1984, pp. 7-9). Defendants-appellees doubly knew that the Angat Dam can safely hold a normal maximum headwater elevation of 217 meters (Appellee's brief, p. 12; Civil Case No. SM-

951, Exhibit "I-6"; Civil Case No. SM-953, Exhibit "J-6"; Civil Case No. SM-1247, Exhibit "G-6"). Yet, despite such knowledge, defendants-appellees maintained a reservoir water elevation even beyond its maximum and safe level, thereby giving no sufficient allowance for the reservoir to contain the rain water that will inevitably be brought by the coming typhoon. On October 24, 1978, before typhoon "Kading" entered the Philippine area of responsibility, water elevation ranged from 217.61 to 217.53, with very little opening of the spillways, ranging from 1/2 to 1 meter. On October 25, 1978, when typhoon "Kading" entered the Philippine area of responsibility, and public storm signal number one was hoisted over Bulacan at 10:45 a.m., later raised to number two at 4:45 p.m., and then to number three at 10:45 p.m., water elevation ranged from 217.47 to 217.57, with very little opening of the spillways, ranging from 1/2 to 1 meter. On October 26, 1978, when public storm signal number three remained hoisted over Bulacan, the water elevation still remained at its maximum level of 217.00 to 218.00 with very little opening of the spillways ranging from 1/2 to 2 meters, until at or about midnight, the spillways were suddenly opened at 5 meters, then increasing swiftly to 8, 10, 12, 12.5, 13, 13.5, 14, 14.5 in the early morning hours of October 27, 1978, releasing water at the rate of 4,500 cubic meters per second, more or less. On October 27, 1978, water elevation remained at a range of 218.30 to 217.05 (Civil Case No. SM-950, Exhibits "D" and series, "L", "M", "N", and "O" and Exhibits "3" and "4"; Civil Case No. SM-951, Exhibits "H" and "H-1"; Civil Case No. SM-953, Exhibits "I" and "I-1"; Civil Case No. SM 1247, Exhibits "F" and "F-1"). From the mass of evidence extant in the record, We are convinced, and so hold that the flash flood on October 27, 1978, was caused not by rain waters (sic), but by stored waters (sic) suddenly and simultaneously released from the Angat Dam by defendantsappellees, particularly from midnight of October 26, 1978 up to the morning hours of October 27, 1978. ISSUE BEFORE THE SC: Whether or not the NPC should be held liable to the private respondents for any kind of damage - such damage being in the nature of damnum absque injuria, since the incident in question was caused by force majeure. SC RULING: We reiterate here in Our pronouncement in the latter case that Juan F. Nakpil & Sons vs. Court of Appeals is still good law as far as the concurrent liability of an obligor in the case of force majeure is concerned. In the Nakpil case, We held: To exempt the obligor from liability under Article 1174 of the Civil Code, for a breach of an obligation due to an "act of God," the following must concur: (a) the cause of the breach of the obligation must be independent of the will of the debtor; (b) the event must be either unforseeable or unavoidable; (c) the event must be such as to render it impossible for the debtor to fulfill his obligation in a moral manner; and (d) the debtor must be free from any participation in, or aggravation of the injury to the creditor. (Vasquez v. Court of Appeals, 138 SCRA 553; Estrada v. Consolacion, 71 SCRA 423; Austria v. Court of Appeals, 39 SCRA 527; Republic of the Phil. v. Luzon Stevedoring Corp., 21 SCRA 279; Lasam v. Smith, 45 Phil. 657).

Thus, if upon the happening of a fortuitous event or an act of God, there concurs a corresponding fraud, negligence, delay or violation or contravention in any manner of the tenor of the obligation as provided for in Article 1170 of the Civil Code, which results in loss or damage, the obligor cannot escape liability. The principle embodied in the act of God doctrine strictly requires that the act must be one occasioned exclusively by the violence of nature and all human agencies are to be excluded from creating or entering into the cause of the mischief. When the effect, the cause of which is to be considered, is found to be in part the result of the participation of man, whether it be from active intervention or neglect, or failure to act, the whole occurrence is thereby humanized, as it were, and removed from the rules applicable to the acts of God. (1 Corpus Juris, pp. 1174-1175). Thus it has been held that when the negligence of a person concurs with an act of God in producing a loss, such person is not exempt from liability by showing that the immediate cause of the damage was the act of God. To be exempt from liability for loss because of an act of God, he must be free from any previous negligence or misconduct by which that loss or damage may have been occasioned. (Fish & Elective Co. v. Phil. Motors, 55 Phil. 129; Tucker v. Milan, 49 O.G. 4379; Limpangco & Sons v. Yangco Steamship Co., 34 Phil. 594, 604; Lasam v. Smith, 45 Phil. 657). Accordingly, petitioners cannot be heard to invoke the act of God or force majeure to escape liability for the loss or damage sustained by private respondents since they, the petitioners, were guilty of negligence. The event then was not occasioned exclusively by an act of God or force majeure; a human factor negligence or imprudence had intervened. The effect then of the force majeure in question may be deemed to have, even if only partly, resulted from the participation of man. Thus, the whole occurrence was thereby humanized, as it were, and removed from the laws applicable to acts of God. WHEREFORE, for want of merit, the instant petition is hereby DISMISSED and the Consolidated Decision of the Court of Appeals in CA-G.R. CV Nos. 27290-93 is AFFIRMED, with costs against the petitioners. SO ORDERED. Cases 96-104 ATANACIO, ZINNIA FARICA MAY V. 105. SOUTHEASTERN COLLEGE, INC. vs. COURT OF APPEALS FACTS: Private respondents are owners of a house at 326 College Road, Pasay City, while petitioner owns a four-storey school building along the same College Road. On October 11, 1989, at about 6:30 in the morning, a powerful typhoon Saling hit Metro Manila. Buffeted by very strong winds, the roof of petitioners building was partly ripped off and blown away, landing on and destroying portions of the roofing of private respondents house. After the typhoon had passed, an ocular inspection of the destroyed buildings was conducted by a team of engineers headed by the city building official, Engr. Jesus L. Reyna.

In the complaint before the Regional Trial Court of Pasay City, Branch 117, for damages based on culpa aquiliana, private respondents alleged that the damage to their house rendered the same uninhabitable; forcing them to stay temporarily in others houses and this was granted. On appeal, the Court of Appeals affirmed with modification the trial courts disposition reducing the award for moral damages from P1, 000,000.00 to P200, 000.00. ISSUE: Whether or not the awarding of actual and moral damages as well as attorneys fees and costs of suit binding even if fortuitous event arises without human intervention? RULING: In order that a fortuitous event may exempt a person from liability, it is necessary that he be free from any previous negligence or misconduct by reason of which the loss may have been occasioned. An act of God cannot be invoked for the protection of a person who has been guilty of gross negligence in not trying to forestall its possible adverse consequences. When a persons negligence concurs with an act of God in producing damage or injury to another, such person is not exempt from liability by showing that the immediate or proximate cause of the damage or injury was a fortuitous event. When the effect is found to be partly the result of the participation of man whether it be from active intervention, or neglect, or failure to act the whole occurrence is hereby humanized, and removed from the rules applicable to acts of God. There is no question that a typhoon or storm is a fortuitous event, a natural occurrence which may be foreseen but is unavoidable despite any amount of foresight, diligence or care. In order to be exempt from liability arising from any adverse consequence engendered thereby, there should have been no human participation amounting to a negligent act. In other words, the person seeking exoneration from liability must not be guilty of negligence. Negligence, as commonly understood, is conduct which naturally or reasonably creates undue risk or harm to others. It may be the failure to observe that degree of care, precaution, and vigilance which the circumstances justly demand, or the omission to do something which a prudent and reasonable man, guided by considerations which ordinarily regulate the conduct of human affairs, would do. At the outset, it bears emphasizing that a person claiming damages for the negligence of another has the burden of proving the existence of fault or negligence causative of his injury or loss. The facts constitutive of negligence must be affirmatively established by competent evidence, not merely by presumptions and conclusions without basis in fact. Private respondents, in establishing the culpability of petitioner, merely relied on the aforementioned report submitted by a team which made an ocular inspection of petitioners school building after the typhoon. As the term imparts, an ocular inspection is one by means of actual sight or viewing. What is visual to the eye though, is not always reflective of the real cause behind. For instance, one who hears a gunshot and then sees a wounded person cannot always definitely conclude that a third person shot the victim. It could have been self-inflicted or caused accidentally by a stray bullet. The relationship of cause and effect must be clearly shown. On the other hand, petitioner elicited from one of the witnesses of private respondents, city building official Jesus Reyna, that the original plans and design of petitioners school building were approved prior to its construction. Engr. Reyna admitted that it was a

legal requirement before the construction of any building to obtain a permit from the city building official (city engineer, prior to the passage of the Building Act of 1977). In like manner, after construction of the building, a certification must be secured from the same official attesting to the readiness for occupancy of the edifice. Having obtained both building permit and certificate of occupancy, these are, at the very least, prima facie evidence of the regular and proper construction of subject school building. In addition, petitioner presented its vice president for finance and administration who testified that an annual maintenance inspection and repair of subject school building were regularly undertaken. Petitioner was even willing to present its maintenance supervisor to attest to the extent of such regular inspection but private respondents agreed to dispense with his testimony and simply stipulated that it would be corroborative of the vice presidents narration. Moreover, the city building official, who has been in the city government service since 1974, admitted in open court that no complaint regarding any defect on the same structure has ever been lodged before his office prior to the institution of the case at bench. It is a matter of judicial notice that typhoons are common occurrences in this country. If subject school buildings roofing was not firmly anchored to its trusses, obviously, it could not have withstood long years and several typhoons even stronger than Saling. With this disposition on the pivotal issue, private respondents claim for actual and moral damages as well as attorneys fees must fail. Petitioner cannot be made to answer for a purely fortuitous event. More so because no bad faith or willful act to cause damage was alleged and proven to warrant moral damages. Private respondents failed to adduce adequate and competent proof of the pecuniary loss they actually incurred. It is not enough that the damage be capable of proof but must be actually proved with a reasonable degree of certainty, pointing out specific facts that afford a basis for measuring whatever compensatory damages are borne. Private respondents merely submitted an estimated amount needed for the repair of the roof of their subject building. What is more, whether the necessary repairs were caused ONLY by petitioners alleged negligence in the maintenance of its school building, or included the ordinary wear and tear of the house itself, is an essential question that remains indeterminable. The Court deems unnecessary to resolve the other issues posed by petitioner. However, the writ of execution issued on April 1, 1993 by the trial court is hereby nullified and set aside. Private respondents are ordered to reimburse any amount or return to petitioner any property which they may have received by virtue of the enforcement of said writ. WHEREFORE, the petition is GRANTED and the challenged Decision is REVERSED. The complaint of private respondents in Civil Case No. 7314 before the trial court a quo is ordered DISMISSED and the writ of execution issued on April 1, 1993 in said case is SET ASIDE. Accordingly, private respondents are ORDERED to return to petitioner any amount or property received by them by virtue of said writ. Costs against the private respondents.

106. ILOCOS NORTE ELECTRIC COMPANY vs. COURT OF APPEALS FACTS: From the evidence of plaintiffs it appears that in the evening of June 28 until the early morning of June 29, 1967 a strong typhoon by the code name "Gening" buffeted the province of Ilocos Norte, bringing heavy rains and consequent flooding in its wake. Between 5:30 and 6:00 A.M. on June 29, 1967, after the typhoon had abated and when the floodwaters were beginning to recede the deceased Isabel Lao Juan, fondly called Nana Belen, ventured out of the house of her son-in-law, Antonio Yabes, on No. 19 Guerrero Street, Laoag City, and proceeded northward towards the direction of the Five Sisters Emporium, of which she was the owner and proprietress, to look after the merchandise therein that might have been damaged. Wading in waist-deep flood on Guerrero, the deceased was followed by Aida Bulong, a Salesgirl at the Five Sisters Grocery, also owned by the deceased, and by Linda Alonzo Estavillo, a ticket seller at the YJ Cinema, which was partly owned by the deceased. Aida and Linda walked side by side at a distance of between 5 and 6 meters behind the deceased, Suddenly, the deceased screamed "Ay" and quickly sank into the water. The two girls attempted to help, but fear dissuaded them from doing so because on the spot where the deceased sank they saw an electric wire dangling from a post and moving in snake-like fashion in the water. Upon their shouts for help, Ernesto dela Cruz came out of the house of Antonio Yabes. Ernesto tried to go to the deceased, but at four meters away from her he turned back shouting that the water was grounded. Aida and Linda prodded Ernesto to seek help from Antonio Yabes at the YJ Cinema building which was four or five blocks away. After due trial, the CFI found the facts in favor of petitioner and dismissed the complaint but awarded to the latter P25,000 in moral damages and attorney's fees of P45,000. An appeal was filed with the CA which issued the controverted decision. ISSUE: Whether or not the trial court did not err in awarding moral damages and attorney's fees to Defendant Corporation? RULING: From the preceding, we find that the CA did not abuse its discretion in reversing the trial court's findings but tediously considered the factual circumstances at hand pursuant to its power to review questions of fact raised from the decision of the Regional Trial Court, formerly the Court of First Instance (see sec. 9, BP 129). In considering the liability of petitioner, the respondent CA awarded the following in private respondent's favor: P30,229.45 in actual damages (i.e., P12,000 for the victim's death and P18,229.45 for funeral expenses); P50,000 in compensatory damages, computed in accordance with the formula set in the Villa-Rey Transit case (31 SCRA 511) with the base of P15,000 as average annual income of the deceased; P10,000 in exemplary damages; P3,000 attorney's fees; and costs of suit. Except for the award of P12,000 as compensation for the victim's death, We affirm the respondent CA's award for damages and attorney's fees. Pusuant to recent jurisprudence (People vs. Mananquil, 132 SCRA 196; People vs. Traya, 147 SCRA 381), We increase the said award of P12,000 to P30,000, thus, increasing the total actual damages to P48,229.45. The exclusion of moral damages and attorney's fees awarded by the lower court was properly made by the respondent CA, the charge of malice and bad faith on the part of respondents in instituting his case being a mere product of wishful thinking and speculation. Award of damages and attorney's fees is unwarranted where the action was filed in good faith; there should be no penalty on the right to litigate (Espiritu vs.

CA, 137 SCRA 50). If damage results from a person's exercising his legal rights, it is damnum absque injuria (Auyong Hian vs. CTA, 59 SCRA 110). WHEREFORE, the questioned decision of the respondent, except for the slight modification that actual damages be increased to P48,229.45 is hereby AFFIRMED. 107. PLEASANTVILLE DEVELOPMENT CORPORATION vs. COURT OF APPEALS FACTS: Edith Robillo purchased from petitioner a parcel of land designated as Lot 9, Phase II and located at Taculing Road, Pleasantville Subdivision, Bacolod City. In 1975, respondent Eldred Jardinico bought the rights to the lot from Robillo. At that time, Lot 9 was vacant. Upon completing all payments, Jardinico secured from the Register of Deeds of Bacolod City on December 19, 1978 Transfer Certificate of Title No. 106367 in his name. It was then that he discovered that improvements had been introduced on Lot 9 by respondent Wilson Kee, who had taken possession thereof. It appears that on March 26, 1974, Kee bought on installment Lot 8 of the same subdivision from C.T. Torres Enterprises, Inc. (CTTEI), the exclusive real estate agent of petitioner. Under the Contract to Sell on Installment, Kee could possess the lot even before the completion of all installment payments. On January 20, 1975, Kee paid CTTEI the relocation fee of P50.00 and another P50.00 on January 27, 1975, for the preparation of the lot plan. These amounts were paid prior to Kee's taking actual possession of Lot 8. After the preparation of the lot plan and a copy thereof given to Kee, CTTEI through its employee, Zenaida Octaviano, accompanied Kee's wife, Donabelle Kee, to inspect Lot 8. Unfortunately, the parcel of land pointed by Octaviano was Lot 9. Thereafter, Kee proceeded to construct his residence, a store, an auto repair shop and other improvements on the lot. The MTCC held that the erroneous delivery of Lot 9 to Kee was attributable to CTTEI. It further ruled that petitioner and CTTEI could not successfully invoke as a defense the failure of Kee to give notice of his intention to begin construction required under paragraph 22 of the Contract to Sell on Installment and his having built a sari-sari store without the prior approval of petitioner required under paragraph 26 of said contract, saying that the purpose of these requirements was merely to regulate the type of improvements to be constructed on the Lot. On appeal, the Regional Trial Court, Branch 48, Bacolod City (RTC) ruled that petitioner and CTTEI were not at fault or were not negligent, there being no preponderant evidence to show that they directly participated in the delivery of Lot 9 to Kee5 The appellate court ruled that Kee was a builder in good faith, as he was unaware of the "mix-up" when he began construction of the improvements on Lot 8. ISSUE: Whether or not the award of attorney's fees is proper? RULING: The MTCC awarded Jardinico attorney's fees and costs in the amount of P3,000.00 and P700.00, respectively, as prayed for in his complaint. The RTC deleted the award, consistent with its ruling that petitioner was without fault or negligence. The

Court of Appeals, however, reinstated the award of attorney's fees after ruling that petitioner was liable for its agent's negligence. The award of attorney's fees lies within the discretion of the court and depends upon the circumstances of each case . We shall not interfere with the discretion of the Court of Appeals. Jardinico was compelled to litigate for the protection of his interests and for the recovery of damages sustained as a result of the negligence of petitioner's agent . In sum, we rule that Kee is a builder in good faith. The disposition of the Court of Appeals that Kee "is entitled to the rights granted him under Articles 448, 546 and 548 of the New Civil Code" is deleted, in view of the deed of sale entered into by Kee and Jardinico, which deed now governs the rights of Jardinico and Kee as to each other. There is also no further need, as ruled by the appellate Court, to remand the case to the court of origin "for determination of the actual value of the improvements and the property (Lot 9), as well as for further proceedings in conformity with Article 448 of the New Civil Code." WHEREFORE , the petition is partially GRANTED. The Decision of the Court of Appeals is hereby MODIFIED as follows: (1) Wilson Kee is declared a builder in good faith; (2) Petitioner Pleasantville Development Corporation and respondent C.T. Torres Enterprises, Inc. are declared solidarily liable for damages due to negligence; however, since the amount and/or extent of such damages was not proven during the trial, the same cannot now be quantified and awarded; (3) Petitioner Pleasantville Development Corporation and respondent C.T. Torres Enterprises, Inc. are ordered to pay in solidum the amount of P3,000.00 to Jardinico as attorney's fees, as well as litigation expenses; and (4) The award of rentals to Jardinico is dispensed with. 108. YOBIDO vs. COURT OF APPEALS FACTS: On April 26, 1988, spouses Tito and Leny Tumboy and their minor children named Ardee and Jasmin, bearded at Mangagoy, Surigao del Sur, a Yobido Liner bus bound for Davao City. Along Picop Road in Km. 17, Sta. Maria, Agusan del Sur, the left front tire of the bus exploded. The bus fell into a ravine around three (3) feet from the road and struck a tree. The incident resulted in the death of 28-year-old Tito Tumboy and physical injuries to other passengers. On November 21, 1988, a complaint for breach of contract of carriage, damages and attorney's fees was filed by Leny and her children against Alberta Yobido, the owner of the bus, and Cresencio Yobido, its driver, before the Regional Trial Court of Davao City. When the defendants therein filed their answer to the complaint, they raised the affirmative defense of caso fortuito. They also filed a third-party complaint against Philippine Phoenix Surety and Insurance, Inc. This third-party defendant filed an answer with compulsory counterclaim. At the pre-trial conference, the parties agreed to a stipulation of facts. On August 29, 1991, the lower court rendered a decision dismissing the action for lack of merit. On the issue of whether or not the tire blowout was a caso fortuito, it found

that "the falling of the bus to the cliff was a result of no other outside factor than the tire blow-out." Dissatisfied, the plaintiffs appealed to the Court of Appeals. The Court of Appeals rendered the Decision reversing that of the lower court. ISSUE: Whether or not the damages being prayed for justifies the act breach of contract of carriage by the petitioner in this particular case? RULING: In view of the foregoing, petitioners' contention that they should be exempt from liability because the tire blowout was no more than a fortuitous event that could not have been foreseen, must fail. A fortuitous event is possessed of the following characteristics: (a) the cause of the unforeseen and unexpected occurrence, or the failure of the debtor to comply with his obligations, must be independent of human will; (b) it must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid; (c) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (d) the obliger must be free from any participation in the aggravation of the injury resulting to the creditor. As Article 1174 provides, no person shall be responsible for a fortuitous event which could not be foreseen, or which, though foreseen, was inevitable. In other words, there must be an entire exclusion of human agency from the cause of injury or loss. Under the circumstances of this case, the explosion of the new tire may not be considered a fortuitous event. There are human factors involved in the situation. The fact that the tire was new did not imply that it was entirely free from manufacturing defects or that it was properly mounted on the vehicle. Neither may the fact that the tire bought and used in the vehicle is of a brand name noted for quality, resulting in the conclusion that it could not explode within five days' use. Be that as it may, it is settled that an accident caused either by defects in the automobile or through the negligence of its driver is not a caso fortuito that would exempt the carrier from liability for damages. Moreover, a common carrier may not be absolved from liability in case of force majeure or fortuitous event alone. The common carrier must still prove that it was not negligent in causing the death or injury resulting from an accident. Having failed to discharge its duty to overthrow the presumption of negligence with clear and convincing evidence, petitioners are hereby held liable for damages. Article 1764 19 in relation to Article 2206 20 of the Civil Code prescribes the amount of at least three thousand pesos as damages for the death of a passenger. Under prevailing jurisprudence, the award of damages under Article 2206 has been increased to fifty thousand pesos (P50,000.00). Moral damages are generally not recoverable in culpa contractual except when bad faith had been proven. However, the same damages may be recovered when breach of contract of carriage results in the death of a passenger, 22 as in this case. Exemplary damages, awarded by way of example or correction for the public good when moral damages are awarded, 23 may likewise be recovered in contractual obligations if the defendant acted in wanton, fraudulent, reckless, oppressive, or malevolent manner. 24 Because petitioners failed to exercise the extraordinary diligence required of a common

carrier, which resulted in the death of Tito Tumboy, it is deemed to have acted recklessly. 25 As such, private respondents shall be entitled to exemplary damages. WHEREFORE, the Decision of the Court of Appeals is hereby AFFIRMED subject to the modification that petitioners shall, in addition to the monetary awards therein, be liable for the award of exemplary damages in the amount of P20,000.00. Costs against petitioners. 109. KRAMER, JR. vs. COURT OF APPEALS FACTS: The record of the case discloses that in the early morning of April 8, 1976, the F/B Marjolea, a fishing boat owned by the petitioners Ernesto Kramer, Jr. and Marta Kramer, was navigating its way from Marinduque to Manila. Somewhere near Maricabon Island and Cape Santiago, the boat figured in a collision with an inter-island vessel, the M/V Asia Philippines owned by the private respondent Trans-Asia Shipping Lines, Inc. As a consequence of the collision, the F/B Marjolea sank, taking with it its fish catch. On May 30, 1985, the petitioners instituted a Complaint for damages against the private respondent before Branch 117 of the Regional Trial Court in Pasay City. It was granted due to the need to rely on highly technical aspects attendant to such collision. The private respondent elevated the case to the Court of Appeals by way of a special civil action for certiorari and prohibition, alleging therein that the trial court committed a grave abuse of discretion in refusing to dismiss the Complaint filed by the petitioners. In a Decision dated November 27, 1987, 7 and clarified in a Resolution dated January 12, 1988, 8 the Court of Appeals granted the Petition filed by the private respondent and ordered the trial court to dismiss the Complaint. The petitioners filed a Motion for the reconsideration of the said Decision but the same was denied by the Court of Appeals in a Resolution dated May 27, 1988. ISSUE: Whether or not a Complaint for damages instituted by the petitioners against the private respondent arising from a marine collision is statute of limitations? RULING: The petition is devoid of merit. Under Article 1146 of the Civil Code, an action based upon a quasi-delict must be instituted within four (4) years. The prescriptive period begins from the day the quasi-delict is committed. In Paulan vs. Sarabia, this Court ruled that in an action for damages arising from the collision of two (2) trucks, the action being based on a quasi-delict, the four (4) year prescriptive period must be counted from the day of the collision. In Espanol vs. Chairman, Philippine Veterans Administration, 17 this Court held as followsThe right of action accrues when there exists a cause of action, which consists of 3 elements, namely: a) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; b) an obligation on the part of defendant to respect such right; and c) an act or omission on the part of such defendant violative of the right of the plaintiff ... It is only when the last element occurs or takes place that it can be said in law that a cause of action has arisen ... .

From the foregoing ruling, it is clear that the prescriptive period must be counted when the last element occurs or takes place, that is, the time of the commission of an act or omission violative of the right of the plaintiff, which is the time when the cause of action arises. It is therefore clear that in this action for damages arising from the collision of two (2) vessels the four (4) year prescriptive period must be counted from the day of the collision. The aggrieved party need not wait for a determination by an administrative body like a Board of Marine Inquiry, that the collision was caused by the fault or negligence of the other party before he can file an action for damages. The ruling in Vasquez does not apply in this case. Immediately after the collision the aggrieved party can seek relief from the courts by alleging such negligence or fault of the owners, agents or personnel of the other vessel. Thus, the respondent court correctly found that the action of petitioner has prescribed. The collision occurred on April 8, 1976. The complaint for damages was filed in court only on May 30, 1 985, was beyond the four (4) year prescriptive period. WHEREFORE, the petition is dismissed. No costs. 110. RAYNERA vs. HICETA FACTS: On March 23, 1989, at about 2:00 in the morning, Reynaldo Raynera was on his way home. He was riding a motorcycle traveling on the southbound lane of East Service Road, Cupang, Muntinlupa. The Isuzu truck was travelling ahead of him at 20 to 30 kilometers per hour. The truck was loaded with two (2) metal sheets extended on both sides, two (2) feet on the left and three (3) feet on the right. There were two (2) pairs of red lights, about 35 watts each, on both sides of the metal plates. The asphalt road was not well lighted. At some point on the road, Reynaldo Raynera crashed his motorcycle into the left rear portion of the truck trailer, which was without tail lights. Due to the collision, Reynaldo sustained head injuries and truck helper Geraldino D. Lucelo rushed him to the Paraaque Medical Center. Upon arrival at the hospital, the attending physician, Dr. Marivic Aguirre, pronounced Reynaldo Raynera dead on arrival. On May 12, 1989, the heirs of the deceased demanded from respondents payment of damages arising from the death of Reynaldo Raynera as a result of the vehicular accident. The respondents refused to pay the claims. On September 13, 1989, petitioners filed with the Regional Trial Court, Manila a complaintfor damages against respondents owner and driver of the Isuzu truck. On December 19, 1991, the trial court rendered decision in favor of petitioners and it held that respondents negligence was the immediate and proximate cause of Reynaldo Rayneras death, for which they are jointly and severally liable to pay damages to petitioners. On January 10, 1992, respondents Hiceta and Orpilla appealed to the Court of Appeals. After due proceedings, on April 28, 1995, the Court of Appeals rendered decision setting aside the appealed decision. The appellate court held that Reynaldo Rayneras bumping

into the left rear portion of the truck was the proximate cause of his death, and consequently, absolved respondents from liability. ISSUE: Whether or not the respondents were negligent, and if so, whether such negligence was the proximate cause of the death of Reynaldo Raynera? RULING: The Court finds no reason to disturb the factual findings of the Court of Appeals. Negligence is the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something, which a prudent and reasonable man would not do. [23] Proximate cause is that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred. During the trial, it was established that the truck had no tail lights. The photographs taken of the scene of the accident showed that there were no tail lights or license plates installed on the Isuzu truck. Instead, what were installed were two (2) pairs of lights on top of the steel plates, and one (1) pair of lights in front of the truck. With regard to the rear of the truck, the photos taken and the sketch in the spot report proved that there were no tail lights. Despite the absence of tail lights and license plate, respondents truck was visible in the highway. It was traveling at a moderate speed, approximately 20 to 30 kilometers per hour. It used the service road, instead of the highway, because the cargo they were hauling posed a danger to passing motorists. In compliance with the Land Transportation Traffic Code (Republic Act No. 4136) [25] respondents installed 2 pairs of lights on top of the steel plates, as the vehicles cargo load extended beyond the bed or body thereof. We find that the direct cause of the accident was the negligence of the victim. Traveling behind the truck, he had the responsibility of avoiding bumping the vehicle in front of him. He was in control of the situation. His motorcycle was equipped with headlights to enable him to see what was in front of him. He was traversing the service road where the prescribed speed limit was less than that in the highway. Traffic investigator Cpl. Virgilio del Monte testified that two pairs of 50-watts bulbs were on top of the steel plates, [26] which were visible from a distance of 100 meters. [27] Virgilio Santos admitted that from the tricycle where he was on board, he saw the truck and its cargo of iron plates from a distance of ten (10) meters. [28] In light of these circumstances, an accident could have been easily avoided, unless the victim had been driving too fast and did not exercise due care and prudence demanded of him under the circumstances. Virgilio Santos testimony strengthened respondents defense that it was the victim who was reckless and negligent in driving his motorcycle at high speed. The tricycle where Santos was on board was not much different from the victims motorcycle that figured in the accident. Although Santos claimed the tricycle almost bumped into the improperly parked truck, the tricycle driver was able to avoid hitting the truck.

It has been said that drivers of vehicles who bump the rear of another vehicle are presumed to be the cause of the accident, unless contradicted by other evidence. [29] The rationale behind the presumption is that the driver of the rear vehicle has full control of the situation as he is in a position to observe the vehicle in front of him. We agree with the Court of Appeals that the responsibility to avoid the collision with the front vehicle lies with the driver of the rear vehicle. Consequently, no other person was to blame but the victim himself since he was the one who bumped his motorcycle into the rear of the Isuzu truck. He had the last clear chance of avoiding the accident. WHEREFORE, we DENY the petition for review on certiorari and AFFIRM the decision of the Court of Appeals in CA-G. R. CV No. 35895, dismissing the amended complaint in Civil Case No. 89-50355, Regional Trial Court, Branch 45, Manila. No costs. 111. PHILIPPINE RABBIT BUS LINES, INC. vs. INTERMEDIATE APPELLATE COURT, G.R. Nos. 66102-04, August 30, 1990 FACTS: About 11:00 o'clock in the morning on December 24, 1966, Catalina Pascua, Caridad Pascua, Adelaida Estomo, Erlinda Meriales, Mercedes Lorenzo, Alejandro Morales and Zenaida Parejas boarded the jeepney owned by spouses Isidro Mangune and Guillerma Carreon and driven by Tranquilino Manalo at Dau, Mabalacat, Pampanga bound for Carmen, Rosales, Pangasinan to spend Christmas at their respective homes. Although they usually ride in buses, they had to ride in a jeepney that day because the buses were full. Their contract with Manalo was for them to pay P24.00 for the trip. Upon reaching barrio Sinayoan, San Manuel, Tarlac, the right rear wheel of the jeepney was detached, so it was running in an unbalanced position. Manalo stepped on the brake, as a result of which, the jeepney which was then running on the eastern lane (its right of way) made a U-turn, invading and eventually stopping on the western lane of the road in such a manner that the jeepney's front faced the south (from where it came) and its rear faced the north (towards where it was going). The jeepney practically occupied and blocked the greater portion of the western lane, which is the right of way of vehicles coming from the north, among which was Bus No. 753 of petitioner Philippine Rabbit Bus Lines, Inc. (Rabbit) driven by Tomas delos Reyes. As a result of the collision, three passengers of the jeepney (Catalina Pascua, Erlinda Meriales and Adelaida Estomo) died while the other jeepney passengers sustained physical injuries. After conducting the investigation, the police filed with the Municipal Court of San Manuel, Tarlac, a criminal complaint against the two drivers for Multiple Homicide. At the preliminary investigation, a probable cause was found with respect to the case of Manalo, thus, his case was elevated to the Court of First Instance. However, finding no sufficiency of evidence as regards the case of delos Reyes, the Court dismissed it. Manalo was convicted and sentenced to suffer imprisonment. Not having appealed, he served his sentence. The complaint for damages was then filed before the Court of First Instance in Pangasinan where costs are adjudged against defendants Mangune, Carreon and

Manalo and Filriters Guaranty. But on appeal, the Intermediate Appellate Court reversed the above-quoted decision by finding delos Reyes negligent. ISSUE: Whether or not the Philippine Rabbit Bus Lines, Inc. and its driver Tomas delos Reyes who acted with diligence required to pay the plaintiffs- appellant jointly and severally damages that the former prayed for? RULING: It cannot be said that the bus was travelling at a fast speed when the accident occurred because the speed of 80 to 90 kilometers per hour, assuming such calculation to be correct, is yet within the speed limit allowed in highways. We cannot even fault delos Reyes for not having avoided the collision. As aforestated, the jeepney left a skid mark of about 45 meters, measured from the time its right rear wheel was detached up to the point of collision. Delos Reyes must have noticed the perilous condition of the jeepney from the time its right rear wheel was detached or some 90 meters away, considering that the road was straight and points 200 meters north and south of the point of collision, visible and unobstructed. Delos Reyes admitted that he was running more or less 50 kilometers per hour at the time of the accident. Using this speed, delos Reyes covered the distance of 45 meters in 3.24 seconds. If We adopt the speed of 80 kilometers per hour, delos Reyes would have covered that distance in only 2.025 seconds. Verily, he had little time to react to the situation. To require delos Reyes to avoid the collision is to ask too much from him. Aside from the time element involved, there were no options available to him. As the trial court remarked (pp. 107-108, Record on Appeal): . . . They (plaintiffs) tried to impress this Court that defendant de los Reyes, could have taken either of two options: (1) to swerve to its right (western shoulder) or (2) to swerve to its left (eastern lane), and thus steer clear of the Mangune jeepney. This Court does not so believe, considering the existing exigencies of space and time. As to the first option, Phil. Rabbit's evidence is convincing and unrebutted that the Western shoulder of the road was narrow and had tall grasses which would indicate that it was not passable. Even plaintiffs own evidence, the pictures (Exhs. P and P-2, Pascua) are mute confirmation of such fact. Indeed, it can be noticed in the picture (Exh. P-2, Pascua) after the Rabbit bus came to a full stop, it was tilted to right front side, its front wheels resting most probably on a canal on a much lower elevation that of the shoulder or paved road. It too shows that all of the wheels of the Rabbit bus were clear of the roadway except the outer left rear wheel. These observation appearing in said picture (Exh P-2, Pascua) clearly shows coupled with the finding the Rabbit bus came to a full stop only five meters from the point of impact (see sketch, Exh. K-Pascua) clearly show that driver de los Reyes veered his Rabbit bus to the right attempt to avoid hitting the Mangune's jeepney. That it was not successful in fully clearing the Mangune jeepney as its (Rabbit's) left front hit said jeepney (see picture Exh. 10-A-Rabbit) must have been due to limitations of space and time. After a minute scrutiny of the factual matters and duly proven evidence, We find that the proximate cause of the accident was the negligence of Manalo and spouses Mangune and Carreon. They all failed to exercise the precautions that are needed precisely pro hac vice. In culpa contractual, the moment a passenger dies or is injured, the carrier is presumed to have been at fault or to have acted negligently, and this disputable presumption may

only be overcome by evidence that he had observed extra-ordinary diligence as prescribed in Articles 1733, 1755 and 1756 of the New Civil Code 2 or that the death or injury of the passenger was due to a fortuitous event 3 (Lasam v. Smith, Jr., 45 Phil. 657). The negligence of Manalo was proven during the trial by the unrebutted testimonies of Caridad Pascua, Police Investigator Tacpal, Police Corporal Cacalda, his (Manalo's) conviction for the crime of Multiple Homicide and Multiple Serious Injuries with Damage to Property thru Reckless Imprudence, and the application of the doctrine of res ipsa loquitur supra. The negligence of spouses Mangune and Carreon was likewise proven during the trial (p. 110, Record on Appeal): To escape liability, defendants Mangune and Carreon offered to show thru their witness Natalio Navarro, an alleged mechanic, that he periodically checks and maintains the jeepney of said defendants, the last on Dec. 23, the day before the collision, which included the tightening of the bolts. This notwithstanding the right rear wheel of the vehicle was detached while in transit. As to the cause thereof no evidence was offered. Said defendant did not even attempt to explain, much less establish, it to be one caused by a caso fortuito. . . . In any event, "[i]n an action for damages against the carrier for his failure to safely carry his passenger to his destination, an accident caused either by defects in the automobile or through the negligence of its driver, is not a caso fortuito which would avoid the carriers liability for damages (Son v. Cebu Autobus Company, 94 Phil. 892 citing Lasam, et al. v. Smith, Jr., 45 Phil. 657; Necesito, etc. v. Paras, et al., 104 Phil. 75). The trial court was therefore right in finding that Manalo and spouses Mangune and Carreon were negligent. However, its ruling that spouses Mangune and Carreon are jointly and severally liable with Manalo is erroneous.The driver cannot be held jointly and severally liable with the carrier in case of breach of the contract of carriage. The rationale behind this is readily discernible. Firstly, the contract of carriage is between the carrier and the passenger, and in the event of contractual liability, the carrier is exclusively responsible therefore to the passenger, even if such breach be due to the negligence of his driver (sees Viluan v. The Court of Appeals et al., G.R. Nos. L-21477-81 April 29, 1966, 16 SCRA 742). In other words, the carrier can neither shift his liability on the contract to his driver nor share it with him, for his driver's negligence is his. Secondly, if We make the driver jointly and severally liable with the carrier, that would make the carrier's liability personal instead of merely vicarious and consequently, entitled to recover only the share which corresponds to the driver, contradictory to the explicit provision of Article 2181 of the New Civil Code. We affirm the amount of damages adjudged by the trial court, except with respect to the indemnity for loss of life. Under Article 1764 in relation to Article 2206 of the New Civil Code, the amount of damages for the death of a passenger is at least three thousand pesos (P3,000.00). The prevailing jurisprudence has increased the amount of P3,000.00 to P30,000.00 (see Heirs of Amparo delos Santos, et al. v. Honorable Court of Appeals, et al., G.R. No. 51165, June 21, 1990 citing De Lima v. Laguna Tayabas Co., G.R. Nos. L-35697-99, April 15, 1988, 160 SCRA 70). ACCORDINGLY, the petition is hereby GRANTED. The decision of the Intermediate Appellate Court dated July 29, 1983 and its resolution dated November 28, 1983 are SET ASIDE. The decision of the Court of First Instance dated December 27, 1978 is

REINSTATED MODIFICATION that only Isidro Mangune, Guillerma Carreon and Filriters Guaranty Assurance Corporation, Inc. are liable to the victims or their heirs and that the amount of indemnity for loss of life is increased to thirty thousand pesos (P30,000.00). So ordered. 112. FILOMENO URBANO, vs. HON. IAC AND PEOPLE OF THE PHILIPPINES FACTS: At about 8:00 o'clock in the morning of October 23, 1980, petitioner Filomeno Urbano went to his rice field at Barangay Anonang, San Fabian, Pangasinan located at about 100 meters from the tobacco seedbed of Marcelo Javier. He found the place where he stored his palay flooded with water coming from the irrigation canal nearby which had overflowed. Urbano saw Marcelo Javier and Emilio Erfe cutting grass and asked them who was responsible for the opening of the irrigation canal and Javier admitted that he was the one. Urbano then got angry and demanded that Javier pay for his soaked palay. A quarrel between them ensued. Urbano unsheathed his bolo and hacked Javier hitting him on the right palm of his hand. Javier who was then unarmed ran away from Urbano but was overtaken by Urbano who hacked him again hitting Javier on the left leg with the back portion of said bolo, causing a swelling on said leg. When Urbano tried to hack and inflict further injury, his daughter embraced and prevented him from hacking Javier. Immediately thereafter, Antonio Erfe, Emilio Erfe, and Felipe Erfe brought Javier to the physician. Upon the intercession of Councilman Solis, Urbano and Javier agreed to settle their differences. Urbano promised to pay P700.00 for the medical expenses of Javier. At about 1:30 a.m. on November 14, 1980, Javier was rushed to the Nazareth General Hospital in a very serious condition. When admitted to the hospital, Javier had lockjaw and was having convulsions. Dr. Edmundo Exconde who personally attended to Javier found that the latter's serious condition was caused by tetanus toxin. He noticed the presence of a healing wound in Javier's palm which could have been infected by tetanus. And on November 15, 1980 at exactly 4:18 p.m., Javier died in the hospital. Urbano was then charged with the crime of homicide before the then Circuit Criminal Court of Dagupan City, Third Judicial District. Upon arraignment, Urbano pleaded "not guilty." After trial, the trial court found Urbano guilty as charged. He was sentenced to suffer an indeterminate prison term. The then Intermediate Appellate Court affirmed the conviction of Urbano on appeal but raised the award of indemnity to the heirs of the deceased to P30,000.00 with costs against the appellant. ISSUE: Whether or not there was an efficient intervening cause from the time Javier was wounded until his death which would exculpate Urbano from any liability for Javier's death? RULING: We look into the nature of tetanusThe incubation period of tetanus, i.e., the time between injury and the appearance of unmistakable symptoms, ranges from 2 to 56 days. However, over 80 percent of patients become symptomatic within 14 days. A short incubation period indicates severe disease,

and when symptoms occur within 2 or 3 days of injury the mortality rate approaches 100 percent. Non-specific premonitory symptoms such as restlessness, irritability, and headache are encountered occasionally, but the commonest presenting complaints are pain and stiffness in the jaw, abdomen, or back and difficulty swallowing. As the progresses, stiffness gives way to rigidity, and patients often complain of difficulty opening their mouths. In fact, trismus in the commonest manifestation of tetanus and is responsible for the familiar descriptive name of lockjaw. As more muscles are involved, rigidity becomes generalized, and sustained contractions called risus sardonicus. The intensity and sequence of muscle involvement is quite variable. In a small proportion of patients, only local signs and symptoms develop in the region of the injury. In the vast majority, however, most muscles are involved to some degree, and the signs and symptoms encountered depend upon the major muscle groups affected. Reflex spasm usually occur within 24 to 72 hours of the first symptom, an interval referred to as the onset time. As in the case of the incubation period, a short onset time is associated with a poor prognosis. Spasms are caused by sudden intensification of afferent stimuli arising in the periphery, which increases rigidity and causes simultaneous and excessive contraction of muscles and their antagonists. Spasms may be both painful and dangerous. As the disease progresses, minimal or inapparent stimuli produce more intense and longer lasting spasms with increasing frequency. Respiration may be impaired by laryngospasm or tonic contraction of respiratory muscles which prevent adequate ventilation. Hypoxia may then lead to irreversible central nervous system damage and death. Mild tetanus is characterized by an incubation period of at least 14 days and an onset time of more than 6 days. Trismus is usually present, but dysphagia is absent and generalized spasms are brief and mild. Moderately severe tetanus has a somewhat shorter incubation period and onset time; trismus is marked, dysphagia and generalized rigidity are present, but ventilation remains adequate even during spasms. The criteria for severe tetanus include a short incubation time, and an onset time of 72 hrs., or less, severe trismus, dysphagia and rigidity and frequent prolonged, generalized convulsive spasms. (Harrison's Principle of Internal Medicine, 1983 Edition, pp. 1004-1005; Emphasis supplied) Therefore, medically speaking, the reaction to tetanus found inside a man's body depends on the incubation period of the disease. In the case at bar, Javier suffered a 2-inch incised wound on his right palm when he parried the bolo which Urbano used in hacking him. This incident took place on October 23, 1980. After 22 days, or on November 14, 1980, he suffered the symptoms of tetanus, like lockjaw and muscle spasms. The following day, November 15, 1980, he died. If, therefore, the wound of Javier inflicted by the appellant was already infected by tetanus germs at the time, it is more medically probable that Javier should have been infected with only a mild cause of tetanus because the symptoms of tetanus appeared on the 22nd day after the hacking incident or more than 14 days after the infliction of the wound. Therefore, the onset time should have been more than six days. Javier, however, died on the second day from the onset time. The more credible conclusion is

that at the time Javier's wound was inflicted by the appellant, the severe form of tetanus that killed him was not yet present. Consequently, Javier's wound could have been infected with tetanus after the hacking incident. Considering the circumstance surrounding Javier's death, his wound could have been infected by tetanus 2 or 3 or a few but not 20 to 22 days before he died. The rule is that the death of the victim must be the direct, natural, and logical consequence of the wounds inflicted upon him by the accused. (People v. Cardenas, supra) And since we are dealing with a criminal conviction, the proof that the accused caused the victim's death must convince a rational mind beyond reasonable doubt. The medical findings, however, lead us to a distinct possibility that the infection of the wound by tetanus was an efficient intervening cause later or between the time Javier was wounded to the time of his death. The infection was, therefore, distinct and foreign to the crime. (People v. Rellin, 77 Phil. 1038). Doubts are present. There is a likelihood that the wound was but the remote cause and its subsequent infection, for failure to take necessary precautions, with tetanus may have been the proximate cause of Javier's death with which the petitioner had nothing to do. As we ruled in Manila Electric Co. v. Remoquillo, et al. (99 Phil. 118). "A prior and remote cause cannot be made the be of an action if such remote cause did nothing more than furnish the condition or give rise to the occasion by which the injury was made possible, if there intervened between such prior or remote cause and the injury a distinct, successive, unrelated, and efficient cause of the injury, even though such injury would not have happened but for such condition or occasion. If no danger existed in the condition except because of the independent cause, such condition was not the proximate cause. And if an independent negligent act or defective condition sets into operation the instances which result in injury because of the prior defective condition, such subsequent act or condition is the proximate cause." (45 C.J. pp. 931932). (at p. 125) It strains the judicial mind to allow a clear aggressor to go scot free of criminal liability. At the very least, the records show he is guilty of inflicting slight physical injuries. However, the petitioner's criminal liability in this respect was wiped out by the victim's own act. After the hacking incident, Urbano and Javier used the facilities of barangay mediators to effect a compromise agreement where Javier forgave Urbano while Urbano defrayed the medical expenses of Javier. This settlement of minor offenses is allowed under the express provisions of Presidential Decree G.R. No. 1508, Section 2(3). (See also People v. Caruncho, 127 SCRA 16). We must stress, however, that our discussion of proximate cause and remote cause is limited to the criminal aspects of this rather unusual case. It does not necessarily follow that the petitioner is also free of civil liability. The well-settled doctrine is that a person, while not criminally liable, may still be civilly liable. Thus, in the recent case of People v. Rogelio Ligon y Tria, et al. (G.R. No. 74041, July 29, 1987), we said: ... While the guilt of the accused in a criminal prosecution must be established beyond reasonable doubt, only a preponderance of evidence is required in a civil action for damages. (Article 29, Civil Code). The judgment of acquittal extinguishes the civil liability of the accused only when it includes a declaration that the facts from which the civil liability might arise did not exist. (Padilla v. Court of Appeals, 129 SCRA 559).

The reason for the provisions of article 29 of the Civil Code, which provides that the acquittal of the accused on the ground that his guilt has not been proved beyond reasonable doubt does not necessarily exempt him from civil liability for the same act or omission, has been explained by the Code Commission as follows: The old rule that the acquittal of the accused in a criminal case also releases him from civil liability is one of the most serious flaws in the Philippine legal system. It has given use to numberless instances of miscarriage of justice, where the acquittal was due to a reasonable doubt in the mind of the court as to the guilt of the accused. The reasoning followed is that inasmuch as the civil responsibility is derived from the criminal offense, when the latter is not proved, civil liability cannot be demanded. This is one of those causes where confused thinking leads to unfortunate and deplorable consequences. Such reasoning fails to draw a clear line of demarcation between criminal liability and civil responsibility, and to determine the logical result of the distinction. The two liabilities are separate and distinct from each other. One affects the social order and the other, private rights. One is for the punishment or correction of the offender while the other is for reparation of damages suffered by the aggrieved party. The two responsibilities are so different from each other that article 1813 of the present (Spanish) Civil Code reads thus: "There may be a compromise upon the civil action arising from a crime; but the public action for the imposition of the legal penalty shall not thereby be extinguished." It is just and proper that, for the purposes of the imprisonment of or fine upon the accused, the offense should be proved beyond reasonable doubt. But for the purpose of indemnity the complaining party, why should the offense also be proved beyond reasonable doubt? Is not the invasion or violation of every private right to be proved only by a preponderance of evidence? Is the right of the aggrieved person any less private because the wrongful act is also punishable by the criminal law? "For these reasons, the Commission recommends the adoption of the reform under discussion. It will correct a serious defect in our law. It will close up an inexhaustible source of injustice-a cause for disillusionment on the part of the innumerable persons injured or wronged." The respondent court increased the P12,000.00 indemnification imposed by the trial court to P30,000.00. However, since the indemnification was based solely on the finding of guilt beyond reasonable doubt in the homicide case, the civil liability of the petitioner was not thoroughly examined. This aspect of the case calls for fuller development if the heirs of the victim are so minded. WHEREFORE, the instant petition is hereby GRANTED. The questioned decision of the then Intermediate Appellate Court, now Court of Appeals, is REVERSED and SET ASIDE. The petitioner is ACQUITTED of the crime of homicide. Costs de oficio. SO ORDERED. 113. GLAN PEOPLE'S LUMBER AND HARDWARE vs. INTERMEDIATE APPELLATE COURT, FACTS: Engineer Orlando T. Calibo, Agripino Roranes, and Maximo Patos were on the jeep owned by the Bacnotan Consolidated Industries, Inc., with Calibo at the wheel, as it approached from the South Lizada Bridge going towards the direction of Davao City at

about 1:45 in the afternoon of July 4,1979. At about that time, the cargo track, loaded with cement bags, GI sheets, plywood, driven by defendant Paul Zacarias y Infants, coming from the opposite direction of Davao City and bound for Glan, South Cotabato, had just crossed said bridge. At about 59 yards after crossing the bridge, the cargo truck and the jeep collided as a consequence of which Engineer Calibo died while Roranes and Patos sustained physical injuries. As a result of the impact, the left side of the truck was slightly damaged while the left side of the jeep, including its fender and hood, was extensively damaged. After the impact, the jeep fell and rested on its right side on the asphalted road a few meters to the rear of the truck, while the truck stopped on its wheels on the road. On November 27, 1979, the instant case for damages was filed by the surviving spouse and children of the late Engineer Calibo who are residents of Tagbilaran City against the driver and owners of the cargo truck. The Court reached the conclusion "that the plaintiffs failed to establish by preponderance of evidence the negligence, and thus the liability, of the defendants." Accordingly, the Court dismissed the complaint (and defendants' counterclaim) "for insufficiency of evidence." Likewise dismissed was thirdparty complaint presented by the defendants against the insurer of the truck. The Court of Appeals saw things differently. It rendered judgment on the plaintiffs' appeal, reversing the decision of the Trial Court. It found Zacarias to be negligent ISSUE: Whether or not negligence of an employee gave rise to the presumption of negligence on the part of the employer, and their liability is both primary and solidary? RULING: The finding that "the truck driven by defendant Paul Zacarias occupied the lane of the jeep when the collision occurred" is a loose one, based on nothing more than the showing that at the time of the accident, the truck driven by Zacarias had edged over the painted center line of the road into the opposite lane by a width of twenty-five (25) centimeters. It ignores the fact that by the uncontradicted evidence, the actual center line of the road was not that indicated by the painted stripe but, according to measurements made and testified by Patrolman Juanita Dimaano, one of the two officers who investigated the accident, correctly lay thirty-six (36) centimeters farther to the left of the truck's side of said stripe. The Appellate Court was not correct in finding that Paulino Zacarias had acted negligently in applying his brakes instead of getting back inside his lane upon espying the approaching jeep. Being well within his own lane, as has already been explained, he had no duty to swerve out of the jeep's way as said Court would have had him do. And even supposing that he was in fact partly inside the opposite lane, coming to a full stop with the jeep still thirty (30) meters away cannot be considered an unsafe or imprudent action, there also being uncontradicted evidence that the jeep was "zigzagging" 20 and hence no way of telling in which direction it would go as it approached the truck. Also clearly erroneous is the finding of the Intermediate Appellate Court that Zacarias had no driver's license at the time. The traffic accident report attests to the proven fact that Zacarias voluntarily surrendered to the investigating officers his driver's license, valid for 1979, that had been renewed just the day before the accident, on July 3, 1979. 21 The Court was apparently misled by the circumstance that when said driver was first asked to show his license by the investigators at the scene of the collision, he had first inadvertently produced the license of a fellow driver, Leonardo Baricuatro, who had left

said license in Davao City and had asked Zacarias to bring it back to him in Glan, Cotabato. The evidence not only acquits Zacarias of any negligence in the matter; there are also quite a few significant indicators that it was rather Engineer Calibo's negligence that was the proximate cause of the accident. Zacarias had told Patrolman Dimaano at the scene of the collision and later confirmed in his written statement at the police headquarters 23 that the jeep had been "zigzagging," which is to say that it was travelling or being driven erratically at the time. The other investigator, Patrolman Jose Esparcia, also testified that eyewitnesses to the accident had remarked on the jeep's "zigzagging." 24 There is moreover more than a suggestion that Calibo had been drinking shortly before the accident. The decision of the Trial Court adverts to further testimony of Esparcia to the effect that three of Calibo's companions at the beach party he was driving home from when the collision occurred, who, having left ahead of him went to the scene when they heard about the accident, had said that there had been a drinking spree at the party and, referring to Calibo, had remarked: "Sabi na huag nang mag drive . . . . pumipilit," (loosely translated, "He was advised not to drive, but he insisted.") The doctrine of the last clear chance provides as valid and complete a defense to accident liability today as it did when invoked and applied in the 1918 case of Picart vs. Smith, supra, which involved a similar state of facts. Of those facts, which should be familiar to every student of law, it is only necessary to recall the summary made in the syllabus of this Court's decision that: (t)he plaintiff was riding a pony on a bridge. Seeing an automobile ahead he improperly pulled his horse over to the railing on the right. The driver of the automobile, however guided his car toward the plaintiff without diminution of speed until he was only few feet away. He then turned to the right but passed so closely to the horse that the latter being frightened, jumped around and was killed by the passing car. . . . . Plaintiff Picart was thrown off his horse and suffered contusions which required several days of medical attention. He sued the defendant Smith for the value of his animal, medical expenses and damage to his apparel and obtained judgment from this Court which, while finding that there was negligence on the part of both parties, held that that of the defendant was the immediate and determining cause of the accident and that of the plaintiff ". . . the more remote factor in the case": It goes without saying that the plaintiff himself was not free from fault, for he was guilty of antecedent negligence in planting himself on the wrong side of the road. But as we have already stated, the defendant was also negligent; and in such case the problem always is to discover which agent is immediately and directly responsible. It will be noted that the negligent acts of the two parties were not contemporaneous, since the negligence of the defendant succeeded the negligence of the plaintiff by an appreciable interval. Under these circumstances the law is that the person who has the last fair chance to avoid the impending harm and fails to do so is chargeable with the consequences, without reference to the prior negligence of the other party. Since said ruling clearly applies to exonerate petitioner Zacarias and his employer (and co-petitioner) George Lim, an inquiry into whether or not the evidence supports the latter's additional defense of due diligence in the selection and supervision of said driver

is no longer necessary and wig not be undertaken. The fact is that there is such evidence in the record which has not been controverted. It must be pointed out, however, that the Intermediate Appellate Court also seriously erred in holding the petitioners Pablo S. Agad and Felix Lim solidarily liable for the damages awarded in its appealed decision, as alleged owners, with petitioner George Lim, of Glan People's Lumber and Hardware, employer of petitioner Zacarias. This manifestly disregarded, not only the certificate of registration issued by the Bureau of Domestic Trade identifying Glan People's Lumber and Hardware as a business name registered by George Lim, 28 but also unimpugned allegations into the petitioners' answer to the complaint that Pablo S. Agad was only an employee of George Lim and that Felix Lim, then a child of only eight (8) years, was in no way connected with the business. In conclusion, it must also be stated that there is no doubt of this Court's power to review the assailed decision of the Intermediate Appellate Court under the authority of precedents recognizing exceptions to the familiar rule binding it to observe and respect the latter's findings of fact. Many of those exceptions may be cited to support the review here undertaken, but only the most obvious that said findings directly conflict with those of the Trial Court will suffice. 29 In the opinion of this Court and after a careful review of the record, the evidence singularly fails to support the findings of the Intermediate Appellate Court which, for all that appears, seem to have been prompted rather by sympathy for the heirs of the deceased Engineer Calibo than by an objective appraisal of the proofs and a correct application of the law to the established facts. Compassion for the plight of those whom an accident has robbed of the love and support of a husband and father is an entirely natural and understandable sentiment. It should not, however, be allowed to stand in the way of, much less to influence, a just verdict in a suit at law. WHEREFORE, the appealed judgment of the Intermediate Appellate Court is hereby REVERSED, and the complaint against herein petitioners in Civil Case No. 3283 of the Court of First Instance of Bohol, Branch IV, is DISMISSED. No pronouncement as to costs. SO ORDERED. Cases 105-113 LACMAAN, FRECHIE O. 114. ROGELIO ENGADA vs. HON. COURT OF APPEALS, G.R. No. 140698. June 20, 2003 FACTS: On November 29, 1989, at about 1:30 in the afternoon, Edwin Iran was driving a blue Toyota Tamaraw jeepney bound for Iloilo City. On board was Sheila Seyan, the registered owner of the Tamaraw. While traversing the road along Barangay Acquit, Barotac Nuevo, the Tamaraw passengers allegedly saw from the opposite direction a speeding Isuzu pick-up, driven by petitioner Rogelio Engada. The pick-up had just negotiated a hilly gradient on the highway. When it was just a few meters away from the Tamaraw, the Isuzu pick-ups right signal light flashed, at the same time, it swerved to its left, encroaching upon the lane of the Tamaraw and headed towards a head-on collision course with it. Seyan shouted at Iran to avoid the pick-up. Iran swerved to his left but the pick-up also swerved to its right. Thus, the pick-up collided with the

Tamaraw, hitting the latter at its right front passenger side. The impact caused the head and chassis of the Tamaraw to separate from its body. Seyan was thrown out of the Tamaraw and landed on a ricefield. The pick-up stopped diagonally astride the center of the road. Seyan and Iran were brought to Barotac Nuevo Medicare Hospital. Seyan was profusely bleeding from her nose and was in a state of shock with her eyes closed. In the afternoon of the same day, November 29, 1989, she was transferred to St. Pauls Hospital in Iloilo City where she was confined. Her medical certificate revealed that she suffered a fracture on the right femur, lacerated wound on the right foot, multiple contusions, abrasions, blunt abdominal injury, and lacerations of the upper-lower pole of the right kidney. She was discharged from the hospital only on January 15, 1990. Seyan incurred P130,000 in medical expenses. The Toyota Tamaraw jeepney ended up in the junk heap. Its total loss was computed at P80,000. On August 25, 1994 the trial court found the accused guilty beyond reasonable doubt of Simple Imprudence resulting in physical injuries and damage to property defined and penalized in Article 263, paragraph 4 and in relation with Article 365, paragraph 2 of the Revised Penal Code, hereby sentences the accused Rogelio Engada to suffer imprisonment of one (1) month and one (1) day of arresto mayor. Accused is further ordered to pay complainant Mrs. Sheila Seyan the amount of P51,000.00 for the total destruction of the Toyota Tamaraw Jeepney and P110,000.00 for indemnification of hospital and medical expenses, and to pay the cost of the suit. Petitioner appealed to the Court of Appeals. On May 31, 1999, the Court of Appeals dismissed the appeal and affirmed with modification the trial courts decision as to the penalty imposed upon the accused who is hereby sentenced to suffer imprisonment of four (4) months of arresto mayor. ISSUE: Whether or not the Court of Appeals err in finding that the action of petitioner, Rogelio Engada, was the proximate cause of the collision. RULING: For failing to observe the duty of diligence and care imposed on drivers of vehicles abandoning their lane, petitioner must be held liable. Iran could not be faulted when in his attempt to avoid the pick-up, he swerved to his left. Petitioners acts had put Iran in an emergency situation which forced him to act quickly. 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. Petitioner tries to extricate himself from liability by invoking the doctrine of last clear chance. He avers that between him and Iran, the latter had the last clear chance to avoid the collision, hence Iran must be held liable. The doctrine of last clear chance states that a person who has the last clear chance or opportunity of avoiding an accident, notwithstanding the negligent acts of his opponent, is considered in law solely responsible for the consequences of the accident. But as already stated on this point, no convincing evidence was adduced by petitioner to support his invocation of the above cited doctrine. Instead, what has been shown is the presence of an emergency and the proper application of the emergency

rule. Petitioners act of swerving to the Tamaraws lane at a distance of 30 meters from it and driving the Isuzu pick-up at a fast speed as it approached the Tamaraw, denied Iran time and opportunity to ponder the situation at all. There was no clear chance to speak of. Accordingly, the Court of Appeals did not err in holding petitioner responsible for the vehicular collision and the resulting damages, including the injuries suffered by Mrs. Sheila Seyan and the total loss of the Tamaraw jeepney. It also did not err in imposing on petitioner the sentence of four (4) months of arresto mayor. 115. PANTRANCO NORTH EXPRESS, INC. VS. MARICAR BAESA FACTS: At about 7:00 oclock in the morning of June 12, 1981, the spouses Ceasar and Marilyn Baesa and their children Harold Jim, Marcelino and Maricar, together with spouses David Ico and Fe O. Ico with their son Erwin Ico and seven other persons, were aboard a passenger jeepney on their way to a picnic at Malalam River, Ilagan, Isabela, to celebrate the fifth wedding anniversary of Ceasar and Marilyn Baesa. The group, numbering fifteen (15) persons, rode in the passenger jeepney driven by David Ico, who was also the registered owner thereof. From Ilagan, Isabela, they proceeded to Barrio Capayacan to deliver some viands to one Mrs. Bascos and thenceforth to San Felipe, taking the highway going to Malalam River. Upon reaching the highway, the jeepney turned right and proceeded to Malalam River at a speed of about 20 kph. While they were proceeding towards Malalam River, a speeding PANTRANCO bus from Aparri, on its regular route to Manila, encroached on the jeepneys lane while negotiating a curve, and collided with it. As a result of the accident David Ico, spouses Ceasar Baesa and Marilyn Baesa and their children, Harold Jim and Marcelino Baesa, died while the rest of the passengers suffered injuries. The jeepney was extensively damaged. After the accident the driver of the PANTRANCO Bus, Ambrosio Ramirez, boarded a car and proceeded to Santiago, Isabela. From that time on up to the present, Ramirez has never been seen and has apparently remained in hiding. All the victims and/or their surviving heirs except herein private respondents settled the case amicably under the No Fault insurance coverage of PANTRANCO. On July 3, 1984, the Court of First Instance of Pangasinan rendered a decision against PANTRANCO awarding the total amount of Two Million Three Hundred Four Thousand Six Hundred Forty-Seven Pesos (P2,304,647.00) as damages, plus 10% thereof as attorneys fees and costs to Maricar Baesa in Civil Case No. 561-R, and the total amount of Six Hundred Fifty Two Thousand Six Hundred Seventy-Two Pesos (P652,672.00) as damages, plus 10% thereof as attorneys fees and costs to Fe Ico and her children in Civil Case No. 589-R. On appeal, the cases were consolidated and the Court of Appeals modified the decision of the trial court by ordering PANTRANCO to pay the total amount of One Million One Hundred Eighty-Nine Thousand Nine Hundred Twenty-Seven Pesos (P1,189,927.00) as damages, plus Twenty Thousand Pesos (P20,000.00) as attorneys fees to Maricar Baesa, and the total amount of Three Hundred Forty-Four Thousand Pesos (P344,000.00) plus Ten Thousand Pesos (P10,000.00) as attorneys fees to Fe Ico and her children, and to pay the costs in both cases. PANTRANCO filed a motion for reconsideration of the Court of Appeals decision, but on June 26, 1987, it denied the same for lack of merit. ISSUES:

1. Whether or not the Court of Appeals erred in applying the doctrine of the last clear chance. 2. Whether or not the petitioner had observed the diligence of a good father of a family to prevent damage. 3. Whether or not the Court of Appeals erred in fixing the damages for the loss of earning capacity of the deceased victims. RULING: 1. The above contention of petitioner is manifestly devoid of merit. Contrary to the petitioners contention, the doctrine of last clear chance finds no application in this case. For the doctrine to be applicable, it is necessary to show that the person who allegedly had the last opportunity to avert the accident was aware of the existence of the peril or should, with exercise of due care, have been aware of it. One cannot be expected to avoid an accident or injury if he does not know or could not have known the existence of the peril. In this case, there is nothing to show that the jeepney driver David Ico knew of the impending danger. When he saw at a distance that the approaching bus was encroaching on his lane, he did not immediately swerve the jeepney to the dirt shoulder on his right since he must have assumed that the bus driver will return the bus to its own lane upon seeing the jeepney approaching from the opposite direction. Petitioners misplaced reliance on the aforesaid law is readily apparent in this case. The cited law itself provides that it applies only to vehicles entering a through highway or a stop intersection. At the time of the accident, the jeepney had already crossed the intersection and was on its way to Malalam River. Petitioner itself cited Fe Icos testimony that the accident occurred after the jeepney had travelled a distance of about two (2) meters from the point of intersection. In fact, even the witness for the petitioner, Leo Marantan, testified that both vehicles were coming from opposite directions, clearly indicating that the jeepney had already crossed the intersection. Considering the foregoing, the Court finds that the negligence of petitioners driver in encroaching into the lane of the incoming jeepney and in failing to return the bus to its own lane immediately upon seeing the jeepney coming from the opposite direction was the sole and proximate cause of the accident without which the collision would not have occurred. There was no supervening or intervening negligence on the part of the jeepney driver which would have made the prior negligence of petitioners driver a mere remote cause of the accident. 2. The Court finds the above contention unmeritorious. The finding of negligence on the part of its driver Ambrosio Ramirez gave rise to the presumption of negligence on the part of petitioner and the burden of proving that it exercised due diligence not only in the selection of its employees but also in adequately supervising their work rests with the petitioner (Lilius v. Manila Railroad Company, 59 Phil. 758 (1934), Umali v. Bacani, G.R. No. L-40570, June 30, 1976, 69 SCRA 623.] Contrary to petitioners claim, there is no presumption that the usual recruitment procedures and safety standards were observed. The mere issuance of rules and regulations and the formulation of various company policies on safety, without showing that they are being complied with, are not sufficient to exempt petitioner from liability arising from the negligence of its employee. It is incumbent upon petitioner to show

that in recruiting and employing the erring driver, the recruitment procedures and company policies on efficiency and safety were followed. Petitioner failed to do this. Hence, the Court finds no cogent reason to disturb the finding of both the trial court and the Court of Appeals that the evidence presented by the petitioner, which consists mainly of the uncorroborated testimony of its Training Coordinator, is insufficient to overcome the presumption of negligence against petitioner. 3. The Court finds that the Court of Appeals committed no reversible error in fixing the amount of damages for the loss of earning capacity of the deceased victims. While it is true that private respondents should have presented documentary evidence to support their claim for damages for loss of earning capacity of the deceased victims, the absence thereof does not necessarily bar the recovery of the damages in question. The testimony of Fe Ico and Francisca Bascos as to the earning capacity of David Ico and the spouses Baesa, respectively, are sufficient to establish a basis from which the court can make a fair and reasonable estimate of the damages for the loss of earning capacity of the three deceased victims. Moreover, in fixing the damages for loss of earning capacity of a deceased victim, the court can consider the nature of his occupation, his educational attainment and the state of his health at the time of death. However, it should be pointed out that the Court of Appeals committed error in fixing the compensatory damages for the death of Harold Jim Baesa and Marcelino Baesa. Respondent court awarded to plaintiff (private respondent) Maricar Baesa Thirty Thousand Pesos (P30,000.00) as compensatory damages for the death of Harold Jim Baesa and Marcelino Baesa. [CA Decision, p.14; Rollo, 57.] In other words, the Court of Appeals awarded only Fifteen Thousand Pesos (P15,000.00) as indemnity for the death of Harold Jim Baesa and another Fifteen Thousand Pesos (P15,000.00) for the death of Marcelino Baesa. This is clearly erroneous. In the case of People v. de la Fuente, G.R. Nos. 63251-52, December 29, 1983, 126 SCRA 518, the indemnity for the death of a person was fixed by this Court at Thirty Thousand Pesos (P30,000.00). Plaintiff Maricar Baesa should therefore be awarded Sixty Thousand Pesos (P60,000.00) as indemnity for the death of her brothers, Harold Jim Baesa and Marcelino Baesa or Thirty Thousand Pesos (P30,000.00) for the death of each brother. The other items of damages awarded by respondent court which were not challenged by the petitioner are hereby affirmed. 116. LBC AIR CARGO, INC., VS. HON. COURT OF APPEALS FACTS: On November 15, 1987, at about 11:30 in the morning, Rogelio Monterola, a licensed driver, was traveling on board his Suzuki motorcycle towards Mangagoy on the right lane along a dusty national road in Bislig, Surigao del Sur. At about the same time, a cargo van of the LBC Air Cargo Incorporated, driven by defendant Jaime Tano, Jr., was coming from the opposite direction on its way to the Bislig Airport. On board were passengers Fernando Yu, Manager of LBC Air Cargo, and his son who was seated beside Tano. When Tano was approaching the vicinity of the airport road entrance on his left, he saw two vehicles racing against each other from the opposite direction. Tano stopped his vehicle and waited for the two racing vehicles to pass by. The stirred cloud of dust made visibility extremely bad. Instead of waiting for the dust to settled, Tano started to make a sharp left turn towards the airport road. When he was about to reach the center of the right lane, the motorcycle driven by Monterola suddenly emerged

from the dust and smashed head-on against the right side of the LBC van. Monterola died from the severe injuries he sustained. A criminal case for "homicide thru reckless imprudence" was filed against Tano. A civil suit was likewise instituted by the heirs of deceased Monterola against Tano, along with Fernando Yu and LBC Air Cargo Incorporated, for the recovery of damages. The two cases were tried jointly by the Regional Trial Court, Branch 29, of Surigao del Sur. On 29 July 1990, the trial court dismissed both cases on the ground that the proximate cause of the "accident" was the negligence of deceased Rogelio Monterola. . On 18 July 1991, the appellate court reversed the court a quo. ISSUES: 1. Whether or not the Court of Appeals erred in finding that Jaime Tano, Jr. was negligent in the driving of his vehicle and in failing to give a signal to approaching vehicles of his intention to make a left turn. 2. Whether or not the Court of Appeals erred in not finding that the proximate cause of the accident was the victim's negligence in the driving of his motorcycle in a very fast speed and thus hitting the petitioner's cargo van RULING: 1. Petitioners poorly invoke the doctrine of "last clear chance" (also referred to, at times, as "supervening negligence" or as "discovered peril"). The doctrine, in essence, is to the effect that where both parties are negligent, but the negligent act of one is appreciably later in time than that of the other, or when it is impossible to determine whose fault or negligence should be attributed to the incident, the one who had the last clear opportunity to avoid the impending harm and failed to do so is chargeable with the consequences thereof. Stated differently, the rule would also mean that an antecedent negligence of a person does not preclude the recovery of damages for supervening negligence of, or bar a defense against the liability sought by, another if the latter, who had the last fair chance, could have avoided the impending harm by the exercise of due diligence (Pantranco North Express, Inc. vs. Baesa, 179 SCRA 384; Glan People's Lumber and Hardware vs. Intermediate Appellate Court, 173 SCRA 464). In the case at bench, the victim was traveling along the lane where he was rightly supposed to be. The incident occurred in an instant. No appreciable time had elapsed, from the moment Tano swerved to his left to the actual impact; that could have afforded the victim a last clear opportunity to avoid the collision. It is true however, that the deceased was not all that free from negligence in evidently speeding too closely behind the vehicle he was following. We, therefore, agree with the appellate court that there indeed was contributory negligence on the victim's part that could warrant a mitigation of petitioners liability for damages. 2. From every indication, the proximate cause of the accident was the negligence of Tano who, despite extremely poor visibility, hastily executed a left turn (towards the Bislig airport road entrance) without first waiting for the dust to settle. It was this negligent act of Tano, which had placed his vehicle (LBC van) directly on the path of the motorcycle coming from the opposite direction, that almost instantaneously caused the collision to occur. Simple prudence required him not

to attempt to cross the other lane until after it would have been safe from and clear of any oncoming vehicle. 117. SAUDI ARABIAN AIRLINES vs. COURT OF APPEALS FACTS: On January 21, 1988 SAUDIA hired Milagros P. Morada as a Flight Attendant for its airlines based in Jeddah, Saudi Arabia. On April 27, 1990, while on a lay-over in Jakarta, Indonesia, Morada went to a disco dance with fellow crew members Thamer AlGazzawi and Allah Al-Gazzawi, both Saudi nationals. Allah left on some pretext and Thamer attempted to rape her. The Indonesian police came and arrested Thamer and Allah Al-Gazzawi, the latter as an accomplice. When she returned to Jeddah, several SAUDIA officials interrogated her about the Jakarta incident. On June 28, 1993, a Saudi judge interrogated her through an interpreter about the Jakarta incident then they let her go. Just as her plane was about to take off, a SAUDIA officer told her that the airline had forbidden her to take flight. On July 3, 1993 a SAUDIA legal officer escorted her to the same court where the judge, to her astonishment and shock, rendered a decision, translated to her in English, sentencing her to five months imprisonment and to 286 lashes. Only then did she realized that the Saudi court had tried her, together with Thamer and Allah, for what happened in Jakarta. The court found Morada guilty of (1) adultery; (2) going to a disco, dancing and listening to the music in violation of Islamic laws; and (3) socializing with the male crew, in contravention of Islamic tradition. Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her and allowed her to leave Saudi Arabia. Shortly before her return to Manila, she was terminated from the service by SAUDIA, without her being informed of the cause. The trial court issued an Order dated August 29, 1994 denying the Motion to Dismiss Amended Complaint filed by Saudia. Respondent Judge subsequently issued another Order dated February 2, 1995, denying SAUDIA's Motion for Reconsideration. However, during the pendency of the instant Petition, respondent Court of Appeals rendered the Decision dated April 10, 1996, now also assailed. It ruled that the Philippines is an appropriate forum considering that the Amended Complaint's basis for recovery of damages is Article 21 of the Civil Code, and thus, clearly within the jurisdiction of respondent Court. It further held that certiorari is not the proper remedy in a denial of a Motion to Dismiss, inasmuch as the petitioner should have proceeded to trial, and in case of an adverse ruling, find recourse in an appeal. ISSUE: Whether or not the Court of Appeals erred in ruling that in this case Philippine Law should govern. RULING: As to the choice of applicable law, we note that choice-of-law problems seek to answer two important questions: (1) What legal system should control a given situation where some of the significant facts occurred in two or more states; and (2) to what extent should the chosen legal system regulate the situation. Several theories have been propounded in order to identify the legal system that should ultimately control. Although ideally, all choice-of-law theories should intrinsically advance both notions of justice and predictability, they do not always do so. The forum is then faced with the problem of deciding which of these two important values should be stressed. Before a choice can be made, it is necessary for us to determine under what category a certain set of facts or rules fall. This process is known as "characterization", or the "doctrine of

qualification". It is the "process of deciding whether or not the facts relate to the kind of question specified in a conflicts rule." The purpose of "characterization" is to enable the forum to select the proper law. Considering that the complaint in the court a quo is one involving torts, the "connecting factor" or "point of contact" could be the place or places where the tortious conduct or lex loci actus occurred. And applying the torts principle in a conflicts case, we find that the Philippines could be said as a situs of the tort (the place where the alleged tortious conduct took place). This is because it is in the Philippines where petitioner allegedly deceived private respondent, a Filipina residing and working here. According to her, she had honestly believed that petitioner would, in the exercise of its rights and in the performance of its duties, "act with justice, give her due and observe honesty and good faith." Instead, petitioner failed to protect her, she claimed. That certain acts or parts of the injury allegedly occurred in another country is of no moment. For in our view what is important here is the place where the over-all harm or the totality of the alleged injury to the person, reputation, social standing and human rights of complainant, had lodged, according to the plaintiff below (herein private respondent). All told, it is not without basis to identify the Philippines as the situs of the alleged tort. Moreover, with the widespread criticism of the traditional rule of lex loci delicti commissi, modern theories and rules on tort liability have been advanced to offer fresh judicial approaches to arrive at just results. In keeping abreast with the modern theories on tort liability, we find here an occasion to apply the "State of the most significant relationship" rule, which in our view should be appropriate to apply now, given the factual context of this case. In applying said principle to determine the State which has the most significant relationship, the following contacts are to be taken into account and evaluated according to their relative importance with respect to the particular issue: (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered. Lastly, no error could be imputed to the respondent appellate court in upholding the trial court's denial of defendant's (herein petitioner's) motion to dismiss the case. Not only was jurisdiction in order and venue properly laid, but appeal after trial was obviously available, and expeditious trial itself indicated by the nature of the case at hand. Indubitably, the Philippines is the state intimately concerned with the ultimate outcome of the case below, not just for the benefit of all the litigants, but also for the vindication of the country's system of law and justice in a transnational setting. With these guidelines in mind, the trial court must proceed to try and adjudge the case in the light of relevant Philippine law, with due consideration of the foreign element or elements involved. Nothing said herein, of course, should be construed as prejudging the results of the case in any manner whatsoever. 118. GLOBE MACKAY CABLE AND RADIO CORP. vs. THE HONORABLE CA FACTS: Restituto M. Tobias was employed by Globe Mackay Cable and Radio Corporation (GLOBE MACKAY) in a dual capacity as a purchasing agent and administrative assistant to the engineering operations manager. In 1972, GLOBE MACKAY discovered fictitious purchases and other fraudulent transactions for which it lost several thousands of pesos. According to Tobias, it was he who actually discovered

the anomalies and reported them on November 10, 1972 to his immediate superior Eduardo T. Ferraren and to petitioner Herbert C. Hendry who was then the Executive Vice-President and General Manager of GLOBE MACKAY. On November 11, 1972, one day after Tobias made the report, petitioner Hendry confronted him by stating that he was the number one suspect, and ordered him to take a one week forced leave, not to communicate with the office, to leave his table drawers open, and to leave the office keys. On November 20, 1972, when Tobias returned to work after the forced leave, petitioner Hendry went up to him and called him a "crook" and a "swindler." Tobias was then ordered to take a lie detector test. He was also instructed to submit specimen of his handwriting, signature, and initials for examination by the police investigators to determine his complicity in the anomalies. Tobias filed a civil case for damages anchored on alleged unlawful, malicious, oppressive, and abusive acts of petitioners. Petitioner Hendry, claiming illness, did not testify during the hearings. The Regional Trial Court (RTC) of Manila, Branch IX, through Judge Manuel T. Reyes rendered judgment in favor of private respondent by ordering petitioners to pay him eighty thousand pesos (P80,000.00) as actual damages, two hundred thousand pesos (P200,000.00) as moral damages, twenty thousand pesos (P20,000.00) as exemplary damages, thirty thousand pesos (P30,000.00) as attorney's fees, and costs. Petitioners appealed the RTC decision to the Court of Appeals. On the other hand, Tobias appealed as to the amount of damages. However, the Court of Appeals, an a decision dated August 31, 1987 affirmed the RTC decision in toto. Petitioners' motion for reconsideration having been denied, the instant petition for review on certiorari was filed. ISSUES: Whether or not petitioners are liable for damages to respondent Tobias. RULING: Considering the extent of the damage wrought on Tobias, the Court finds that, contrary to petitioners' contention, the amount of damages awarded to Tobias was reasonable under the circumstances. According to the principle of damnum absque injuria, damage or loss which does not constitute a violation of a legal right or amount to a legal wrong is not actionable [Escano v. CA, G.R. No. L-47207, September 25, 1980, 100 SCRA 197; See also Gilchrist v. Cuddy 29 Phil, 542 (1915); The Board of Liquidators v. Kalaw, G.R. No. L-18805, August 14, 1967, 20 SCRA 987]. This principle finds no application in this case. It bears repeating that even granting that petitioners might have had the right to dismiss Tobias from work, the abusive manner in which that right was exercised amounted to a legal wrong for which petitioners must now be held liable. Moreover, the damage incurred by Tobias was not only in connection with the abusive manner in which he was dismissed but was also the result of several other quasi-delictual acts committed by petitioners. However, the Court has already ruled in Wassmer v. Velez, G.R. No. L-20089, December 26, 1964, 12 SCRA 648, 653, that per express provision of Article 2219 (10) of the New Civil Code, moral damages are recoverable in the cases mentioned in Article 21 of said Code." Hence, the Court of Appeals committed no error in awarding moral damages to Tobias. Although Article 2231 of the Civil Code provides that "in quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence," the Court, in Zulueta v. Pan American World Airways, Inc., G.R. No. L- 28589, January 8, 1973, 49

SCRA 1, ruled that if gross negligence warrants the award of exemplary damages, with more reason is its imposition justified when the act performed is deliberate, malicious and tainted with bad faith. As in the Zulueta case, the nature of the wrongful acts shown to have been committed by petitioners against Tobias is sufficient basis for the award of exemplary damages to the latter. 119. LLORENTE vs. THE SANDIGANBAYAN FACTS: Atty. Llorente was employed in the PCA, a public corporation (Sec. 1, PD 1468) from 1975 to August 31, 1986, when he resigned. He occupied the positions of Assistant Corporate Secretary for a year, then Corporate Legal Counsel until November 2, 1981 and, finally, Deputy Administrator for Administrative Services, Finance Services, Legal Affairs Departments. As a result of a massive reorganization in 1981, hundreds of PCA employees resigned effective October 31, 1981. Among them were Mr. Curio, Mrs. Perez, Mr. Azucena, and Mrs. Javier. They were all required to apply for PCA clearances in support of their gratuity benefits. After the clearance was signed by the PCA officers concerned, it was to be approved, first, by Atty. Llorente, in the case of a rank-and-file employee, or by Col. Duefias, the acting administrator, in the case of an officer, and then by Atty. Rodriguez, the corporate auditor. The clearanceof Mrs. Javier of the same date of October 30, 1991 was also signed by all PCA officers concerned, including Mrs. Sotto even though the former had unsettled obligations noted thereon. The clearance of Mr. Curio dated November 4,1981, likewise favorably passed all officers concerned, including Mrs. Sotto, the latter signing despite the notation handwritten on December 8, 1981. On December 1, 1982, Mr. Curio brought the matter of his unapproved clearance to Col. Dueas. His voucher was also approved, and his gratuity benefits paid to him in the middle of December 1986, after deducting those obligations. Between December 1981 and December 1986, Mr. Curio failed to get gainful employment; as a result, his family literally went hungry, In 1981, he applied for work with the Philippine Cotton Authority, but was refused, because he could not present his PCA clearance. According to the Sandiganbayan, the petitioner was guilty nonetheless of abuse of right under Article 19 of the Civil Code and as a public officer, he was liable for damages suffered by the aggrieved party (under Article 27). ISSUE: Whether or not the petitioner is liable under Article 19 of the Civil Code and liable for damages suffered by the aggrieved party. RULING: It is no defense that the petitioner was motivated by no ill-will (a grudge, according to the Sandiganbayan), since the facts speak for themselves. It is no defense either that he was, after all, complying merely with legal procedures since, as we indicated, he was not as strict with respect to the three retiring other employees. There can be no other logical conclusion that he was acting unfairly, no more, no less, to Mr. Curio. It is the essence of Article 19 of the Civil Code, under which the petitioner was made to pay damages, together with Article 27, that the performance of duty be done with justice and good faith. In the case of Velayo vs. Shell Co. of the Philippines, we held the defendant liable under Article 19 for disposing of its propertv a perfectly legal act in order to escape the reach of a creditor. In two fairly more recent cases, Sevilla vs. Court of Appeals and Valenzuela vs. Court of Appeals, we held that a principal is liable

under Article 19 in terminating the agency again, a legal act when terminating the agency would deprive the agent of his legitimate business. We believe that the petitioner is liable under Article 19. The Court finds the award of P90,000.00 to be justified bv Article 2202 of the Civil Code, which holds the defendant liable for all "natural and probable" damages. Hennenegildo Cunct presented evidence that as a consequence of the petitioner's refusal to clear him, he failed to land a job at the Philippine Cotton Authority and Philippine First Marketing Authority. He also testified that a job in either office would have earned him salary of P2,500.00 a month, or P150,000.00 in five years. Deducting his probable expenses of reasonably about P1,000.00 a month or P60,000.00 in five years, the petitioner owes him a total actual damages of P90,000.00 120. ARTURO P. VALENZUELA vs. THE HONORABLE COURT OF APPEALS FACTS: Arturo P. Valenzuela (Valenzuela) is a General Agent of private respondent Philippine American General Insurance Company, Inc. (Philamgen) since 1965. As such, he was authorized to solicit and sell in behalf of Philamgen all kinds of non-life insurance, and in consideration of services rendered was entitled to receive the full agent's commission of 32.5% from Philamgen under the scheduled commission rates. From 1973 to 1975, Valenzuela solicited marine insurance from one of his clients, the Delta Motors, Inc. (Division of Electronics Airconditioning and Refrigeration) in the amount of P4.4 Million from which he was entitled to a commission of 32%. However, Valenzuela did not receive his full commission which amounted to P1.6 Million from the P4.4 Million insurance coverage of the Delta Motors. During the period 1976 to 1978, premium payments amounting to P1,946,886.00 were paid directly to Philamgen and Valenzuela's commission to which he is entitled amounted to P632,737.00. In 1977, Philamgen started to become interested in and expressed its intent to share in the commission due Valenzuela on a fifty-fifty basis. Valenzuela refused. On February 8, 1978 Philamgen and its President, Bienvenido M. Aragon insisted on the sharing of the commission with Valenzuela. Because of the refusal of Valenzuela, Philamgen and its officers, namely: Bienvenido Aragon, Carlos Catolico and Robert E. Parnell took drastic action against Valenzuela. They: (a) reversed the commission due him by not crediting in his account the commission earned from the Delta Motors, Inc. insurance \ (b) placed agency transactions on a cash and carry basis; (c) threatened the cancellation of policies issued by his agency ; and (d) started to leak out news that Valenzuela has a substantial account with Philamgen. All of these acts resulted in the decline of his business as insurance agent Then on December 27, 1978, Philamgen terminated the General Agency Agreement of Valenzuela. After due proceedings, the trial court found that since defendants are not justified in the termination of Arturo P. Valenzuela as one of their General Agents, defendants shall be liable for the resulting damage and loss of business of Arturo P. Valenzuela. On January 29, 1988, respondent Court of Appeals promulgated its decision in the appealed case. ISSUES: Whether or not Philamgen and/or its officers can be held liable for damages due to the termination of the General Agency Agreement it entered into with the petitioners.

RULING: Prescinding from the foregoing, and considering that the private respondents terminated Valenzuela with evident mala fide it necessarily follows that the former are liable in damages. Respondent Philamgen has been appropriating for itself all these years the gross billings and income that it unceremoniously took away from the petitioners. The preponderance of the authorities sustain the preposition that a principal can be held liable for damages in cases of unjust termination of agency. In Danon v. Brimo, 42 Phil. 133 [1921]), this Court ruled that where no time for the continuance of the contract is fixed by its terms, either party is at liberty to terminate it at will, subject only to the ordinary requirements of good faith. The right of the principal to terminate his authority is absolute and unrestricted, except only that he may not do so in bad faith. The trial court in its decision awarded to Valenzuela the amount of Seventy Five Thousand Pesos (P75,000,00) per month as compensatory damages from June 1980 until its decision becomes final and executory. This award is justified in the light of the evidence extant on record showing that the average gross premium collection monthly of Valenzuela over a period of four (4) months from December 1978 to February 1979, amounted to over P300,000.00 from which he is entitled to a commission of P100,000.00 more or less per month. Moreover, his annual sales production amounted to P2,500,000.00 from where he was given 32.5% commissions. Under Article 2200 of the new Civil Code, "indemnification for damages shall comprehend not only the value of the loss suffered, but also that of the profits which the obligee failed to obtain." The circumstances of the case, however, require that the contractual relationship between the parties shall be terminated upon the satisfaction of the judgment. No more claims arising from or as a result of the agency shall be entertained by the courts after that date. 121. SERGIO AMONOY vs. Spouses GUTIERREZ FACTS: On 12 January 1965, the Project of Partition submitted was approved and two (2) of the said lots were adjudicated to Asuncion Pasamba and Alfonso Formilda. The Attorney's fees charged by Amonoy was P27,600.00 and on 20 January 1965 Asuncion Pasamba and Alfonso Formida executed a deed of real estate mortgage on the said two (2) lots adjudicated to them, in favor of Amonoy to secure the payment of his attorney's fees. But it was only on 6 August 1969 after the taxes had been paid, the claims settled and the properties adjudicated, that the estate was declared closed and terminated.Asuncion Pasamba died on 24 February 1969 while Alfonso Fornilda passsed away on 2 July 1969. Among the heirs of the latter was his daughter, plaintiff-appellant Angela Gutierrez. On 28 September 1972 judgment was rendered in favor of Amonoy requiring the heirs to pay within 90 days the P27,600.00 secured by the mortgage, P11,880.00 as value of the harvests, and P9,645.00 as another round of attorney's fees. Failing in that, the two (2) lots would be sold at public auction. They failed to pay. In its January 27, 1993 Decision, the RTC dismissed respondents' suit. On appeal, the CA set aside the lower court's ruling and ordered petitioner to pay respondents P250,000 as actual damages. Petitioner then filed a Motion for Reconsideration, which was also denied. ISSUE: Whether or not the Court of Appeals was correct was correct in deciding that the petition was liable to the respondents for damages.

RULING: Well-settled is the maxim that damage resulting from the legitimate exercise of a person's rights is a loss without injury- damnum absque injuria - for which the law gives no remedy. In other words, one who merely exercises one's rights does no actionable injury and cannot be held liable for damages. Clearly then, the demolition of respondents' house by petitioner, despite his receipt of the TRO, was not only an abuse but also an unlawful exercise of such right. In insisting on his alleged right, he wantonly violated this Court's Order and wittingly caused the destruction of respondents; house.1wphi1.nt Obviously, petitioner cannot invoke damnum absque injuria, a principle premised on the valid exercise of a right.Anything less or beyond such exercise will not give rise to the legal protection that the principle accords. And when damage or prejudice to another is occasioned thereby, liability cannot be obscured, much less abated. In the ultimate analysis, petitioner's liability is premised on the obligation to repair or to make whole the damage caused to another by reason of one's act or omission, whether done intentionally or negligently and whether or not punishable by law. 122. JOSUE ARLEGUI vs. HON. COURT OF APPEALS FACTS: The object of the controversy is a residential apartment unit (no. 15) located at the corner of Romualdez and Kalentong Streets in Mandaluyong City. The said property was formerly owned by Serafia Real Estate, Incorporated (hereinafter referred to as Serafia), a company owned by Alberto, Alfonso and Simeon, all surnamed Barretto, and their siblings Rosa B. Ochoa and Teresita B. Alcantara. For more than twenty (20) years, unit no. 15 was leased by Serafia to the spouses Gil and Beatriz Genguyon. In a letter dated March 26, 1984, the Genguyon spouses, along with the other tenants in the apartment building were informed by Alberto Barretto that Serafia and its assets had already been assigned and transferred to A.B. Barretto Enterprises. Apprehensive that they were about to be ejected from their respective units, the tenants formed an organization called the Barretto Apartment Tenants Association. They elected officers from among themselves to represent them in the negotiations with A.B. Barretto Enterprises for the purchase of their respective apartment units. Among those elected were Josue Arlegui as vice-president and Mateo Tan Lu as auditor of the association. Sometime thereafter, believing that negotiations were still ongoing, the Genguyons were surprised to learn on January 23, 1987 that the unit they were leasing had already been sold to Mateo Tan Lu. This notwithstanding, the Genguyons continued to occupy the subject premises and paid the rentals therefore. The following year, or on July 7, 1988, the Genguyons were informed that Mateo Tan Lu had sold the subject apartment unit to Josue Arlegui. Not long thereafter, they received a letter from Arleguis lawyer demanding that they vacate the premises. When they failed to accede to Arleguis demand, the latter filed an action for ejectment against the Genguyons before the Metropolitan Trial Court of Mandaluyong City.. On January 11, 1990, the RTC ordered the issuance of a writ of preliminary injunction directing the MTC to desist from taking further action in the ejectment case pending before it.

On February 14, 1996, the Court of Appeals rendered judgment in CA-G.R. CV No. 32833, annulling and setting aside the RTC decision. ISSUES: Whether or not the Court of Appeals erred in holding that the private respondents are entitled to damages instead of the petitioner. RULING: There is no doubt that because of Tan Lu and Arleguis violation of the trust and confidence reposed in them as officers and negotiators in behalf of the tenantsmembers of the Association, damages have accrued upon spouses Genguyons for which they must be indemnified. Article 19 of the New Civil Code of the Philippines exhorts the citizens in the correct exercise of rights and performance of duties in this wise: Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. This principle of abuse of rights is based upon the famous maxim suum jus summa injuria (the abuse of a right is the greatest possible wrong). The acts of Tan Lu and Arlegui directly violate the principles enunciated in Art. 19 which declares that every person must practice justice, honesty and good faith in his dealings with his fellowmen. That there was a valid pact or agreement among the Association members and their entrusted officers charged with the negotiations, is an accepted fact. As two of the three entrusted officers charged with the negotiations, Tan Lu and Arlegui fall within the purview of Art. 19 which is also implemented by Art. 21, New Civil Code, a sequent of Art. 19, which declares that "[A]ny person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. In addition, Articles 2221 and 2222 of the New Civil Code provide that the Court may award nominal damages: (1) in order that a right of the plaintiff, which has been violated or invaded, may be vindicated or recognized; or (2) in every case where any property right has been invaded. Under the circumstances, whether as compensatory or nominal damages, the amount of P35,000.00, inclusive of attorneys fees, is just and reasonable. Cases114-122 TAMANG, SWITLE MAE A. 123. PETROPHIL CORPORATION vs. COURT OF APPEALS FACTS: On December 27, 1970, Petrophil Corporation (Petrophil) entered into contract with Dr. Amanda Ternida-Cruz, allowing the latter to haul and transport any and all packages and/or bulk products of Petrophil. The contract provided that (1) Petrophil could terminate the contract for breach, negligence, discourtesy, improper and/or inadequate performance or abandonment; (2) that Dr. Cruz is required to reserve the use of at least two (2) units of tank trucks solely for the hauling requirements of Petrophil; and (3) that the contact shall be for an indefinite period, provided that

Petrophil may terminate said contract at any time with 30 days prior written notice. In a letter dated May 21, 1987, Petrophil, advised Dr. Cruz that it was terminating her hauling contract in accordance with what the provisions of the contract. Dr. Cruz filed with the Regional Trial Court of Manila, a complaint against Petrophil seeking the nullity of the termination of the contract and declaring its suspension as unjustified and contrary to its terms and conditions. Jessie de Vera, Marcial Mulig, Antonio and Rufino Cuenca, all tank truck drivers of Dr. Cruz, also filed a complaint for damages against Petrophil. The two cases consolidated and tried jointly. During the hearing, Dr. Cruz claimed that the termination of her hauling contract was a retaliation against her for allegedly sympathizing with the then striking Petrophil employees and for informing the PNOC president of anomalies perpetrated by some of its officers and employees. Driver Jessie de Vera corroborated these allegations and testified that before the termination of the contract, Petrophil officials reduced their hauling trips to make life harder for them so that they would resign from Dr: Cruz's employ, which in turn would result in the closure of her business. Petrophil on the other hand professed that the hauling trips were reduced not because Dr. Cruz was being punished, but because the company was assigning hauling trips on the basis of compartmentation and not on a first-come first-serve. Additionally, witnesses for Petrophil testified that on April 25, 1987, there was a strike at the Pandacan terminal and Dr. Cruz and her husband were at the picket line. They refused to load petroleum products, resulting in the disruption of delivery to service stations in Metro Manila and in the provinces, which in turn resulted in loss of sales and revenues. Because of Dr. Cruz's refusal to load, the management terminated the hauling contract The trial court ruled in favor of Dr Cruz and ordered Petrophil to pay Dr. Cruz the sum of P309,723.65 as unearned hauling charges and P20,000.00 as attorney's fees and expenses of suit and to pay Jessie de Vera and Rufino Cuenca the sums of P64,390.00 and P5,000.00 as unearned income and attorney's fees. The Court of Appeals sustained the trial court declaring that the termination of the contract was "for cause", and that the procedures set forth in petitioner's policy guidelines should be followed. Hence this petition. ISSUE: 1. Whether petitioner was guilty of arbitrary termination of the contract, which would entitle Dr. Cruz to damages. 2. Whether the Court of Appeals erred when it imposed a tortious liability where the requisites were not established by the evidence. RULING: We differ with Petrophil on the first issue. Recall that before Petrophil terminated the contract on May 25, 1987, there was a strike of its employees at the Pandacan terminal. Dr. Cruz and her husband were seen at the picket line and were reported to have instructed their truck drivers not to load petroleum products. At the resumption of the operation in Pandacan terminal, Dr. Cruz's contract was suspended for one week and eventually terminated. Based on these circumstances, the Court of Appeals like the trial court concluded that Petrophil terminated the contract because of

Dr. Cruz's refusal to load petroleum products during the strike. In respondent court's view, the termination appeared as a retaliation or punishment for her sympathizing with the striking employees. Nowhere in the record do we find that petitioner asked her to explain her actions. Petrophil simply terminated her contract. These factual findings are binding and conclusive on us, especially in the absence of any allegation that said findings are unsupported by the evidence, or that the appellate and trial courts misapprehended these facts.16 In terminating the hauling contract of Dr. Cruz without hearing her side on the factual context above described, a petitioner opened itself to a charge of bad faith. While Petrophil had the right to terminate the contract, petitioner could not act purposely to injure private respondents. In BPI Express Card Corporation vs. CA, 296 SCRA 260, 272 (1998), we held that there is abuse of a right under Article 19 if the following elements are present: 1) there is a legal right or duty; 2) which is exercised in bad faith; 3) for the sole purpose of prejudicing or injuring another. We find all these three elements present in the instant case. Hence, we are convinced that the termination by petitioner of the contract with Dr. Cruz calls for appropriate sanctions by way of damages. On the second assigned error, petitioner contends that the Court of Appeals erred when it imposed a tortious liability where the requisites therefor were not established by the evidence. According to petitioner, aside from the hearsay and inadmissible testimony of Jessie de Vera, there is no other evidence that the termination of the contract was done with deliberate intent to harm or for the sole purpose of prejudicing the respondentdrivers. Petitioner adds that the termination was an exercise of a right and directed primarily at Dr. Cruz. Article 20 of the Civil Code provides that every person who, contrary to law, willfully or negligently causes damage to another, shall indemnify the latter for the damage done. Petitioner might not have deliberately intended to injure the respondent-drivers. But as a consequence of its willful act directed against Dr. Cruz, respondent-drivers lost their jobs and consequently suffered loss of income. Note that under Article 20, there is no requirement that the act must be directed at a specific person, but it suffices that a person suffers damage as a consequence of a wrongful act of another in order that indemnity could be demanded from the wrongdoer.The appellate court did not err, given the circumstances of this case, in awarding damages to respondent-drivers. 124. VIRGINIA M. ANDRADE vs. COURT OF APPEALS FACTS: On July 6, 1971, Virginia Andrade was appointed as permanent teacher in the Division of City Schools, Manila and was initially assigned as English teacher at the Araullo High School, Manila. She was referred by Virginia Fermin to Dominador Wingsing principla of Araullo High School regarding her teaching load. However because of Andrades low teaching performance, she was referred back to Ms Fermin. Displeased from being referred back and forth from one person to another, she wrote a letter to Superintendent Arturo F. Coronel, Assistant Schools Division Superintendent of the Division of City Schools, Manila, requesting that she be given a teaching assignment. In an indorsement addressed to Superintendent Coronel, respondent Wingsing cited three (3) reasons why petitioner Andrade was not given any teaching load: (1) drastic drop of enrollment; (2) she was declared an excess teacher; and (3) she ranked lowest in

her performance rating hence, Superintendent Coronel informed that the she would be designated to a non-teaching position in the meantime. On October 4, 1985, Andrade made a request to Benedicto M. Hormilla, Chief of Personnel Services of the Division of City Schools of Manila, that she be transferred to Ramon Magsaysay High School in Manila, and said request was favorably acted upon by Superintendent Coronel. Andrade then reported for work at the Ramon Magsaysay High School, but in a letter of the same date, she relayed that she is withdrawing her request for transfer back at the Araullo High School. Thereafter, she discovered that her name has been deleted from the regular monthly payroll and transferred to a special voucher list. Andrade, distressed by the situation filed an action for damages with mandatory injunction against respondent Wingsing, English Department Head Fermin and Assistant Schools Division Superintendent Coronel before the Regional Trial Court Quezon City claiming that they conspired in depriving her of her teaching load and humiliated her further by excluding her name from the regular monthly payroll. In his answer, respondent Wingsing explained that the decrease in the enrollment for the school year 1985-1986 necessitated that a number of teachers be declared in a list as excess teachers, and as petitioner had the lowest performance rating, she was included in the said list and as for the deletion of Andrades name from the regular monthly payroll, Wingsing declared that he and his co-defendants were merely exercising and doing their duties in accordance with the existing school policies, rules and regulations. The trial court rendered its Decision absolving Virginia Fermin and Arturo Coronel, but held herein respondent Wingsing liable to petitioner for actual and compensatory damages in the amount of P93,575.99, attorneys fees in the sum of P10,000.00 and costs of suit. Wingsing appealed to the Court of Appeals, maintaining the necessity of declaring excess teachers, including the petitioner, during the subject school year and invoking regularity in the performance of his functions as principal of the Araullo High School. Finding merit in his argument, the appellate court reversed the decision of the trial court and denied Andrades motion for reconsideration. Hence this petition. ISSUE: Whether or not the act of Dominador S. Wingsing, Virginia E. Fermin and Arturo F. Coronel of withholding her teaching load and deleting her name in the payroll his attended by badfaith thus entitling her to collect damages. RULING: Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. While Article 19 of the New Civil Code may have been intended as a declaration of principle, the cardinal law on human conduct expressed in said article has given rise to certain rules, e.g., that where a person exercises his rights but does so arbitrarily or unjustly or performs his duties in a manner that is not in keeping with honesty and good faith, he opens himself to civil liability. The elements of abuse of ones rights under the said Article 19 are the following: (1) there is a legal right or duty; (2) which is exercised

in bad faith; (3) for the sole intent of prejudicing or injuring another. In this regard, it appeared that the complaint of petitioner Andrade failed to meet the second and third requirements. A careful review of the records reveals that the declaration of petitioner as an excess teacher was not motivated by any personal desire on the part of respondent Wingsing to cause her undue misery or injury, but merely the result of the valid exercise of authority. The decrease in the enrollment for the school year 1985-1986 in the Araullo High School resulted in a number of teachers being declared as excess teachers in the following subjects: Social Studies, 1; Math, 2, and English, 1. In exercising his judgment, the evidence reveals that respondent Wingsing was not at all dictated by whim or fancy, nor of spite against the petitioner but was rather guided by the following factors: qualification to teach, seniority, teaching performance and attitude towards the school community. For two (2) consecutive years petitioner received an unsatisfactory rating, the lowest, from two (2) English Department Heads, namely: Herminia Valdez and Virginia Fermin. Petitioner knew about her poor rating, but she refused to acknowledge it. She did not question nor contest the same. Homeroom teacher Zaida Perez and Remedios P. Rutaquio, a retired Supervisor of English, Division of City Schools, Manila, both testified that petitioner frequently absented herself from classes. Assistant Principal Romeo F. Amparado likewise testified that petitioner was often the subject of complaints from school personnel and students, one of which involved the slapping of a student without provocation, for which petitioner was suspended for one month without pay. Petitioner Andrade was therefore declared as an excess teacher, as rightfully recommended by private respondent, the latter being the school principal. It was a judgment made in good faith by respondent. Entrenched is the rule that bad faith does not simply connote bad judgment or negligence; it imputes a dishonest purpose or some moral obliquity and conscious doing of a wrong; a breach of sworn duty through some motive or intent or ill will; it partakes of the nature of fraud. In the case at bar, we find that there was no dishonest purpose, or some moral obliquity, or conscious doing of a wrong, or breach of a known duty, or some motive or interest or ill will that can be attributed to the private respondent. It appeared that efforts to accommodate petitioner were made as she was offered to handle two (2) non-teaching jobs, that is, to handle Developmental Reading lessons and be an assistant Librarian, pending her re-assignment or transfer to another work station, but she refused. The same would not have been proposed if the intention of private respondent were to cause undue hardship on the petitioner. Good faith is always presumed unless convincing evidence to the contrary is adduced. It is incumbent upon the party alleging bad faith to sufficiently prove such allegation. Absent enough proof thereof, the presumption of good faith prevails. In the case at bar, the burden of proving alleged bad faith therefore was with petitioner but she failed to discharge suchonus probandi. Without a clear and persuasive evidence of bad faith, the presumption of good faith in favor of private respondent stands. With regards to the deletion of petitioners name from the regular monthly payroll of teachers, we find the same to be merely the result of a school policy being implemented by the school personnel. Private respondent Wingsing had nothing to do with the preparation of the payroll as it was the school payroll clerk who prepared the same. As explained by payroll clerk Aida Soliman, petitioners name was not deleted from the regular monthly payroll but merely transferred to the last page of the roll since she failed to submit her Form 48 or Daily Time Record (DTR) sheet on time. The move was

made so that the other teachers would not be unduly prejudiced by the delayed release of petitioners salary, which as a policy was the consequence for late submission of DTRs. There was no showing that private respondent had a hand in this situation as Aida Soliman likewise revealed that the decision to transfer petitioners name on the last page of the payroll was made on the instruction of the Accounting Services upon discovery that she did not report to work on the first day of class. Indeed, after being declared as an excess teacher and having declined her transfer to Ramon Magsaysay High School, petitioners status could only be described as floating. She should have expected that there would be changes in her situation, and that she should not have immediately blamed it on others, more particularly on private respondent. Although there might have been a delay in the receipt of petitioners salary, we find that it was not as grave as she painted it out to be considering that she was nonetheless paid her salary until October 15, 1986. The only reason why she failed to receive her salary and benefits from October 16, 1986 to June 1988 was because she did not report for work during the said period due to her unjustified refusal to accept her assignment. 125. UNIVERSITY OF THE EAST vs. ROMEO A. JADER, FACTS: Romeo Jader was a law student of University of the East from 1984-1988. In his first Semester in his last year, he failed in his subject Practice Court I and was given an incomplete grade. He petitioned for the removal of the incomplete grade to his professor Carlos Ortega and was approved by Dean Celedonio Tiongson. He took the exam and was given a grade of 5 by his professor. In the meantime, the Dean and the Faculty Members of the College of Law met to deliberate on who among the fourth year students should be allowed to graduate. The Jaders name appeared in the Tentative List of Candidates for graduation for the Degree of Bachelor of Laws (LL.B) as of Second Semester (1987-1988). He graduated and thereafter prepared himself for the bar examination. He took a enrolled at the pre-bar review class in Far Eastern University. Having learned of the deficiency he dropped his review class and was not able to take the bar examination. Consequently, Jader sued petitioner for damages alleging that he suffered moral shock, mental anguish, serious anxiety, besmirched reputation, wounded feelings and sleepless nights when he was not able to take the 1988 bar examinations arising from the latter's negligence. He prayed for an award of moral and exemplary damages, unrealized income, attorney's fees, and costs of suit. In its answer with counterclaim, petitioner denied liability arguing mainly that it never led respondent to believe that he completed the requirements for a Bachelor of Laws degree when his name was included in the tentative list of graduating students. After trial, the lower court rendered judgment in favor of the plaintiff and against the defendant ordering the latter to pay plaintiff the sum of THIRTY FIVE THOUSAND FOUR HUNDRED SEVENTY PESOS (P35,470.00) with legal rate of interest from the filing of the complaint until fully paid, the amount of FIVE THOUSAND PESOS (P5,000.00) as attorney's fees and the cost of suit. On appeal by both parties was affirmed by the Court of Appeals (CA) with modification.

Hence this petition. ISSUE: Whether or not the proximate and immediate cause of the alleged damages incurred by the Jader arose out of his own negligence in not verifying from the professor concerned the result of his removal exam. RULING: The petition lacks merit. When a student is enrolled in any educational or learning institution, a contract of education is entered into between said institution and the student. The professors, teachers or instructors hired by the school are considered merely as agents and administrators tasked to perform the school's commitment under the contract. Since the contracting parties are the school and the student, the latter is not duty-bound to deal with the former's agents, such as the professors with respect to the status or result of his grades, although nothing prevents either professors or students from sharing with each other such information. The Court takes judicial notice of the traditional practice in educational institutions wherein the professor directly furnishes his/her students their grades. It is the contractual obligation of the school to timely inform and furnish sufficient notice and information to each and every student as to whether he or she had already complied with all the requirements for the conferment of a degree or whether they would be included among those who will graduate. Although commencement exercises are but a formal ceremony, it nonetheless is not an ordinary occasion, since such ceremony is the educational institution's way of announcing to the whole world that the students included in the list of those who will be conferred a degree during the baccalaureate ceremony have satisfied all the requirements for such degree. Prior or subsequent to the ceremony, the school has the obligation to promptly inform the student of any problem involving the latter's grades and performance and also most importantly, of the procedures for remedying the same. Petitioner, in belatedly informing respondent of the result of the removal examination, particularly at a time when he had already commenced preparing for the bar exams, cannot be said to have acted in good faith. Absence of good faith must be sufficiently established for a successful prosecution by the aggrieved party in a suit for abuse of right under Article 19 of the Civil Code. Good faith connotes an honest intention to abstain from taking undue advantage of another, even though the forms and technicalities of the law, together with the absence of all information or belief of facts, would render the transaction unconscientious. It is the school that has access to those information and it is only the school that can compel its professors to act and comply with its rules, regulations and policies with respect to the computation and the prompt submission of grades. Students do not exercise control, much less influence, over the way an educational institution should run its affairs, particularly in disciplining its professors and teachers and ensuring their compliance with the school's rules and orders. Being the party that hired them, it is the school that exercises general supervision and exclusive control over the professors with respect to the submission of reports involving the students' standing. Exclusive control means that no other person or entity had any control over the instrumentality which caused the damage or injury. The college dean is the senior officer responsible for the operation of an academic program, enforcement of rules and regulations, and the supervision of faculty and student services. He must see to it that his own professors and teachers, regardless of their status or position outside of the university, must comply with the rules set by the latter. The negligent act of a professor who fails to observe the rules of the school, for

instance by not promptly submitting a student's grade, is not only imputable to the professor but is an act of the school, being his employer. Considering further, that the institution of learning involved herein is a university which is engaged in legal education, it should have practiced what it inculcates in its students, more specifically the principle of good dealings enshrined in Articles 19 and 20 of the Civil Code which states: Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same. Art. 19 was intended to expand the concept of torts by granting adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to provide specifically in statutory law. In civilized society, men must be able to assume that others will do them no intended injury that others will commit no internal aggressions upon them; that their fellowmen, when they act affirmatively will do so with due care which the ordinary understanding and moral sense of the community exacts and that those with whom they deal in the general course of society will act in good faith. The ultimate thing in the theory of liability is justifiable reliance under conditions of civilized society. Schools and professors cannot just take students for granted and be indifferent to them, for without the latter, the former are useless. Educational institutions are duty-bound to inform the students of their academic status and not wait for the latter to inquire from the former. The conscious indifference of a person to the rights or welfare of the person/persons who may be affected by his act or omission can support a claim for damages. Want of care to the conscious disregard of civil obligations coupled with a conscious knowledge of the cause naturally calculated to produce them would make the erring party liable. Petitioner ought to have known that time was of the essence in the performance of its obligation to inform respondent of his grade. It cannot feign ignorance that respondent will not prepare himself for the bar exams since that is precisely the immediate concern after graduation of an LL.B. graduate. It failed to act seasonably. Petitioner cannot just give out its student's grades at any time because a student has to comply with certain deadlines set by the Supreme Court on the submission of requirements for taking the bar. Petitioner's liability arose from its failure to promptly inform respondent of the result of an examination and in misleading the latter into believing that he had satisfied all requirements for the course. Worth quoting is the following disquisition of the respondent co urt: It is apparent from the testimony of Dean Tiongson that defendant-appellee University had been informed during the deliberation that the professor in Practice Court I gave plaintiff-appellant a failing grade. Yet, defendant-appellee still did not inform plaintiffappellant of his failure to complete the requirements for the degree nor did they remove his name from the tentative list of candidates for graduation. Worse, defendant-appellee university, despite the knowledge that plaintiff-appellant failed in Practice Court I, again included plaintiff-appellant's name in the "tentative list of candidates for graduation which was prepared after the deliberation and which became the basis for the commencement rites program. Dean Tiongson reasons out that plaintiff-appellant's name was allowed to remain in the tentative list of candidates for

graduation in the hope that the latter would still be able to remedy the situation in the remaining few days before graduation day. Dean Tiongson, however, did not explain how plaintiff appellant Jader could have done something to complete his deficiency if defendant-appellee university did not exert any effort to inform plaintiff-appellant of his failing grade in Practice Court I. Petitioner cannot pass on its blame to the professors to justify its own negligence that led to the delayed relay of information to respondent. When one of two innocent parties must suffer, he through whose agency the loss occurred must bear it. The modern tendency is to grant indemnity for damages in cases where there is abuse of right, even when the act is not illicit. If mere fault or negligence in one's acts can make him liable for damages for injury caused thereby, with more reason should abuse or bad faith make him liable. A person should be protected only when he acts in the legitimate exercise of his right, that is, when he acts with prudence and in good faith, but not when he acts with negligence or abuse. However, while petitioner was guilty of negligence and thus liable to respondent for the latter's actual damages, we hold that respondent should not have been awarded moral damages. We do not agree with the Court of Appeals' findings that respondent suffered shock, trauma and pain when he was informed that he could not graduate and will not be allowed to take the bar examinations. At the very least, it behooved on respondent to verify for himself whether he has completed all necessary requirements to be eligible for the bar examinations. As a senior law student, respondent should have been responsible enough to ensure that all his affairs, specifically those pertaining to his academic achievement, are in order. Given these considerations, we fail to see how respondent could have suffered untold embarrassment in attending the graduation rites, enrolling in the bar review classes and not being able to take the bar exams. If respondent was indeed humiliated by his failure to take the bar, he brought this upon himself by not verifying if he has satisfied all the requirements including his school records, before preparing himself for the bar examination. Certainly, taking the bar examinations does not only entail a mental preparation on the subjects thereof; there are also prerequisites of documentation and submission of requirements which the prospective examinee must meet. 126. GASHEM SHOOKAT BAKSH vs. HON. COURT OF APPEALS FACTS: On 27 October 1987, private respondent, without the assistance of counsel, filed a complaint in the trial court for damages against the petitioner for the alleged violation of their agreement to get married. She alleges that the petitioner courted and proposed to marry her; she accepted his love on the condition that they would get married; they therefore agreed to get married after the end of the school semester, which was in October of that year; petitioner then visited the private respondent's parents in Baaga, Bugallon, Pangasinan to secure their approval to the marriage; sometime in 20 August 1987, the petitioner forced her to live with him in the Lozano Apartments; she was a virgin before she began living with him; a week before the filing of the complaint, petitioner's attitude towards her started to change; he maltreated and threatened to kill her; as a result of such maltreatment, she sustained injuries; during a confrontation with a representative of the barangay captain of Guilig a day before the filing of the complaint, petitioner repudiated their marriage agreement and asked her not to live

with him anymore and; the petitioner is already married to someone living in Bacolod City. In his Answer with Counterclaim, petitioner claimed that he never proposed marriage to or agreed to be married with the private respondent; he neither sought the consent and approval of her parents nor forced her to live in his apartment; he did not maltreat her, but only told her to stop coming to his place because he discovered that she had deceived him by stealing his money and passport; and finally, no confrontation took place with a representative of the barangay captain. After trial on the merits, the lower court, applying Article 21 of the Civil Code, rendered on 16 October 1989 a decision favoring the private respondent. The decision is anchored on the trial court's findings and conclusions that (a) petitioner and private respondent were lovers, (b) private respondent is not a woman of loose morals or questionable virtue who readily submits to sexual advances, (c) petitioner, through machinations, deceit and false pretenses, promised to marry private respondent, d) because of his persuasive promise to marry her, she allowed herself to be deflowered by him, (e) by reason of that deceitful promise, private respondent and her parents in accordance with Filipino customs and traditions made some preparations for the wedding that was to be held at the end of October 1987 by looking for pigs and chickens, inviting friends and relatives and contracting sponsors, (f) petitioner did not fulfill his promise to marry her and (g) such acts of the petitioner, who is a foreigner and who has abused Philippine hospitality, have offended our sense of morality, good customs, culture and traditions. The trial court gave full credit to the private respondent's testimony because, inter alia, she would not have had the temerity and courage to come to court and expose her honor and reputation to public scrutiny and ridicule if her claim was false. The Court of Appeals affirmed the decision in toto. Hence this petition. ISSUE: Whether or not Article 21 of the Civil Code applies to the case at bar thus justifies a claim for damages. RULING: The existing rule is that a breach of promise to marry per se is not an actionable wrong. Congress deliberately eliminated from the draft of the New Civil Code the provisions that would have made it so. The reason therefor is set forth in the report of the Senate Committees on the Proposed Civil Code, from which We quote: The elimination of this chapter is proposed. That breach of promise to marry is not actionable has been definitely decided in the case of De Jesus vs. Syquia. The history of breach of promise suits in the United States and in England has shown that no other action lends itself more readily to abuse by designing women and unscrupulous men. It is this experience which has led to the abolition of rights of action in the so-called Heart Balm suits in many of the American states. . . . This notwithstanding, the said Code contains a provision, Article 21, which is designed to expand the concept of torts or quasi-delict in this jurisdiction by granting adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to specifically enumerate and punish in the statute books. As the Code Commission itself stated in its Report:

But the Code Commission had gone farther than the sphere of wrongs defined or determined by positive law. Fully sensible that there are countless gaps in the statutes, which leave so many victims of moral wrongs helpless, even though they have actually suffered material and moral injury, the Commission has deemed it necessary, in the interest of justice, to incorporate in the proposed Civil Code the following rule: Art. 23. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. An example will illustrate the purview of the foregoing norm: "A" seduces the nineteenyear old daughter of "X". A promise of marriage either has not been made, or can not be proved. The girl becomes pregnant. Under the present laws, there is no crime, as the girl is above nineteen years of age. Neither can any civil action for breach of promise of marriage be filed. Therefore, though the grievous moral wrong has been committed, and though the girl and family have suffered incalculable moral damage, she and her parents cannot bring action for damages. But under the proposed article, she and her parents would have such a right of action. Thus at one stroke, the legislator, if the forgoing rule is approved, would vouchsafe adequate legal remedy for that untold number of moral wrongs which it is impossible for human foresight to provide for specifically in the statutes. Article 2176 of the Civil Code, which defines a quasi-delict thus: Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no preexisting contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. is limited to negligent acts or omissions and excludes the notion of willfulness or intent. Quasi-delict, known in Spanish legal treatises as culpa aquiliana, is a civil law concept while torts is an Anglo-American or common law concept. Torts is much broader than culpa aquiliana because it includes not only negligence, but international criminal acts as well such as assault and battery, false imprisonment and deceit. In the general scheme of the Philippine legal system envisioned by the Commission responsible for drafting the New Civil Code, intentional and malicious acts, with certain exceptions, are to be governed by the Revised Penal Code while negligent acts or omissions are to be covered by Article 2176 of the Civil Code. In between these opposite spectrums are injurious acts which, in the absence of Article 21, would have been beyond redress. Thus, Article 21 fills that vacuum. It is even postulated that together with Articles 19 and 20 of the Civil Code, Article 21 has greatly broadened the scope of the law on civil wrongs; it has become much more supple and adaptable than the Anglo-American law on torts. In the light of the above laudable purpose of Article 21, We are of the opinion, and so hold, that where a man's promise to marry is in fact the proximate cause of the acceptance of his love by a woman and his representation to fulfill that promise thereafter becomes the proximate cause of the giving of herself unto him in a sexual congress, proof that he had, in reality, no intention of marrying her and that the promise was only a subtle scheme or deceptive device to entice or inveigle her to accept

him and to obtain her consent to the sexual act, could justify the award of damages pursuant to Article 21 not because of such promise to marry but because of the fraud and deceit behind it and the willful injury to her honor and reputation which followed thereafter. It is essential, however, that such injury should have been committed in a manner contrary to morals, good customs or public policy. In the instant case, respondent Court found that it was the petitioner's "fraudulent and deceptive protestations of love for and promise to marry plaintiff that made her surrender her virtue and womanhood to him and to live with him on the honest and sincere belief that he would keep said promise, and it was likewise these fraud and deception on appellant's part that made plaintiff's parents agree to their daughter's living-in with him preparatory to their supposed marriage." 24 In short, the private respondent surrendered her virginity, the cherished possession of every single Filipina, not because of lust but because of moral seduction the kind illustrated by the Code Commission in its example earlier adverted to. The petitioner could not be held liable for criminal seduction punished under either Article 337 or Article 338 of the Revised Penal Code because the private respondent was above eighteen (18) years of age at the time of the seduction. Prior decisions of this Court clearly suggest that Article 21 may be applied in a breach of promise to marry where the woman is a victim of moral seduction. Thus, in Hermosisima vs. Court of Appeals, this Court denied recovery of damages to the woman because: . . . we find ourselves unable to say that petitioner is morally guilty of seduction, not only because he is approximately ten (10) years younger than the complainant who was around thirty-six (36) years of age, and as highly enlightened as a former high school teacher and a life insurance agent are supposed to be when she became intimate with petitioner, then a mere apprentice pilot, but, also, because the court of first instance found that, complainant "surrendered herself" to petitioner because, "overwhelmed by her love" for him, she "wanted to bind" him by having a fruit of their engagement even before they had the benefit of clergy. In Tanjanco vs. Court of Appeals, while this Court likewise hinted at possible recovery if there had been moral seduction, recovery was eventually denied because We were not convinced that such seduction existed. The following enlightening disquisition and conclusion were made in the said case: The Court of Appeals seem to have overlooked that the example set forth in the Code Commission's memorandum refers to a tort upon a minor who had been seduced. The essential feature is seduction, that in law is more than mere sexual intercourse, or a breach of a promise of marriage; it connotes essentially the idea of deceit, enticement, superior power or abuse of confidence on the part of the seducer to which the woman has yielded (U.S. vs. Buenaventura, 27 Phil. 121; U.S. vs. Arlante, 9 Phil. 595). It has been ruled in the Buenaventura case (supra) that To constitute seduction there must in all cases be some sufficient promise or inducementand the woman must yield because of the promise or other inducement. If she consents merely from carnal lust and the intercourse is from mutual desire, there is no seduction (43 Cent. Dig. tit. Seduction, par. 56) She must be induced to depart from the path of virtue by the use of some species of arts, persuasions and wiles, which are

calculated to have and do have that effect, and which result in her person to ultimately submitting her person to the sexual embraces of her seducer (27 Phil. 123). Over and above the partisan allegations, the fact stand out that for one whole year, from 1958 to 1959, the plaintiff-appellee, a woman of adult age, maintain intimate sexual relations with appellant, with repeated acts of intercourse. Such conduct is incompatible with the idea of seduction. Plainly there is here voluntariness and mutual passion; for had the appellant been deceived, had she surrendered exclusively because of the deceit, artful persuasions and wiles of the defendant, she would not have again yielded to his embraces, much less for one year, without exacting early fulfillment of the alleged promises of marriage, and would have cut short all sexual relations upon finding that defendant did not intend to fulfill his defendant did not intend to fulfill his promise. Hence, we conclude that no case is made under article 21 of the Civil Code, and no other cause of action being alleged, no error was committed by the Court of First Instance in dismissing the complaint. In his annotations on the Civil Code, Associate Justice Edgardo L. Paras, who recently retired from this Court, opined that in a breach of promise to marry where there had been carnal knowledge, moral damages may be recovered: . . . if there be criminal or moral seduction, but not if the intercourse was due to mutual lust. (Hermosisima vs. Court of Appeals, L-14628, Sept. 30, 1960; Estopa vs. Piansay, Jr., L-14733, Sept. 30, 1960; Batarra vs. Marcos, 7 Phil. 56 (sic); Beatriz Galang vs. Court of Appeals, et al., L-17248, Jan. 29, 1962). (In other words, if the CAUSE be the promise to marry, and the EFFECT be the carnal knowledge, there is a chance that there was criminal or moral seduction, hence recovery of moral damages will prosper. If it be the other way around, there can be no recovery of moral damages, because here mutual lust has intervened). . . . together with "ACTUAL damages, should there be any, such as the expenses for the wedding presentations (See Domalagon v. Bolifer, 33 Phil. 471). Senator Arturo M. Tolentino is also of the same persuasion: It is submitted that the rule in Batarra vs. Marcos, still subsists, notwithstanding the incorporation of the present article in the Code. The example given by the Code Commission is correct, if there was seduction, not necessarily in the legal sense, but in the vulgar sense of deception. But when the sexual act is accomplished without any deceit or qualifying circumstance of abuse of authority or influence, but the woman, already of age, has knowingly given herself to a man, it cannot be said that there is an injury which can be the basis for indemnity. But so long as there is fraud, which is characterized by willfulness (sic), the action lies. The court, however, must weigh the degree of fraud, if it is sufficient to deceive the woman under the circumstances, because an act which would deceive a girl sixteen years of age may not constitute deceit as to an experienced woman thirty years of age. But so long as there is a wrongful act and a resulting injury, there should be civil liability, even if the act is not punishable under the criminal law and there should have been an acquittal or dismissal of the criminal case for that reason. We are unable to agree with the petitioner's alternative proposition to the effect that granting, for argument's sake, that he did promise to marry the private respondent, the

latter is nevertheless also at fault. According to him, both parties are in pari delicto; hence, pursuant to Article 1412(1) of the Civil Code and the doctrine laid down inBatarra vs. Marcos, the private respondent cannot recover damages from the petitioner. The latter even goes as far as stating that if the private respondent had "sustained any injury or damage in their relationship, it is primarily because of her own doing, for: . . . She is also interested in the petitioner as the latter will become a doctor sooner or later. Take notice that she is a plain high school graduate and a mere employee . . . (Annex "C") or a waitress (TSN, p. 51, January 25, 1988) in a luncheonette and without doubt, is in need of a man who can give her economic security. Her family is in dire need of financial assistance. (TSN, pp. 51-53, May 18, 1988). And this predicament prompted her to accept a proposition that may have been offered by the petitioner. These statements reveal the true character and motive of the petitioner. It is clear that he harbors a condescending, if not sarcastic, regard for the private respondent on account of the latter's ignoble birth, inferior educational background, poverty and, as perceived by him, dishonorable employment. Obviously then, from the very beginning, he was not at all moved by good faith and an honest motive. Marrying with a woman so circumstances could not have even remotely occurred to him. Thus, his profession of love and promise to marry were empty words directly intended to fool, dupe, entice, beguile and deceive the poor woman into believing that indeed, he loved her and would want her to be his life's partner. His was nothing but pure lust which he wanted satisfied by a Filipina who honestly believed that by accepting his proffer of love and proposal of marriage, she would be able to enjoy a life of ease and security. Petitioner clearly violated the Filipino's concept of morality and brazenly defied the traditional respect Filipinos have for their women. It can even be said that the petitioner committed such deplorable acts in blatant disregard of Article 19 of the Civil Code which directs every person to act with justice, give everyone his due and observe honesty and good faith in the exercise of his rights and in the performance of his obligations. No foreigner must be allowed to make a mockery of our laws, customs and traditions. The pari delicto rule does not apply in this case for while indeed, the private respondent may not have been impelled by the purest of intentions, she eventually submitted to the petitioner in sexual congress not out of lust, but because of moral seduction. In fact, it is apparent that she had qualms of conscience about the entire episode for as soon as she found out that the petitioner was not going to marry her after all, she left him. She is not, therefore, in pari delicto with the petitioner. Pari delicto means "in equal fault; in a similar offense or crime; equal in guilt or in legal fault." At most, it could be conceded that she is merely in delicto. Equity often interferes for the relief of the less guilty of the parties, where his transgression has been brought about by the imposition of undue influence of the party on whom the burden of the original wrong principally rests, or where his consent to the transaction was itself procured by fraud. In Mangayao vs. Lasud, We declared: Appellants likewise stress that both parties being at fault, there should be no action by one against the other (Art. 1412, New Civil Code). This rule, however, has been

interpreted as applicable only where the fault on both sides is, more or less, equivalent. It does not apply where one party is literate or intelligent and the other one is not. (c.f. Bough vs. Cantiveros, 40 Phil. 209). We should stress, however, that while We find for the private respondent, let it not be said that this Court condones the deplorable behavior of her parents in letting her and the petitioner stay together in the same room in their house after giving approval to their marriage. It is the solemn duty of parents to protect the honor of their daughters and infuse upon them the higher values of morality and dignity. 127. MARILYN L. BERNARDO vs. NLRC FACTS: Petitioner Marilyn Bernardo was employed at the Univet Agricultural Products, Inc., a division of United Laboratories. On January 1989, the Manufacturing Department of the Univet Agricultural asked for two filing cabinets. Accordingly, petitioner prepared the Capital Appropriations Request (CAR) for the purchase of two filing cabinets. The request was signed by Dr. Salvador P. Cajilog, department head, and later approved by five other officers of Univet Agricultural. Before the CAR was transmitted to the purchasing department for the procurement of the office equipment, it was discovered that petitioner had included in the order the acquisition of one executive swivel chair. On February 18, 1989, a memorandum was issued to petitioner, requiring her to explain within 48 hours why no disciplinary action should be taken against her. Petitioner admitted making the insertion in the Capital Appropriations Request but explained that she had done so in good faith. Apparently, petitioners explanation was considered not satisfactory, because on March 18, 1989, she was given notice of the termination of her employment. Petitioner wrote Dr. Delfin Samson, president of United Laboratories, Inc., asking for a fair investigation. Getting no favorable response, she filed on April 7, 1989 a complaint for illegal dismissal against Univet Agricultural Products, Inc. Petitioner alleged that she made the intercalation in the CAR in good faith, without any intention of defrauding the company, because she intended the chair for the manager of her department. She claimed that what she did was made with the knowledge of Dr. Cajilog. Petitioner alleged that she was dismissed because she had exposed the involvement of two company officers, Conrado Baylon and Dr. Benedicto Santiago, in the rival company, Biomass Corp. of the Philippines. The Labor Arbiter rendered a decision dismissing petitioners complaint for lack of merit. The Labor Arbiter found petitioner guilty of dishonesty and serious misconduct, warranting dismissal from the service. On appeal the NLRC, while finding petitioner liable to disciplinary action, thought that the penalty imposed by the company was too severe. Accordingly, it set aside the decision of the Labor Arbiter and ordered the petitioner reinstated and paid backwages.

Petitioner moved for reconsideration but her motion was denied on May 20, 1992. Hence, this petition alleging that the NLRC gravely abused its discretion. Hence this case. ISSUE: Whether or not petitioner is entitled to Moral damages and the payment of attorneys fees under Art. 2208. RULING: Petitioners claim for moral damages is without merit. Not only was she guilty of misconduct, there is no showing that the company acted in bad faith or fraud or in a manner which is contrary to morals, good customs or public policy, in dismissing petitioner. Univet Agricultural was acting in the legitimate protection of its interest in seeing to it that its employees were performing their jobs with honesty, integrity and fidelity. For the same reason there is no basis for an award of attorneys fees. Under Art. 2208(2) of the Civil Code, the award of such fees is to be justified if the claimant is compelled to litigate with third persons or to incur expenses to protect his interest by reason of an unjustified act of the party against whom it is sought. 128. DRILON vs. COURT OF APPEALS FACTS: In a letter-complaint to then Secretary of Justice Franklin Drilon dated March 20, 1990, General Renato de Villa, who was then the Chief of Staff of the Armed Forces of the Philippines, requested the Department of Justice to order the investigation of several individuals named therein, including herein private respondent Homobono Adaza, for their alleged participation in the failed December 1989 coup detat. Gen. de Villas letter-complaint with its annexes was referred for preliminary inquiry to the Special Composite Team of Prosecutors. Petitioner then Assistant Chief State Prosecutor Aurelio Trampe, the Team Leader, finding sufficient basis to continue the inquiry, issued a subpoena to the individuals named in the letter-complaint, Adaza included, and assigned the case for preliminary investigation to a panel of investigators composed of prosecutors George Arizala, as Chairman, and Ferdinand Abesamis and Cesar Solis as members. The panel then found that there is probable cause to hold herein respondents for trial for the crime of REBELLION WITH MURDER AND FRUSTRATED MURDER hence recommended the filing of the corresponding information against them in court. Feeling aggrieved by the institution of these proceedings against him, private respondent Adaza filed a complaint for damages, ]before Branch 100 of the Regional Trial Court of Quezon City. In his complaint, Adaza charged petitioners with engaging in a deliberate, willful and malicious experimentation by filing against him a charge of rebellion complexed with murder and frustrated murder when petitioners, according to Adaza, were fully aware of the non-existence of such crime in the statute books. The petitioners filed a Motion to Dismiss Adazas complaint on the ground that said complaint states no actionable wrong constituting a valid cause of action against petitioners but was denied.

On appeal, the appellate court dismissed the petition for lack of merit and ordered respondent Judge to proceed with the trial of Civil Case. Hence, this petition, dated October 9, 1992, pleading this Court to exercise its power of review under Rule 45 of the Revised Rules of Court. ISSUE: Whether or not respondent may collect damages arising from the alleged malicious prosecution of rebellion with murder and frustrated murder to him. RULING: The term malicious prosecution has been defined in various ways. In American jurisdiction, it is defined as: One begun in malice without probable cause to believe the charges can be sustained (Eustace v. Dechter, 28 Cal. App. 2d. 706,83 P. 2d. 525). Instituted with intention of injuring defendant and without probable cause, and which terminates in favor of the person prosecuted. For this injury an action on the case lies, called the action of malicious prosecution (Hicks v. Brantley, 29 S.E. 459, 102 Ga. 264; Eggett v. Allen, 96 N.W. 803, 119 Wis. 625). In Philippine jurisdiction, it has been defined as: An action for damages brought by one against whom a criminal prosecution, civil suit, or other legal proceeding has been instituted maliciously and without probable cause, after the termination of such prosecution, suit, or other proceeding in favor of the defendant therein. The gist of the action is the putting of legal process in force, regularly, for the mere purpose of vexation or injury (Cabasaan v. Anota, 14169-R, November 19, 1956). The statutory basis for a civil action for damages for malicious prosecution are found in the provisions of the New Civil Code on Human Relations and on damages particularly Articles 19, 20, 21, 26, 29, 32, 33, 35, 2217 and 2219 (8). To constitute malicious prosecution, however, there must be proof that the prosecution was prompted by a sinister design to vex and humiliate a person, and that it was initiated deliberately by the defendant knowing that his charges were false and groundless. Concededly, the mere act of submitting a case to the authorities for prosecution does not make one liable for malicious prosecution. Thus, in order for a malicious prosecution suit to prosper, the plaintiff must prove three (3) elements: (1) the fact of the prosecution and the further fact that the defendant was himself the prosecutor and that the action finally terminated with an acquittal; (2) that in bringing the action, the prosecutor acted without probable cause; and (3) that the prosecutor was actuated or impelled by legal malice, that is by improper or sinister motive. All these requisites must concur. 129. PONCE vs. LEGASPI FACTS: Petitioner Ponce and husband Manuel owned 43% of the stockholdings of L'NOR Marine Services, Inc. (L'NOR).48% of the stocks was owned by the spouses Porter. The allegations of petitioner state that during the time while respondent Legaspi is the legal counsel of LNOR, there occurred fraudulent manipulations by spouses Porter another officers and that with the aid of Legaspi, they incorporated the Yrasport Dry docks, Inc.

which was designed to compete with LNOR but still used the office space, equipment and goodwill of LNOR. On account of the illicit schemes and frauds committed by Edward Porter and the officers of the corporation, complainant asked Legaspi to take steps to protect LNOR, of which he is the legal counsel by retainer. The latter refused, without valid excuse. Instead, he appeared as counsel to Porter and others in the estafa case against them. Complainant filed for disbarment against Legaspi, alleging that he committed gross misconduct in office as a member of the Philippine Bar because, as legal counsel, he violated his duty to and the trust of his client L'NOR, when he represented conflicting interests and assisted the Porter spouses in incorporating a competitor. The disbarment case however was dismissed. Legaspi subsequently filed a complaint for damages against petitioner, which was granted by the lower court and affirmed by CA. ISSUE: Whether Legaspi is entitled to damages as a result of the disbarment case RULING: Before proceeding with the merits of the case, the scope of an action for damages arising from malicious prosecution needs to be clarified. Both the Court of Appeals and the petitioner are of the belief that the suit for damages filed by Atty. Legaspi is not one arising from malicious prosecution because "a disbarment proceeding is not a criminal action. (De Jesus-Paras v. Vailoces, 1 SCRA 954 [1961])." The obvious inference is that only an unsuccessful criminal action may subsequently give rise to a claim for damages based on malicious prosecution. This is not correct. While generally, malicious prosecution refers to unfounded criminal actions and has been expanded to include unfounded civil suits just to vex and humiliate the defendant despite the absence of a cause of action or probable cause (Equitable Banking Corporation v. Intermediate Appellate Court, 133 SCRA 138 [1984]) the foundation of an action for malicious prosecution is an original proceeding, judicial in character. (Lorber v. Storrow, 70 P. 2d 513 [1937]; Shigeru Hayashida v. Tsunehachi Kakimoto, 23 P. 2d 311 [1933]; Graves v. Rudman, 257 N.Y.S. 212 [1932]). A disbarment proceeding is, without doubt, judicial in character and therefore may be the basis for a subsequent action for malicious prosecution. A perusal of the allegations in Atty. Legaspi's complaint for damages, particularly paragraphs 10, 11, 12 and 15 thereof (Rollo, pp. 56-59) shows that his main cause of action was predicated on injury resulting from the institution of the disbarment case against him. This being the case, we find that the suit filed by the respondent lawyer makes out a case of damages for malicious prosecution. An action for damages arising from malicious prosecution is anchored on the provisions of Article 21, 2217 and 2219 [8] of the New Civil Code. Under these Articles: Art. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for 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. Art. 2219. Moral damages may be recovered in the following and analogous cases:

(8) Malicious prosecution. In order, however, for the malicious prosecution suit to prosper, the plaintiff must prove: (1) the fact of the prosecution and the further fact that the defendant was himself the prosecutor, and that the action finally terminated with an acquittal; (2) that in bringing the action, the prosecutor acted without probable cause; and (3) that the prosecutor was actuated or impelled by legal malice, that is by improper or sinister motive. (Lao v. Court of Appeals, 199 SCRA 58 [1991]; Rehabilitation Finance Corporation v. Kohl, 4 SCRA 535 [1962]; Buchanan v. Viuda de Esteban, 32 Phil. 363 [1915]). Atty. Legaspi may have suffered injury as a consequence of the disbarment proceedings. But the adverse result of anaction does not per se make the action wrongful and subject the actor to make payment of damages for the law couldnot have meant to impose a penalty on the right to litigate. One who exercises his rights does no injury. If damageresults from a person's exercising his legal rights, it is damnum absque injuria 130. MS. VIOLETA YASOA vs. RODENCIO and JOVENCIO DE RAMOS FACTS: Aurea Yasoa and her son, Saturnino, went to the house of Jovencio de Ramos to ask for financial assistance in paying their loans to Philippine National Bank (PNB), otherwise their residential house and lot, covered by TCT No. T-32810, would be foreclosed. Inasmuch as Aurea was his aunt, Jovencio acceded to the request. They agreed that, upon payment by Jovencio of the loan to PNB, half of Yasoas subject property would be sold to him. On December 29, 1971, Jovencio paid Aureas bank loan. As agreed upon, Aurea executed a deed of absolute sale in favor of Jovencio over half of the lot consisting of 123 square meters. The said lot was then registered. Twenty-two years later, Aurea filed an estafa complaint against brothers Jovencio and Rodencio de Ramos on the ground that she was deceived by them. Aurea alleged that Rodencio asked her to sign a blank paper on the pretext that it would be used in the redemption of the mortgaged property. Aurea signed the blank paper without further inquiry because she trusted her nephew, Rodencio. Thereafter, they heard nothing from Rodencio and this prompted Nimpha Yasoa Bondoc to confront Rodencio but she was told that the title was still with the Register of Deeds. However, when Nimpha inquired from the Register of Deeds, she was shocked to find out that the lot had been divided into two, pursuant to a deed of sale apparently executed by Aurea in favor of Jovencio. Aurea averred that she never sold any portion of her property to Jovencio and never executed a deed of sale. On February 21, 1994, Assistant Provincial Prosecutor Rodrigo B. Zayenis dismissed the criminal complaint for estafa for lack of evidence. On account of this dismissal, Jovencio and Rodencio filed a complaint for damages on the ground of malicious prosecution with the Regional Trial Court of Sta. Cruz, Laguna, Branch 91, They alleged that the filing of the estafa complaint against them was done with malice and it caused irreparable injury to their reputation, as Aurea knew fully well that she had already sold half of the property to Jovencio. The trial court ruled in favor of Jovencio.

The Court of Appeals dismissed the appeal due to improper remedy. Hence this petition. ISSUE: Whether the filing of the criminal complaint for estafa by petitioners against respondents constituted malicious prosecution. RULING: In this jurisdiction, the term "malicious prosecution" has been defined as "an action for damages brought by one against whom a criminal prosecution, civil suit, or other legal proceeding has been instituted maliciously and without probable cause, after the termination of such prosecution, suit, or other proceeding in favor of the defendant therein." To constitute "malicious prosecution," there must be proof that the prosecution was prompted by a sinister design to vex or humiliate a person, and that it was initiated deliberately by the defendant knowing that his charges were false and groundless. Concededly, the mere act of submitting a case to the authorities for prosecution does not make one liable for malicious prosecution. In this case, however, there is reason to believe that a malicious intent was behind the filing of the complaint for estafa against respondents. The records show that the sale of the property was evidenced by a deed of sale duly notarized and registered with the local Register of Deeds. After the execution of the deed of sale, the property was surveyed and divided into two portions. Separate titles were then issued in the names of Aurea Yasoa (TCT No. 73252) and Jovencio de Ramos (TCT No. 73251). Since 1973, Jovencio had been paying the realty taxes of the portion registered in his name. In 1974, Aurea even requested Jovencio to use his portion as bond for the temporary release of her son who was charged with malicious mischief. Also, when Aurea borrowed money from the Rural Bank of Lumban in 1973 and the PNB in 1979, only her portion covered by TCT No. 73252 was mortgaged. All these pieces of evidence indicate that Aurea had long acknowledged Jovencios ownership of half of the property. Furthermore, it was only in 1993 when petitioners decided to file the estafa complaint against respondents. If petitioners had honestly believed that they still owned the entire property, it would not have taken them 22 years to question Jovencios ownership of half of the property. The only conclusion that can be drawn from the circumstances is that Aurea knew all along that she was no longer the owner of Jovencios portion after having sold it to him way back in 1971. Likewise, other than petitioners bare allegations, no other evidence was presented by them to substantiate their claim. Malicious prosecution, both in criminal and civil cases, requires the elements of (1) malice and (2) absence of probable cause. These two elements are present in the present controversy. Petitioners were completely aware that Jovencio was the rightful owner of the lot covered by TCT No. 73251, clearly signifying that they were impelled by malice and avarice in bringing the unfounded action. That there was no probable cause at all for the filing of the estafa case against respondents led to the dismissal of the charges filed by petitioners with the Provincial Prosecutors Office in Siniloan, Laguna. Petitioners reliance on Drilon vs. Court of Appeals is misplaced. It must be noted that in Drilon, the investigating panel found that there was probable cause to hold private respondent Homobono Adaza for trial for the crime of rebellion with murder and frustrated murder. Thus, petitioner (now Senate President) Franklin Drilon could not be held liable for malicious prosecution as there existed probable cause for the criminal

case. Here, the complaint for estafa was dismissed outright as the prosecutor did not find any probable cause against respondents. A suit for malicious prosecution will prosper where legal prosecution is carried out without probable cause. In sum, we find no reversible error on the part of the appellate court in dismissing the petition and in effect affirming the trial courts decision holding petitioners liable for damages for the malicious prosecution of respondents. 131. PATRICIO vs. THE HONORABLE OSCAR LEVISTE FACTS: On 16 May 1976 at about 10:00 o'clock in the evening, while a benefit dance was on-going in connection with the celebration of the town fiesta, petitioner together with two (2) policemen were posted near the gate of the public auditorium to check on the assigned watchers of the gate. Private respondent Bienvenido Bacalocos, President of the Association of Barangay Captains of Pilar, Capiz and a member of the Sangguniang Bayan, who was in a state of drunkenness and standing near the same gate together with his companions, struck a bottle of beer on the table causing an injury on his hand which started to bleed. Then, he approached petitioner in a hostile manner and asked the latter if he had seen his wounded hand, and before petitioner could respond, private respondent, without provocation, hit petitioner's face with his bloodied hand. As a consequence, a commotion ensued and private respondent was brought by the policemen to the municipal building. As a result of the incident, a criminal complaint for Slander by Deed was filed by petitioner with the Municipal Trial Court of Pilar, Capiz, but the same was dismissed. Subsequently, a complaint for damages was filed by petitioner with the court a quo. The trial court ruled in favor of herein petitioner (as complainant), holding private respondent liable to the former for moral damages as a result of the physical suffering, moral shock and social humiliation caused by private respondent's act of hitting petitioner on the face in public. ISSUE: Whether or not Patricio is entitled to damages for the humiliation he experienced during the town fiesta RULING: There is no question that moral damages may be recovered in cases where a defendant's wrongful act or omission has caused the complainant physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury. 16 An award of moral damages is allowed in cases specified or analogous to those provided in Article 2219 of the Civil Code, to wit: ART. 2219. Moral damages may be recovered in the following and analogous cases (1) A criminal offense resulting in physical injuries; (2) Quasi-delicts causing physical injuries; (3) Seduction, abduction, rape, or other lascivious acts. (4) Adultery or concubinage; (5) Illegal or arbitrary detention or arrest; (6) Illegal search; (7) Libel, slander or any other form of defamation; (8) Malicious prosecution;

(9) Acts mentioned in article 309; (10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. Private respondent's contention that there was no bad faith on his part in slapping petitioner on the face and that the incident was merely accidental is not tenable. It was established before the court a quo that there was an existing feud between the families of both petitioner and private respondent and that private respondent slapped the petitioner without provocation in the presence of several persons. The act of private respondent in hitting petitioner on the face is contrary to morals and good customs and caused the petitioner mental anguish, moral shock, wounded feelings and social humiliation. Private respondent has to take full responsibility for his act and his claim that he was unaware of what he had done to petitioner because of drunkenness is definitely no excuse and does not relieve him of his liability to the latter. Pursuant to Art. 21 of the Civil Code in relation to par. (10) of Art. 2219 of the same Code, "any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage." The fact that no actual or compensatory damage was proven before the trial court, does not adversely affect petitioner's right to recover moral damages. Moral damages may be awarded in appropriate cases referred to in the chapter on human relations of the Civil Code (Articles 19 to 36), without need of proof that the wrongful act complained of had caused any physical injury upon the complainant. It is clear from the report of the Code Commission that the reason underlying an award of damages under Art. 21 of the Civil Code is to compensate the injured party for the moral injury caused upon his person, thus ... . Fully sensible that there are countless gaps in the statutes, which leave so many victims of moral wrongs helpless, even though they have actually suffered material and moral injury, the Commission has deemed it necessary, in the interest of justice, to incorporate in the proposed Civil Code the following rule: ART. 23. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. In addition to the award of moral damages, exemplary or corrective damages may be imposed upon herein private respondent by way of example or correction for the public good. Exemplary damages are required by public policy to suppress the wanton acts of the offender. They are an antidote so that the poison of wickedness may not run through the body politic. The amount of exemplary damages need not be proved where it is shown that plaintiff is entitled to either moral, temperate or compensatory damages, as the case may be, although such award cannot be recovered as a matter of right. In cases where exemplary damages are awarded to the injured party, attorney's fees are also recoverable.

Cases 123-131 URBANOZO, LAIRD DIONEL N. 132. MARIA FORD VS COURT OF APPEALS FACTS: There are two sides in the incident of the case. First is Sulpicia Fabrigars, she claims that on our about July 27, 1973 at around 3:00 to 3:30 P.M., being a head teacher at a public school of Barrio Sta. Dumalag, Capiz by reason of the deputization of the of all public school teachers to assist the COMELEC in the conduct of national referendum, was humiliated by Barrio Captain Vicente Uy because she was telling Vicente Uys son, Elmo Uy, in writing remarks on the voting sheets. She claims that she was humiliated publicly by Vicente Uy and that she would be reported to Maria Ford, owner of a sugar central. She further claims that Maria ford also humiliated her by slapping her in the face publicly. However, Vicente Uy presented his version that at around 2:00 PM, upon knowledge that his son was being embarrassed by Sulpicia Fabrigar, approached the latter talked calmly but the Fabrigar refused to do so and would most likely hit Elmo Uy. Vicente Uy referred the matter to Maria Ford and that the latter tried to approach Fabrigar but to no avail. Maria Ford slapped Fabrigar claiming that she was already hysterical in order for her to calm down. Trial Courts decision: Statements of Vicente Uy which did not call for any comment from Sulpicia Fabrigar, her silence should be deemed to be an admission of their truth and truth can not hurt or insult. Hence, he complaint filed by Sulpicia Fabrigar is dismissed. Court of Appeals decision: The facts obtaining in this case indicate that appellee Ford in performing the act of slapping the school teacher in front of the people was motivated by personal animosity we believe that Maria Ford has by deed slandered plaintiff Sulpicia Fabrigar which would entitle the latter to damages. There can be no circumstance more humiliating for a headteacher of a barrio school than to be seen by the barrio folks being slapped in her face. Hence, the court ordered that Vicente Uy and Maria Ford be held accountable for the damage done to Sulpicia Fabrigar. ISSUE: Whether or not Maria Ford is liable for damages by slapping Sulpicia Fabrigar? HELD: We are satisfied with private respondent's explanation. Her initiative in promptly instituting her complaint clearly manifests her honest intention to vindicate the wrong committed against her. She explained that shortly after the incident between her and petitioner Uy, petitioner Ford came and slapped her. Thus, when the report was made by private respondent to the police authorities of Dumalag Capiz, the immediate hurt and humiliation being felt by her was not only the slander committed by petitioner Uy but, primarily and foremost, the slapping by petitioner Ford. Hence, the police report of private respondent which focused on her being slapped by petitioner Ford, although inadvertently omitting the incident with petitioner Uy in view of her emotional state then, should not be construed to mean that private respondent was not slandered by petitioner Uy.

133. ERLINDA ILUSIO VS ERLINDA BIDNER FACTS: Erlinda Ilusio is the wife of lawyer Potenciano Ilusorio they have lived together as hudband and wife for about 30 years, but eventually separated from bed and board for undisclosed reasons. Potenciano living in his penthouse in Baguio City and his wife in Antipolo City. Potenciano, upon visiting Erlinda in the United States, their children alleged that Erlinda gave Potenciano an overdose of medicine causing sever health failure as a result. Later on Erlinda filed with the RTC a petition for guardianship over the person and property of his husband because he was getting old and frail. Potenciano lived in Makati, upon knowledge of Erlinda, she filed with the Court of appeals for habeas corpus to have the custody of lawyer Potenciano Ilusorio. She alleged that respondent refused petitioners demands to see and visit her husband and prohibited Potenciano from returning to Antipolo City. Court of Appeals decision: The court ordered that for humanitarian consideration and upon petitioners manifestation, respondents Erlinda K. Ilusorio Bildner and Sylvia Ilusorio-Yap, the administrator of Cleveland Condominium or anywhere in its place, his guards and Potenciano Ilusorios staff especially Ms. Aurora Montemayor to allow visitation rights to Potenciano Ilusorios wife, Erlinda Ilusorio and all her children, notwithstanding any list limiting visitors thereof, under penalty of contempt in case of violation of refusal thereof and that the previous grant of Habeas Corpus be recalled and the herein petition for habeas corpus be DENIED DUE COURSE, as it is hereby DISMISSED for lack of unlawful restraint or detention of the subject of the petition. ISSUE: Whether or not the issuance of Habeas Corpus is valid? HELD: The essential object and purpose of the writ of habeas corpus is to inquire into all manner of involuntary restraint, and to relieve a person therefrom if such restraint is illegal.To justify the grant of the petition, the restraint of liberty must be an illegal and involuntary deprivation of freedom of action.The illegal restraint of liberty must be actual and effective, not merely nominal or moral. As to lawyer Potenciano Ilusorios mental state, the Court of Appeals observed that he was of sound and alert mind, having answered all the relevant questions to the satisfaction of the court. Being of sound mind, he is thus possessed with the capacity to make choices. In this case, the crucial choices revolve on his residence and the people he opts to see or live with. The choices he made may not appeal to some of his family members but these are choices which exclusively belong to Potenciano. He made it clear before the Court of Appeals that he was not prevented from leaving his house or seeing people. With that declaration, and absent any true restraint on his liberty, we have no reason to reverse the findings of the Court of Appeals. With his full mental capacity coupled with the right of choice, Potenciano Ilusorio may not be the subject of visitation rights against his free choice. Otherwise, we will deprive him of his right to privacy. Needless to say, this will run against his fundamental constitutional right. No court is empowered as a judicial authority to compel a husband to live with his wife. Coverture cannot be enforced by compulsion of a writ ofhabeas corpus carried out by

sheriffs or by any other mesne process. That is a matter beyond judicial authority and is best left to the man and womans free choice. 134. BLAS OPLE VS RUBEN TORRES FACTS: On 12 Dec 1996, Ramos issued AO 308 entitled "Adoption of a National Computerized Identification Reference System". The late Senator Ople averred that the said AO is unconstitutional because it infringes upon the peoples privacy and that the said AO is an encroachment of the Legislatures power to legislate laws. Blas opined that the said AO is not merely an AO because it partakes of the nature of a law hence it is beyond the presidents power to issue such. He filed a petition to enjoin Ruben Torres et al from carrying out such AO. Torres et al countered that the AO is not a law for it creates no office; confers no right; affords no protection and imposes no duty. ISSUE: Whether or not the acts of the president is an encroachment of the functions of the Legislature. HELD: As head of the Executive Department, the President is the Chief Executive. He represents the government as a whole and sees to it that all laws are enforced by the officials and employees of his department. He has control over the executive department, bureaus and offices. This means that he has the authority to assume directly the functions of the executive department, bureau and office or interfere with the discretion of its officials. Corollary to the power of control, the President also has the duty of supervising the enforcement of laws for the maintenance of general peace and public order. Thus, he is granted administrative power over bureaus and offices under his control to enable him to discharge his duties effectively. Administrative power is concerned with the work of applying policies and enforcing orders as determined by proper governmental organs. It enables the President to fix a uniform standard of administrative efficiency and check the official conduct of his agents. To this end, he can issue administrative orders, rules and regulations. Upon these precepts, AO 308 involves a subject that is not appropriate to be covered by an administrative order. An administrative order is: Sec. 3. Administrative Orders. Acts of the President which relate to particular aspects of governmental operation in pursuance of his duties as administrative head shall be promulgated in administrative orders. An administrative order is an ordinance issued by the President which relates to specific aspects in the administrative operation of government. It must be in harmony with the law and should be for the sole purpose of implementing the law and carrying out the legislative policy. An AO is not a law. In here, AO 308 partakes the nature of a law hence it is beyond executive power. Only the legislative can enact such a law of general effect. 135. AYER PRODUCTIONS PTY. VS HON. IGNACIO CAPULONG FACTS: Petitioner McElroy an Australian film maker, and his movieproduction company, Ayer Productions, envisioned, sometime in 1987, for commercial viewing and for Philippine and international release, the historic peaceful struggle of the Filipinos at

EDSA. The proposed motion picture entitled "The Four Day Revolution" was endorsed by the MTRCB as and other government agencies consulted. Ramos also signified his approval of the intended film production. It is designed to be viewed in a six-hour mini-series television play, presented in a "docudrama" style, creating four fictional characters interwoven with real events, and utilizing actual documentary footage as background. David Williamson is Australia's leading playwright and Professor McCoy (University of New South Wales) is an American historian have developed a script. Enrile declared that he will not approve the use, appropriation, reproduction and/or exhibition of his name, or picture, or that of any member of his family in any cinema or television production, film or other medium for advertising or commercial exploitation. petitioners acceded to this demand and the name of Enrile was deleted from themovie script, and petitioners proceeded to film the projected motion picture. However, a complaint was filed by Enrile invoking his right to privacy. Lower court decision: The court ordered for the desistance of the movie production and making of any reference to plaintiff or his family and from creating any fictitious character in lieu of plaintiff which nevertheless is based on, or bears substantial or marked resemblance to Enrile. ISSUE: Whether or Not freedom of expression was violated. HELD: Yes. Freedom of speech and of expression includes the freedom to film and produce motion pictures and exhibit such motion pictures in theaters or to diffuse them through television. Furthermore the circumstance that the production of motion picture films is a commercial activity expected to yield monetary profit, is not a disqualification for availing of freedom of speech and of expression. The projected motion picture was as yet uncompleted and hence not exhibited to any audience. Neither private respondent nor the respondent trial Judge knew what the completed film would precisely look like. There was, in other words, no "clear and present danger" of any violation of any right to privacy. Subject matter is one of public interest and concern. The subject thus relates to a highly critical stage in the history of the country. At all relevant times, during which the momentous events, clearly of public concern, that petitioners propose to film were taking place, Enrile was a "public figure:" Such public figures were held to have lost, to some extent at least, their right to privacy. The line of equilibrium in the specific context of the instant case between the constitutional freedom of speech and of expression and the right of privacy, may be marked out in terms of a requirement that the proposed motion picture must be fairly truthful and historical in its presentation of events. 136. RODRIGO CONCEPCION VS COURT OF APPEALS FACTS: Sometime in 1985, the spouses Nestor Nicolas and Allen Nicolas resided at 51 M. Concepcion, San Joaquin, Pasig City, in an apartment leased to them by Concepcion who

also resided in the same compound where the apartment was located. Nestor was then engaged in the business of supplying government agencies with office equipments. Concepcion joined this venture by contributing capital on the condition that after her capital investment was returned to her, any profit would be divided equally between her and Nestor. Sometime in the 2nd week of July 1985, Rodrigo brother of Concepcions husband (dead), angrily accosted Nestor at the latters apartment and accused him of adultery with Concepcion. To clarify matters, Nestor went with Rodrigo to see his relatives who allegedly have knowledge of such adultery. However, those people denied any knowledge thereof. Nevertheless, Rodrigo reiterated his accusation and threatened Concepcion that should something happen to his sick mother, in case the mother would learn about the affair, he would kill Concepcion. The Nicolas spouses sued Rodrigo for damages. Regional Trial Court decision: The court ordered to pay respondent spouses Nestor Nicolas and Allem Nicolas the sums of P50,000.00 for moral damages, P25,000.00 for exemplary damages and P10,000.00 for attorneys fees, plus the costs of suit. Court of Appeals decision: Affirms the decision of the lower court. ISSUE: Whether or not there is basis in law for the award of damages to spouses Nicolas. HELD: The Code Commission stressed in no uncertain terms that the human personality must be exalted. The sacredness of human personality is a concomitant consideration of every plan for amelioration. The touchstone of every system of law, of the culture and civilization of every country is how far it dignifies man. If the statutes insufficiently protect a person from being unjustly humiliated, in short, if human personality is not exalted, then the laws are indeed defective. Thus, the rights of persons are aptly protected, and damages are provided for violations of a persons dignity, personality, privacy and peace of mind. The decision of the CA is affirmed. 137. MVRS VS. ISLAMIC DAWAH COUNCIL FACTS- The ISLAMIC DA'WAH COUNCIL OF THE PHIL (IDCP), alocal federation of more than 70 Muslim religious orgs,and some individual Muslims filed in the RTC Manila acomplaint for damages in their own behalf and as aclass suit in behalf of the Muslim members nationwide against MVRS PUBLICATIONS, et.al.- Complaint alleged that what was published in BULGARwas insulting and damaging to the Muslims; that thesewords alluding to the pig as the God of the Muslims wasnot only published out of sheer ignorance but withintent to hurt the feelings, cast insult and disparage theMuslims and Islam; that on account of these libelouswords Bulgar insulted not only the Muslims in the Philbut the entire Muslim world, esp. every Muslimindividual in non-Muslim countries MVRS claimed it was merely an expression of belief/opinion and was published without malice. Also, it did not mention respondents as object of the article,hence, were not entitled to damages. RTC dismissed- plaintiffs failed to establish theircause of action since the persons allegedly defamed bythe article were not specifically identified. CA reversed-it was "clear from the disputed articlethat the defamation was directed to all adherents of Islamic faith.

ISSUE- Whether or nothe cause of action should rise from anintentional tortuous act causing mental distress HELD:.Action arising from an intentional tortuous actcausing mental distress cannot be sustained in thiscase, for such action is personal in nature, and since noparticular individual was identified in the disputedarticle, such cause of action cannot be sustained. Torts with independent civil action: DEFAMATION An "emotional distress" tort action is personal innature; it is a civil action filed by an individual toassuage the injuries to his emotional tranquility due topersonal attacks on his character.- The purported damage caused by the publishedarticle falls under principle of relational harm- whichincludes harm to social relationships in the community in the form of defamation; as distinguished from the principle of reactive harm- which includes injuries to individual emotional tranquility in the form of an infliction of emotional distress. The present case falls within the application of the relational harm principle of tort actions for defamation.- To recover for this the plaintiff must show that: (a)conduct of the defendant was intentional or in reckless disregard of plaintiff; (b)conduct was extreme and outrageous; (c)causal connection between defendant's conduct and the plaintiff's mentaldistress; and, (d) the plaintiff's mental distress was extreme and severe.- Any party seeking recovery for mental anguish must prove more than mere worry, anxiety, embarrassment or anger. 138. INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS V. QUISUMBING AND INTERNATIONAL SCHOOL FACTS: International School (IS) pays its teachers who are hired from abroad, or foreignhires, a higher salary than its local-hires, whether the latter are Filipino or not (most are Filipino, but some are American). It justifies this under the dislocation factor that foreigners must be given a higher salary both to attract them to teach here, and to compensate them for the significant economic disadvantages involved in coming here. The Teachers Union cries discrimination. ISSUE: Whether or not discrimination exists which would constitute damage HELD: Discrimination exists. Equal pay for equal work is a principal long honored in this jurisdiction, as it rests on fundamental norms of justice 1. Art. XIII, Sec. 1 of the Constitution (Social Justice and Human Rights) exhorts Congress to give the highest priority to the enactment of measures that protect and ennhance the right od all people to human dignity, reduce social, economic, and political inequalitites. The Constitution also provides that labor is entitled to humane conditions of work.. These conditions are not restricted to the physical workplace, but include as well the manner by which employers treat their employees. Lastly, the Constitution directs the State to promote equality of employment opportunities for all, regardless of sex, race, or creed. It would be an affront to both the spirit and

the letter of these provisions if the State closes its eyes to unequal and discriminatory terms and conditions of employment. 2. International law, which springs from general principles of law, likewise proscribes discrimination. General principles of law include principles of equity, i.e., fairness and justice, based on the test of what is reasonable. The Universal Declaration of Human Rights and numerous other international Conventions all embody the general principle against discrimination, the very antithesis of fairness and justice. The Philippines, through its Constitution, has incorporated this principle as part of its national laws. 139. BIBOSO VS. JUDGE OSMUNDO M. VILLANUEVA FACTS: Complainant Lucita E. Biboso, 33, claimed that at around 11 oclock in the morning of August 20, 1996, she went to see respondent at the MCTC in Esperanza, Sultan Kudarat to follow up her case, she was molested by respondent. Lucita claims that Judge Villanueva kissed, hugged, unzipped the pants of complainant and that she could not do anything because of respondents strength. What she did then is evade the sexual advances of respondent and ran outside the chamber and went home. Respondent on the other hand claims that the allegations made by the complainant is false, claiming that he dismissed two cases submitted by Biboso, and such act was a form of revenge. Furthermore he claims that he was in Lebak and not in his office, he submitted several documentary evidence of him being in Lebak. Regional Trial Court decision: Executive Judge German M. Malcampo found complainants claim of sexual harassment to be unsubstantiated due to material inconsistencies between complainants affidavit-complaint and her testimony during the investigation of the case. Nevertheless, in view of his finding that respondent gave assistance to complainants father-in-law in filing a case in his sala, Judge Malcampo recommended that respondent be reprimanded and ordered to pay a fine in the amount of P20,000.00. ISSUE: Whether or not respondent commit sexual harassment towards complainant HELD: Complainant thus failed to prove her charges against respondent. The inconsistencies between her testimony and complaint-affidavit, in contrast to the credible testimonial and documentary evidence presented by respondent, put in serious doubt the veracity of her claims. Indeed, it appears, as respondent judge claims, that this case was filed to punish him for having dismissed the cases filed by complainant and her father-in-law, especially as the filing of this case came on the heels of the dismissal of the latter. There could no other reason for complainant to turn against respondent when the latter had previously helped complainant in her legal problems to the extent of preparing her father-in-laws complaint-affidavit for estafa against Navarra and even issuing a writ of execution in one case (Civil Case No. 71) and a warrant of arrest in another (Criminal Case No. 1662-B). Furthermore, it took complainant more than a year after the commission of the alleged sexual harassment on September 4, 1996 to file the instant administrative complaint. Even complainant's explanation as to why she executed her affidavit-complaint only on October 16, 1997 was conflicting. She initially

stated that she was only able to execute her complaint-affidavit for this case on said late date because rumors had spread by that time that she was respondents lover (kabit).During her cross-examination, however, she stated that she had to defer the execution of her complaint because she had to wait for her husband to come back from Manila. 140. PHILIPPINE AEOLUS AUTO-MOTIVE UNITED CORPORATION Vs. NLRC FACTS: On October 5 1994, a memorandum was issued to Rosalinda C. Cortez requiring her to explain why no disciplinary action should be taken against her for throwing a stapler against Plant Manager Chua, for losing the sum amount of money of P1488.00 and for asking a co-employee to stamp her card to make it appear that she was at work when in fact she was not. Said memorandum was refused by respondent Cortez and did not submit an explanation hence she was placed in a preventive suspension. While pending suspension she was given a second memorandum requiring her to explain why the ATM applications of 9 of her co-workers were not processed. She submitted a written explanation with respet to the money lost and the punching of the card. A third memorandum was issued against her for termination on grounds of gross and habitual negligence, serious misconduct and fraud or willful breach of trust. Hence respondent filed for illegal dismissal. Labor Arbiters decision: Labor Arbiter rendered a decision holding the termination of Cortez as valid and legal, at the same time dismissing her claim for damages for lack of merit. NLRC decision: reversed the decision of the labor arbiter and found corporation guilty of illegal dismissal and the reinstatement of Cortez with back wages. ISSUE: Whether or not Cortez is entitled to damages in the event that the illegality of her dismissal is sustained. HELD: In determining entitlement to moral and exemplary damages, we restate the bases therefor. In moral damages, it suffices to prove that the claimant has suffered anxiety, sleepless nights, besmirched reputation and social humiliation by reason of the act complained of. Exemplary damages, on the other hand, are granted in addition to, inter alia, moral damages "by way of example or correction for the public good" if the employer ''acted in a wanton, fraudulent, reckless, oppressive or malevolent manner." Anxiety was gradual in private respondent's five (5)-year employment. It began when her plant manager showed an obvious partiality for her which went out of hand when he started to make it clear that he would terminate her services if she would not give in to his sexual advances. Sexual harassment is an imposition of misplaced "superiority" which is enough to dampen an employee's spirit in her capacity for advancement. It affects her sense of judgment; it changes her life. If for this alone private respondent should be adequately compensated. Thus, for the anxiety, the seen and unseen hurt that she suffered, petitioners should also be made to pay her moral damages, plus exemplary damages, for the oppressive manner with which petitioners effected her dismissal from the service, and to serve as a forewarning to lecherous officers and employers who take undue advantage of their ascendancy over their employees.

All told, the penalty of dismissal is too excessive and not proportionate to the alleged infractions committed considering that it does not appear that private respondent was an incorrigible offender or that she inflicted serious damage to the company, nor would her continuance in the service be patently inimical to her employer's interest. Even the suspension imposed upon her while her case was pending investigation appears to be unjustified and uncalled for. Cases 132-140 DELA ROSA, JOHN ROME L. 141. OBRA VS CA FACTS: Petitioner Obra was a regional director of the Bureau of Mines and Geo Sciences in Baguio City. On June 26, 1985 Jeannette Grybos wrote him a letter in behalf of the Gillies heirs in Mankayan. The letter alleged that the spouses James and June Brett were conducting illegal mining activities in lands owned by the said heirs and without the requisite permits. Obra then wrote Regional Unified Command 1 (RUC-1) Brig. Gen. Dumipit and enlisted his help in stopping a truck illegedly used by respondents in shipping the illegally mined ores. Obra also wrote the provincial commander of Benguet Col. Estepa and requested that he stop any mining activities over the contested area. Elements of RUC-1 seized an Isuzu Elf truck belonging to respondents and impounded it. Private respondents filed a complaint for injunction and damages with an application for a TRO in the RTC due to violations of Art. 32 and 19-21 of the Civil Code. Court likewise ruled that no investigation had been made and according to jurisprudence respondents are entitled to damages for violation of their rights. Accordingly, the trial court ruled that, under Art. 32 of the Civil Code and the ruling in Aberca v. Ver, private respondents were entitled to actual and compensatory damages, moral damages, and exemplary damages in the total amount of P100,000.00 and attorney's fees in the total amount of P10,000.00, plus costs of suit. On appeal, the appellate court affirmed the decision in toto. ISSUES & ARGUMENTS: 1. WoN Petitioners could not be held liable for damages in the performance of their duty in Good Faith. 2. WoN Petitioners are entitled to an award of Damages. RULING: PETITION IS WITHOUT MERIT, CA DECISION AFFIRMED PD No. 1281 gave powers to order arrest, even without warrant, of persons violation PD No. 463 or any laws being enforced by Bureau of Mines and seize tools used for the same in favor of the government and to deputize any PC, police agency, barangay or any person qualified to police mining activities. The petitioners contend that this grant of power is valid even in the Constitution.

The Constitution merely makes valid the grant of power to issue warrants but did not in any way exempt the agencies so empowered from the duty of determining probable cause as basis for the issuance of warrants. The real question is whether or not petitioner conducted any investigation at all. As we said in Aberca v. Ver, the military is not to be restrained from pursuing their task or carrying out their mission with vigor. However, in doing so, care must be taken that constitutional and legal safeguards are not disregarded. In this case, there was absolutely no justification for the disregard of procedures for issuing search and seizure orders. The Court of Appeals rightly concluded then that petitioners violated private respondents' constitutional rights to due process and to security against unreasonable searches and seizure in ordering the seizure and impoundment of private respondents' vehicle. For as the trial court held: From all the above arguments and counter-arguments, the Court finds that the petitioners do not seriously dispute that the private respondents were, indeed, deprived of the use of their Isuzu "ELF" Truck when the private respondents' foreman and the driver of the truck were told by Sgt. Morales of the RUC-I that the same could not leave the mining area in Palasa-an, Mankayan, Benguet, "per orders", and the same was parked in front of the building where the military team specifically assigned for that particular mission was staying. The arguments of the petitioners that there was no distraint and/or seizure because the keys of the truck were always in the possession of private respondents' driver Kiyabang, that, on several occasions, the truck left the Palasa-an mining area, . . . and that the private respondents voluntarily and maliciously refused to use or enjoy their own truck . . . are facetious, to say the least, and deserve no serious consideration, in the light of the undisputed fact that the military men led by Sgt. Morales did not allow him to drive the truck out of the Palasa-an mining area, and on those occasions when he drove the truck out of the mining area, it was on missions of mercy and for purposes of the needs of the military personnel assigned in the Palasaan mining area, and these, always with a soldier on board the truck. There was, therefore, a distraint and at least constructive seizure by the military men led by Sgt. Morales, "as per orders," of the Isuzu Ilf truck of the private respondents, effectively depriving the latter of its use and enjoyment of their property. Likewise, it is not disputed by the petitioners that Petitioners Obra's request for the "checking and apprehending" of private respondents' truck by Petitioner Dumpit's RUC-I Command on June 26, 1985 (Exh. C) and the actual apprehension of said truck by Sgt. Morales and his men on July 1, 1985, were not preceded by and based on an investigation conducted by Petitioner Obra or his Office, but, instead, were based on the letter-complaint of Jeannette Grybos received by said Office also on June 26, 1985 (Exh. B). The petitioners' claim that this did not violate the constitutional right of the private respondents to due process because of the aforequoted reasons completely ignores the fundamental rule that laws should not be so interpreted or implemented as to violate the provisions of the constitution. Specifically, Petitioner Obra's interpretation of the law that grants him "jurisdictional supervision and control" over persons and things that have something to do with mines and mining (Sec. 6, P.D. No. 1281) authorizes him to distrain and seize private respondents' truck, as he actually did through Sgt. Morales and his men, "without prerequisite conditions such as a prior preliminary investigation of the case" (taken from the above quotation from petitioners' Memorandum), clearly violates the provision of the Bill of Rights on due process . . .

These findings and conclusions of the trial court, as affirmed by the Court of Appeals, are binding on this Court in the absence of any showing that they are contrary to the evidence in the record. On the other hand, petitioner Dumpit claims that unlike the superior officers in Aberca, he had no knowledge of the acts of his subordinates since they did not file an "afterincident report" which was the standard procedure in these cases. He claims that all he did was to endorse the request to Major Densen, the Intelligence Officer of RUC-1, to coordinate with the BMGS and implement the order accordingly. These contentions have no merit. It was sufficiently proved in this case that the seizure of the truck was effected upon the orders of petitioner Dumpit, acting on the request of petitioner Obra. Private respondents' witnesses testified that when they asked the military men who stopped them upon their entry to the "Mamakar" mining site, the soldiers told them that they were acting upon the orders of "the general in Camp Dangwa." Sgt. Morales even issued a certification that the truck was seized "as per orders." Art. 32 of the Civil Code makes liable any public officer who is directly or indirectly responsible for violating an individual's constitutional rights. The ruling in Aberca, which has been reiterated in subsequent cases, is stated as follows: . . . [T]he decisive factor in this case, in our view, is the language of Article 32. The law speaks of an officer or employee or person "directly" or "indirectly" responsible for the violation of the constitutional rights and liberties of another. Thus, it is not the actor alone (i.e., the one directly responsible) who must answer for damages under Article 32; the person indirectly responsible has also to answer for the damages or injury caused to the aggrieved party. . . . While it would certainly be too naive to expect that violators of human rights would easily be deterred by the prospect of facing damage suits, it should nonetheless be made clear in no uncertain terms that Article 32 of the Civil Code makes the persons who are directly, as well as indirectly, responsible for the transgressions joint tortfeasors. It was clear from petitioner Obra's letter to petitioner Dumpit that assistance was sought for the seizure of private respondents' truck. Thus, when petitioner Dumpit endorsed the request to his subordinates for proper action, there could not have been any other foreseeable consequence but the eventual seizure of the truck. Petitioner Dumpit cannot evade responsibility for his acts by claiming that he merely performed a ministerial duty in ordering the implementation of petitioner Obra's request. Otherwise, Art. 32 could easily be avoided by the mere plea that the officer concerned was only carrying out a ministerial duty. Petitioner Dumpit was a ranking military official. It is unseemly for him to claim that he was merely executing a ministerial act. WHEREFORE, the petition is DISMISSED and the decision of the Court of Appeals is hereby AFFIRMED. SO ORDERED.

142. SERRANO VS NIRC FACTS: This is a Petition seeking review of the resolutions, dated March 30, 1994 and August 26, 1994, of the National Labor Relations Commission (NLRC) which reversed the decision of the Labor Arbiter and dismissed petitioner Ruben Serrano's complaint for illegal dismissal and denied his motion for reconsideration. Petitioner was hired by the Respondent Isetann Department Store as a security checker to apprehend shoplifters. As a cost-cutting measure, private respondent decided to phase out its security section engage the services of an independent security agency. Petitioner was then terminated. The problem was that Petitioner was only given notice of dismissal on the same day that he was terminated. This prompted him to file a complaint for illegal dismissal. NLRC ordered petitioner to be given separation pay holding that the phase-out of the security section was a legitimate business decision. However, respondent was denied the right to be given written notice before termination of his employment. ISSUES: Was the dismissal illegal? What is the effect of violation of the notice requirement when termination is based on an authorized cause? RULING: An employers good faith in implementing a redundancy program is not necessarily put in doubt by the availment of the services of an independent contractor to replace the services of the terminated employees to promote economy and efficiency. Absent proof that management acted in a malicious or arbitrary manner, the Court will not interfere with the exercise of judgment by an employer. If termination of employment is not for any of the cause provided by law, it is illegal and the employee should be reinstated and paid backwages. To contend that even if the termination is for a just cause, the employee concerned should be reinstated and paid backwages would be to amend Art 279 by adding another ground for considering dismissal illegal. If it is shown that the employee was dismissed for any of the causes mentioned in Art 282, the in accordance with that article, he should not be reinstated but must be paid backwages from the time his employment was terminated until it is determined that the termination of employment is for a just cause because the failure to hear him before he is dismissed renders the termination without legal effect. Accordingly, we hold that the termination of petitioner's services was for an authorized cause, i.e., redundancy. Hence, pursuant to Art. 283 of the Labor Code, petitioner should be given separation pay at the rate of one month pay for every year of service. Sanctions for Violations of the Notice Requirement Art. 283 also provides that to terminate the employment of an employee for any of the authorized causes the employer must serve "a written notice on the workers and the Department of Labor and Employment at least one (1) month before the intended date thereof." In the case at bar, petitioner was given a notice of termination on October 11, 1991. On the same day, his services were terminated. He was thus denied his right to be

given written notice before the termination of his employment, and the question is the appropriate sanction for the violation of petitioner's right. The decision followed the ruling in several cases involving dismissals which, although based on any of the just causes under Art. 282, were effected without notice and hearing to the employee as required by the implementing rules. As this Court said: "It is now settled that where the dismissal of one employee is in fact for a just and valid cause and is so proven to be but he is not accorded his right to due process, i.e., he was not furnished the twin requirements of notice and opportunity to be heard, the dismissal shall be upheld but the employer must be sanctioned for non-compliance with the requirements of, or for failure to observe, due process." We agree with our esteemed colleagues, Justices Puno and Panganiban, that we should rethink the sanction of fine for an employer's disregard of the notice requirement. We do not agree, however, that disregard of this requirement by an employer renders the dismissal or termination of employment null and void. That would be to uphold the right of the employee but deny the right of the employer to dismiss for cause. Rather, the remedy is to order the payment to the employee of full backwages from the time of his dismissal until the court finds that the dismissal was for a just cause. But, otherwise, his dismissal must be upheld and he should not be reinstated. This is because his dismissal is ineffectual. Not all notice requirements are requirements of due process. Some are simply part of a procedure to be followed before a right granted to a party can be exercised. Others are simply an application of the Justinian precept, embodied in the Civil Code, to act with justice, give everyone his due, and observe honesty and good faith toward one's fellowmen. Such is the notice requirement in Arts. 282-283. The consequence of the failure either of the employer or the employee to live up to this precept is to make him liable in damages, not to render his act (dismissal or resignation, as the case may be) void. The measure of damages is the amount of wages the employee should have received were it not for the termination of his employment without prior notice. If warranted, nominal and moral damages may also be awarded. 143. ABERCA VS MAJ. GEN. FABIAN VER FACTS: Then President Marcos had already lifted Martial Law but the privilege of the writ of habeas corpus was still suspended. General Ver ordered Task Force Makabansa (TFM) to conduct pre-emptive strikes against known communist-terrorist (CT) underground houses in view of increasing reports about CT plans to sow disturbances in Metro Manila. Petitioners filed a complaint which contained allegations of searches made without search warrants or based on irregularly issued or substantially defective warrants; seizures and confiscation, without proper receipts, of cash and personal effects belonging to them and other items of property which were not subversive and illegal nor covered by the search warrants; arrest and detention of petitioners without warrant or under irregular, improper and illegal circumstances; detention of petitioners at several undisclosed places of 'safehouses" where they were kept incommunicado and subjected to physical and psychological torture and other inhuman, degrading and brutal treatment for the purpose of extracting incriminatory statements. The complaint

contains a detailed recital of abuses perpetrated upon the petitioners violative of their constitutional rights. The RTC of Quezon City dismissed the complaint upon motion by the respondents. ISSUES & ARGUMENTS 1. WoN the TFM may be held liable for their acts under an official duty 2. WoN the suspension of the privilege of the writ of habeas corpus bars a civil action for damages for illegal searches conducted by military personnel and other violations of rights and liberties guaranteed under the Constitution. Respondents: They have immunity from suit of a state for they only followed the orders of the President when he called them out. It was their constitutional duty to exercise their functions. RULING: YES, THEIR DUTY TO SUPPRESS LAWLESSNESS IS NOT A BLANKET LICENSE WHICH IGNORED THE CONSTITUTIONAL RIGHTS OF THEPEOPLE. Article 32 clearly specifies as actionable the act of violating or in any manner impeding or impairing any of the constitutional rights and liberties enumerated therein, among others 1. Freedom from arbitrary arrest or illegal detention; 2. The right against deprivation of property without due process of law; 3. The right to be secure in one's person, house, papers and effects against unreasonable searches and seizures; 4. The privacy of communication and correspondence; 5. Freedom from being compelled to be a witness against one's self, or from being forced to confess guilt, or from being induced by a promise of immunity or reward to make a confession, except when the person confessing becomes a state witness. The complaint in this litigation alleges facts showing with abundant clarity and details, how plaintiffs' constitutional rights and liberties mentioned in Article 32 of the Civil Code were violated and impaired by defendants. The complaint speaks of, among others, searches made without search warrants or based on irregularly issued or substantially defective warrants; seizures and confiscation, without proper receipts, of cash and personal effects belonging to plaintiffs and other items of property which were not subversive and illegal nor covered by the search warrants; arrest and detention of plaintiffs without warrant or under irregular, improper and illegal circumstances; detention of plaintiffs at several undisclosed places of 'safehouses" where they were kept incommunicado and subjected to physical and psychological torture and other inhuman, degrading and brutal treatment for the purpose of extracting incriminatory statements. The complaint contains a detailed recital of abuses perpetrated upon the plaintiffs violative of their constitutional rights. Secondly, neither can it be said that only those shown to have participated "directly" should be held liable. Article 32 of the Civil Code encompasses within the ambit of its provisions those directly, as well as indirectly, responsible for its violation. The responsibility of the defendants, whether direct or indirect, is amply set forth in the complaint. It is well established in our law and jurisprudence that a motion to dismiss on the ground that the complaint states no cause of action must be based on what appears

on the face of the complaint. To determine the sufficiency of the cause of action, only the facts alleged in the complaint, and no others, should be considered. For this purpose, the motion to dismiss must hypothetically admit the truth of the facts alleged in the complaint. Applying this test, it is difficult to justify the trial court's ruling, dismissing for lack of cause of action the complaint against all the defendants, except Major Rodolfo Aguinaldo and Master Sgt. Bienvenido Balaba. The complaint contained allegations against all the defendants which, if admitted hypothetically, would be sufficient to establish a cause or causes of action against all of them under Article 32 of the Civil Code. Accordingly, we grant the petition and annul and set aside the resolution of the respondent court, dated November 8, 1983, its order dated May 11, 1984 and its resolution dated September 21, 1984. Let the case be remanded to the respondent court for further proceedings. With costs against private respondents. SO ORDERED. 144. ALONZO VS CA FACTS: This petition for review on certiorari challenges the decision of the Court of Appeals in CA-G.R. CR No. 10504 and its resolution 2 denying the motion for the reconsideration of the decision. The decision affirmed in toto the judgment of the Regional Trial Court, Branch 11, Davao City, in Criminal Case No. 13698 convicting the petitioner of libel. Petitioner, Dr. Merle Alonzo was the Field Operations Officer of the Philippine Medical Care Commission (PMCC). She was directed to conduct inspections of medicareaccredited clinics and hospitals. Among these hospitals were Sto. Nio Medical Clinic and Our Lady of Fatima Medical Clinic, both in Davao del Sur and owned by herein private respondents Velasco spouses. In her report to the Vice Chairman of the PMCC regarding said hospitals, she included, with the violations, the statement, In all, this particular clinic should be closely monitored because, aside from the above mentioned violations, the husband is a judge and it gives them a certain amount of untouchability. In fact, they make court suits their pastime. Dr. Velasco and her husband, Judge Dan Velasco, then filed a complaint for libel against the petitioner with the Office of the City Fiscal of Davao City and, after preliminary investigation, Assistant City Fiscal Raul Bendigo filed the corresponding information for libel against the petitioner with the Regional Trial Court, Davao City; which docketed it as Criminal Case No. 13698. After due trial, the trial court promulgated on 19 November 1990 its decision finding the petitioner "guilty beyond reasonable doubt of two (2) crimes of libel, penalized under Article 355 of the Revised Penal Code, as charged," and sentenced her "to pay a fine of P1,000.00; for each crime; pay Dr. Angeles Te-Velasco and Judge Dan U. Velasco P5,000.00 each for moral damages; and to pay the costs." Such Judgment was affirmed by the CA on appeal. A motion for reconsideration was likewise denied. ISSUE: WoN the questioned report is libelous.

RULING: Libel is defined in Article 353 of the Revised Penal Code as follows: Art. 333. Definition of libel. A libel is a public and malicious imputation of a crime, or of a vice or defect, real or imaginary, or any act or omission, condition, status, or circumstance tending to cause the dishonor, discredit, or contempt of a natural or juridical person or to blacken the memory of one who is dead. For an imputation then to be libelous, the following requisites must concur: (a) it must be defamatory; (b) it must be malicious; (c) it must be given publicity; and (d) the victim must be identifiable. Any of the imputations covered by Article 353 is defamatory and, under the general rule laid down in Article 354, every defamatory imputation is presumed to be malicious, even if it be true; if no good intention and justifiable motive for making it is shown. There is malice when the author of the imputation is prompted by personal ill-will or spite and speaks not in response to duty but merely to injure the reputation of the person who claims to have been defamed. Truth then is not a defense, unless it is shown that the matter charged as libelous was made with good motives and for justifiable ends. Article 361 of the Revised Penal Code provides, in part, as follows: Art. 361. Proof of truth. In every criminal prosecution for libel, the truth may be given in evidence to the court and if it appears that the matter charged as libelous is true, and, moreover, that it was published with good motives and for justifiable ends, the defendant shall be acquitted. However, malice is not presumed and must, therefore, be proved, under the following exceptions provided for in Article 354, viz.: 1. A private communication made by any person to another in the performance of any legal, moral or social duty; and 2. A fair and true report, made in good faith, without any comments or remarks; of any judicial legislative or other official proceedings which are not of confidential nature, or of any statement, report or speech delivered in said proceedings, or of any other act performed by public officers in the exercise of their functions. The privileged character of these communications is not absolute, but merely qualified since they could still be shown to be malicious by proof of actual malice or malice in fact. 7 The burden of proof in this regard is on the plaintiff or the prosecution. Publication means "to make public; to make known to people in general; to bring before the public." Specifically put, publication in the law of libel means the making known of the defamatory matter, after it has been written, to some person other than the person of whom it is written. If the statement is sent straight to a person whom it is written there is no publication of it. The reason for this is that [a] communication of the defamatory matter to the person defamed cannot injure his reputation though it may wound his self-esteem. A man's reputation is not the good opinion he has of himself, but the estimation in which others hold him. We Cannot agree with the differing conclusion of the Court of Appeals that "the derogatory remarks were obviously made out of ill-will or revenge, in view of the rumored threat of libel from the complainants according to the Davao del Sur PHA

grapevine." For one, this only shows that both the trial court and the Court of Appeals could not agree on what the basis for the motive of the petitioner should be. For another, as indicated above, the private respondents themselves focused their minds and hearts on the untruthfulness of the violations indicated in the petitioner's report. Finally, the statement on the threat of a libel charge was evidently based on a rumor (from the grapevine) which we, nevertheless, find to be relevant to the report since it serves to forewarn the petitioner's superiors of the risks she and they might meet as a consequence of her report on the violations and to emphasize the need for PMCC's firmness and courage to pursue the appropriate charges as may be warranted in the premises. All told then, the prosecution in this case was unable to prove malice in fact. Finally there was, in law, no publication of the questioned report. The rule is settled that a communication made by a public officer in the discharge of his official duties to another or to a body of officers having a duty to perform with respect to the subject matter of the communication does not amount to a publication within the meaning of the law on defamation. There was also no publication when Atty. Balasabas, a third person, read the complaint against Dr. Velasco and the report of the petitioner attached thereto. The private respondents entrusted these documents to Atty. Balasabas with the request that he give them to their counsel, Atty. David Montaa. Where the plaintiff himself communicated or by his acts caused the communication of the libelous matter to a third person, there was no actionable publication. WHEREFORE, the instant petition is GRANTED. The assailed decision of the Court of Appeals in CA-G.R. CR No. 10504 is hereby REVERSED and petitioner DR. MERLE A. ALONZO is hereby ACQUITTED of the crime charged. No pronouncement as to costs. SO ORDERED. 145. SAZON VS CA FACTS: Petitioner, Fernando Sazon and private complainant Abdon Reyes were both elected to the new board of directors for the PML Homes in Marikina. Later, petitioner was also elected as the president of the new board of directors defeating private complainant, Abdon. Abdon, unable to accept defeat, questioned such election and filed an election protest. Upon approval, Abdon immediately scattered leaflets entitled Supalpal si Sazon among his co-homeowners. And at about the same time the phrase. Sazon, nasaan ang pondo ng simbahan? was seen at the gates of the subdivision. In response, petitioner, Sazon, as the editor of the homeowners association newsletter, published an article which defined Abdon as manlilinlang, mandurugas , and manloloko, and accused him of being the mastermind of the phrase at the gates. Aggrieved by the aforequoted article, the Abdon filed a complaint for libel against Sazon.

On March 18, 1992, the trial court rendered its decision finding the petitioner guilty of the crime charged, and accordingly sentenced him, thus: WHEREFORE, foregoing considered, the accused is found guilty beyond reasonable doubt of the crime charged and is hereby sentenced to suffer imprisonment of FOUR (4) months and ONE (1) day of arresto mayor as minimum to TWO (2) years, FOUR (4) months and ONE (1) day of prision correccional as maximum, with the accessory penalties provided by law, and to pay a fine of P200.00 in accordance with Art. 353, in relation to Art. 355 of the Revised Penal Code. With costs against the accused. The Court of Appeals affirmed the decision. Thus the present petition. ISSUE: WoN the questioned article is libelous. ARGUMENTS: 1. Petitioner insists that the allegedly offensive words found in the subject article are not actually defamatory. According to petitioner, the word mandurugas and other words and phrases used in the questioned article do not impute to private complainant any crime, vice or defect which would be injurious or damaging to his name and reputation. As far as petitioner is concerned, the descriptive words and phrases used should be considered as mere epithets which are a form of non-actionable opinion, because while they may express petitioners strong emotional feelings of dislike, they do not mean to reflect adversely on private complainants reputation. 2. Petitioner also maintains that there was no malice in this case. He argues that the prosecution failed to present evidence demonstrating that the accused was prompted by personal ill-will or spite or that he did not act in response to duty but acted merely to cause harm to private complainant. Consequently, the prosecution failed to discharge its burden of proving malice on the part of the accused beyond all reasonable doubt. RULING: Article 353 of the Revised Penal Code defines libel in this wise: ART. 353. Definition of libel. - A libel is a public and malicious imputation of a crime, or of a vice or defect, real or imaginary, or any act, omission, condition, status, or circumstance tending to cause the dishonor, discredit, or contempt of a natural or juridical person, on to blacken the memory of one who is dead. For an imputation then to be libelous, the following requisites must concur: (a) it must be defamatory; (b) it must be malicious; (c) it must be given publicity; and (d) the victim must be identifiable. Petitioner concedes the existence of the third and fourth requisites in the case at bench. Accordingly, only the first and second elements need to be discussed herein. In libel cases, the question is not what the writer of an alleged libel means, but what the words used by him mean. Here, the defamatory character of the words used by the petitioner are shown by the very recitals thereof in the questioned article. No evidence aliunde need be adduced to prove it. Petitioner used the following words and phrases in describing the private complainant: mandurugas, mag-ingat sa panlilinlang, matagal na tayong niloloko, may kasamang pagyayabang, ang ating pobreng super kulit, patuloy na kabulastugan, mastermind sa paninirang puri,

etc. Jurisprudence has laid down a test to determine the defamatory character of words used in the following manner, viz: Words calculated to induce suspicion are sometimes more effective to destroy reputation than false charges directly made. Ironical and metaphorical language is a favored vehicle for slander. A charge is sufficient if the words are calculated to induce the hearers to suppose and understand that the person or persons against whom they were uttered were guilty of certain offenses, or are sufficient to impeach their honesty, virtue, or reputation, or to hold the person or persons up to public ridicule. This test was satisfied in the case at bench. Branding private complainant Reyes mandurugas, et al. most certainly exposed him to public contempt and ridicule. No amount of sophistical explanation on the part of petitioner can hide, much less erase, the negative impression already created in the minds of the readers of the libelous material towards private complainant. Respondent Court of Appeals is, thus, correct in holding that these words and phrases (mandurugas, et al.) are indisputably defamatory for they impute upon the private complainant a condition that is dishonorable and shameful, since they tend to describe him as a swindler and/or a deceiver. The general rule laid down in Article 354 of the Revised Penal Code provides that: Art. 354. Requirement of publicity. - Every defamatory imputation is presumed to be malicious, even if it be true, if no good intention and justifiable motive for making it is shown. x x x Prescinding from this provision, when the imputation is defamatory, as in this case, the prosecution need not prove malice on the part of the defendant (malice in fact), for the law already presumes that the defendants imputation is malicious (malice in law). The burden is on the side of the defendant to show good intention and justifiable motive in order to overcome the legal inference of malice. Unfortunately, petitioner miserably failed to discharge this burden in the case before us. even assuming, ex gratia argumenti, that petitioners article qualifies under the category of privileged communication, this does not still negate the presence of malice in the instant case. It is well to note that the existence of malice in fact may be shown by extrinsic evidence that the defendant bore a grudge against the offended party, or that there was rivalry or ill-feeling between them which existed at the date of the publication of the defamatory imputation or that the defendant had an intention to injure the reputation of the offended party as shown by the words used and the circumstances attending the publication of the defamatory imputation. The circumstances under which the subject article was published by the petitioner serve to buttress the inference that petitioner was animated solely by revenge towards the private complainant on account of the leaflet entitled Supalpal si Sazon, earlier circulated among the homeowners as well as the writings near the entrance gate of the subdivision, all of which petitioner believes to be the handiwork of the private complainant. Furthermore, the words used in the questioned article were mostly uncalled for, strongly sending the message that petitioners objective was merely to malign and injure the reputation of the private complainant. This is certainly indicative of malice in fact on the part of the petitioner. WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED with the modification that, in lieu of imprisonment and fine, the penalty to be imposed upon the

petitioner shall be a fine of Three Thousand (P3,000.00) PESOS with subsidiary imprisonment in case of insolvency. SO ORDERED. 146. BORJAL VS CA FACTS: A civil action for damages based on libel was filed before the court against Borjal and Soliven for writing and publishing articles that are allegedly derogatory and offensive against Francisco Wenceslao, attacking among others the solicitation letters he send to support a conference to be launch concerning resolving matters on transportation crisis that is tainted with anomalous activities. Wenceslao however was never named in any of the articles nor was the conference he was organizing. The lower court ordered petitioners to indemnify the private respondent for damages which was affirmed by the Court of Appeals. A petition for review was filed before the SC contending that private respondent was not sufficiently identified to be the subject of the published articles. ISSUE: WoN there are sufficient grounds to constitute guilt of petitioners for libel. RULING: In order to maintain a libel suit, it is essential that the victim be identifiable although it is not necessary that he be named. It is also not sufficient that the offended party recognized himself as the person attacked or defamed, but it must be shown that at least a third person could identify him as the object of the libelous publication. These requisites have not been complied with in the case at bar. The element of identifiability was not met since it was Wenceslaso who revealed he was the organizer of said conference and had he not done so the public would not have known. The concept of privileged communications is implicit in the freedom of the press and that privileged communications must be protective of public opinion. Fair commentaries on matters of public interest are privileged and constitute a valid defense in an action for libel or slander. The doctrine of fair comment means that while in general every discreditable imputation publicly made is deemed false, because every man is presumed innocent until his guilt is judicially proved, and every false imputation is deemed malicious, nevertheless, when the discreditable imputation is directed against a public person in his public capacity, it is not necessarily actionable. In order that such discreditable imputation to a public official may be actionable, it must either be a false allegation of fact or a comment based on a false supposition. If the comment is an expression of opinion, based on established facts, then it is immaterial that the opinion happens to be mistaken, as long as it might reasonably be inferred from the facts. The questioned article dealt with matters of public interest as the declared objective of the conference, the composition of its members and participants, and the manner by which it was intended to be funded no doubt lend to its activities as being genuinely imbued with public interest. Respondent is also deemed to be a public figure and even otherwise is involved in a public issue. The court held that freedom of expression is constitutionally guaranteed and protected with the reminder among media members to practice highest ethical standards in the exercise thereof. A privileged communication may be either: 1. Absolutely privileged communication are those which are not actionable even if the author has acted in bad faith. An example is found in Sec. 11, Art.VI, of the 1987

Constitution which exempts a member of Congress from liability for any speech or debate in the Congress or in any Committee thereof. 2. Qualifiedly privileged communications are those containing defamatory imputations are not actionable unless found to have been made without good intention justifiable motive. To this genre belong "private communications" and "fair and true report without any comments or remarks." 147. OCCENA VS ICAMINA FACTS: On May 31, 1979, herein petitioner Eulogio Occena instituted before the Second Municipal Circuit Trial Court of Sibalom, San Remigio Belison, Province of Antique, Criminal Case No. 1717, a criminal complaint for Grave Oral Defamation against herein private respondent Cristina Vegafria for allegedly openly, publicly and maliciously uttering the following insulting words and statements: "Gago ikaw nga Barangay Captain, montisco, traidor, malugus, Hudas," which, freely translated, mean: "You are a foolish Barangay Captain, ignoramus, traitor, tyrant, Judas" and other words and statements of similar import which caused great and irreparable damage and injury to his person and honor. Private respondent as accused therein entered a plea of not guilty. Trial thereafter ensued, at which petitioner, without reserving his right to file a separate civil action for damages actively intervened thru a private prosecutor. After trial, private respondent was convicted of the offense of Slight Oral Defamation and was sentenced to pay a fine of Fifty Pesos (P50.00) with subsidiary imprisonment in case of insolvency and to pay the costs. No damages were awarded to petitioner in view of the trial court's opinion that "the facts and circumstances of the case as adduced by the evidence do not warrant the awarding of moral damages." ISSUES & ARGUMENTS 1. WoN the decision of the Second Municipal Trial Court of Sibalom, San-RemigioBelison, Province of Antique constitutes the final adjudication on the merits of private respondent's civil liability; and 2. W/N petitioner is entitled to an award of damages arising from the remarks uttered by private respondent and found by the trial court to be defamatory. HOLDING: The decision of the Municipal Circuit Trial Court as affirmed by the Regional Trial Court in Criminal Case No. 1709 cannot be considered as a final adjudication on the civil liability of private respondent simply because said decision has not yet become final due to the timely appeal filed by petitioner with respect to the civil liability of the accused in said case. It was only the unappealed criminal aspect of the case which has become final. We tackle the second issue by determining the basis of civil liability arising from crime. Civil obligations arising from criminal offenses are governed by Article 100 of the Revised Penal Code which provides that "(E)very person criminally liable for a felony is also civilly liable," in relation to Article 2177 of the Civil Code on quasidelict, the provisions for independent civil actions in the Chapter on Human Relations and the provisions regulating damages, also found in the Civil Code.

Underlying the legal principle that a person who is criminally liable is also civilly liable is the view that from the standpoint of its effects, a crime has dual character: (1) as an offense against the state because of the disturbance of the social order; and (2) as an offense against the private person injured by the crime unless it involves the crime of treason, rebellion, espionage, contempt and others wherein no civil liability arises on the part of the offender either because there are no damages to be compensated or there is no private person injured by the crime. 3 In the ultimate analysis, what gives rise to the civil liability is really the obligation of everyone to repair or to make whole the damage caused to another by reason of his act or omission, whether done intentional or negligently and whether or not punishable by law. Article 2219, par. (7) of the Civil Code allows the recovery of moral damages in case of libel, slander or any other form of defamation This provision of law establishes the right of an offended party in a case for oral defamation to recover from the guilty party damages for injury to his feelings and reputation. The offended party is likewise allowed to recover punitive or exemplary damages. It must be remembered that every defamatory imputation is presumed to be malicious, even if it be true, if no good intention and justifiable motive for making it is shown. And malice may be inferred from the style and tone of publication subject to certain exceptions which are not present in the case at bar. Calling petitioner who was a barangay captain an ignoramus, traitor, tyrant and Judas is clearly an imputation of defects in petitioner's character sufficient to cause him embarrassment and social humiliation. Petitioner testified to the feelings of shame and anguish he suffered as a result of the incident complained of. 6 It is patently error for the trial court to overlook this vital piece of evidence and to conclude that the "facts and circumstances of the case as adduced by the evidence do not warrant the awarding of moral damages." Having misapprehended the facts, the trial court's findings with respect thereto is not conclusive upon us. From the evidence presented, we rule that for the injury to his feelings and reputation, being a barangay captain, petitioner is entitled to moral damages in the sum of P5,000.00 and a further sum of P5,000.00 as exemplary damages. 148. PEOPLE VS DEVARAS FACTS: On July 10, 1990, at about 7 oclock in the evening, the three appellants were drinking tuba with him in the house of Pablo Devaras and that thereafter they joined him on his tour of duty as bantay-bayan. They had been making the rounds in the town for about four hours when, while at the Daguitan bridge, they saw a zigzagging pedicab approach. When the pedicab was halfway across the bridge, Blademir Devaras, who was carrying a long bolo known as a sansibar, suddenly attacked Efren Verzosa, the pedicab driver. Efren fell from his seat but Blademir continued hacking him with the bolo, hitting him in the head and neck. At about the same time, Ronilo Caisek, who also carrying a long bolo, attacked Felix Verzosa, the passenger, who tried to parry the blows with his arms as he got out of the vehicle. He fell, staggered and ran but was overtaken by Ronilo, who continued striking the helpless old man in the head, neck, chest and shoulders.

Ronilo said that he was barely 5 meters away from the assailants and was so shocked at what had happened that he could barely move or say anything. Pablo Devaras also did not participate in the brutal slaying but later helped his cousin Blademir throw Efrens body over the bridge into the river below. Ronilo himself was ordered to help throw the body of Felix and, although he initially hesitated, had to comply in the end because he was threatened with death if he refused to obey. After the joint trial, Judge Pedro S. Espina of the Regional Trial Court of Palo, Leyte, finding the presence of treachery but no conspiracy, convicted Blademir Devaras as principal and Pablo Devaras as accessory in the murder of Efren Verzosa, and Ronilo Caisek for the murder of Felix Verzosa. Blademir Devaras and Caisek were both sentenced to reclusion perpetua and each was ordered to pay civil indemnity in the amount of P50,000.00 to the heirs of their respective victims. Pablo Devaras was convicted as an accessory in the murder of Efren Verzosa and sentenced to an indeterminate penalty of 6 years, 1 month and 11 days to 8 years and 20 days. All three have appealed on the grounds that the trial court erred a) in convicting them of murder instead of homicide; and b) in not holding that Ruel Animos should also have been charged and convicted as an accessory like appellant Pablo Devaras. ISSUES 1. WoN the crime was that of murder. 2. WoN Ruel Animos was supposed to be charged and convicted as an accessory to the cime. 3. WoN the appellants are solidarily liable to pay civil indemnity for both victims. RULING: We defer to the factual findings of the trial court, there being no showing that they were reached arbitrarily or without basis. The evaluation of the credibility of the witnesses is better made by the judge presiding at the trial rather than by the appellate court because of the formers opportunity to observe the deportment of the witnesses and to ascertain therefrom whether they are narrating the truth or falsifying it. Moreover, the assignment of errors is in effect an admission by the appellants of their participation in the killings of the two victims. As we see it, their appeal is only an attempt to reduce their penalties. The first error assigned by the appellants is untenable because the evidence of record clearly shows that Blademir and Ronilo suddenly attacked their unarmed victims with bolos, thereby insuring the commission of the offense without risk themselves arising from the defense the victims might make. Alevosia qualified the crime to murder. The killings would have been homicide only without the attendance of treachery, which is one of the qualifying circumstances mentioned in Article 248 of the Revised Penal Code. The second assigned error must also be dismissed. The determination of the persons to be prosecuted on the basis of the evidence against them rests primarily with the prosecutor, who is vested with quasi-judicial discretion in the discharge of this function. We have held that, as an exception, the prosecutor can be compelled by mandamus if he abuses this discretion and refuses to include a person as a co-accused against whom

there appears to be at least prima facie. However, this extraordinary writ is available only if the petitioner shows that he has first exhausted all remedies in the ordinary course of law, such as a motion filed with the trial court for the indictment of the person or persons excluded by the prosecutor. It does not appear that such a motion was filed by the appellants in the case at bar. If both Bladimir Devaras and Pablo Devaras had been convicted as principals, they would have been solidarily liable for the civil indemnity to the heirs of Efren Versoza. But inasmuch as Pablo Devaras was convicted only as an accessory, he and Blademir Devaras shall be directly liable only for their respective shares in the award of P50,000.00, and subsidiarily liable for the others share. The following articles of the Revised Penal Code are applicable: Art. 109. Share of each person civilly liable. If there are two or more persons civilly liable for a felony, the courts shall determine the amount for which each must respond. Art. 110. Several and subsidiary liability of principals, accomplices and accessories of a felony; Preference in payment. Notwithstanding the provisions of the next preceding article, the principals, accomplices and accessories, each within their respective class, shall be liable severally (in solidum) among themselves for their quotas, and subsidiarily for those of the other persons liable. The subsidiary liability shall be enforced, first against the property of the principals; next against that of accomplices, and lastly against that of the accessories. Whenever the liability in solidum or the subsidiary liability has been enforced, the person by whom payment has been made shall have the right of ~action against the others for the amount of their respective shares. In the exercise of our discretion, we hereby require Blademir Devaras, as principal, to indemnify the heirs of Efren Verzosa in the amount of P40,000.00 and Pablo Devaras, as accessory, to pay the amount of P10,000.00, provided that each shall be subsidiarily liable for the others share in case of the latters insolvency. WHEREFORE, the decision of the trial court is AFFIRMED, but with modification. The penalty of reclusion perpetua for both Bladimir Devaras and Ronilo Caisek, and the civil indemnity of P50,000.00 to be paid by Caisek to the heirs of Felix Verzosa, are maintained. But the indeterminate penalty to be imposed on Pablo Devaras shall be four years and two months of prision correccional, as minimum, to eight years of prision mayor, as maximum, and that of the civil indemnity of P50,000.00 due the heirs of Felix Verzosa, P40,000.00 shall be paid by Blademir Devaras and P10,000.00 by Pablo Devaras, provided that each shall be liable for the others share in case of insolvency. Costs against the appellants. 149. PEOPLE VS BAYOTAS FACTS: Rogelio Bayotas y Cordova was charged with Rape and eventually convicted thereof. Pending appeal of his conviction, Bayotas died in the National Bilibid Hospital due to cardio respiratory arrest. Consequently, the Supreme Court in its resolution dismissed the criminal aspect of the appeal. However, it required the Solicitor General to file its comment with regard to Bayotas' civil liability arising from his commission of the offense charged. In his comment, the Solicitor General expressed his view that the

death of accused-appellant did not extinguish his civil liability as a result of his commission of the offense charged. The Solicitor General, relying on the case of People v. Sendaydiego insists that the appeal should still be resolved for the purpose of reviewing his conviction by the lower court on which the civil liability is based. Counsel for the accused-appellant, on the other hand, opposed the view of the Solicitor General arguing that the death of the accused while judgment of conviction is pending appeal extinguishes both his criminal and civil penalties. In support of his position, said counsel invoked the ruling of the Court of Appeals in People v. Castillo and Ocfemia which held that the civil obligation in a criminal case takes root in the criminal liability and, therefore, civil liability is extinguished if accused should die before final judgment is rendered. ISSUE: Whether the death of the accused pending appeal of his conviction extinguish his civil liability. HOLDING: Yes. Article 89 of the Revised Penal Code is the controlling statute. It reads, in part: Art. 89. How criminal liability is totally extinguished. Criminal liability is totally extinguished: (1.) By the death of the convict, as to the personal penalties; and as to the pecuniary penalties liability therefor is extinguished only when the death of the offender occurs before final judgment; The legal precept contained in this Article is lifted from Article 132 of the Spanish El Codigo Penal de 1870. Accordingly, SC rule: if the private offended party, upon extinction of the civil liability ex delicto desires to recover damages from the same act or omission complained of, he must subject to Section 1, Rule 111 (1985 Rules on Criminal Procedure as amended) file a separate civil action, this time predicated not on the felony previously charged but on other sources of obligation. The source of obligation upon which the separate civil action is premised determines against whom the same shall be enforced. If the same act or omission complained of also arises from quasi-delict or may, by provision of law, result in an injury to person or property (real or personal), the separate civil action must be filed against the executor or administrator of the estate of the accused pursuant to Sec. 1, Rule 87 of the Rules of Court: Sec. 1. Actions which may and which may not be brought against executor or administrator. No action upon a claim for the recovery of money or debt or interest thereon shall be commenced against the executor or administrator; but actions to recover real or personal property, or an interest therein, from the estate, or to enforce a lien thereon, and actions to recover damages for an injury to person or property, real or personal, may be commenced against him. This is in consonance with our ruling in Belamala where we held that, in recovering damages for injury to persons thru an independent civil action based on Article 33 of the Civil Code, the same must be filed against the executor or administrator of the estate of deceased accused and not against the estate under Sec. 5, Rule 86 because this rule explicitly limits the claim to those for funeral expenses, expenses for the last sickness of the decedent, judgment for money and claims arising from contract, express or implied. Contractual money claims, we stressed, refers only to purely personal obligations other than those which have their source in delict or tort. Conversely, if the same act or omission complained of also arises from contract, the separate civil action must be filed against the estate of the accused, pursuant to Sec. 5, Rule 86 of the Rules of Court. Summary of Rules:

1. Death of the accused pending appeal of his conviction extinguishes his criminal liability as well as the civil liability based solely thereon. As opined by Justice Regalado, in this regard, "the death of the accused prior to final judgment terminates his criminal liability and only the civil liability directly arising from and based solely on the offense committed, i.e., civil liability ex delicto in senso strictiore." 2. Corollarily, the claim for civil liability survives notwithstanding the death of accused, if the same may also be predicated on a source of obligation other than delict. 19 Article 1157 of the Civil Code enumerates these other sources of obligation from which the civil liability may arise as a result of the same act or omission: (a) Law (b) Contracts (c) Quasicontracts (d) . . . (e) Quasi-delicts 3. Where the civil liability survives, as explained in Number 2 above, an action for recovery therefor may be pursued but only by way of filing a separate civil action and subject to Section 1, Rule 111 of the 1985 Rules on Criminal Procedure as amended. This separate civil action may be enforced either against the executor/administrator or the estate of the accused, depending on the source of obligation upon which the same is based as explained above. 4. Finally, the private offended party need not fear a forfeiture of his right to file this separate civil action by prescription, in cases where during the prosecution of the criminal action and prior to its extinction, the private-offended party instituted together therewith the civil action. In such case, the statute of limitations on the civil liability is deemed interrupted during the pendency of the criminal case, conformably with provisions of Article 1155 of the Civil Code, that should thereby avoid any apprehension on a possible privation of right by prescription. Applying this set of rules to the case at bench, SC held that the death of appellant Bayotas extinguished his criminal liability and the civil liability based solely on the act complained of, i.e., rape. Consequently, the appeal is hereby dismissed without qualification. Cases 141-149 BARCELON, FREDERICK I. 150. VILLEGAS vs. COURT OF APPEALS FACTS: The subject property is allocated by petitioner Iluminada Villegas, to her son Ramon Villegas as his residence. Private respondent Rufo Quemuel is a lessee of said property, allegedly since 1969 of the second floor of the house for a present monthly rental of P160.00 and in 1974, a lessee of the ground floor for a monthly rental of P 200.00. After the dismissal and after the receipt from lessor of a letter of demand dated April 7, 1980, lessee Quemuel entered into an agreement dated September 16, 1980 with Senedela Nazareth and Iluminada Villegas, which provided among others the condonation of all unpaid rentals from December, 1976 up to January 15, 1981, if Quemuel leaves voluntarily and surrenders peacefully the leased premises on or before January 15, 1981 without need of further demand. In the event of failure of herein

private respondent Quemuel to surrender peacefully the leased premises he will pay damages in the amount of P 20,000.00 and in addition, he pays all the back rentals from December 1, 1976 to January 15, 1981 and all rentals thereafter. In a letter dated August 1, 1981 of Iluminada Villegas and Senedela Nazareth to Rufo Quemuel, demand to comply with the terms of the agreement was made after the latter failed to comply despite the extension given. In their second letter dated August 17, 1981 the same demands were made. The last of such demand letters was allegedly made on October 2, 1981, asking for the refund of P 6,000.00 and demanding that Quemuel vacate the premises and pay the back rentals up to September, 1981 in the sum of P 21,750.00. On August 17, 1981, a complaint for Unlawful Detainer and Damages was filed by Iluminada Villegas and Senedela Nazareth in the Court of First Instance of Manila to enforce the agreement. However, after answer of Rufo Quemuel, said case was withdrawn by motion of plaintiffs dated November 16, 1981 which was granted by the court on December 18, 1981. Meanwhile, on December 1, 1981 before the aforementioned motion to withdraw was granted, the lessors Iluminada Villegas and Senedela Nazareth filed before the City Court of Manila, an ejectment case against Rufo Quemuel. ISSUES: whether herein petitioner's cause of action is anchored not only upon the failure of herein private respondent to pay the rent from 1976 but also upon the failure of private respondent to comply with the terms and conditions of their compromise agreement, particularly the portion thereof that he should vacate the leased premises on or before January 15, 1981 or on April 16, 1981, as extended. HELD: Quemuel was already unlawfully withholding possession of the leased premises from his lessor, herein petitioner. To remedy this situation, the law grants the petitioner-lessor the right of filing a case of unlawful detainer against herein lessee. Unlawful detainer is defined as the act of withholding the possession of land or building from another who is entitled to it after the expiration or termination of the right of the illegal detainer to hold possession by virtue of a contract, express or implied, when one year had not yet elapsed from the time the original possession had become illegal. Under Sec. 1, Rule 70 of the Revised Rules of Court, it is provided that the act of withholding possession which could be the subject matter of an ejectment suit is that which results from any contract. In other words, an unlawful detainer case can spring not only from a contract of lease but may also spring from a compromise agreement which is also a contract such as in the case at bar. And under Section 33 of Batas Pambansa Bilang 129 otherwise known as the Judiciary Reorganization Act of 1980, the Metropolitan Trial Court shall exercise exclusive original jurisdiction over such case. 151. AVELINO CASUPANAN vs. MARIO LLAVORE LAROYA FACTS: Two vehicles, one driven by respondent Mario Llavore Laroya and the other owned by petitioner Roberto Capitulo and driven by petitioner Avelino Casupanan, figured in an accident. As a result, two cases were filed with the Municipal Circuit Trial Court of Capas, Tarlac. Laroya filed a criminal case against Casupanan for reckless imprudence resulting in damage to property, docketed as Criminal Case No. 002-99. On

the other hand, Casupanan and Capitulo filed a civil case against Laroya for quasi-delict, docketed as Civil Case No. 2089. When the civil case was filed, the criminal case was then at its preliminary investigation stage. Laroya, defendant in the civil case, filed a motion to dismiss the civil case on the ground of forum-shopping considering the pendency of the criminal case. The MCTC granted the motion in the Order of March 26, 1999 and dismissed the civil case. On Motion for Reconsideration, Casupanan and Capitulo insisted that the civil case is a separate civil action which can proceed independently of the criminal case. The MCTC denied the motion for reconsideration in the Order of May 7, 1999. Casupanan and Capitulo filed a petition for certiorari under Rule 65 before the Regional Trial Court of Capas, Tarlac, Branch 66 assailing the MCTCs Order of dismissal. ISSUE: Whether an accused in a pending criminal case for reckless imprudence can validly file, simultaneously and independently, a separate civil action for quasi-delict against the private complainant in the criminal case. HELD: We make this ruling aware of the possibility that the decision of the trial court in the criminal case may vary with the decision of the trial court in the independent civil action. This possibility has always been recognized ever since the Civil Code introduced in 1950 the concept of an independent civil action under Articles 32, 33, 34 and 2176 of the Code. But the law itself, in Article 31 of the Code, expressly provides that the independent civil action may proceed independently of the criminal proceedings and regardless of the result of the latter. There can indeed be no other logical conclusion than this, for to subordinate the civil action contemplated in the said articles to the result of the criminal prosecution whether it be conviction or acquittal would render meaningless the independent character of the civil action and the clear injunction in Article 31 that this action 'may proceed independently of the criminal proceedings and regardless of the result of the latter. WHEREFORE, the petition for review on certiorari is hereby GRANTED. The Resolutions dated December 28, 1999 and August 24, 2000 in Special Civil Action No. 17-C (99) are ANNULLED and Civil Case No. 2089 is REINSTATED. SO ORDERED. 152. RAFAEL REYES TRUCKING CORPORATION vs. PEOPLE FACTS: That on or about the 20th day of June, 1989, in the Municipality of Cauayan, Province of Isabela, Philippines, and within the jurisdiction of this Honorable Court, the said accused being the driver and person-in-charge of a Trailer Truck Tractor bearing Plate No. N2A-867 registered in the name of Rafael Reyes Trucking Corporation, with a load of 2,000 cases of empty bottles of beer grande, willfully, unlawfully and feloniously drove and operated the same while along the National Highway of Barangay Tagaran, in said Municipality, in a negligent, careless and imprudent manner, without due regard to traffic laws, rules and ordinances and without taking the necessary precautions to prevent injuries to persons and damage to property, causing by such negligence, carelessness and imprudence the said trailer truck to hit and bump a Nissan Pick-up bearing Plate No. BBG-957 driven by Feliciano Balcita and Francisco Dy, Jr., Pacquing, due to irreversible shock, internal and external hemorrhage and multiple injuries, open wounds, abrasions, and further causing damages to the heirs of Feliciano Balcita in the

amount of P100,000.00 and to the death of Francisco Dy, Jr.; @ Pacquing and damages to his Nissan Pick-Up bearing Plate No. BBG-957 in the total amount of P2,000,000.00. Upon arraignment on October 23, 1989, the accused entered a plea of not guilty. On the same occasion, the offended parties made a reservation to file a separate civil action against the accused arising from the offense charged. On November 29, 1989, the offended parties actually filed with the Regional Trial Court, Isabela, Branch 19, Cauayan a complaint against petitioner Rafael Reyes Trucking Corporation, as employer of driver Romeo Dunca y de Tumol, based on quasi delict. ISSUE: May the Court award damages to the offended parties in the criminal case despite the filing of a civil action against the employer of the truck driver; and in amounts exceeding that alleged in the information for reckless imprudence resulting in homicide and damage to property? HELD: In the instant case, the offended parties elected to file a separate civil action for damages against petitioner as employer of the accused, based on quasi delict, under Article 2176 of the Civil Code of the Philippines. Private respondents sued petitioner Rafael Reyes Trucking Corporation, as the employer of the accused, to be vicariously liable for the fault or negligence of the latter. Under the law, this vicarious liability of the employer is founded on at least two specific provisions of law. The first is expressed in Article 2176 in relation to Article 2180 of the Civil Code, which would allow an action predicated on quasi-delict to be instituted by the injured party against the employer for an act or omission of the employee and would necessitate only a preponderance of evidence to prevail. Here, the liability of the employer for the negligent conduct of the subordinate is direct and primary, subject to the defense of due diligence in the selection and supervision of the employee. The enforcement of the judgment against the employer in an action based on Article 2176 does not require the employee to be insolvent since the nature of the liability of the employer with that of the employee, the two being statutorily considered joint tortfeasors, is solidary. The second, predicated on Article 103 of the Revised Penal Code, provides that an employer may be held subsidiarily civilly liable for a felony committed by his employee in the discharge of his duty. This liability attaches when the employee is convicted of a crime done in the performance of his work and is found to be insolvent that renders him unable to properly respond to the civil liability adjudged. As regards the first issue, the answer is in the negative. Rafael Reyes Trucking Corporation, as employer of the accused who has been adjudged guilty in the criminal case for reckless imprudence, can not be held subsidiarily liable because of the filing of the separate civil action based on quasi delict against it. In view of the reservation to file, and the subsequent filing of the civil action for recovery of civil liability, the same was not instituted with the criminal action. Such separate civil action was for recovery of damages under Article 2176 of the Civil Code, arising from the same act or omission of the accused. WHEREFORE, the Court GRANTS the petition and SETS ASIDE the amended decision and resolution of the Court of Appeals in CA-G. R. CR No. 14448, promulgated on January 6, 1997, and the joint decision of the Regional Trial Court, Isabela, Branch 19, Cauayan, in Criminal Case No. Br. 19-311 and Civil Case No. Br. 19-424, dated June 6, 1992.

153. RUBEN MANIAGO vs. COURT OF APPEALS FACTS: On January 7, 1990, one of his buses figured in a vehicular accident with a passenger jeepney owned by private respondent Alfredo Boado along Loakan Road, Baguio City. As a result of the accident, a criminal case for reckless imprudence resulting in damage to property and multiple physical injuries was filed on March 2, 1990 against petitioner's driver, Herminio Andaya, with the Regional Trial Court of Baguio City, Branch III, where it was docketed as Criminal Case No. 7514-R. A month later, on April 19, 1990, a civil case for damages was filed by private respondent Boado against petitioner himself. The complaint, docketed as Civil Case No. 2050-R, was assigned to Branch IV of the same court. ISSUE: whether the civil action could not proceed independently of the criminal case because no reservation of the right to bring it separately had been made in the criminal case. HELD: The reservation of the right to institute the separate civil actions shall be made before the prosecution starts to present its evidence and under circumstances affording the offended party a reasonable opportunity to make such reservation. n the present case, the criminal action was filed against the employee, bus driver. Had the driver been convicted and found insolvent, his employer would have been held subsidiarily liable for damages. But if the right to bring a separate civil action (whether arising from the crime or from quasi delict) is reserved, there would be no possibility that the employer would be held liable because in such a case there would be no pronouncement as to the civil liability of the accused. In such a case the institution of a separate and independent civil action under the Civil Code would not result in the employee being held liable for the same act or omission. The rule requiring reservation in the end serves to implement the prohibition against double recovery for the same act or omission. As held in Barredo v. Garcia, the injured party must choose which of the available causes of action for damages he will bring. If he fails to reserve the filing of a separate civil action he will be deemed to have elected to recover damages from the bus driver on the basis of the crime. In such a case his cause of action against the employer will be limited to the recovery of the latter's subsidiary liability under Art. 103 of the Revised Penal Code. Nor does it matter that the action is against the employer to enforce his vicarious liability under Art. 2180 of the Civil Code. Though not an accused in the criminal case, the employer is very much a party, as long as the right to bring or institute a separate action (whether arising from crime or from quasi delict) is not reserved. The ruling that a decision convicting the employee is binding and conclusive upon the employer "not only with regard to its civil liability but also with regard to its amount because the liability of an employer cannot be separated but follows that of his employee" is true not only with respect to the civil liability arising from crime but also with respect to the civil liability under the Civil Code. Since whatever is recoverable against the employer is ultimately recoverable by him from the employee, the policy against double recovery requires that only one action be maintained for the same act or omission whether the action is brought against the employee or against his employer. Thus in Dulay v. Court of Appeals this Court held that an employer may be sued under Art. 2180 of the Civil Code and that the right to bring the action did not have to be reserved because, having been instituted before the criminal case against the employee, the filing of the civil action against the employer constituted an express reservation of the right to institute it separately.

WHEREFORE, the decision appealed from is REVERSED and the complaint against petitioner is DISMISSED. SO ORDERED. 154. TAMARGO vs. COURT OF APPEALS FACTS: 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 had acted without discernment. ISSUES: 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. HELD: 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. 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. 155. LIBI VS IAC FACTS: Wendell Libi, son of petitioners, and Julie Ann Gotiong, the daughter of private respondent spouses, were sweethearts until Julie broke up withWendell upon finding out of his sadistic and irresponsible character.Wendell tried hard to reconcile with Julie Ann but when the latterrefused, Wendell started making threats. On that fateful day of January 14,1978, Julie Ann and Wendell diedfrom a single gunshot wound each comingfrom the same Smith and Wesson revolver licensed in the name of petitionerCresencio Libi. There being no eyewitnesses to the crime, petitioners and privaterespondents herein advanced conflicting versions of the case. Privaterespondents claimed that with the use of the same gun, Wendell took hisown life after killing Julie Ann. On the other hand, the petitioners argued thatan unknown third party, whom Wendell may have displeased by reason of his work as a narcotic informant, must have caused the death of Wendell and Julie Ann.As a result of the death of Julie Ann, private respondents filed an actionto recover damages arising from the vicarious liability of the parents of Wendell (petitioners herein) under Article 2180 of the New Civil Code. Aftertrial, the case was dismissed for insufficiency of evidence. Likewise, thecounterclaim filed by the petitioners was dismissed for lack of merit.On appeal lodged by private respondents, the respondent court setaside the dismissal of the case and held petitioners liable under Art. 2180 of the NCC. Hence this case.Herein petitioners seek for the reversal of judgment of requiring themto pay P30,000.00 for moral damages, P10,000.00 for exemplary damages. ISSUE: Are petitioners liable for vicarious liability under Art 2180 of the NCC? HELD: Under said Article 2180, the enforcement of such liability shall be effected against thefather and, in case of his death or incapacity, the mother. This was amplified by the Childand 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 familyfriend of the youthful offender. However, under the Family Code, this

civil liability isnow, without such alternative qualification, the responsibility of the parents and those whoexercise parental authority over the minor offender. 33 For civil liability arising fromquasi-delicts committed by minors, the same rules shall apply in accordance with Articles2180 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 afelony 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 hereinexplained, we conjoin in its findings that said petitioners failed to duly exercise therequisite diligentissimi patris familias to prevent such damages.ACCORDINGLY, the instant Petition is DENIED and the assailed judgment of respondentCourt of Appeals is hereby AFFIRMED, with costs against petitioners. 156. ST. FRANCIS HIGH SCHOOL VS. COURT OF APPEALS FACTS: 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. ISSUE: Whether or not there was negligence attributable to the defendants which will warrant the award of damages to the plaintiffs. HELD: 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. 157. SOLIMAN VS.. TUAZON

FACTS: On March 22, 1983, petitioner Soliman filed a civil complaint for damages against private respondent Republic Central Colleges, the RL Security Agency Inc and one Jimmy Solomon, a security guard, as defendants. The complaint alleged that on August 13, 1982, while the plaintiff was in the campus ground and premises of the defendant, Republic Central Colleges, as he is a regular enrolled student and taking his morning classes, the defendant Solomon, without any provocation, in a wanton, fraudulent, reckless, oppressive or malevolent manner, with intent to kill, attack, assault, strike and shoot the plaintiff on the abdomen with a .38 Caliber Revolver. The plaintiff was treated and confined at Angeles Medical Center, Angeles City, and as per doctors opinion, the plaintiff may not be able to attend to his regular classes and will be incapacitated in the performance of his usual work for a duration of from three to four months before his wounds would be completely healed. Private respondent Colleges filed a motion to dismiss, contending that the complaint stated no cause of action against it. Private respondent argued that it is free from any liability for the injuries sustained by petitioner for the reason that private respondent school was not the employer of the security guard charged, Jimmy Solomon, and hence was not responsible for any wrongful act of Solomon. Private respondent school further argued that Article 2180, 7th paragraph, of the NCC did not apply, since said paragraph holds teachers and heads of establishment of arts and trades liable for damages caused by their pupils and students or apprentices, while security guard was not a pupil or apprentice of the school. In an order dated November 29, 1983, respondent Judge granted private respondent schools motion to dismiss, holding that security guard Solomon was not an employee of the school. Petitioner moved for reconsideration, without success. In this Petition for Certiorari and Prohibition, it is contended that respondent trial judge committed grave abuse of discretion when he refused to apply the provisions of Article 2180, as well as those of Articles 349, 350 and 352 of the NCC and granted the schools motion to dismiss. ISSUE: Whether or not petitioner is entitled to damages and the judge committed grave abuse of discretion when he refused to apply provisions of Arts 2180, 349, 350 and 352. HELD: The Court resolved to grant due course to the petition, to treat the comment of respondent Colleges as its answer and to reverse and set aside the order dated November 29, 1983. The case was remanded to the court a quo for further proceedings consistent with the Resolution. Under Article 2180 of the Civil Code, the obligation to respond for damage inflicted by one against another by fault or negligence exists not only for one's own act or omission, but also for acts or omissions of a person for whom one is by law responsible. The first paragraph of Article 2180 offers no basis for holding the Colleges liable for the alleged wrongful acts of security guard Jimmy B. Solomon inflicted upon petitioner Soliman, Jr. Private respondent school was not the employer of Jimmy Solomon. Since there is no question that Jimmy Solomon was not a pupil or student or an apprentice of the Colleges, he being in fact an employee of the R.L. Security Agency Inc. Persons exercising substitute parental authority are made responsible for damage inflicted upon a third person by the child or person subject to such substitute parental

authority. In the instant case, as already noted, Jimmy Solomon who committed allegedly tortious acts resulting in injury to petitioner, was not a pupil, student or apprentice of the Republic Central Colleges; the school had no substitute parental authority over Solomon. 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. The 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 obligation and corresponding to the circumstances of person, time and place. In the PSBA case, the trial court had denied the school's motion to dismiss the complaint against it, and both the Court of Appeals and this Court affirmed the trial court's order. In the case at bar, the court a quo granted the motion to dismiss filed by respondent Colleges, upon the assumption that petitioner's cause of action was based, and could have been based, only on Article 2180 of the Civil Code. As PSBA, however, states, acts which are tortious or allegedly tortious in character may at the same time constitute breach of a contractual, or other legal, obligation. Respondent trial judge was in serious error when he supposed that petitioner could have no cause of action other than one based on Article 2180 of the Civil Code. Respondent trial judge should not have granted the motion to dismiss but rather should have, in the interest of justice, allowed petitioner to prove acts constituting breach of an obligation ex contractu or ex lege on the part of respondent Colleges. In line, therefore, with the most recent jurisprudence of this Court, and in order to avoid a possible substantial miscarriage of justice, and putting aside technical considerations, we consider that respondent trial judge committed serious error correctible by this Court in the instant case.

158. JOSE S. AMADORA vs. COURT OF APPEALS FACTS: Like any prospective graduate, Alfredo Amadora was looking forward to the commencement exercises where he would ascend the stage and in the presence of his relatives and friends receive his high school diploma. These ceremonies were scheduled on April 16, 1972. As it turned out, though, fate would intervene and deny him that awaited experience. On April 13, 1972, while they were in the auditorium of their school, the Colegio de San Jose-Recoletos, a classmate, Pablito Damon, fired a gun that mortally hit Alfredo, ending all his expectations and his life as well. The victim was only seventeen years old. Daffon was convicted of homicide thru reckless imprudence . Additionally, the herein petitioners, as the victim's parents, filed a civil action for damages under Article 2180 of the Civil Code against the Colegio de San Jose-Recoletos, its rector the high school principal, the dean of boys, and the physics teacher, together with Daffon and two other students, through their respective parents. The complaint against the students was later dropped. After trial, the Court of First Instance of Cebu held the remaining defendants liable to the plaintiffs in the sum of P294,984.00, representing death compensation, loss of earning capacity, costs of litigation, funeral expenses, moral damages, exemplary damages, and attorney's fees . On appeal to the respondent court, however, the decision was reversed and all the defendants were completely absolved . In its decision, which is now the subject of this petition for certiorari under Rule 45 of the Rules of Court, the respondent court found that Article 2180 was not applicable as the Colegio de San Jose-Recoletos was not a school of arts and trades but an academic institution of learning. It also held that the students were not in the custody of the school at the time of the incident as the semester had already ended, that there was no clear identification of the fatal gun and that in any event the defendant, had exercised the necessary diligence in preventing the injury. ISSUES: whether or not the teachers are liable. HELD: Applying the foregoing considerations, the Court has arrived at the following conclusions: 1. At the time Alfredo Amadora was fatally shot, he was still in the custody of the authorities of Colegio de San Jose-Recoletos notwithstanding that the fourth year classes had formally ended. It was immaterial if he was in the school auditorium to finish his physics experiment or merely to submit his physics report for what is important is that he was there for a legitimate purpose. As previously observed, even the mere savoring of the company of his friends in the premises of the school is a legitimate purpose that would have also brought him in the custody of the school authorities. 2. The rector, the high school principal and the dean of boys cannot be held liable because none of them was the teacher-in-charge as previously defined. Each of them was exercising only a general authority over the student body and not the direct control and influence exerted by the teacher placed in charge of particular classes or sections and thus immediately involved in its discipline. The evidence of the parties does not disclose who the teacher-in-charge of the offending student was. The mere fact that Alfredo Amadora had gone to school that day in connection with his physics report did

not necessarily make the physics teacher, respondent Celestino Dicon, the teacher-incharge of Alfredo's killer. 3. At any rate, assuming that he was the teacher-in-charge, there is no showing that Dicon was negligent in enforcing discipline upon Daffon or that he had waived observance of the rules and regulations of the school or condoned their nonobservance. His absence when the tragedy happened cannot be considered against him because he was not supposed or required to report to school on that day. And while it is true that the offending student was still in the custody of the teacher-in-charge even if the latter was physically absent when the tort was committed, it has not been established that it was caused by his laxness in enforcing discipline upon the student. On the contrary, the private respondents have proved that they had exercised due diligence, through the enforcement of the school regulations, in maintaining that discipline. especially in view of the unrefuted evidence that he had earlier confiscated an unlicensed gun from one of the students and returned the same later to him without taking disciplinary action or reporting the matter to higher authorities. While this was clearly negligence on his part, for which he deserves sanctions from the school, it does not necessarily link him to the shooting of Amador as it has not been shown that he confiscated and returned pistol was the gun that killed the petitioners' son. 5. Finally, as previously observed, the Colegio de San Jose-Recoletos cannot be held directly liable under the article because only the teacher or the head of the school of arts and trades is made responsible for the damage caused by the student or apprentice. Neither can it be held to answer for the tort committed by any of the other private respondents for none of them has been found to have been charged with the custody of the offending student or has been remiss in the discharge of his duties in connection with such custody. In sum, the Court finds under the facts as disclosed by the record and in the light of the principles herein announced that none of the respondents is liable for the injury inflicted by Pablito Damon on Alfredo Amadora that resulted in the latter's death at the auditorium of the Colegio de San Jose-Recoletos on April 13, 1972. While we deeply sympathize with the petitioners over the loss of their son under the tragic circumstances here related, we nevertheless are unable to extend them the material relief they seek, as a balm to their grief, under the law they have invoked. WHEREFORE, the petition is DENIED, without any pronouncement as to costs. It is so ordered. Cases 150-158 MANGANIP, WINNIE D. 159. PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION VS. COURT OF APPEALS FACTS: 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) 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. The suit impleaded the petitioners. During the proceedings a quo, Lt. M. Soriano terminated his relationship with the other petitioners by resigning from his position in the school. RULING OF TRIAL COURT: The respondent trial court, however, overruled petitioners' contention and thru an order, denied their motion to dismiss. A subsequent motion for reconsideration was similarly dealt with by an order, hence filed a petition to appellate court. RULING OF C.A.: The respondent appellate court denied the petition of the petitioners and primarily anchored its decision on the law of quasi-delicts, as enunciated in Articles 2176 and 2180 of the Civil Code. 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; it must be dynamic. In fact, the greatest value and significance of law as a rule of conduct in 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 and Mercado vs. Court of Appeals; hence, the ruling in the Palisoc 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. ISSUE: Whether or not PSBA and the petitioners are liable for damages to respondents. RULING: 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. 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 the 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. 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. 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. InCangco 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." InAustro-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. 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. 160. ST. MARYS ACADEMY vs. WILLIAM CARPITANOS FACTS: From 13 to 20 February 1995, defendant-appellant St. Marys Academy of Dipolog City conducted an enrollment drive for the school year 1995-1996. A facet of

the enrollment campaign was the visitation of schools from where prospective enrollees were studying. As a student of St. Marys Academy, Sherwin Carpitanos was part of the campaigning group. Accordingly, on the fateful day, Sherwin, along with other high school students were riding in a Mitsubishi jeep owned by defendant Vivencio Villanueva on their way to Larayan Elementary School, Larayan, Dapitan City. The jeep was driven by James Daniel II then 15 years old and a student of the same school. Allegedly, the latter drove the jeep in a reckless manner and as a result the jeep turned turtle. Sherwin Carpitanos died as a result of the injuries he sustained from the accident. RULING OF TRIAL COURT: On 20 February 1997, Branch 6 of the Regional Trial Court of Dipolog City rendered its decision the dispositive portion of which reads as follows: WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in the following manner: 1. Defendant St. Marys Academy of Dipolog City, is hereby ordered to pay plaintiffs William Carpitanos and Luisa Carpitanos, the following sums of money: a. FIFTY THOUSAND PESOS (P50,000.00) indemnity for the loss of life of Sherwin S. Carpitanos; b. FORTY THOUSAND PESOS (P40,000.00) actual damages incurred by plaintiffs for burial and related expenses; c. TEN THOUSAND PESOS (P10,000.00) for attorneys fees; d. FIVE HUNDRED THOUSAND PESOS (P500,000.00) for moral damages; and to pay costs. 2. Their liability being only subsidiary, defendants James Daniel, Sr. and Guada Daniel are hereby ordered to pay herein plaintiffs the amount of damages above-stated in the event of insolvency of principal obligor St. Marys Academy of Dipolog City; 3. Defendant James Daniel II, being a minor at the time of the commission of the tort and who was under special parental authority of defendant St. Marys Academy, is ABSOLVED from paying the above-stated damages, same being adjudged against defendants St. Marys Academy, and subsidiarily, against his parents; 4. Defendant Vivencio Villanueva is hereby ABSOLVED of any liability. His counterclaim not being in order as earlier discussed in this decision, is hereby DISMISSED. IT IS SO ORDERERED. RULING OF C.A.: In due time, petitioner St. Marys academy appealed the decision to the Court of Appeals. On February 29, 2000, the Court of Appeals promulgated a decision reducing the actual damages to P25,000.00 but otherwise affirming the decision a quo, in toto. On February 29, 2000, petitioner St. Marys Academy filed a motion for reconsideration of the decision. However, on May 22, 2000, the Court of Appeals denied the motion. ISSUES: 1) Whether the Court of Appeals erred in holding the petitioner liable for damages for the death of Sherwin Carpitanos. 2) Whether the Court of Appeals erred in affirming the award of moral damages against the petitioner. RULING: We reverse the decision of the Court of Appeals.

The Court of Appeals held petitioner St. Marys Academy liable for the death of Sherwin Carpitanos under Articles 218 and 219of the Family Code, pointing out that petitioner was negligent in allowing a minor to drive and in not having a teacher accompany the minor students in the jeep. Under Article 218 of the Family Code, the following shall have special parental authority over a minor child while under their supervision, instruction or custody: (1) the school, its administrators and teachers; or (2) the individual, entity or institution engaged in child care. This special parental authority and responsibility applies to all authorized activities, whether inside or outside the premises of the school, entity or institution. Thus, such authority and responsibility applies to field trips, excursions and other affairs of the pupils and students outside the school premises whenever authorized by the school or its teachers. Under Article 219 of the Family Code, if the person under custody is a minor, those exercising special parental authority are principally and solidarily liable for damages caused by the acts or omissions of the unemancipated minor while under their supervision, instruction, or custody. However, for petitioner to be liable, there must be a finding that the act or omission considered as negligent was the proximate cause of the injury caused because the negligence must have a causal connection to the accident. In order that there may be a recovery for an injury, however, it must be shown that the injury for which recovery is sought must be the legitimate consequence of the wrong done; the connection between the negligence and the injury must be a direct and natural sequence of events, unbroken by intervening efficient causes. In other words, the negligence must be the proximate cause of the injury. For, negligence, no matter in what it consists, cannot create a right of action unless it is the proximate cause of the injury complained of. And the proximate cause of an injury is that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred. In this case, the respondents failed to show that the negligence of petitioner was the proximate cause of the death of the victim. Respondents Daniel spouses and Villanueva admitted that the immediate cause of the accident was not the negligence of petitioner or the reckless driving of James Daniel II, but the detachment of the steering wheel guide of the jeep. In their comment to the petition, respondents Daniel spouses and Villanueva admitted the documentary exhibits establishing that the cause of the accident was the detachment of the steering wheel guide of the jeep. Hence, the cause of the accident was not the recklessness of James Daniel II but the mechanical defect in the jeep of Vivencio Villanueva. Respondents, including the spouses Carpitanos, parents of the deceased Sherwin Carpitanos, did not dispute the report and testimony of the traffic investigator who stated that the cause of the accident was the detachment of the steering wheel guide that caused the jeep to turn turtle. Significantly, respondents did not present any evidence to show that the proximate cause of the accident was the negligence of the school authorities, or the reckless

driving of James Daniel II. Hence, the respondents reliance on Article 219 of the Family Code that those given the authority and responsibility under the preceding Article shall be principally and solidarily liable for damages caused by acts or omissions of the unemancipated minor was unfounded. Further, there was no evidence that petitioner school allowed the minor James Daniel II to drive the jeep of respondent Vivencio Villanueva. It was Ched Villanueva, grandson of respondent Vivencio Villanueva, who had possession and control of the jeep. He was driving the vehicle and he allowed James Daniel II, a minor, to drive the jeep at the time of the accident. Hence, liability for the accident, whether caused by the negligence of the minor driver or mechanical detachment of the steering wheel guide of the jeep, must be pinned on the minors parents primarily. The negligence of petitioner St. Marys Academy was only a remote cause of the accident. Between the remote cause and the injury, there intervened the negligence of the minors parents or the detachment of the steering wheel guide of the jeep. The proximate cause of an injury is that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred. Considering that the negligence of the minor driver or the detachment of the steering wheel guide of the jeep owned by respondent Villanueva was an event over which petitioner St. Marys Academy had no control, and which was the proximate cause of the accident, petitioner may not be held liable for the death resulting from such accident. Consequently, we find that petitioner likewise cannot be held liable for moral damages in the amount of P500,000.00 awarded by the trial court and affirmed by the Court of Appeals. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendants wrongful act or omission. In this case, the proximate cause of the accident was not attributable to petitioner. For the reason that petitioner was not directly liable for the accident, the decision of the Court of Appeals ordering petitioner to pay death indemnity to respondent Carpitanos must be deleted. Moreover, the grant of attorneys fees as part of damages is the exception rather than the rule The power of the court to award attorneys fees under Article 2208 of the Civil Code demands factual, legal and equitable justification. Thus, the grant of attorneys fees against the petitioner is likewise deleted. Incidentally, there was no question that the registered owner of the vehicle was respondent Villanueva. He never denied and in fact admitted this fact. We have held that the registered owner of any vehicle, even if not used for public service, would primarily be responsible to the public or to third persons for injuries caused the latter while the vehicle was being driven on the highways or streets. Hence, with the overwhelming evidence presented by petitioner and the respondent Daniel spouses that the accident occurred because of the detachment of the steering

wheel guide of the jeep, it is not the school, but the registered owner of the vehicle who shall be held responsible for damages for the death of Sherwin Carpitanos. WHEREFORE, the Court REVERSES and SETS ASIDE the decision of the Court of Appeals and that of the trial court. The Court remands the case to the trial court for determination of the liability of defendants, excluding petitioner St. Marys Academy, Dipolog City. No costs. SO ORDERED. 161. VICTORY LINER, INC. vs.HEIRS OF ANDRES MALECDAN FACTS: Petitioner is a common carrier. Private respondent Elena Malecdan is the widow of the deceased, while private respondents Veronica, Virginia, Mary Pauline, Arthur, Viola, Manuel and Valentin Malecdan are their children. Andres Malecdan was a 75 year-old farmer residing in Barangay Nungnungan 2, Municipality of Cauayan, Province of Isabela. On July 15, 1994, at around 7:00 p.m., while Andres was crossing the National Highway on his way home from the farm, a Dalin Liner bus on the southbound lane stopped to allow him and his carabao to pass. However, as Andres was crossing the highway, a bus of petitioner Victory Liner, driven by Ricardo C. Joson, Jr., bypassed the Dalin bus. In so doing, respondent hit the old man and the carabao on which he was riding. As a result, Andres Malecdan was thrown off the carabao, while the beast toppled over. The Victory Liner bus sped past the old man, while the Dalin bus proceeded to its destination without helping him. The incident was witnessed by Andres Malecdan's neighbor, Virgilio Lorena, who was resting in a nearby waiting shed after working on his farm. Malecdan sustained a wound on his left shoulder, from which bone fragments protruded. He was taken by Lorena and another person to the Cagayan District Hospital where he died a few hours after arrival. The carabao also died soon afterwards. Subsequently, a criminal complaint for reckless imprudence resulting in homicide and damage to property was filed against the Victory Liner bus driver Ricardo Joson, Jr. RULING OF TRIAL COURT: The dispositive portion of the trial court's decision reads: WHEREFORE, judgment is hereby rendered ordering the defendants to pay, jointly and severally to the plaintiffs the amounts of: a. P50,000.00 as death indemnity; b. P88,339.00 for actual damages; c. P200,000.00 for moral damages; d. P50,000.00 as exemplary damages; e. Thirty percent (30%) as attorney's fees of whatever amount that can be collected by the plaintiff; and f. The costs of the suit. The counterclaim of the defendant Victory Liner, Inc. against the plaintiffs and the thirdparty complaint of the same defendant against the Zenith Insurance Corporation are dismissed. SO ORDERED. RULING OF C.A.: On appeal, the decision was affirmed by the Court of Appeals, with the modification that the award of attorney's fees was fixed at P50,000.00.

ISSUES: I. Whether or not the honorable court of appeals erred in affirming the appealed decision of the regional trial court granting p200,000.00 as moral damages which is double the p100,000.00 as prayed for by the private respondents in their complaint and in granting actual damages not supported by official receipts and spent way beyond the burial of the deceased victim. II. Whether or not the affirmation by the honorable court of appeals of the appealed decision of the regional trial court granting the award of moral and exemplary damages and attorney's fees which were not proved and considering that there is no finding of bad faith and gross negligence on the part of the petitioner was not established, is in accord with law and jurisprudence. III. Whether or not the honorable court of appeals erred in affirming the appealed decision of the regional trial court which disregarded the appellant's testimonial and documentary evidence that it has exercised extraordinary diligence in the selection and supervision of its employees, or stated differently, whether or not the affirmation by the court of appeals of the appealed decision of the trial court that is contrary to law and jurisprudence constitutes grave abuse and excess of jurisdiction. RULING: We find the appealed decision to be in order. First. Victory Liner, Inc. no longer questions the findings of the Regional Trial Court that Andres Malecdan was injured as a result of the gross negligence of its driver, Ricardo Joson, Jr. What petitioner now questions is the finding that it (petitioner) failed to exercise the diligence of a good father of the family in the selection and supervision of its employee. Petitioner argues, With all due respect, the assignment of three inspectors to check and remind the drivers of petitioner Victory Liner of its policies in a two-and-a-half hour driving distance, the installation of tachometers to monitor the speed of the bus all throughout the trip, the periodic monitoring and checking of the trips from one station to another through a trip ticket from station to station, the regular periodic conducting of safety and defensive driving [training sessions] for its drivers are concrete and physical proofs of the formulated operating standards, the implementation and monitoring of the same, designed for the exercise of due diligence of a good father of a family in the supervision of its employees. It explained that it did not present bus driver Joson, Jr. on the witness stands because he had been dismissed from the company after the incident, which it found was a breach in the company regulations. Petitioner blames private respondents for the death of their father, Andres Malecdan, who was already 75 years old, for allowing him to plough their field by himself. The contention has no merit. Article 2176 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 preexisting contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

Article 2180 provides for the solidary liability of an employer for the quasi-delict committed by an employee. The responsibility of employers for the negligence of their employees in the performance of their duties is primary and, therefore, the injured party may recover from the employers directly, regardless of the solvency of their employees. The rationale for the rule on vicarious liability has been explained 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 prices, 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. Employers may be relieved of responsibility for the negligent acts of their employees acting within the scope of their assigned task only if they can show that "they observed all the diligence of a good father of a family to prevent damage." For this purpose, they have the burden of proving that they have indeed exercised such diligence, both in the selection of the employee 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.18 With respect to the supervision of employees, employers must formulate standard operating procedures, monitor their implementation and impose disciplinary measures for breaches thereof. These facts must be shown by concrete proof, including documentary evidence. In the instant case, petitioner presented the results of Joson, Jr.'s written examination, actual driving tests, x-ray examination, psychological examination, NBI clearance, physical examination, hematology examination, urinalysis, student driver training, shop training, birth certificate, high school diploma and reports from the General Maintenance Manager and the Personnel Manager showing that he had passed all the tests and training sessions and was ready to work as a professional driver. However, as the trial court noted, petitioner did not present proof that Joson, Jr. had nine years of driving experience. Petitioner also presented testimonial evidence that drivers of the company were given seminars on driving safety at least twice a year. Again, however, as the trial court noted there is no record of Joson, Jr. ever attending such a seminar. Petitioner likewise failed to establish the speed of its buses during its daily trips or to submit in evidence the trip tickets, speed meters and reports of field inspectors. The finding of the trial court that petitioner's bus was running at a very fast speed when it overtook the Dalin bus and hit the deceased was not disputed by petitioner. For these reasons, we hold that the trial court did not err in finding petitioner to be negligent in the supervision of its driver Joson, Jr.

Second. To justify an award of actual damages, there should be proof of the actual amount of loss incurred in connection with the death, wake or burial of the victim. We cannot take into account receipts showing expenses incurred some time after the burial of the victim, such as expenses relating to the 9th day, 40th day and 1st year death anniversaries. In this case, the trial court awarded P88,339.00 as actual damages. While these were duly supported by receipts, these included the amount of P5,900.00, the cost of one pig which had been butchered for the 9th day death anniversary of the deceased. This item cannot be allowed. We, therefore, reduce the amount of actual damages to P82,439.00.00. The award of P200,000.00 for moral damages should likewise be reduced. The trial court found that the wife and children of the deceased underwent "intense moral suffering" as a result of the latter's death. Under Art. 2206 of the Civil Code, the spouse, legitimate children and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased. Under the circumstances of this case an award of P100,000.00 would be in keeping with the purpose of the law in allowing moral damages. On the other hand, the award of P50,000.00 for indemnity is in accordance with current rulings of the Court. Art. 2231 provides that exemplary damages may be recovered in cases involving quasidelicts if the defendant acted with gross negligence. Exemplary damages are imposed not to enrich one party or impoverish another but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions. In this case, petitioner's driver Joson, Jr. was grossly negligent in driving at such a high speed along the national highway and overtaking another vehicle which had stopped to allow a pedestrian to cross. Worse, after the accident, Joson, Jr. did not stop the bus to help the victim. Under the circumstances, we believe that the trial court's award of P50,000.00 as exemplary damages is proper. Finally, private respondents are entitled to attorney's fees. Under Art. 2008 of the Civil Code, attorney's fees may be recovered when, as in the instant case, exemplary damages are awarded. In the recent case of Metro Manila Transit Corporation v. Court of Appeals, we held an award of P50,000.00 as attorney's fees to be reasonable. Hence, private respondents are entitled to attorney's fees in that amount. WHEREFORE, the decision of the Court of Appeals, dated January 17, 2002, is hereby AFFIRMED, with the MODIFICATION that petitioner Victory Liner, Inc. is ordered to pay the following amounts to the respondent heirs of Andres Malecdan: 1. Death indemnity in the amount of Fifty Thousand Pesos (P50,000.00); 2. Actual damages in the amount of Eighty-Two Thousand Four Hundred Thirty-Nine Pesos (P82,439.00); 3. Moral damages in the amount of One Hundred Thousand Pesos (P100,000.00); 4. Exemplary damages in the amount of Fifty Thousand Pesos (P50,000.00); 5. Attorney's fees in the amount of Fifty Thousand Pesos (P50,000.00); and 6. Costs of suit. SO ORDERED.

162. MARTIN vs. COURT OF APPEALS FACTS: Ernesto Martin was the owner of a private car bearing license plate No. NPA930. At around 2 o'clock in the morning of May 11, 1982, while being driven by Nestor Martin, it crashed into a Meralco electric post on Valley Golf Road, in Antipolo, Rizal. The car was wrecked and the pole severely damaged. Meralco subsequently demanded reparation from Ernesto Martin, but the demand was rejected. It thereupon sued him for damages in the Regional Trial Court of Pasig, alleging inter alia that he was liable to it in the sum of P17,352.00 plus attorney's fees and litigation costs as the employer of Nestor Martin. The petitioner's main defense was that Nestor Martin was not his employee. After the plaintiff had rested, the defendant moved to dismiss the complaint on the ground that no evidence had been adduced to show that Nestor Martin was his employee. The motion was denied. The case was considered submitted for decision with the express waiver by the defendant of his right to present his own evidence. The defendant thus did not rebut the plaintiff's allegation that he was Nestor Martin's employer. RULING OF TRIAL COURT: In the decision dated August 27, 1985, Judge Eutropio Migrio held in favor of the plaintiff, awarding him the amount claimed, with 12% interest, and P4,000.00 attorney's fees, plus costs. RULING OF C.A.: The decision was seasonably elevated to the Court of Appeals, which affirmed it in toto on February 22, 1988, prompting this petition for review. ISSUE: Whether or not the employer is liable. RULING: The petition has merit. It is important to stress that the complaint for damages was filed by the private respondent against only Ernesto Martin as alleged employer of Nestor Martin, the driver of the car at the time of the accident. Nestor Martin was not impleaded. The action was based on tort under Article 2180 of the Civil Code, providing in part 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 above rule is applicable only if there is an employer-employee relationship although it is not necessary that the employer be engaged in any business or industry. It differs in this sense from Article 103 of the Revised Penal Code, which requires that the employer be engaged in an industry to be subsidiarily liable for the felony committed by his employee in the course of his employment. Whether or not engaged in any business or industry, the employer under Article 2180 is liable for the torts committed by his employees within the scope of their assigned task. But it is necessary first to establish the employment 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 defendant, as employer, may find it necessary to interpose the defense of due diligence in the selection and supervision of the employee as allowed in that article.

In the case at bar, no evidence whatsoever was adduced by the plaintiff to show that the defendant was the employer of Nestor Martin at the time of the accident. The trial court merely presumed the existence of the employer-employee relationship and held that the petitioner had not refuted that presumption. It noted that although the defendant alleged that he was not Nestor Martin's employer, "he did not present any proof to substantiate his allegation." As the trial court put it: There is no need to stretch one's imagination to realize that a car owner entrusts his vehicle only to his driver or to anyone whom he allows to drive it. Since neither plaintiff nor defendant has presented any evidence on the status of Nestor Martin, the Court presumes that he was at the time of the incident, an employee of the defendant. It is elementary that he who makes an allegation is required to prove the same. Defendant alleges that Nestor Martin was not his employee but he did not present any proof to substantiate his allegation. While it is true plaintiff did not present evidence on its allegation that Nestor Martin was defendant's employee, the Court believes and so holds, that there was no need for such evidence. As above adverted to, the Court can proceed on the presumption that one who drives the motor vehicle is an employee of the owner thereof. A presumption is defined as an inference as to the existence of a fact not actually known, arising from its usual connection with another which is known, or a conjecture based on past experience as to what course human affairs ordinarily take. It is either a presumption juris, or of law, or a presumption hominis, or of fact. There is no law directing the deduction made by the courts below from the particular facts presented to them by the parties. Such deduction is not among the conclusive presumptions under Section 2 or the disputable presumptions under Section 3 of Rule 131 of the Rules of Court. In other words, it is not a presumption juris. Neither is it a presumption hominis, which is a reasonable deduction from the facts proved without an express direction of law to that effect. The facts proved, or not denied, viz., the ownership of the car and the circumstances of the accident, are not enough bases for the inference that the petitioner is the employer of Nestor Martin. In the modern urban society, most male persons know how to drive and do not have to employ others to drive for them unless this is needed for business reasons. Many cannot afford this luxury, and even if they could, may consider it an unnecessary expense and inconvenience. In the present case, the more plausible assumption is that Nestor Martin is a close relative of Ernesto Martin and on the date in question borrowed the car for some private purpose. Nestor would probably not have been accommodated if he were a mere employee for employees do not usually enjoy the use of their employer's car at two o'clock in the morning. As the employment relationship between Ernesto Martin and Nestor Martin could not be presumed, it was necessary for the plaintiff to establish it by evidence. Meralco had the burden of proof, or the duty "to present evidence on the fact in issue necessary to establish his claim" as required by Rule 131, Section 1 of the Revised Rules of Court. Failure to do this was fatal to its action.

It was enough for the defendant to deny the alleged employment relationship, without more, for he was not under obligation to prove this negative averment. Ei incumbit probatio qui dicit, non qui negat. This 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 the facts upon which he bases his claim, the defendant is under no obligation to prove his exception or defense." The case of Amor v. Soberano, a Court of Appeals decision not elevated to this Court, was misapplied by the respondent court in support of the petitioner's position. The vehicle involved in that case was a six-by-six truck, which reasonably raised the factual presumption that it was engaged in business and that its driver was employed by the owner of the vehicle. The case at bar involves a private vehicle as its license plate indicates. No evidence was ever offered that it was being used for business purposes or that, in any case, its driver at the time of the accident was an employee of the petitioner. It is worth mentioning in this connection that in Filamer Christian Institute v. Court of Appeals, the owner of the jeep involved in the accident was absolved from liability when it was shown that the driver of the vehicle was not employed as such by the latter but was a "working scholar" as that term is defined by the Omnibus Rules Implementing the Labor Code. He was assigned to janitorial duties. Evidence was introduced to establish the employment relationship but it failed nonetheless to hold the owner responsible. Significantly, no similar evidence was even presented in the case at bar, the private respondent merely relying on its mere allegation that Nestor Martin was the petitioner's employee. Allegation is not synonymous with proof. The above observations make it unnecessary to examine the question of the driver's alleged negligence or the lack of diligence on the part of the petitioner in the selection and supervision of his employee. These questions have not arisen because the employment relationship contemplated in Article 1860 of the Civil Code has not been established. WHEREFORE, the petition is GRANTED. The decision of the respondent court is REVERSED, and Civil Case No. 48045 in the Regional Trial Court of Pasig, Branch 151, is DISMISSED, with costs against the respondent. It is so ordered. 163. CARTICIANO v. NUVAL FACTS: On September 3, 1992 at about 9:30 in the evening, plaintiff Zacarias Carticiano was on his way home to Imus, Cavite. Plaintiff Zacarias was driving his fathers (plaintiff Rosendo Carticiano) Ford Laser car, traversing the coastal roads of Longos, Bacoor, Cavite. On the same date and time, defendant Nuvals owner-type Jeep, then driven by defendant Darwin was traveling on the opposite direction going to Paraaque. When the two cars were about to pass one another, defendant Darwin veered his vehicle to his left going to the center island of the highway and occupied the lane which plaintiff Zacarias was traversing.

As a result thereof, plaintiff Zacarias Ford Laser collided head-on with defendant Nuvals Jeep. Defendant Darwin immediately fled from the scene. Plaintiff Zacarias was taken out of the car by residents of the area and was brought to the hospital by Eduard Tangan, a Narcom agent who happened to pass by the place. Plaintiff Zacarias suffered multiple fracture on his left leg and other injuries in his body. Plaintiff Zacarias underwent a leg operation and physical therapy to repair the damaged leg. Defendant Nuval offered P100,000.00 as compensation for the injuries caused. Plaintiffs refused to accept the amount. On this account, plaintiffs filed a criminal suit against defendant Darwin. Plaintiffs also filed this present civil suit against defendants for damages. RULING OF THE COURT OF APPEALS: The Court of Appeals explained that in order to hold an employer liable for the negligent acts of an employee under Article 2180 of the Civil Code, it must be shown that the employee was acting within the scope of his assigned task when the tort complained of was committed. The employer in this case, Respondent Mario Nuval, cannot be held liable for the tort committed by Darwin. First, appellants did not present evidence showing that the driver was indeed an employee of respondent at the time the accident occurred. And second, even assuming arguendo that Darwin was in fact an employee of Nuval, it was not shown that the former was acting within the scope of his assigned task when the incident happened. Thus, the requisites for holding an employer liable for the tort committed by an employee were not satisfied. ISSUES: Petitioners present the following issues: 1. Whether or not Defendant Darwin was in fact an employee of Defendant Nuval; 2. Whether or not Defendant Nuval was negligent in the selection and supervision of his employees; 3. Whether or not Defendant Nuval was grossly negligent in the safekeeping of the key to his owner-type jeep and of said vehicle itself; 4. Whether or not respondent must be held liable for the damages and injuries suffered by appellees; 5. Whether or not findings of facts of the Court of Appeals are subject to exceptions.9 RULING: The Petition is meritorious. First Issue: No Proof That Employment Was Terminated Respondent maintains that on the date the accident happened, Darwin was no longer his employee because the latters services had already been terminated. Nuval adds that Darwin was hired for a period of only four to six days. To substantiate this claim, the former presented payroll and employment records showing that the latter was no longer his employee. We disagree. The only proof proferred by Respondent Nuval to show that Darwin was no longer his employee was the payroll in which the latters name was not included. However, as revealed by the testimonies of the witnesses presented during trial, respondent had other employees working for him who were not listed in the payroll either. The trial court explained as follows:

It surfaced that the payroll and daily time records presented by defendant Nuval [were] not reliable proofs of the names and number of employees that defendant Nuval had at the time of the incident in view of the testimonies of witnesses for defendant Nuval tending to show that there were more employees of defendant Nuval who were not in the payroll. The rather easy access which Darwin had to the keys to the vehicle of Nuval further weakened the latters cause.First, nobody questioned the fact that the former had freely entered respondents house where the keys to the vehicle were kept. The theory of Nuval that Darwin must have stolen the keys as well as the vehicle is rather farfetched and not supported by any proof whatsoever. It is obviously an afterthought concocted to present some semblance of a defense. Second, both respondent and his employees who testified did not act as if the vehicle had been stolen. He had not reported the alleged theft of his vehicle. Neither did he search nor ask his employees to search for the supposedly stolen vehicle. In fact, he testified that his employees had told him that the keys and the vehicle had merely probably been stolen by Darwin. Atty. Bobadilia: Did you ask among your employees who gave the key to Darwin? Mario Nuval: I asked them, sir. Atty. Bobadilla: What was the reply of your employees? M. Nuval: According to my employees he stole the key of the jeepney at home. Atty. Abas: I disagree with the interpretation of the interpreter because the answer of the witness is ninanak yata. Interpreter: I agree, your Honor. Court: So, what is the correct interpretation? A: According to my employees perhaps the key was stolen, or perhaps Darwin stole the key to the jeep. From the totality of the evidence, we are convinced that Darwin was Nuvals driver at the time of the accident. Second to Fourth Issues: Employers Liability The CA agreed with the theory of respondent that he could not be held liable for the negligent acts of his employee because Darwin was not acting within the scope of his assigned tasks when the damage occurred. Respondent adds that he observed the diligence of a good father of a family and was not negligent in safeguarding the keys to the said vehicle. Article 2180 of the Civil Code provides that employers shall be liable for damages caused by their employees acting within the scope of their assigned tasks. The said provision is reproduced below: ART. 2180. The obligation imposed by article 2176 is demandable not only for ones own acts or omissions, but also for those of persons for whom one is responsible. The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor children who live [in] their company. Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and live in their company.

The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions. Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry. The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in article 2176 shall be applicable. Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their custody. The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. (Italics supplied) The facts established in the case at bar show that Darwin was acting within the scope of the authority given him when the collision occurred. That he had been hired only to bring respondents children to and from school must be rejected. True, this may have been one of his assigned tasks, but no convincing proof was presented showing that it was his only task. His authority was to drive Nuvals vehicle. Third parties are not bound by the allegation that the driver was authorized to operate the jeep only when the employers children were on board the vehicle. Giving credence to this outlandish theory would enable employers to escape their legal liabilities with impunity. Such loophole is easy to concoct and is simply unacceptable. The claim of respondent that he had exercised the diligence of a good father of a family is not borne out by the evidence. Neither is it supported by logic. His main defense that at the time of the accident Darwin was no longer his employee, having been merely hired for a few days, is inconsistent with his other argument of due diligence in the selection of an employee. Once a driver is proven negligent in causing damages, the law presumes the vehicle owner equally negligent and imposes upon the latter the burden of proving proper selection of employee as a defense. Respondent failed to show that he had satisfactorily discharged this burden. No Proof of Contributory Negligence Respondent Nuvals accusation that Petitioner Zacarias Carticiano is guilty of contributory negligence by failing to stop his car or to evade the oncoming jeep is untenable. Both the trial and the appellate courts found that the accident was caused by the fact that Darwins jeep suddenly veered towards Zacarias lane when the vehicles were about to pass each other, thus making it difficult if not impossible for petitioner to avoid the head-on collission. Nuval utterly failed to present sufficient evidence to show that Zacarias could have evaded the jeep. Given the distance between the vehicles and the speed at which they were travelling, the former was not able to demonstrate convincingly that the latter could have minimized the damage complained of.

Review of Factual Findings Generally, the factual findings of lower courts are accorded great respect by this Court. However, the above rule is subject to certain exceptions, one of which is when the two lower courts findings oppose each other. In the present case, there is a clear conflict between the findings of the trial court and those of the CA. Such conflict hinges on whether it was sufficiently proven that the employment of Darwin had indeed been terminated by respondent, and whether the former was acting within the scope of his assigned tasks at the time the collision occurred. The resolution of both of these pivotal factual issues is determinative of respondents vicarious liability for the injuries caused by Darwin. It is thus necessary for this Court to pore over the evidence adduced, as it did already. Damages Article 2199 of the Civil Code allows the aggrieved party to recover the pecuniary loss that he has suffered. ART. 2199. 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. Such compensation is referred to as actual or compensatory damages. Based on the above, Petitioner Zacarias is entitled to indemnification for actual damages caused by the negligence of Darwin, for which the latters employer, Respondent Nuval, is solidarily liable. And as found by the trial court, petitioner is entitled to P160,715.19 for his medical treatment, as testified to by Dr. Eduardo Arandia. In the same vein, both petitioners are also entitled to P173,788, which represents the costs incurred for the repair of the damaged vehicle. The Civil Code allows indemnification for lost profit or income, but petitioners failed to adduce sufficient proof of such loss. However, moral damages are in order, based on Articles 2217 and 2219 of the Civil Code which respectively provide: 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 defendants wrongful act or omission. ART. 2219. Moral damages may be recovered in the following and analogous cases: xxx (2) Quasi-delicts causing physical injuries x x x As a direct result of the collision, petitioner suffered physically. It is also true that he experienced and will continue to experience social humiliation and ridicule for having his left leg shorter than the right which causes him to limp when walking. For the above, we agree with the trial court that Petitioner Zacarias is entitled to an award of moral damages. Exemplary damages and attorneys fees are likewise authorized by the following provisions of the Civil Code:

ART. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages. ART. 2234. While the amount of the exemplary damages need not be proved, the plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded. In case liquidated damages have been agreed upon, although no proof of loss is necessary in order that such liquidated damages may be recovered, nevertheless, before the court may consider the question of granting exemplary in addition to the liquidated damages, the plaintiff must show that he would be entitled to moral, temperate or compensatory damages were it not for the stipulation for liquidated damages. ART. 2208. In the absence of stipulation, attorneys fees and expenses of litigation, other than judicial costs, cannot be recovered, except: (1) When exemplary damages are awarded x x x. As held by the trial court, respondents refusal to answer adequately for the damages forced petitioners to litigate and incur expenses. And to serve as an example for the public good, exemplary damages are affirmed, since Petitioner Zacarias has already shown that he is entitled to compensatory and moral damages in accordance with Article 2234 of the Civil Code. WHEREFORE, the Petition is hereby GRANTED. The assailed Decision is REVERSED and SET ASIDE and the trial courts Decision REINSTATED, except that the award of P100,000 for lost income or opportunities is DELETED. SO ORDERED. 164. FGU INSURANCE CORPORATION VS.COURT OF APPEALS FACTS: This was a two-car collision at dawn. At around 3 o'clock of 21 April 1987, two (2) vehicles, both Mitsubishi Colt Lancers, cruising northward along Epifanio de los Santos Avenue, Mandaluyong City, figured in a traffic accident. The car bearing Plate No. PDG 435 owned by Lydia F. Soriano was being driven at the outer lane of the highway by Benjamin Jacildone, while the other car, with Plate No. PCT 792, owned by respondent FILCAR Transport, Inc. (FILCAR), and driven by Peter Dahl-Jensen as lessee, was at the center lane, left of the other vehicle. Upon approaching the corner of Pioneer Street, the car owned by FILCAR swerved to the right hitting the left side of the car of Soriano. At that time Dahl-Jensen, a Danish tourist, did not possess a Philippine driver's license. As a consequence, petitioner FGU Insurance Corporation, in view of its insurance contract with Soriano, paid the latter P25,382.20. By way of subrogation, it sued DahlJensen and respondent FILCAR as well as respondent Fortune Insurance Corporation (FORTUNE) as insurer of FILCAR for quasi-delict before the Regional Trial Court of Makati City. Unfortunately, summons was not served on Dahl-Jensen since he was no longer staying at his given address; in fact, upon motion of petitioner, he was dropped from the complaint.

RULING OF TRIAL COURT: On 30 July 1991 the trial court dismissed the case for failure of petitioner to substantiate its claim of subrogation. RULING OF C.A.: On 31 January 1995 respondent Court of Appeals affirmed the ruling of the trial court although based on another ground, i.e., only the fault or negligence of Dahl-Jensen was sufficiently proved but not that of respondent FILCAR. In other words, petitioner failed to establish its cause of action for sum of money based on quasi-delict. ISSUE: Whether or not the respondents are liable on the strength of the ruling in MYCAgro-Industrial Corporation v. Vda. de Caldo that the registered owner of a vehicle is liable for damages suffered by third persons although the vehicle is leased to another. RULING: We find no reversible error committed by respondent court in upholding the dismissal of petitioner's complaint. The pertinent provision is Art. 2176 of the Civil Code which states: "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 . . . . " To sustain a claim based thereon, the following requisites must concur: (a) damage suffered by the plaintiff; (b) fault or negligence of the defendant; and, (c) connection of cause and effect between the fault or negligence of the defendant and the damage incurred by the plaintiff. We agree with respondent court that petitioner failed to prove the existence of the second requisite, i.e., fault or negligence of defendant FILCAR, because only the fault or negligence of Dahl-Jensen was sufficiently established, not that of FILCAR. It should be noted that the damage caused on the vehicle of Soriano was brought about by the circumstance that Dahl-Jensen swerved to the right while the vehicle that he was driving was at the center lane. It is plain that the negligence was solely attributable to DahlJensen thus making the damage suffered by the other vehicle his personal liability. Respondent FILCAR did not have any participation therein. Article 2180 of the same Code which deals also with quasi-delict provides: The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor children who live in their company. Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and live in their company. The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions. Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.

The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in article 2176 shall be applicable. Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their custody. The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. The liability imposed by Art. 2180 arises by virtue of a presumption juris tantum of negligence on the part of the persons made responsible thereunder, derived from their failure to exercise due care and vigilance over the acts of subordinates to prevent them from causing damage. Yet, as correctly observed by respondent court, Art. 2180 is hardly applicable because none of the circumstances mentioned therein obtains in the case under consideration. Respondent FILCAR being engaged in a rent-a-car business was only the owner of the car leased to Dahl-Jensen. As such, there was no vinculum juris between them as employer and employee. Respondent FILCAR cannot in any way be responsible for the negligent act of Dahl-Jensen, the former not being an employer of the latter. We now correlate par. 5 of Art. 2180 with Art. 2184 of the same Code which provides: "In motor vehicle mishap, the owner is solidarily liable with his driver, if the former, who was in the vehicle, could have by the use of due diligence, prevented the misfortune . . . . If the owner was not in the motor vehicle, the provisions of article 2180 are applicable." Obviously, this provision of Art. 2184 is neither applicable because of the absence of master-driver relationship between respondent FILCAR and Dahl-Jensen. Clearly, petitioner has no cause of action against respondent FILCAR on the basis of quasi-delict; logically, its claim against respondent FORTUNE can neither prosper. Petitioner's insistence on MYC-Agro-Industrial Corporation is rooted in a misapprehension of our ruling therein. In that case, the negligent and reckless operation of the truck owned by petitioner corporation caused injuries to several persons and damage to property. Intending to exculpate itself from liability, the corporation raised the defense that at the time of the collision it had no more control over the vehicle as it was leased to another; and, that the driver was not its employee but of the lessee. The trial court was not persuaded as it found that the true nature of the alleged lease contract was nothing more than a disguise effected by the corporation to relieve itself of the burdens and responsibilities of an employer. We upheld this finding and affirmed the declaration of joint and several liability of the corporation with its driver. WHEREFORE, the petition is DENIED. The decision of respondent Court of Appeals dated 31 January 1995 sustaining the dismissal of petitioner's complaint by the trial court is AFFIRMED. Costs against petitioner. SO ORDERED.

165. PILIPINAS SHELL PETROLEUM CORPORATION vs. COURT OF APPEALS FACTS: Private respondent Clarita T. Camacho (private respondent for short) was the operator of a gasoline station in Naguilian Road, Baguio City, wherein she sells petitioner Shell's petroleum products. Sometime in April 1983, private respondent requested petitioner to conduct a hydro-pressure test on the underground storage tanks of the said station in order to determine whether or not the sales losses she was incurring for the past several months were due to leakages therein. Petitioner acceded to the said request and on April 27, 1983, one Jesus "Jessie" Feliciano together with other workers, came to private respondent's station with a Job Order from petitioner to perform the hydro-pressure test. On the same day, Feliciano and his men drained the underground storage tank which was to be tested of its remaining gasoline. After which, they filled the tank with water through a water hose from the deposit tank of private respondent. Then, after requesting one of private respondent's gasoline boys to shut off the water when the tank was filled, Feliciano and his men left. At around 2:00 a.m. the following day, private respondent saw that the water had reached the lip of the pipe of the underground storage tank and so, she shut off the water faucet. At around 5:30 a.m., private respondent's husband opened the station and started selling gasoline. But at about 6:00 a.m., the customers who had bought gasoline returned to the station complaining that their vehicles stalled because there was water in the gasoline that they bought. On account of this, private respondent was constrained to replace the gasoline sold to the said customers. However, a certain Eduardo Villanueva, one of the customers, filed a complaint with the police against private respondent for selling the adulterated gasoline. In addition, he caused the incident to be published in two local newspapers. Feliciano, who arrived later that morning, did not know what caused the water pollution of the gasoline in the adjacent storage tank. So he called up Nick Manalo, Superintendent of Shell's Poro Point Installation at San Fernando, La Union, and referred the matter to the latter. Manalo went up to Baguio in the afternoon to investigate. Thereafter, he and Feliciano again filled with water the underground storage tank undergoing hydro-pressure test whereat they noticed that the water was transferring to the other tanks from whence came the gasoline being sold. Manalo asked permission from Shell's Manila Office to excavate the underground pipes of the station. Upon being granted permission to do so, Feliciano and his men began excavating the driveway of private respondent's station in order to expose the underground pipeline. The task was continued by one Daniel "Danny" Pascua who replaced Feliciano, Pascua removed the corroded pipeline and installed new independent vent pipe for each storage tank. RULING OF TRIAL COURT: The trial court dismissed private respondent's complaint for damages for the reason that: "The hydro-pressure test which brought about the incident was conducted by Jesus Feliciano, who was neither an employee nor agent nor representative of the defendant. Jesus Feliciano is responsible for his own acts and omissions. He alone was in control of the manner of how he is to undertake the hydro-pressure test.

Considering that the conduct of said hydro-pressure test was under the sole and exclusive control and supervision of Jesus Feliciano, the overflow with water causing the same to sip into the adjoining tank cannot be attributed to the fault or negligence of defendant. RULING OF C.A.: From the adverse decision of the trial court, private respondent appealed to the Court of Appeals which court reversed the decision of the trial court. Thus, "PREMISES CONSIDERED, the decision being appealed from is hereby SET ASIDE and, in lieu thereof, another rendered ordering defendant to pay plaintiff: 1. P100,000.00 as moral damages; 2. P2,639.25 and P15,000.00 representing the actual losses suffered by plaintiff as a result of the water pollution of the gasoline. No costs. SO ORDERED." Petitioner moved to have the above decision reconsidered but the same was denied in a Resolution dated March 9, 1992. ISSUE: Whether or not petitioner should be held accountable for the damage to private respondent due to the hydro-pressure test conducted by Jesus Feliciano. RULING: It is a well-entrenched rule that an employer-employee relationship must exist before an employer may be held liable for the negligence of his employee. It is likewise firmly settled that the existence or non-existence of the employer-employee relationship is commonly to be determined by examination of certain factors or aspects of that relationship. These include: (a) the manner of selection and engagement of the putative employee; (b) the mode of payment of wages; (c) the presence or absence of a power to control the putative employee's conduct, although the latter is the most important element. In this case, respondent Court of Appeals held petitioner liable for the damage caused to private respondent as a result of the hydro-pressure test conducted by Jesus Feliciano due to the following circumstances: 1. Feliciano was hired by petitioner; 2. He received his instructions from the Field Engineer of petitioner, Mr. Roberto Mitra; 3. While he was at private respondent's service station, he also received instructions from Nick Manalo, petitioner's Poro Point Depot Superintendent; 4. Instructions from petitioner's Manila Office were also relayed to him while he was at .the job site at Baguio City; 5. His work was under the constant supervision of petitioner's engineer; 6. Before he could complete the work, he was instructed by Mr. Manalo, petitioner's Superintendent, to discontinue the same and it was turned over to Daniel Pascua, who was likewise hired by petitioner. Based on the foregoing, respondent Court of Appeals concluded that Feliciano was not an independent contractor but was under the control and supervision of petitioner in the performance of the hydro-pressure test, hence, it held petitioner liable for the former's acts and omissions.

We are not in accord with the above finding of respondent Court of Appeals. As aptly held by the trial court, petitioner did not exercise control and supervision over Feliciano with regard to the manner in which he conducted the hydro-pressure test. All that petitioner did, through its Field Engineer, Roberto Mitra, was relay to Feliciano the request of private respondent for a hydro-pressure test, to determine any possible leakages in the storage tanks in her gasoline station. The mere hiring of Feliciano by petitioner for that particular task is not the form of control and supervision contemplated by may be the basis for establishing an employer-employee relationship between petitioner and Feliciano. The fact that there was no such control is further amplified by the absence of any Shell representative in the job site time when the test was conducted. Roberto Mitra was never there. Only Feliciano and his men were. True, it was petitioner who sent Feliciano to private respondent's gasoline station in conduct the hydro-pressure test as per the request of private respondent herself. But this single act did not automatically make Feliciano an employee of petitioner. As discussed earlier, more than mere hiring is required. It must further be established that petitioner is the one who is paying Felicia's salary on a regular basis; that it has the power to dismiss said employee, and more importantly, that petitioner has control and supervision over the work of Feliciano. The last requisite was sorely missing in the instant case. A careful perusal of the records will lead to the conclusion that Feliciano is an independent contractor. Section 8 of Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code provides: "Sec. 8. Job contracting. There is job contracting permissible under the Code if the following conditions are met: (1) The contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and (2) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business." Feliciano is independently maintaining a business under a duly registered business name, "JFS Repair and Maintenance Service," and is duly registered with the Bureau of Domestic Trade. He does not enjoy a fixed salary but instead charges a lump sum consideration for every piece of work he accomplishes. If he is not able to finish his work, he does not get paid, as what happened in this case. Further, Feliciano utilizes his own tools and equipment and has a complement of workers. Neither is he required to work on a regular basis. Instead, he merely awaits calls from clients such as petitioner whenever repairs and maintenance services are requested. Moreover, Feliciano does not exclusively service petitioner because he can accept other business but not from other oil companies. All these are the hallmarks of an independent contractor. Being an independent contractor, Feliciano is responsible for his own acts and omissions. As he alone was in control over the manner of how he was to undertake the hydro-pressure test, he alone must bear the consequences of his negligence, if any, in the conduct of the same.

Anent the issue of damages, the same has been rendered moot by the failure of private respondent to establish an employer-employee relationship between petitioner and Feliciano. Absent said relationship, petitioner cannot be held liable for the acts and omissions of the independent contractor, Feliciano. WHEREFORE, premises considered, the appealed decision of respondent Court of Appeals is hereby SET ASIDE and the decision of the trial court REINSTATED. Without pronouncement as to costs. SO ORDERED. 166. NPC vs. COURT OF APPEALS FACTS: On July 22, 1979, a convoy of four (4) dump trucks owned by the National Power Corporation (NPC) left Marawi city bound for Iligan city. Unfortunately, enroute to its destination, one of the trucks with plate no RFT-9-6-673 driven by a certain Gavino Ilumba figured in a head-on-collision with a Toyota Tamaraw. The incident resulted in the death of three (3) persons riding in the Toyota Tamaraw, as well as physical injuries to seventeen other passengers. On June 10, 1980, the heirs of the victims filed a complaint for damages against National Power Corporation (NPC) and PHESCO Incorporated (PHESCO) before the then Court of First Instance of Lanao del Norte, Marawi City. When defendant PHESCO filed its answer to the complaint it contended that it was not the owner of the dump truck which collided with the Toyota Tamaraw but NPC. Moreover, it asserted that it was merely a contractor of NPC with the main duty of supplying workers and technicians for the latter's projects. On the other hand, NPC denied any liability and countered that the driver of the dump truck was the employee of PHESCO. RULING OF TRIAL COURT: The trial court rendered a decision dated July 25, 1988 absolving NPC of any liability. The dispositive portion reads: Consequently, in view of the foregoing consideration, judgment is hereby rendered ordering PHESCO, Inc. and Gavino Ilumba upon receipt hereof: 1. To pay jointly and severally the plaintiffs thru the Dansalan College the sum of P954,154.55 representing the actual or compensatory damages incurred by the plaintiffs; and 2. To pay the sum of P50,000.00 representing Attorney's fees. SO ORDERED. RULING OF C.A.: Dissatisfied, PHESCO appealed to the Court of Appeals, which on November 10, 1994 reversed the trial court's judgment. We quote the pertinent portion of the decision: A "labor only" contractor is considered merely as an agent of the employer (Deferia vs. National Labor Relations Commission, 194 SCRA 525). A finding that a contractor is a "labor only" contractor is equivalent to a finding that there is an employer-employee relationship between the owner of the project and the employees of the "labor only" contractor (Industrial Timer Corporation vs. National Labor Relations Commission, 202 SCRA 465). So, even if Phesco hired driver Gavino Ilumba, as Phesco is admittedly a "labor only" contractor of Napocor the statute itself establishes an employer-employee relationship between the employer (Napocor) and the employee (driver Ilumba) of the

labor only contractor (Phesco). (Ecal vs. National Labor Relations Commission, 195 SCRA 224). Consequently, we hold Phesco not liable for the tort of driver Gavino Ilumba, as there was no employment relationship between Phesco and driver Gavino Ilumba. Under Article 2180 of the Civil Code, to hold the employer liable for torts committed by his employees within the scope of their assigned task, there must exist an employeremployee relationship. (Martin vs. Court of Appeals, 205 SCRA 591). WHEREFORE, we REVERSE the appealed decision. In lieu thereof, the Court renders judgment sentencing defendant National Power Corporation to pay plaintiffs the sum of P174,889.20 plus P20,000.00 as attorney's fees and costs. SO ORDERED. ISSUE: The principal query to be resolved is, as between NPC and PHESCO, who is the employer of Ilumba, driver of the dumptruck which figured in the accident and which should, therefore, would be liable for damages to the victims. RULING: As earlier stated, NPC denies that the driver of the dump truck was its employee. It alleges that it did not have the power of selection and dismissal nor the power of control over Ilumba. PHESCO, meanwhile, argues that it merely acted as a "recruiter" of the necessary workers for and in behalf of NPC. Before we decide who is the employer of Ilumba, it is evidently necessary to ascertain the contractual relationship between NPC and PHESCO. Was the relationship one of employer and job (independent) contractor or one of employer and "labor only" contractor? Job (independent) contracting is present if the following conditions are met: (a) the contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except to the result thereof; and (b) the contractor has substantial capital or investments in the form of tools, equipment, machineries, work premises and other materials which are necessary in the conduct of his business. Absent these requisites, what exists is a "labor only" contract under which the person acting as contractor is considered merely as an agent or intermediary of the principal who is responsible to the workers in the same manner and to the same extent as if they had been directly employed by him. Taking into consideration the above distinction and the provisions of the "Memorandum of Understanding" entered into by PHESCO and NPC, we are convinced that PHESCO was engaged in "labor only" contracting. It must be noted that under the Memorandum, NPC had mandate to approve the "critical path network and rate of expenditure to be undertaken by PHESCO. Likewise, the manning schedule and pay scale of the workers hired by PHESCO were subject to confirmation by NPC. Then too, it cannot be ignored that if PHESCO enters into any subcontract or lease, again NPC's concurrence is needed. Another consideration is that even in the procurement of tools and equipment that will be used by PHESCO, NPC's favorable recommendation is still necessary before these tools and equipment can be purchased. Notably, it is NPC that will provide the money or funding that will be used by PHESCO to undertake the project. Furthermore, it must be emphasized that the project being undertaken by PHESCO, i.e., construction of power energy facilities, is related to

NPC's principal business of power generation. In sum, NPC's control over PHESCO in matters concerning the performance of the latter's work is evident. It is enough that NPC has the right to wield such power to be considered as the employer. Under this factual milieu, there is no doubt that PHESCO was engaged in "labor-only" contracting vis--vis NPC and as such, it is considered merely an agent of the latter. In labor-only contracting, an employer-employee relationship between the principal employer and the employees of the "labor-only" contractor is created. Accordingly, the principal employer is responsible to the employees of the "labor-only" contractor as if such employees had been directly employed by the principal employer. Since PHESCO is only a "labor-only" contractor, the workers it supplied to NPC, including the driver of the ill-fated truck, should be considered as employees of NPC. After all, it is axiomatic that any person (the principal employer) who enters into an agreement with a job contractor, either for the performance of a specified work or for the supply of manpower, assumes responsibility over the employees of the latter. However, NPC maintains that even assuming that a "labor only" contract exists between it and PHESCO, its liability will not extend to third persons who are injured due to the tortious acts of the employee of the "labor-only" contractor. Stated otherwise, its liability shall only be limited to violations of the Labor Code and not quasi-delicts. To bolster its position, NPC cites Section 9(b), Rule VII, Book III of the Omnibus Rules Implementing the Labor Code which reads: (b) Labor only contracting as defined herein is hereby prohibited and the person acting as contractor shall be considered merely as an agent or intermediary of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. In other words, NPC posits the theory that its liability is limited only to compliance with the substantive labor provisions on working conditions, rest periods, and wages and shall not extend to liabilities suffered by third parties, viz.: Consequently, the responsibilities of the employer contemplated in a "labor only" contract, should, consistent with the terms expressed in the rule, be restricted "to the workers." The same can not be expanded to cover liabilities for damages to third persons resulting from the employees' tortious acts under Article 2180 of the Civil Code. The reliance is misplaced. It bears stressing that the action was premised on the recovery of damages as a result of quasi-delict against both NPC and PHESCO, hence, it is the Civil Code and not the Labor Code which is the applicable law in resolving this case. To be sure, the pronouncement of this Court in Filamer Christian Institute v. IAC, is most instructive: 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. Corollarily from the above doctrine, the ruling in Cuison v. Norton & Harrison Co., finds applicability in the instant case,viz.: It is well to repeat that under the civil law an employer is only liable for the negligence of his employees in the discharge of their respective duties. The defense of independent contractor would be a valid one in the Philippines just as it would be in the United States. Here Ora was a contractor, but it does not necessarily follow that he was an independent contractor. The reason for this distinction is that the employer retained the power of directing and controlling the work. The chauffeur and the two persons on the truck were the employees of Ora, the contractor, but Ora, the contractor, was an employee of Norton & Harrison Co., charged with the duty of directing the loading and transportation of the lumber. And it was the negligence in loading the lumber and the use of minors on the truck which caused the death of the unfortunate boy. On the facts and the law, Ora was not an independent contractor, but was the servant of the defendant, and for his negligence defendant was responsible. Given the above considerations, it is apparent that Article 2180 of the Civil Code and not the Labor Code will determine the liability of NPC in a civil suit for damages instituted by an injured person for any negligent act of the employees of the "labor only" contractor. This is consistent with the ruling that a finding that a contractor was a "labor-only" contractor is equivalent to a finding that an employer-employee relationship existed between the owner (principal contractor) and the "labor-only" contractor, including the latter's workers. With respect to the liability of NPC as the direct employer, Article 2180 of the Civil Code explicitly provides: 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. In this regard, NPC's liability is direct, primary and solidary with PHESCO and the driver. Of course, NPC, if the judgment for damages is satisfied by it, shall have recourse against PHESCO and the driver who committed the negligence which gave rise to the action. Finally, NPC, even if it truly believed that it was not the employer of the driver, could still have disclaimed any liability had it raised the defense of due diligence in the selection or supervision of PHESCO and Ilumba. However, for some reason or another, NPC did not invoke said defense. Hence, by opting not to present any evidence that it exercised due diligence in the supervision of the activities of PHESCO and Ilumba, NPC has foreclosed its right to interpose the same on appeal in conformity with the rule that points of law, theories, issues of facts and arguments not raised in the proceedings below cannot be ventilated for the first time on appeal. Consequently, its liability stands. WHEREFORE, in view of the foregoing, the assailed decision of the Court of Appeals dated November 10, 1994 and its accompanying resolution dated February 9, 1995 are AFFIRMED without prejudice to the right of NPC to demand from PHESCO and Ilumba

reimbursement of the damages it would be adjudged to pay to complainants. No costs. SO ORDERED. 167. FILAMER CHRISTIAN INSTITUTE vs. IAC FACTS: 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. 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. 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. DECISION OF THE SUPREME COURT: 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. RULING: 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 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. Cases 159-167 TABUZO, MAE ABEGAIL I. 168. METRO MANILA TRANSIT CORPORATION vs. COURT OF APPEALS FACTS: The eyewitness account of plaintiffs witness, Maria Zenaida Baylon, tends to show that in the afternoon of December 24, 1986, she, her daughter Maria Zenia and the victim, Florentina Sabalburo, were on their way to Baclaran to buy foodstuffs for their Noche Buena. For some time, they stood on the island at the intersection of St. Andrews Street and Domestic Road, [Pasay City] waiting for the traffic light to change so they could cross to the other side of St. Andrews Street where they intended to take a ride for Baclaran. When the traffic light turned red and the vehicles along St. Andrews Street had stopped, the three of them stepped off the island. Just as they started to cross the street, she (Baylon) saw an MMTC bus coming from their right (Tramo) which was moving at a fast speed. The next moment, the left front portion of the bus hit the victim on the right side of her head. The impact was of such force that the victims right ear was slashed off and she thereupon fell on the cement and became unconscious. The victim was brought by the bus driver, Apolinario Ajoc and the bus conductress to the San Juan de Dios Hospital where she was given medical attention. Florentina Sabalburo never regained consciousness and it was on January 3, 1987 that she succumbed to her injuries. Private respondents filed a complaint for damages against MMTC and its driver, Ajoc, with the Regional Trial Court of Makati. the complaint essentially alleged that Ajoc drove the MMTC bus in a wanton and reckless manner, in gross violation of traffic rules and regulations, without due regard for the safety of others, thus causing the untimely death of the victim. Petitioners denied the material allegations of the complaint, disclaimed any liability for the incident, and insisted that the accident was solely due to the victims own negligence. ISSUE: Whether or not article 2179 as an exception to article 2176 of the civil code is applicable in the instant case

HELD: Petitioners insist that a closer look at the facts established by the trial court would show that the incident happened at around 3:30 in the afternoon of December 24, 1986 or barely eight (8) hours before Christmas Eve. Thus, the victims thoughts were naturally directed towards the Noche Buena. The victim then crossed busy Andrew Avenue for the purpose of getting a ride to Baclaran to buy food for the Christmas Eve celebration. Since her thoughts were on the Christmas Eve feast, she crossed where there was no pedestrian lane and while the green light for vehicular traffic was on. Petitioner MMTC submits that petitioner Ajoc cannot be charged with negligence considering that he cannot see what is in the mind of a pedestrian. Considering that the victims own negligence was the direct and proximate cause of her injuries and untimely demise, it was error for the Court of Appeals not to have applied Article 2179 of the Civil Code to the instant case. Petitioners claim that at the time of the incident, the victims mind was preoccupied with the preparations for the Noche Buena, is naught but pure conjecture and speculation, with nary a scintilla of proof to support it, according to respondents. Both the trial and appellate courts established that the immediate and proximate cause of the victims death was the negligent and careless driving by petitioner Ajoc. Therefore, the full force of Article 2176 of the Civil Code applies, concluded respondents. In asking us to apply Article 2179 of the Civil Code, we note that petitioners are asking us to make a finding that the victims own negligence was the direct and proximate cause of her death. This we cannot do. The issue of whether a person is negligent or not is a question of fact. The Supreme Court is not a trier of facts, although it has the power and authority to review and reverse the factual findings of lower courts where these do not conform to the evidence or where the courts below came up with contradictory factual findings. We have thoroughly perused the records of this case, and nowhere do we find evidence to support petitioners claim that the victim was so engrossed in thinking about Noche Buena while crossing a busy street. Petitioners stance regarding the victims alleged negligence is non sequitur. It simply does not follow that one who is run over by a vehicle on Christmas Eve (or any other holiday for that matter) is negligent because his thoughts were on the holiday festivities. Instead, the records support private respondents claim that the MMTC bus was being driven carelessly. As found by the trial court and affirmed by the Court of Appeals, the victim and her companions were standing on the island of Andrew Avenue, waiting for the traffic light to change so they could cross. Upon seeing the red light, the victim and her companions started to cross. It was then when petitioner Ajoc, who was trying to beat the red light, hit the victim. As the court a quo noted, Ajocs claim that he failed to see the victim and her companions proves his recklessness and lack of caution in driving his vehicle. Findings of fact of the trial court, especially when affirmed by the Court of Appeals, are binding and conclusive on the Supreme Court. More so, as in this case, where petitioners have not adequately shown that the courts below overlooked or disregarded certain facts or circumstances of such import as would have altered the outcome of the case. Contrary to petitioners insistence, the applicable law in this case is Article 2176 of the Civil Code and not Article 2179. Petitioner MMTC next contends that the Court of Appeals erred in finding it solidarily liable for damages with its driver/employee, Ajoc, pursuant to the relevant paragraphs

of Article 2180 of the Civil Code. It argues that the act of Ajoc in bringing the victim to a hospital reflects MMTCs diligence in the selection and supervision of its drivers, particularly with regard to safety measures. Hence, having exercised the diligence of a good father of a family in the selection and supervision of its employees to prevent damage, MMTC should not be held vicariously liable. It should be stressed, however, that whenever an employees negligence causes damage or injury to another, there instantly arises a presumption juris tantum that there was negligence on the part of the employer, either in the selection of the employee (culpa in eligiendo) or the supervision over him after the selection (culpa in vigilando). Hence, to escape solidary liability for a quasi-delict committed by his employee, an employer must rebut the presumption by presenting convincing proof that in the selection and supervision of his employee, he has exercised the care and diligence of a good father of a family. In the present case, petitioner MMTC failed to rebut the presumption of negligence on its part. The claim that Ajocs act of bringing the victim to the nearest medical facility shows adequate supervision by MMTC over its employees deserves but scant consideration. For one, the act was after the fact of negligence on Ajocs part. For another, the evidence on record shows that Ajocs act was neither voluntary nor spontaneous; he had to be prevailed upon by the victims companions to render assistance to his victim. Moreover, the evidence to show that MMTC had exercised due diligence in the selection and supervision of its employees consisted merely of the pertinent guidelines for the screening and selection of its drivers, as well as periodic seminars on road safety. As found by the trial court, and affirmed by the appellate court, petitioner MMTC failed to show that its driver, Ajoc, had actually undergone such screening or had attended said seminars. As previously held, [t]he mere formulation of various company policies on safety without showing that they were being complied with is not sufficient to exempt (an employer) from liability arising from negligence of its employees. It is incumbent upon petitioner to show that in recruiting and employing the erring driver the recruitment procedures and company policies on efficiency and safety were followed. In this case, MMTC has made no satisfactory showing that it had paid more than lip service to its guidelines and policies in hiring and supervision. Its failure to do so cannot but warrant the proper sanctions from this Court, considering that MMTC is a government-owned public utility organized for the public welfare. Having failed to rebut the presumption of negligence on its part, MMTC is primarily and directly liable for the damages caused by its employee, the erring driver, Ajoc, pursuant to Article 2180 of the Civil Code. The owners of public utilities fall within the scope of this article. As earlier stated, MMTC is a public utility, organized and owned by the government for public transport service. Hence, its liability to private respondents, for the negligent and reckless acts of its driver, Ajoc, under Article 2180 of the Civil Code is both manifest and clear. 169. SANITARY STEAM LAUNDRY, INC. vs. COURT OF APPEALS FACTS: This case involves a collision between a Mercedes Benz panel truck of petitioner Sanitary Steam Laundry and a Cimarron which caused the death of three persons and the injuries of several others. The accident took place at the Aguinaldo Highway in Imus, Cavite on August 31, 1980. All the victims were riding in the Cimarron.

The passengers of the Cimarron were mostly employees of the Project Management Consultants, Inc. (PMCI). The Cimarron was owned by Salvador Salenga, father of one of the employees of PMCI. Driving the vehicle was Rolando Hernandez. It appears that at about 8:00 p.m., as it was traveling along Aguinaldo Highway in Imus, Cavite on its way back to Manila, the Cimarron was hit on its front portion by petitioners panel truck which was traveling in the opposite direction. The driver, Herman Hernandez, claimed that a jeepney in front of him suddenly stopped. He said he stepped on the brakes to avoid hitting the jeepney and that this caused his vehicle to swerve to the left and encroach on a portion of the opposite lane. As a result, his panel truck collided with the Cimarron on the north-bound lane. The driver of the Cimarron, Rolando Hernandez, and two of his passengers, namely, Jason Bernabe and Dalmacio Salunoy, died. Several of the other passengers of the Cimarron were injured and taken to various hospitals. On December 4, 1980, private respondents filed this civil case for damages before the then Court of First Instance of Rizal, Pasig Branch, against petitioner. On November 23, 1990, the Regional Trial Court of Makati, to which the case was transferred following the reorganization of the judiciary, rendered judgment for private respondents. The Court of Appeals, to which the decision of the trial court was appealed, affirmed the decision on January 26, 1995. Hence, this appeal. ISSUES: 1. Whether the driver of the Cimarron was guilty of contributory negligence and, therefore, the liability of the petitioner should be mitigated, if not totally extinguished. 2. Whether the non-submission of the NBI clearance and police clearance of the petitioners driver does not mean that the latter failed to exercise the diligence of a good father of the family in the selection and supervision of its employees. HELD: Petitioner contends that the driver of the Cimarron was guilty of contributory negligence and, therefore, its liability should be mitigated, if not totally extinguished. It claims that the driver of the Cimarron was guilty of violation of traffic rules and regulations at the time of the mishap. Hence, in accordance with Art. 2185 of the Civil Code, he was presumed to be negligent. According to petitioner, the negligence consisted of the following: 1. The Cimarron was overloaded because there were from 20 to 25 passengers inside when the passenger capacity of the vehicle was only 17. 2. The front seat of the Cimarron was occupied by four adults, including the driver. 3. The Cimarron had only one headlight on (its right headlight) as its left headlight was not functioning. Petitioner cites Art. III, 2 of R.A. No. 4136, known as the Land Transportation and Traffic Code, which provides that No person operating any vehicle shall allow more passengers or more freight or cargo in his vehicle than its registered carry capacity and Art. IV, 3(e) which states that Every motor vehicle of more than one meter of projected width, while in use on any public highway shall bear two headlights... which not later than one-half hour after sunset and until at least one-half hour before sunrise and whenever weather conditions so require, shall both be lighted.

Petitioner asserts that the fact that its panel truck encroached on a portion of the lane of the Cimarron does not show that its driver was negligent. Petitioner cites the case of Bayasen v. Court of Appeals, which allegedly held that the sudden swerving of a vehicle caused by its driver stepping on the brakes is not negligence per se. Petitioner further claims that even if petitioners swerving to the lane of respondents were considered proof of negligence, this fact would not negate the presumption of negligence on the part of the other driver arising from his violations of traffic rules and regulations. Petitioner likewise invokes the ruling in Mckee v. Intermediate Appellate Court, in which a driver who invaded the opposite lane and caused a collision between his car and a truck coming from the opposite lane, was exonerated based on the doctrine of last clear chance, which states that a person who has the last clear chance or opportunity of avoiding an accident, notwithstanding the negligent acts of his opponent, is solely responsible for the consequences of the accident. Petitioner contends that the ruling in that case should be applied to the present case. According to petitioner, although the driver of the panel truck was initially negligent, the driver of the Cimarron had the last opportunity to avoid the accident. However, because of his negligence (i.e., the aforementioned violations of traffic rules and regulations such as the use of only one headlight at night and the overcrowding at the front seat of the vehicle), he was not able to avoid a collision with the panel truck. We find the foregoing contention to be without merit. First of all, it has not been shown how the alleged negligence of the Cimarron driver contributed to the collision between the vehicles. Indeed, petitioner has the burden of showing a causal connection between the injury received and the violation of the Land Transportation and Traffic Code. He must show that the violation of the statute was the proximate or legal cause of the injury or that it substantially contributed thereto. Negligence, consisting in whole or in part, of violation of law, like any other negligence, is without legal consequence unless it is a contributing cause of the injury. Petitioner says that driving an overloaded vehicle with only one functioning headlight during nighttime certainly increases the risk of accident, that because the Cimarron had only one headlight, there was decreased visibility, and that the fact that the vehicle was overloaded and its front seat overcrowded decreased [its] maneuverability. However, mere allegations such as these are not sufficient to discharge its burden of proving clearly that such alleged negligence was the contributing cause of the injury. The panel truck drivers testimony is consistent with the testimonies of private respondents that the panel truck went out of control and simply smashed into the Cimarron in which they were riding. Nor is there any basis in fact for petitioners contention that because of overcrowding in the front seat of the Cimarron there was decreased maneuverability which prevented the Cimarron driver from avoiding the panel truck. There is absolutely no basis for this claim. There is nothing in the testimonies of the passengers of the Cimarron, particularly Charito Estolano, who was seated in front, which suggest that the driver had no elbow room for maneuvering the vehicle. To the contrary, from the testimony of some of the witnesses, it appears that the driver of the Cimarron tried to avoid the collision but because of the emergency created by the speeding panel truck coming from the opposite direction he was not able to fully move his Cimarron away from the

path of the oncoming vehicle. We are convinced that no maneuvering which the Cimarron driver could have done would have avoided a collision with the panel truck, given the suddenness of the events. Clearly, the overcrowding in the front seat was immaterial On its liability as employer of the negligent driver, petitioner contends that the nonsubmission of the NBI clearance and police clearance of its driver does not mean that it failed to exercise the diligence of a good father of the family in the selection and supervision of its employees. It argues that there is no law requiring employees to submit NBI and police clearance prior to their employment. Hence, petitioners failure to require submission of these documents does not mean that it did not exercise due diligence in the selection and supervision of its employees. On the other hand, it asserts that its employment of Herman Hernandez as a driver means that he had passed the screening tests of the company, including submission of the aforementioned documents. Petitioner maintains that the presumption is that the said driver submitted NBI and police clearance. Petitioner likewise contends that the Court of Appeals position that it failed to exercise due diligence in the selection and supervision of its employees by not requiring its prospective employees to undergo psychological and physical tests before employment has no basis in law because there is no law requiring such tests prior to hiring employees. The petitioners contention has no merit. The Court of Appeals did not say that petitioners failure to submit NBI and police clearances of its driver was proof that petitioner failed to exercise due diligence in the selection of its employees. What the Court of Appeals said was that petitioners policy of requiring prospective employees to submit NBI and police clearance and to have at least two (2) years experience as driver prior to employment was not enough to prove the exercise of due diligence and that even this policy petitioner failed to prove by its failure to present the drivers NBI and police records during the trial. With respect to the requirement of passing psychological and physical tests prior to his employment, although no law requires it, such circumstance would certainly be a reliable indicator of the exercise of due diligence. As the trial court said: . . . No tests of skill, physical as well as mental and emotional, were conducted on their would-be employees. No on-the-job training and seminars reminding employees, especially drivers, of road courtesies and road rules and regulations were done. There were no instructions given to defendants drivers as to how to react in cases of emergency nor what to do after an emergency occurs. There was even failure on the part of defendant to present its concerned employees 204 file. All these could only mean failure on the part of defendant to exercise the diligence required of it of a good father of a family in the selection and supervision of its employees. Indeed, driving exacts a more than usual toll on the senses.Accordingly, it behooves employers to exert extra care in the selection and supervision of their employees. They must go beyond the minimum requirements fixed by law. In this case, David Bautista, the office manager of petitioner in its Dasmarias plant, said that petitioner has a policy of requiring job applicants to submit clearances from the police and the NBI. In the case of applicants for the position of driver they are required to have at least two (2) years driving experience and to be holders of a professional drivers license for at least two

years. But the supposed company policies on employment were not in writing. Nor did Bautista show in what manner he supervised the drivers to ensure that they drove their vehicles in a safe way. 170. ERNESTO PLEYTO vs. MARIA D. LOMBOY FACTS: At approximately 11:30 a.m. of May 16, 1995, PRBL driven by petitioner Pleyto, was traveling along MacArthur Highway in Gerona, Tarlac bound for Vigan, Ilocos Sur. It was drizzling that morning and the macadam road was wet. Right in front of the bus, headed north, was the tricycle owned and driven by one Rodolfo Esguerra. According to Rolly Orpilla, a witness and one of the bus passengers, Pleyto tried to overtake Esguerras tricycle but hit it instead. Pleyto then swerved into the left opposite lane. Coming down the lane, some fifty meters away, was a southbound Mitsubishi Lancer car driven by Arnulfo Asuncion. The car was headed for Manila with some passengers. Seated beside Arnulfo was his brother-in-law, Ricardo Lomboy, while in the back seat were Ricardos 18-year old daughter Carmela and her friend, one Rhino Daba. PRBL smashed head-on the car, killing Arnulfo and Ricardo instantly. Carmela and Rhino suffered injuries, but only Carmela required hospitalization. In their Answer, petitioners PRBL and Ernesto Pleyto both claimed that the bus was running slowly at the time of the accident. They pointed out the Bus had been inspected by driver Pleyto and examined by a mechanic prior to the trip, in accordance with the companys standard operating procedure. It was found in good working condition. Pleyto claimed that while cruising along the highway at Gerona, Tarlac, he noticed Esguerras tricycle and followed it at a safe distance after he was unable to overtake it. Suddenly and without warning, the tricycle stopped in the middle of the road. Pleyto stepped on the brakes and the bus lost speed. But, since it skidded towards the direction of the tricycle, he swerved the bus to the other lane to avoid hitting it, only to collide with the Manila-bound Mitsubishi car. The Trial Court in its decision judgment in favor of the plaintiffs and against the defendants ordering the defendants to pay solidarily the plaintiffs the following amounts: 1) P50,000.00 as indemnification for the death of Ricardo Lomboy; 2) P1,642,521.00 for lost earnings of Ricardo Lomboy; 3) P59,550.00 as actual damages for the funeral, wake, religious services and prayer for the soul of the departed; 4) P52,000.00 for the medical treatment and medicine of Carmela Lomboy; 5) P500,000.00 as moral damages for the wife and children excluding Carmela Lomboy; 6) P50,000.00 as moral damages for Carmela Lomboy; and 7) To pay costs. The RTC found Pleyto negligent and lacking in precaution when he overtook the tricycle with complete disregard of the approaching car in the other lane. It found the testimony of Rolly Orpilla credible and persuasive as against Pleytos self-serving and unbelievable testimony. The court found that Pleyto should have been more prudent in overtaking a tricycle, considering that it was drizzling, the road was slippery, and another vehicle was approaching from the opposite direction. The RTC found that Pleyto had clearly violated traffic rules and regulations, and thus was negligent under Article 2185 of the Civil Code of the Philippines because petitioner Pleyto failed to present any proof to rebut the

presumption. The lower court likewise held co-petitioner PRBL equally liable under Article 2180 of the Civil Code for its failure to show that it had maintained proper supervision of its employees notwithstanding strict standards in employee selection. On appeal, the Court of Appeals, affirmed the decision of the trial court, with modification in the award of damages, to wit: for actual damages, it is reduced to P39,550.00, for funeral and religious services and P27,000.00 for medical expenses of Carmela Lomboy; and the award for loss of earning capacity is accordingly corrected to P1,152,000.00. ISSUES: 1. Whether the Supreme Court may review the conclusion drawn by the Court of Appeals, namely, that the PRBL bus overtook a tricycle thus causing the accident, since it was made in disregard of facts undisputed by the parties. 2. Whether the court of appeals disregarded the doctrine laid down in villa Rey Transit, Inc. V. Court Of Appeals, G.R. No. L-25499, February 18, 1970, 31 SCRA 511, when it arbitrarily pegged the monthly living expenses at 50% of gross earnings. HELD: 1. No. At the outset, it appears that petitioners call for this Court to review the factual findings and conclusions of the Court of Appeals. Petitioners assail the appellate courts affirmance of the finding by the trial court that Pleyto was negligent. The issue of negligence is factual and, in quasi-delicts, crucial in the award of damages. But it is well established that under Rule 45 of the 1997 Rules of Civil Procedure, only questions of law, not of fact, may be raised before the Supreme Court. It must be stressed that this Court is not a trier of facts, and it is not its function to re-examine and weigh anew the respective evidence of the parties. Factual findings of the trial court, especially those affirmed by the Court of Appeals, are conclusive on this Court when supported by the evidence on record. In the present petition, no compelling reason is shown by petitioners whatsoever for this Court to reverse those findings. 2. No. The petitioners misread Villa Rey Transit case. Thus, it has been consistently held that earning capacity, as an element of damages to ones estate for his death by wrongful act is necessarily his net earning capacity or his capacity to acquire money, less the necessary expense for his own living. Stated otherwise, the amount recoverable is not loss of the entire earning, but rather the loss of that portion of the earnings which the beneficiary would have received. In other words, only net earnings, not gross earning, are to be considered that is, the total of the earnings less expenses necessary in the creation of such earnings or income and less living and other incidental expenses. In considering the earning capacity of the victim as an element of damages, the net earnings, which is computed by deducting necessary expenses from the gross earnings, and not the gross earnings, is to be utilized in the computation. Note that in the present case, both the Court of Appeals and the trial court used net earnings, not gross earnings in computing loss of earning capacity. The amount of net earnings was arrived at after deducting the necessary expenses (pegged at 50% of gross income) from the gross annual income. This computation is in accord with settled jurisprudence, including the Villa Rey case.

Thus, no reversible error may be attributed to the court a quo in fixing the loss of earning capacity at said amount. 171. ERNESTO SYKI vs. SALVADOR BEGASA FACTS: On June 22, 1992, around 11:20 a.m., near the corner of Araneta and Magsaysay Streets, Bacolod City, respondent Salvador Begasa and his three companions flagged down a passenger jeepney driven by Joaquin Espina and owned by Aurora Pisuena. While respondent was boarding the passenger jeepney (his right foot already inside while his left foot still on the boarding step of the passenger jeepney), a truck driven by Elizalde Sablayan and owned by petitioner Ernesto Syki bumped the rear end of the passenger jeepney. Respondent fell and fractured his left thigh bone (femur). On October 29, 1992, respondent filed a complaint for damages for breach of common carriers contractual obligations and quasi-delict against Aurora Pisuena, the owner of the passenger jeepney, herein petitioner Ernesto Syki, the owner of the truck, and Elizalde Sablayan, the driver of the truck. After hearing, the trial court dismissed the complaint against Aurora Pisuena, the owner and operator of the passenger jeepney but ordered petitioner Ernesto Syki and his truck driver, Elizalde Sablayan, to pay respondent Salvador Begasa, jointly and severally, actual and moral damages plus attorneys fees. Petitioner Syki and his driver appealed to the Court of Appeals. However, the appellate court found no reversible error in the decision of the trial court and affirmed the same in toto. The appellate court also denied their motion for reconsideration. ISSUES: 1. Whether the petitioner has failed to observe the diligence of a good father of a family in the selection and supervision of his driver. 2. Whether the respondent is guilty of contributory negligence that should mitigate or decrease the liability of the petitioner. HELD: Article 2180 of the Civil Code provides: 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. x x x The responsibility treated in this article shall cease when the persons herein mentioned prove they observed all the diligence of a good father of a family to prevent damage. From the above provision, when an injury is caused by the negligence of an employee, a legal presumption instantly arises that the employer was negligent in the selection and/or supervision of said employee. The said presumption may be rebutted only by a clear showing on the part of the employer that he exercised the diligence of a good father of a family in the selection and supervision of his employee. If the employer successfully overcomes the legal presumption of negligence, he is relieved of liability. In other words, the burden of proof is on the employer.

The employer must not merely present testimonial evidence to prove that he observed the diligence of a good father of a family in the selection and supervision of his employee, but he must also support such testimonial evidence with concrete or documentary evidence. The reason for this is to obviate the biased nature of the employers testimony or that of his witnesses. In this case, petitioners evidence consisted entirely of testimonial evidence. He testified that before he hired Elizalde Sablayan, he required him to submit a police clearance in order to determine if he was ever involved in any vehicular accident. He also required Sablayan to undergo a driving test conducted by his mechanic, Esteban Jaca. Petitioner claimed that he, in fact, accompanied Sablayan during the driving test and that during the test, Sablayan was taught to read and understand traffic signs like Do Not Enter, One Way, Left Turn and Right Turn. Petitioners mechanic, Esteban Jaca, on the other hand, testified that Sablayan passed the driving test and never figured in any vehicular accident except the one in question. He also testified that he maintained in good condition all the trucks of petitioner by checking the brakes, horns and tires thereof before providing hauling services. Petitioner, however, never presented the alleged police clearance given to him by Sablayan nor the results of Sablayans driving test. Petitioner also did not present records of the regular inspections that his mechanic allegedly conducted. The unsubstantiated and self-serving testimonies of petitioner and his mechanic were, without doubt, insufficient to overcome the legal presumption that petitioner was negligent in the selection and supervision of his driver. Accordingly, we affirm the ruling of the Court of Appeals that petitioner is liable for the injuries suffered by respondent. It should be emphasized that the legal obligation of employers to observe due diligence in the selection and supervision of their employees provided in Article 2180 of the Civil Code is not an empty provision or a mere formalism since the non-observance thereof actually becomes the basis of the employers vicarious liability. Employers should thus seriously observe such adegree of diligence (and prove it in court by sufficient and concrete evidence) that would exculpate them from liability. Petitioner next contends that, even if he is liable, the award of damages given to respondent should be decreased or mitigated because respondent was guilty of contributory negligence. Petitioner claims that his driver was allegedly caught unaware when the passenger jeepney hailed by respondent suddenly stopped at the intersection of a national highway. Petitioner argues that, had respondent flagged down the passenger jeepney at the proper place, the accident could have been avoided. Petitioners contention has no merit. Article 2179 provides: When the plaintiffs own negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendants lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded. The underlying precept of the above article on contributory negligence is that a plaintiff who is partly responsible for his own injury should not be entitled to recover damages in

full but must bear the consequences of his own negligence. The defendant must thus be held liable only for the damages actually caused by his negligence. In the present case, was respondent partly negligent and thus, should not recover the full amount of the damages awarded by the trial court? We rule in the negative. There was no evidence that respondent Begasa and his three companions flagged down the passenger jeepney in a prohibited area. All the facts showed was that the passenger jeepney was near the corner of Araneta and Magsaysay Streets, Bacolod City when petitioners driver bumped it from the rear. No city resolution, traffic regulation or DPWH memorandum was presented to show that the passenger jeepney picked up respondent and his three companions in a prohibited area. In fact, the trial court dismissed the case against the driver and owner of the passenger jeepney on the ground that they were not liable, meaning, that no negligence could be attributed to them. The trial court also found no negligence on the part of respondent Begasa. This factual finding was affirmed in toto by the Court of Appeals. It must be emphasized that petitions for review under Rule 45 of the Rules of Court should deal only with questions of law. The factual conclusions of the Court of Appeals are given great weight and even finality by the Supreme Court, specially when, as in the present case, the appellate court upholds the findings of fact of the trial court. The factual findings of the Court of Appeals can only be overturned if it is shown that such findings are obviously whimsical, capricious and arbitrary, or contrary to the factual findings of the trial court. In this case, we find no reason to overturn the factual findings of the Court of Appeals. Thus, we affirm the appellate courts finding that there was no contributory negligence on the part of respondent. In sum, the sole and proximate cause of the accident was the negligence of petitioners driver who, as found by the lower courts, did not slow down even when he was already approaching a busy intersection within the city proper. The passenger jeepney had long stopped to pick up respondent and his three companions and, in fact, respondent was already partly inside the jeepney when petitioners driver rear-ended it. The impact was so strong that respondent fell and fractured his left thigh bone (femur), and suffered severe wounds in his left knee and leg. No doubt petitioners driver was reckless. Since the negligence of petitioners driver was the sole and proximate cause of the accident, petitioner is liable, under Article 2180 of the Civil Code, to pay damages to respondent Begasa for the injuries sustained by him. WHEREFORE, the petition is hereby DENIED. The decision of the Court of Appeals is AFFIRMED. SO ORDERED. 172. FIGURACION VDA. DE MAGLANA, vs. CONSOLACION FACTS: Lope Maglana was an employee of the Bureau of Customs whose work station was at Lasa, here in Davao City. On December 20, 1978, early morning, Lope Maglana was on his way to his work station, driving a motorcycle owned by the Bureau of Customs. At Km. 7, Lanang, he met an accident that resulted in his death. He died on the spot. The PUJ jeep that bumped the deceased was driven by Pepito Into, operated and

owned by defendant Destrajo. From the investigation conducted by the traffic investigator, the PUJ jeep was overtaking another passenger jeep that was going towards the city poblacion. While overtaking, the PUJ jeep of defendant Destrajo running abreast with the overtaken jeep, bumped the motorcycle driven by the deceased who was going towards the direction of Lasa, Davao City. The point of impact was on the lane of the motorcycle and the deceased was thrown from the road and met his untimely death. Consequently, the heirs of Lope Maglana, Sr., here petitioners, filed an action for damages and attorney's fees against operator Patricio Destrajo and the Afisco Insurance Corporation (AFISCO for brevity) before the then Court of First Instance of Davao, Branch II. An information for homicide thru reckless imprudence was also filed against Pepito Into. the lower court rendered a decision finding that Destrajo had not exercised sufficient diligence as the operator of the jeepney. The dispositive portion of the decision reads: WHEREFORE, the Court finds judgment in favor of the plaintiffs against defendant Destrajo, ordering him to pay plaintiffs the sum of P28,000.00 for loss of income; to pay plaintiffs the sum of P12,000.00 which amount shall be deducted in the event judgment in Criminal Case No. 3527-D against the driver, accused Into, shall have been enforced; to pay plaintiffs the sum of P5,901.70 representing funeral and burial expenses of the deceased; to pay plaintiffs the sum of P5,000.00 as moral damages which shall be deducted in the event judgment (sic) in Criminal Case No. 3527-D against the driver, accused Into; to pay plaintiffs the sum of P3,000.00 as attorney's fees and to pay the costs of suit. The defendant insurance company is ordered to reimburse defendant Destrajo whatever amounts the latter shall have paid only up to the extent of its insurance coverage. SO ORDERED. Petitioners filed a motion for the reconsideration of the second paragraph of the dispositive portion of the decision contending that AFISCO should not merely be held secondarily liable because the Insurance Code provides that the insurer's liability is "direct and primary and/or jointly and severally with the operator of the vehicle, although only up to the extent of the insurance coverage." Hence, they argued that the P20,000.00 coverage of the insurance policy issued by AFISCO, should have been awarded in their favor. ISSUE: Whether AFISCO should not merely be held secondarily liable but direct and primary and/or jointly and severally with the operator of the vehicle. HELD. Yes. The particular provision of the insurance policy on which petitioners base their claim is as follows: Sec. 1 LIABILITY TO THE PUBLIC 1. The Company will, subject to the Limits of Liability, pay all sums necessary to discharge liability of the insured in respect of (a) death of or bodily injury to any THIRD PARTY (b) . . . . 2. . . . .

3. In the event of the death of any person entitled to indemnity under this Policy, the Company will, in respect of the liability incurred to such person indemnify his personal representatives in terms of, and subject to the terms and conditions hereof. The above-quoted provision leads to no other conclusion but that AFISCO can be held directly liable by petitioners. As this Court ruled in Shafer vs. Judge, RTC of Olongapo City, Br. 75, "[w]here an insurance policy insures directly against liability, the insurer's liability accrues immediately upon the occurrence of the injury or even upon which the liability depends, and does not depend on the recovery of judgment by the injured party against the insured." 8 The underlying reason behind the third party liability (TPL) of the Compulsory Motor Vehicle Liability Insurance is "to protect injured persons against the insolvency of the insured who causes such injury, and to give such injured person a certain beneficial interest in the proceeds of the policy . . ." 9 Since petitioners had received from AFISCO the sum of P5,000.00 under the no-fault clause, AFISCO's liability is now limited to P15,000.00. However, we cannot agree that AFISCO is likewise solidarily liable with Destrajo. In Malayan Insurance Co., Inc. v. Court of Appeals, this Court had the opportunity to resolve the issue as to the nature of the liability of the insurer and the insured vis-avis the third party injured in an accident. We categorically ruled thus: While it is true that where the insurance contract provides for indemnity against liability to third persons, such third persons can directly sue the insurer, however, the direct liability of the insurer under indemnity contracts against third party liability does not mean that the insurer can be held solidarily liable with the insured and/or the other parties found at fault. The liability of the insurer is based on contract; that of the insured is based on tort. In the case at bar, petitioner as insurer of Sio Choy, is liable to respondent Vallejos (the injured third party), but it cannot, as incorrectly held by the trial court, be made "solidarily" liable with the two principal tortfeasors, namely respondents Sio Choy and San Leon Rice Mill, Inc. For if petitioner-insurer were solidarily liable with said, two (2) respondents by reason of the indemnity contract against third party liability under which an insurer can be directly sued by a third party this will result in a violation of the principles underlying solidary obligation and insurance contracts. The Court then proceeded to distinguish the extent of the liability and manner of enforcing the same in ordinary contracts from that of insurance contracts. While in solidary obligations, the creditor may enforce the entire obligation against one of the solidary debtors, in an insurance contract, the insurer undertakes for a consideration to indemnify the insured against loss, damage or liability arising from an unknown or contingent event. Thus, petitioner therein, which, under the insurance contract is liable only up to P20,000.00, can not be made solidarily liable with the insured for the entire obligation of P29,013.00 otherwise there would result "an evident breach of the concept of solidary obligation." Similarly, petitioners herein cannot validly claim that AFISCO, whose liability under the insurance policy is also P20,000.00, can be held solidarily liable with Destrajo for the total amount of P53,901.70 in accordance with the decision of the lower court. Since under both the law and the insurance policy, AFISCO's liability is only up to P20,000.00, the second paragraph of the dispositive portion of the decision in question may have

unwittingly sown confusion among the petitioners and their counsel. What should have been clearly stressed as to leave no room for doubt was the liability of AFISCO under the explicit terms of the insurance contract. In fine, we conclude that the liability of AFISCO based on the insurance contract is direct, but not solidary with that of Destrajo which is based on Article 2180 of the Civil Code. As such, petitioners have the option either to claim the P15,000 from AFISCO and the balance from Destrajo or enforce the entire judgment from Destrajo subject to reimbursement from AFISCO to the extent of the insurance coverage. While the petition seeks a definitive ruling only on the nature of AFISCO's liability, we noticed that the lower court erred in the computation of the probable loss of income. Using the formula: 2/3 of (80-56) x P12,000.00, it awarded P28,800.00. Upon recomputation, the correct amount is P192,000.00. Being a "plain error," we opt to correct the same. Furthermore, in accordance with prevailing jurisprudence, the death indemnity is hereby increased to P50,000.00. WHEREFORE, premises considered, the present petition is hereby GRANTED. The award of P28,800.00 representing loss of income is INCREASED to P192,000.00 and the death indemnity of P12,000.00 to P50,000.00. 173. CONRADO AGUILAR, SR. vs. COMMERCIAL SAVINGS BANK FACTS: Petitioner Conrado Aguilar, Sr. is the father of Conrado Aguilar, Jr., the victim in a vehicular accident involving a Lancer car registered in the name of respondent bank, but driven by co-respondent Ferdinand G. Borja. Aguilar, Jr. and his companions, among them Nestor Semella, had just finished their snack along Zapote-Alabang Road. As they crossed the road, a Lancer and driven by Ferdinand Borja, overtook a passenger jeepney. In so doing, the Lancer hit Aguilar and Semella. Aguilar was thrown upwards and smashed against the windshield of the Lancer, which did not stop. Aguilar was pronounced dead on arrival when brought to the hospital. Petitioner filed a complaint for damages against respondents in the Regional Trial Court. Borja did not file his answer within the reglementary period, hence, he was declared in default by the trial court. At the trial, respondent bank admitted that the Lancer was registered in its name at the time of the incident. Petitioners counsel also showed that Borja was negligent in driving the car. The Trial Court held defendants liable for Aguilars death on the ground that Borjas negligence, carelessness, and imprudence caused the victims death. It also found that Borja was an assistant vice president of respondent bank at the time of the incident. It held that under Art. 2180 of the Civil Code, the negligence of the employee is presumed to be that of the employer, whose liability is primary and direct; and that respondent bank failed to exercise due diligence in the selection of its employees. On appeal to the Court of Appeals, the Respondent Bank before it can apply Art. 2180 on which private respondent anchored its claim of the banks negligence, petitioner must first establish that Borja acted on the occasion or by reason of the functions entrusted to him by his employer. The appellate court found no evidence that Borja had

acted as respondent banks assistant vice-president at the time of the mishap. The Court of Appeals reversed the trial courts decision. ISSUE: Whether respondent bank, as the Lancers registered owner, is liable for damages. HELD: Yes. Registered owner of any vehicle, even if not for public service, is primarily responsible to third persons for deaths, injuries and damages it caused (BA Finance Corporation vs. Court of Appeals, 215 SCRA 715). This is true even if the vehicle is leased to third persons. Registration is required not to make said registration the operative act by which ownership in vehicles is transferred, as in land registration cases, because the administrative proceeding of registration does not bear any essential relation to the contract of sale between the parties (Chinchilla vs. Rafael and Verdaguer, 39 Phil. 888), but to permit the use and operation of the vehicle upon any public highway (section 5 [a], Act No. 3992, as amended.) The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or that any damage or injury is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite individual, the registered owner. Instances are numerous where vehicles running on public highways caused accidents or injuries to pedestrians or other vehicles without positive identification of the owner or drivers, or with very scant means of identification. It is to forestall these circumstances, so inconvenient or prejudicial to the public, that the motor vehicle registration is primarily ordained, in the interest of the determination of persons responsible for damages or injuries caused on public highways. The above policy and application of the law may appear quite harsh and would seem to conflict with truth and justice. We do not think it is so. A registered owner who has already sold or transferred a vehicle has the recourse to a third-party complaint, in the same action brought against him to recover for the damage or injury done, against the vendee or transferee of the vehicle. The inconvenience of the suit is no justification for relieving him of liability; said inconvenience is the price he pays for failure to comply with the registration that the law demands and requires. In synthesis, we hold that the registered owner, the defendant-appellant herein, is primarily responsible for the damage caused to the vehicle of the plaintiff-appellee, but he (defendant-appellant) has a right to be indemnified by the real or actual owner of the amount that he may be required to pay as damage for the injury caused to the plaintiffappellant. 174. EQUITABLE LEASING CORP. VS. LUCITA SUYON FACTS: A Fuso Road Tractor driven by Raul Tutor rammed into the house cum store of Myrna Tamayo located at Pier 18, Vitas, Tondo, Manila. A portion of the house was destroyed. Pinned to death under the engine of the tractor were Respondent Myrna Tamayos son, Reniel Tamayo, and Respondent Felix Oledans daughter, Felmarie Oledan. Injured were Respondent Oledan himself, Respondent Marissa Enano, and two sons of Respondent Lucita Suyom.

Tutor was charged with and later convicted of reckless imprudence resulting in multiple homicide and multiple physical injuries in Criminal Case No. 296094-SA, Metropolitan Trial Court of Manila, Branch 12. Upon verification with the Land Transportation Office, respondents were furnished a copy of Official Receipt and Certificate of Registration showing that the registered owner of the tractor was Equitable Leasing Corporation/leased to Edwin Lim. Respondents filed against Raul Tutor, Ecatine Corporation (Ecatine) and Equitable Leasing Corporation (Equitable) a Complaint for damages. The trial court, upon motion of plaintiffs counsel, issued an Order dropping Raul Tutor, Ecatine and Edwin Lim from the Complaint, because they could not be located and served with summonses. On the other hand, in its Answer with Counterclaim, petitioner alleged that the vehicle had already been sold to Ecatine and that the former was no longer in possession and control thereof at the time of the incident. It also claimed that Tutor was an employee, not of Equitable, but of Ecatine. After trial on the merits, the RTC rendered its Decision ordering petitioner to pay actual and moral damages and attorneys fees to respondents. It held that since the Deed of Sale between petitioner and Ecatine had not been registered with the Land Transportation Office (LTO), the legal owner was still Equitable. Thus, petitioner was liable to respondents. ISSUES: 1. Whether petitioner is liable for damages suffered by private respondents in an action based on quasi delict for the negligent acts of a driver who [was] not the employee of the petitioner. 2. Whether moral damages be awarded to private respondents despite their failure to prove that the injuries they suffered were brought by petitioners wrongful act. HELD: 1. Yes. Petitioner contends that it should not be held liable for the damages sustained by respondents and that arose from the negligence of the driver of the Fuso Road Tractor, which it had already sold to Ecatine at the time of the accident. Not having employed Raul Tutor, the driver of the vehicle, it could not have controlled or supervised him. We are not persuaded. In negligence cases, the aggrieved party may sue the negligent party under (1) Article 100 of the Revised Penal Code, for civil liability ex delicto; or (2) under Article 2176 of the Civil Code, for civil liability ex quasi delicto. Furthermore, under Article 103 of the Revised Penal Code, employers may be held subsidiarily liable for felonies committed by their employees in the discharge of the latters duties. This liability attaches when the employees who are convicted of crimes committed in the performance of their work are found to be insolvent and are thus unable to satisfy the civil liability adjudged. On the other hand, under Article 2176 in relation to Article 2180 of the Civil Code, an action predicated on quasi delict may be instituted against the employer for an employees act or omission. The liability for the negligent conduct of the subordinate

is direct and primary, but is subject to the defense of due diligence in the selection and supervision of the employee. The enforcement of the judgment against the employer for an action based on Article 2176 does not require the employee to be insolvent, since the liability of the former is solidary -- the latter being statutorily considered a joint tortfeasor. To sustain a claim based on quasi delict, the following requisites must be proven: (a) damage suffered by the plaintiff, (b) fault or negligence of the defendant, and (c) connection of cause and effect between the fault or negligence of the defendant and the damage incurred by the plaintiff. These two causes of action (ex delicto or ex quasi delicto) may be availed of, subject to the caveat that the offended party cannot recover damages twice for the same act or omission or under both causes. Since these two civil liabilities are distinct and independent of each other, the failure to recover in one will not necessarily preclude recovery in the other. In the instant case, respondents -- having failed to recover anything in the criminal case -- elected to file a separate civil action for damages, based on quasi delict under Article 2176 of the Civil Code. The evidence is clear that the deaths and the injuries suffered by respondents and their kins were due to the fault of the driver of the Fuso tractor. Dated June 4, 1991, the Lease Agreement between petitioner and Edwin Lim stipulated that it is the intention of the parties to enter into a FINANCE LEASE AGREEMENT. Under such scheme, ownership of the subject tractor was to be registered in the name of petitioner, until the value of the vehicle has been fully paid by Edwin Lim. Further, in the Lease Schedule, the monthly rental for the tractor was stipulated, and the term of the Lease was scheduled to expire on December 4, 1992. After a few months, Lim completed the payments to cover the full price of the tractor. Thus, on December 9, 1992, a Deed of Sale over the tractor was executed by petitioner in favor of Ecatine represented by Edwin Lim. However, the Deed was not registered with the LTO. We hold petitioner liable for the deaths and the injuries complained of, because it was the registered owner of the tractor at the time of the accident on July 17, 1994. The Court has consistently ruled that, regardless of sales made of a motor vehicle, the registered owner is the lawful operator insofar as the public and third persons are concerned; consequently, it is directly and primarily responsible for the consequences of its operation. In contemplation of law, the owner/operator of record is the employer of the driver, the actual operator and employer being considered as merely its agent. The same principle applies even if the registered owner of any vehicle does not use it for public service. Since Equitable remained the registered owner of the tractor, it could not escape primary liability for the deaths and the injuries arising from the negligence of the driver. The finance-lease agreement between Equitable on the one hand and Lim or Ecatine on the other has already been superseded by the sale. In any event, it does not bind third persons. Further, petitioners insistence on FGU Insurance Corp. v. Court of Appeals is misplaced. First, in FGU Insurance, the registered vehicle owner, which was engaged in a

rent-a-car business, rented out the car. In this case, the registered owner of the truck, which is engaged in the business of financing motor vehicle acquisitions, has actually sold the truck to Ecatine, which in turn employed Tutor. Second, in FGU Insurance, the registered owner of the vehicle was not held responsible for the negligent acts of the person who rented one of its cars, because Article 2180 of the Civil Code was not applicable. We held that no vinculum juris as employer and employee existed between the owner and the driver. In this case, the registered owner of the tractor is considered under the law to be the employer of the driver, while the actual operator is deemed to be its agent. Thus, Equitable, the registered owner of the tractor, is -- for purposes of the law on quasi delict -- the employer of Raul Tutor, the driver of the tractor. Ecatine, Tutors actual employer, is deemed as merely an agent of Equitable. True, the LTO Certificate of Registration, dated 5/31/91, qualifies the name of the registered owner as EQUITABLE LEASING CORPORATION/Leased to Edwin Lim. But the lease agreement between Equitable and Lim has been overtaken by the Deed of Sale on December 9, 1992, between petitioner and Ecatine. While this Deed does not affect respondents in this quasi delict suit, it definitely binds petitioner because, unlike them, it is a party to it. We must stress that the failure of Equitable and/or Ecatine to register the sale with the LTO should not prejudice respondents, who have the legal right to rely on the legal principle that the registered vehicle owner is liable for the damages caused by the negligence of the driver. Petitioner cannot hide behind its allegation that Tutor was the employee of Ecatine. This will effectively prevent respondents from recovering their losses on the basis of the inaction or fault of petitioner in failing to register the sale. The non-registration is the fault of petitioner, which should thus face the legal consequences thereof. 2. Petitioner further claims that it is not liable for moral damages, because respondents failed to establish or show the causal connection or relation between the factual basis of their claim and their wrongful act or omission, if any. Moral damages are not punitive in nature, but are designed to compensate and alleviate in some way the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury unjustly caused a person. Although incapable of pecuniary computation, moral damages must nevertheless be somehow proportional to and in approximation of the suffering inflicted. This is so because moral damages are in the category of an award designed to compensate the claimant for actual injury suffered, not to impose a penalty on the wrongdoer. Viewed as an action for quasi delict, the present case falls squarely within the purview of Article 2219 (2), which provides for the payment of moral damages in cases of quasi delict. Having established the liability of petitioner as the registered owner of the vehicle, respondents have satisfactorily shown the existence of the factual basis for the award and its causal connection to the acts of Raul Tutor, who is deemed as petitioners employee. Indeed, the damages and injuries suffered by respondents were the proximate result of petitioners tortious act or omission. Further, no proof of pecuniary loss is necessary in order that moral damages may be awarded, the amount of indemnity being left to the discretion of the court. The evidence gives no ground for doubt that such discretion was properly and judiciously

exercised by the trial court. The award is in fact consistent with the rule that moral damages are not intended to enrich the injured party, but to alleviate the moral suffering undergone by that party by reason of the defendants culpable action. 175. FIRST MALAYAN LEASING AND FINANCE CORPORATION vs. COURT OF APPEALS FACTS: While Vitug's car was at a full stop at the intersection of New York Street and (EDSA) in Cubao, Quezon City, northward-bound, the on-coming Isuzu cargo truck bumped, a Ford Granada car behind him with such force that the Ford car was thrown on top of Vitug's car crushing its roof. The cargo truck thereafter struck Vitug's car in the rear causing the gas tank to explode and setting the car ablaze. Stunned by the impact. Vitug was fortunately extricated from his car by solicitous bystanders before the vehicle exploded. However, two of his passengers were burned to death. Vitug's car, valued at P70,000, was a total loss. At the time of the accident on December 14, 1983, the Isuzu cargo truck was registered in the name of the First Malayan Leasing and Finance Corporation (FMLFC). However, FMLFC denied any liability, alleging that it was not the owner of the truck neither the employer of the driver Crispin Sicat, because it had sold the truck to Vicente Trinidad on September 24. 1980, after the latter had paid all his monthly amortizations under the financing lease agreement between FMLFC and Trinidad. ISSUE: Whether the FMLFC is liable despite the fact that it is not the actual owner of the car. HELD. Yes. This Court has consistently ruled that regardless of who the actual owner of a motor vehicle might be, the registered owner is the operator of the same with respect to the public and third persons, and as such, directly and primarily responsible for the consequences of its operation. In contemplation of law, the owner/operator of record is the employer of the driver, the actual operator and employer being considered merely as his agent (MYC-Agro-Industrial Corporation vs. Vda. de Caldo, 132 SCRA 10. citing Vargas vs. Langcay. 6 SCRA 174; Tamayo vs. Aquino. 105 Phil. 949). In order for a transfer of ownership of a motor vehicle to be valid against third persons. it must be recorded in the Land Transportation Office. For, although valid between the parties, the sale cannot affect third persons who rely on the public registration of the motor vehicle as conclusive evidence of ownership. In law, FMLFC was the owner and operator of the Izusu cargo truck, hence, fully liable to third parties injured by its operation due to the fault or negligence of the driver thereof. 176. NOSTRADAMUS VILLANUEVA VS. DOMINGO FACTS: Priscilla R. Domingo is the registered owner of a silver Mitsubishi Lancer Car bearing plate No. NDW 781 91 with [co-respondent] Leandro Luis R. Domingo as authorized driver. [Petitioner] Nostradamus Villanueva was then the registered owner of a green Mitsubishi Lancer bearing Plate No. PHK 201 91.

On 22 October 1991 at about 9:45 in the evening, following a green traffic light, [respondent] Priscilla Domingos silver Lancer car with Plate No. NDW 781 91 then driven by [co-respondent] Leandro Luis R. Domingo was cruising along the middle lane of South Superhighway at moderate speed from north to south. Suddenly, a green Mitsubishi Lancer with plate No. PHK 201 91 driven by Renato Dela Cruz Ocfemia darted from Vito Cruz Street towards the South Superhighway directly into the path of NDW 781 91 thereby hitting and bumping its left front portion. As a result of the impact, NDW 781 91 hit two (2) parked vehicles at the roadside, the second hitting another parked car in front of it. Nostradamus Villanueva claimed that he was no longer the owner of the car at the time of the mishap because it was swapped with a Pajero owned by Albert Jaucian/Auto Palace Car Exchange who was the employer of Renato Dela Cruz Ocfemia. ISSUE: Whether the registered owner of a motor vehicle be held liable for damages arising from a vehicular accident involving his motor vehicle while being operated by the employee of its buyer without the latters consent and knowledge. HELD. Yes. We have consistently ruled that the registered owner of any vehicle is directly and primarily responsible to the public and third persons while it is being operated. Whether the driver is authorized or not by the actual owner is irrelevant to determining the liability of the registered owner who the law holds primarily and directly responsible for any accident, injury or death caused by the operation of the vehicle in the streets and highways. To require the driver of the vehicle to be authorized by the actual owner before the registered owner can be held accountable is to defeat the very purpose why motor vehicle legislations are enacted in the first place. Cases 168-176 CASIL, LEO ANGELO P. 177. ABELARDO LIM VS CA FACTS: Private respondent Donato Gonzales purchased a passenger jeepney from Gomercino Vallarta, holder of a certificate of public convenience for the operation of public utility vehicles. While private respondent Gonzales continued offering the jeepney for public transport services he did not have the registration of the vehicle transferred in his name nor did he secure for himself a certificate of public convenience for its operation. While the jeepney was running northbound, it collided with a ten-wheeler truck owned by petitioner Abelardo Lim and driven by his co-petitioner Esmadito Gunnaban. Gunnaban owned responsibility for the accident, explaining that while he was traveling towards Manila the truck suddenly lost its brakes. To avoid colliding with another vehicle, he swerved to the left until he reached the center island. However, as the center island eventually came to an end, he veered farther to the left until he smashed into a Ferroza automobile, and later, into private respondent's passenger jeepney driven

by one Virgilio Gonzales. The impact caused severe damage to both the Ferroza and the passenger jeepney and left one (1) passenger dead and many others wounded. Petitioner Lim shouldered the costs for hospitalization of the wounded, compensated the heirs of the deceased passenger, and had the Ferroza restored to good condition. He also negotiated with private respondent and offered to have the passenger jeepney repaired at his shop. Private respondent however did not accept the offer so Lim offered him P20,000.00, the assessment of the damage as estimated by his chief mechanic. Again, petitioner Lim's proposition was rejected; instead, private respondent demanded a brand-new jeep or the amount of P236,000.00. Lim increased his bid to P40,000.00 but private respondent was unyielding. Under the circumstances, negotiations had to be abandoned; hence, the filing of the complaint for damages by private respondent against petitioners. RULING OF THE TRIAL COURT: The trial court upheld private respondent's claim and awarded him P236,000.00 with legal interest from 22 July 1990 as compensatory damages and P30,000.00 as attorney's fees. In support of its decision, the trial court ratiocinated that as vendee and current owner of the passenger jeepney private respondent stood for all intents and purposes as the real party in interest. Even Vallarta himself supported private respondent's assertion of interest over the jeepney for, when he was called to testify, he dispossessed himself of any claim or pretension on the property. Gunnaban was found by the trial court to have caused the accident since he panicked in the face of an emergency which was rather palpable from his act of directing his vehicle to a perilous streak down the fast lane of the superhighway then across the island and ultimately to the opposite lane where it collided with the jeepney. On the other hand, petitioner Lim's liability for Gunnaban's negligence was premised on his want of diligence in supervising his employees. It was admitted during trial that Gunnaban doubled as mechanic of the ill-fated truck despite the fact that he was neither tutored nor trained to handle such task. DECISION OF THE COURT OF APPEALS: Petitioners appealed to the Court of Appeals which affirmed the decision of the trial court. In upholding the decision of the court a quo the appeals court concluded that while an operator under thekabit system could not sue without joining the registered owner of the vehicle as his principal, equity demanded that the present case be made an exception. ISSUE: 1. Whether or not the Court of Appeals erred in sustaining the decision of the trial court despite their opposition to the well-established doctrine that an operator of a vehicle continues to be its operator as long as he remains the operator of record. 2. Whether or not an award of P236,000.00 is inconceivably large and would amount to unjust enrichment. DECISION OF THE SUPREME COURT 1. The kabit system is an arrangement whereby a person who has been granted a certificate of public convenience allows other persons who own motor vehicles to operate them under his license, sometimes for a fee or percentage of the earnings.

In the early case of Dizon v. Octavio the Court explained that one of the primary factors considered in the granting of a certificate of public convenience for the business of public transportation is the financial capacity of the holder of the license, so that liabilities arising from accidents may be duly compensated. The kabit system renders illusory such purpose and, worse, may still be availed of by the grantee to escape civil liability caused by a negligent use of a vehicle owned by another and operated under his license. If a registered owner is allowed to escape liability by proving who the supposed owner of the vehicle is, it would be easy for him to transfer the subject vehicle to another who possesses no property with which to respond financially for the damage done. Thus, for the safety of passengers and the public who may have been wronged and deceived through the banefulkabit system, the registered owner of the vehicle is not allowed to prove that another person has become the owner so that he may be thereby relieved of responsibility. Subsequent cases affirm such basic doctrine. It would seem then that the thrust of the law in enjoining the kabit system is not so much as to penalize the parties but to identify the person upon whom responsibility may be fixed in case of an accident with the end view of protecting the riding public. The policy therefore loses its force if the public at large is not deceived, much less involved. In the present case it is at once apparent that the evil sought to be prevented in enjoining the kabit system does not exist. First, neither of the parties to the pernicious kabit system is being held liable for damages. Second, the case arose from the negligence of another vehicle in using the public road to whom no representation, or misrepresentation, as regards the ownership and operation of the passenger jeepney was made and to whom no such representation, or misrepresentation, was necessary. Thus it cannot be said that private respondent Gonzales and the registered owner of the jeepney were in estoppel for leading the public to believe that the jeepney belonged to the registered owner. Third, the riding public was not bothered nor inconvenienced at the very least by the illegal arrangement. On the contrary, it was private respondent himself who had been wronged and was seeking compensation for the damage done to him. Certainly, it would be the height of inequity to deny him his right. In light of the foregoing, it is evident that private respondent has the right to proceed against petitioners for the damage caused on his passenger jeepney as well as on his business. Any effort then to frustrate his claim of damages by the ingenuity with which petitioners framed the issue should be discouraged, if not repelled. 2. In awarding damages for tortuous injury, it becomes the sole design of the courts to provide for adequate compensation by putting the plaintiff in the same financial position he was in prior to the tort. It is a fundamental principle in the law on damages that a defendant cannot be held liable in damages for more than the actual loss which he has inflicted and that a plaintiff is entitled to no more than the just and adequate compensation for the injury suffered. His recovery is, in the absence of circumstances giving rise to an allowance of punitive damages, limited to a fair compensation for the harm done. The law will not put him in a position better than where he should be in had not the wrong happened. In the present case, petitioners insist that as the passenger jeepney was purchased in 1982 for only P30,000.00 to award damages considerably greater than this amount would be improper and unjustified. Petitioners are at best reminded that indemnification for damages comprehends not only the value of the loss suffered but also that of the profits which the obligee failed to obtain. In other words,

indemnification for damages is not limited todamnum emergens or actual loss but extends to lucrum cessans or the amount of profit lost. Had private respondent's jeepney not met an accident it could reasonably be expected that it would have continued earning from the business in which it was engaged. Private respondent avers that he derives an average income of P300.00 per day from his passenger jeepney and this earning was included in the award of damages made by the trial court and upheld by the appeals court. The award therefore of P236,000.00 as compensatory damages is not beyond reason nor speculative as it is based on a reasonable estimate of the total damage suffered by private respondent, i.e. damage wrought upon his jeepney and the income lost from his transportation business. Petitioners for their part did not offer any substantive evidence to refute the estimate made by the courts a quo. However, we are constrained to depart from the conclusion of the lower courts that upon the award of compensatory damages legal interest should be imposed beginning 22 July 1990, i.e. the date of the accident. Upon the provisions of Art. 2213 of the Civil Code, interest "cannot be recovered upon unliquidated claims or damages, except when the demand can be established with reasonable certainty." It is axiomatic that if the suit were for damages, unliquidated and not known until definitely ascertained, assessed and determined by the courts after proof, interest at the rate of six percent (6%) per annum should be from the date the judgment of the court is made (at which time the quantification of damages may be deemed to be reasonably ascertained). In this case, the matter was not a liquidated obligation as the assessment of the damage on the vehicle was heavily debated upon by the parties with private respondent's demand for P236,000.00 being refuted by petitioners who argue that they could have the vehicle repaired easily for P20,000.00. In fine, the amount due private respondent was not a liquidated account that was already demandable and payable. One last word. We have observed that private respondent left his passenger jeepney by the roadside at the mercy of the elements. Article 2203 of the Civil Code exhorts parties suffering from loss or injury to exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission in question. One who is injured then by the wrongful or negligent act of another should exercise reasonable care and diligence to minimize the resulting damage. Anyway, he can recover from the wrongdoer money lost in reasonable efforts to preserve the property injured and for injuries incurred in attempting to prevent damage to it. However we sadly note that in the present case petitioners failed to offer in evidence the estimated amount of the damage caused by private respondent's unconcern towards the damaged vehicle. It is the burden of petitioners to show satisfactorily not only that the injured party could have mitigated his damages but also the amount thereof; failing in this regard, the amount of damages awarded cannot be proportionately reduced. WHEREFORE, the questioned Decision awarding private respondent Donato Gonzales P236,000.00 with legal interest from 22 July 1990 as compensatory damages and P30,000.00 as attorney's fees is MODIFIED. Interest at the rate of six percent (6%) per annum shall be computed from the time the judgment of the lower court is made until the finality of this Decision. If the adjudged principal and interest remain unpaid

thereafter, the interest shall be twelve percent (12%) per annum computed from the time judgment becomes final and executory until it is fully satisfied.1wphi1.ntCosts against petitioners. SO ORDERED. 178. CARPIO VS DOROJA FACTS: Accused-respondent Edwin Ramirez, while driving a passenger Fuso Jitney owned and operated by Eduardo Toribio, bumped Dionisio Carpio, a pedestrian crossing the street, as a consequence of which the latter suffered from a fractured left clavicle as reflected in the medico-legal certificate and sustained injuries which required medical attention for a period of (3) three months. An information for Reckless Imprudence Resulting to Serious Physical Injuries was filed against Edwin Ramirez with the Municipal Trial Court of Zamboanga City. The accused voluntarily pleaded guilty to a lesser offense and was accordingly convicted for Reckless Imprudence Resulting to Less Serious Physical Injuries under an amended information punishable under Article 365 of the Revised Penal Code. When a Writ of Execution was served upon the accused, it was unsatisfied by reason of insolvency. Hence, Thus, complainant moved for a subsidiary writ of execution against the subsidiary liability of the owner-operator of the vehicle. The same was denied by the trial court on two grounds, namely, the decision of the appellate court made no mention of the subsidiary liability of Eduardo Toribio, and the nature of the accident falls under "culpa-aquiliana" and not culpa-contractual." A motion for reconsideration of the said order was disallowed for the reason that complainant having failed to raise the matter of subsidiary liability with the appellate court, said court rendered its decision which has become final and executory and the trial court has no power to alter or modify such decision. DECISION OF THE TRIAL COURT: WHEREFORE, finding the accused EDWIN RAMIREZ y WEE guilty as a principal beyond reasonable doubt of the Amended Information to which he voluntarily pleaded guilty and appreciating this mitigating circumstance in his favor, hereby sentences him to suffer the penalty of One (1) month and One (1) day to Two (2) months of Arresto Mayor in its minimum period. The accused is likewise ordered to indemnify the complainant Dionisio A. Carpio the amount of P45.00 representing the value of the 1/2 can of tomatoes lost; the amount of P200.00 which complainant paid to the Zamboanga General Hospital, to pay complainant the amount of Pl,500.00 as attorney's fees and to pay the cost of this suit. SO ORDERED. ISSUE: Whether or not the subsidiary liability of the owner-operator may be enforced in the same criminal proceeding against the driver where the award was given, or in a separate civil action. DECISION OF THE SUPREME COURT: The law involved in the instant case is Article 103 in relation to Article 100, both of the Revised Penal Code, which reads thus: Art. 103. Subsidiary civil liability of other persons. The subsidiary liability established in the next preceding article shall apply to employers, teachers, persons, and corporations engaged in any kind of industry for felonies committed by their servants, pupils, workmen, apprentices, or employees in the discharge of their duties.

Respondent contends that the case of Pajarito v. Seneris cannot be applied to the present case, the former being an action involving culpa-contractual, while the latter being one of culpa-aquiliana. Such a declaration is erroneous. The subsidiary liability in Art. 103 should be distinguished from the primary liability of employers, which is quasidelictual in character as provided in Art. 2180 of the New Civil Code. Under Art. 103, the liability emanated from a delict. On the other hand, the liability under Art. 2180 is founded on culpa-aquiliana. The present case is neither an action for culpa-contractual nor for culpa-aquiliana. This is basically an action to enforce the civil liability arising from crime under Art. 100 of the Revised Penal Code. In no case can this be regarded as a civil action for the primary liability of the employer under Art. 2180 of the New Civil Code, i.e., action for culpa-aquiliana. In order that an employer may be held subsidiarily liable for the employee's civil liability in the criminal action, it should be shown (1) that the employer, etc. is engaged in any kind of industry, (2) that the employee committed the offense in the discharge of his duties and (3) that he is insolvent (Basa Marketing Corp. v. Bolinao, 117 SCRA 156). The subsidiary liability of the employer, however, arises only after conviction of the employee in the criminal action. All these requisites present, the employer becomes ipso facto subsidiarily liable upon the employee's conviction and upon proof of the latter's insolvency. Needless to say, the case at bar satisfies all these requirements. Furthermore, we are not convinced that the owner-operator has been deprived of his day in court, because the case before us is not one wherein the operator is sued for a primary liability under the Civil Code but one in which the subsidiary civil liability incident to and dependent upon his employee's criminal negligence is sought to be enforced. Considering the subsidiary liability imposed upon the employer by law, he is in substance and in effect a party to the criminal case. Ergo, the employer's subsidiary liability may be determined and enforced in the criminal case as part of the execution proceedings against the employee. This Court held in the earlier case of Pajarito v. Seneris, supra, that "The proceeding for the enforcement of the subsidiary civil liability may be considered as part of the proceeding for the execution of the judgment. A case in which an execution has been issued is regarded as still pending so that all proceedings on the execution are proceedings in the suit. There is no question that the court which rendered the judgment has a general supervisory control over its process of execution, and this power carries with it the right to determine every question of fact and law which may be involved in the execution." The argument that the owner-operator cannot be held subsidiarily liable because the matter of subsidiary liability was not raised on appeal and in like manner, the appellate court's decision made no mention of such subsidiary liability is of no moment. As already discussed, the filing of a separate complaint against the operator for recovery of subsidiary liability is not necessary since his liability is clear from the decision against the accused. Such being the case, it is not indispensable for the question of subsidiary liability to be passed upon by the appellate court. Such subsidiary liability is already implied from the appellate court's decision. In the recent case of Vda. de Paman v. Seneris, 115 SCRA 709, this Court reiterated the following pronouncement: "A judgment of conviction sentencing a defendant employer to pay an indemnity in the absence of any collusion between the defendant and the offended party, is conclusive upon the employer in an action for the enforcement of the latter's subsidiary liability not only with regard to the civil liability, but also with regard to its amount." This being the case, this Court stated in Rotea v. Halili, 109 Phil. 495, "that the court has no other function

than to render decision based upon the indemnity awarded in the criminal case and has no power to amend or modify it even if in its opinion an error has been committed in the decision. A separate and independent action is, therefore, unnecessary and would only unduly prolong the agony of the heirs of the victim." Finally, the position taken by the respondent appellate court that to grant the motion for subsidiary writ of execution would in effect be to amend its decision which has already become final and executory cannot be sustained. Compelling the owneroperator to pay on the basis of his subsidiary liability does not constitute an amendment of the judgment because in an action under Art. 103 of the Revised Penal Code, once all the requisites as earlier discussed are met, the employer becomes ipso facto subsidiarily liable, without need of a separate action. Such being the case, the subsidiary liability can be enforced in the same case where the award was given, and this does not constitute an act of amending the decision. It becomes incumbent upon the court to grant a motion for subsidiary writ of execution (but only after the employer has been heard), upon conviction of the employee and after execution is returned unsatisfied due to the employee's insolvency. WHEREFORE, the order of respondent court disallowing the motion for subsidiary writ of execution is hereby SET ASIDE. The Court a quo is directed to hear and decide in the same proceeding the subsidiary liability of the alleged owner-operator of the passenger jitney. Costs against private respondent. 179. FRANCO VS IAC FACTS: Macario Yuro, the driver of Franco Bus, swreved to the left side of MacArthur Highway at Capas, Tarlac to avoid hitting the trailer truck parked along the cemented pavement of the said highway. Thereby, taking the lane of an incoming mini bus being driven by Magdaleno Lugue, resulting to the collision opf the two vehicles. The collision resulted in the deaths of the two drivers Macario Yuro and Magdaleno Lugue, and two (2) passengers of the mini bus, Romeo Bue and Fernando Chuay. Consequently, the registered owner of the mini bus, Antonio Reyes and Mrs. Susan Chuay, the wife of victim Fernando Chuay, and Mrs. Lolita Lugue, the wife of drivervictim Magdaleno Lugue,filed an action for damages through reckless imprudence before the CFI of Pampanga in Angeles City against the owners and operators of Franco Transpoortation Company. In answer to the complaint, defendants set up, among others, the affirmative defense that as owners and operators of the Franco Transportation Company, they exercised due diligence in the selection and supervision of all their employees, including the deceased driver Macario Yuro. DECISION OF THE TRIAL COURT: Said defense was, however, rejected by the trial court in its decision 1 dated May 17, 1978, for the reason that the act of the Franco Bus driver was a negligent act punishable by law resulting in a civil obligation arising from Article 103 of the Revised Penal Code and not from Article 2180 of the Civil Code. It said: "This is a case of criminal negligence out of which civil liability arises, and not a case of civil negligence and the defense of having acted like a good father of a family or having

trained or selected the drivers of his truck is no defense to avoid civil liability." On this premise, the trial court ruled as follows: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs, Antonio Reyes, Lolita Lugue, and Susan Chuay, and against the defendants Mr. and Mrs. Federico Franco, ordering the latter: (1) To pay Antonio Reyes, actual and compensatory damages in the amount of P90,000.00 for the Isuzu Mini Bus; (2) To pay Lolita Lugue, the widow of Magdaleno Lugue, actual and compensatory damages in the total sum of P18,000.00; (3) To pay Susan Chuay, the widow of Fernando Chuay, actual and compensatory damages in the total sum of P24,000.00; and (4) To pay attorney's fee in the amount of P5.000.00; All with legal interests from the filing of this suit on November 11, 1974 until paid; and the costs of this suit. SO ORDERED. DECISION OF THE COURT OF APPEALS: On appeal by herein petitioners as defendantsappellants, respondent appellate court, agreeing with the lower court, held that defendants-appellants' driver who died instantly in the vehicular collision, was guilty of reckless or criminal imprudence punishable by law in driving appellants' bus; that the civil obligation of the appellants arises from Article 103 of the Revised Penal Code resulting in the subsidiary liability of the appellants under the said provisions, that the case subject of appeal is one involving culpable negligence out of which civil liability arises and is not one of civil negligence; and that there is nothing in Articles 102 and 103 of the Revised Penal Code which requires a prior judgment of conviction of the erring vehicle driver and his obligation to pay his civil liability before the said provisions can be applied. Respondent appellate court increased the award of damages granted by the lower court as follows: WHEREFORE, the decision appealed from is hereby modified as follows: 1. To pay Susan Chuay, widow of Fernando Chuay, the sum of P30,000.00 for the latter's death and P112,000.00 for loss of earning capacity; 2. To pay Lolita Lugue, widow of Magdaleno Lugue, the sum of P30,000.00 for the latter's death and P62,000.00 for loss of earning capacity. The rest of the judgment appealed from is affirmed. Costs against defendants-appellants. SO ORDERED. The defendants-appellants then filed a Motion for Reconsideration of the aforesaid decision of the respondent appellate courts decision, but the same was denied. ISSUES: 1. whether the action for recovery of damages instituted by herein private respondents was predicated upon crime or quasi-delict; 2. whether respondent appellate court in an appeal filed by the defeated parties, herein petitioners, may properly increase the award of damages in favor of the private respondents Chuay and Lugue, prevailing parties in the lower court, who did not appeal said court's decision. DECISION OF THE SUPREME COURT: 1. We find merit in this contention of herein private respondents as plaintiffs in Civil Case No. 2154 unequivocally claim that the former as the employers of

Macario Yuro, the driver of the Franco Bus who caused the vehicular mishap, are jointly and severally liable to the latter for the damages suffered by them which thus makes Civil Case No. 2154 an action predicated upon a quasi-delict under the Civil Code subject to the defense that the employer exercised all the diligence of a good father of a family in the selection and supervision of their employees Distinction should be made between the subsidiary liability of the employer under the Revised Penal Code and the employer's primary liability under the Civil Code which is quasi-delictual or tortious in character. The first type of liability is governed by Articles 102 and 103 of the Revised Penal Code which provide as follows: Art. 102. Subsidiary civil liability of innkeepers, tavern-keepers and proprietors of establishments. In default of the persons criminally liable, innkeepers, tavernkeepers, and any other persons or corporations shall be civilly liable for crimes committed in their establishments, in all cases where a violation of municipal ordinances or some general or special police regulations shall have been committed by them or their employees. Innkeepers are also subsidiarily liable for the restitution of goods taken by robbery or theft within their houses from guests lodging therein, or for the payment of the value thereof, provided that such guests shall have notified in advance the innkeeper himself, or the person representing him, of the deposits of such goods within the inn; and shall furthermore have followed the directions which such innkeeper or his representative may have given them with respect to the care and vigilance over such goods. No liability shall attach in case of robbery with violence against or intimidation of persons unless committed by the innkeeper's employees. Art. 103. Subsidiary civil liability of other persons. The subsidiary liability established in the next preceding article shall also apply to employers, teachers, persons, and corporations engaged in any kind of industry for felonies committed by the servants, pupils, workmen, apprentices, or employees in the discharge of their duties; While the second kind is governed by the following provisions of the Civil Code: Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties is called a quasi-delict and is governed by the provisions of this Chapter. Art. 2177. Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant. Art. 2180. The obligations 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. 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 treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. Under Article 103 of the Revised Penal Code, liability originates from a delict committed by the employee who is primarily liable therefor and upon whose primary liability his employer's subsidiary liability is to be based. Before the employer's subsidiary liability may be proceeded against, it is imperative that there should be a criminal action whereby the employee's criminal negligence or delict and corresponding liability therefor are proved. If no criminal action was instituted, the employer's liability would not be predicated under Article 103. In the case at bar, no criminal action was instituted because the person who should stand as the accused and the party supposed to be primarily liable for the damages suffered by private respondents as a consequence of the vehicular mishap died. Thus, petitioners' subsidiary liability has no leg to stand on considering that their liability is merely secondary to their employee's primary liability. Logically therefore, recourse under this remedy is not possible. On the other hand, under Articles 2176 and 2180 of the Civil Code, liability is based on culpa aquiliana which holds the employer primarily liable for tortious acts of its employees subject, however, to the defense that the former exercised all the diligence of a good father of a family in the selection and supervision of his employees. Respondent appellate court relies on the case of Arambulo, supra, where it was held that the defense of observance of due diligence of a good father of a family in the selection and supervision of employees is not applicable to the subsidiary liability provided in Article 20 of the Penal Code (now Article 103 of the Revised Penal Code). By such reliance, it would seem that respondent appellate court seeks to enforce the subsidiary civil liability of the employer without a criminal conviction of the party primarily liable therefor. This is not only erroneous and absurd but is also fraught with dangerous consequences. It is erroneous because the conviction of the employee primarily liable is a condition sine qua non for the employer's subsidiary liability 10 and, at the same time, absurd because we will be faced with a situation where the employer is held subsidiarily liable even without a primary liability being previously established. It is likewise dangerous because, in effect, the employer's subsidiary liability would partake of a solidary obligation resulting in the law's amendment without legislative sanction. The Court in the aforecited M.D. Transit case went further to say that there can be no automatic subsidiary liability of defendant employer under Article 103 of the Revised Penal Code where his employee has not been previously criminally convicted. Having thus established that Civil Case No. 2154 is a civil action to impose the primary liability of the employer as a result of the tortious act of its alleged reckless driver, we confront ourselves with the plausibility of defendants-petitioners' defense that they observed due diligence of a good father of a family in the selection and supervision of their employees.

On this point, the appellate court has unequivocally spoken in affirmation of the lower court's findings, to wit: Anyway, a perusal of the record shows that the appellants were not able to establish the defense of a good father of a family in the supervision of their bus driver. The evidence presented by the appellants in this regard is purely self-serving. No independent evidence was presented as to the alleged supervision of appellants' bus drivers, especially with regard to driving habits and reaction to actual traffic conditions. The appellants in fact admitted that the only kind of supervision given the drivers referred to the running time between the terminal points of the line (t.s.n., September 16, 1976, p. 21). Moreover, the appellants who ran a fleet of 12 buses plying the Manila-Laoag line, have only two inspectors whose duties were only ticket inspection. There is no evidence that they are really safety inspectors. Basically, the Court finds that these determinations are factual in nature. As a painstaking review of the evidence presented in the case at bar fails to disclose any evidence or circumstance of note sufficient to overrule said factual findings and conclusions, the Court is inclined to likewise reject petitioners' affirmative defense of due diligence. The wisdom of this stance is made more apparent by the fact that the appellate court's conclusions are based on the findings of the lower court which is in a better position to evaluate the testimonies of the witnesses during trial. As a rule, this Court respects the factual findings of the appellate and trial courts and accord them a certain measure of finality. Consequently, therefore, we find petitioners liable for the damages claimed pursuant to their primary liability under the Civil Code. 2. On the second legal issue raised in the instant petition, we agree with petitioners' contention that the Intermediate Appellate Court (later Court of Appeals) is without jurisdiction to increase the amount of damages awarded to private respondents Chuay and Lugue, neither of whom appealed the decision of the lower court. While an appellee who is not also an appellant may assign error in his brief if his purpose is to maintain the judgment on other grounds, he cannot ask for modification or reversal of the judgment or affirmative relief unless he has also appealed. For failure of plaintiffs-appellees, herein private respondents, to appeal the lower court's judgment, the amount of actual damages cannot exceed that awarded by it. 14 Furthermore, the records show that plaintiffs-private respondents limited their claim for actual and compensatory damages to the supposed average income for a period of one (1) year of P6,000.00 for the driver Magdaleno Lugue and P12,000.00 for the Chinese businessman Fernando Chuay. We feel that our award should not exceed the said amounts . However, the increase in awards for indemnity arising from death to P30,000.00 each remains, the same having been made in accordance with prevailing jurisprudence decreeing such increase in view of the depreciated Philippine currency. WHEREFORE, the decision of the Court of Appeals is hereby modified decreasing the award to private respondents of actual and compensatory damages for loss of average income for the period of one year to P6,000.00 for the deceased Magdaleno Lugue and P12,000.00 for the deceased Fernando Chuay. The rest of the judgment appealed from is hereby affirmed. Costs against the private respondents. This decision is immediately executory. SO ORDERED.

180. YONAHA VS CA FACTS: Elmer Ouano while driving a Toyota Tamaraw duly registered under the name of Raul Cabahug and owned by EK Sea Products feloniously maneuver and operate it in a negligent and reckless manner, without taking the necessary precaution to avoid injuries to person and damage to property, as a result thereof the motor vehicle he was then driving bumped and hit Hector Caete, which caused the latters instantaneous death, due to the multiple severe traumatic injuries at different parts of his body; was charged with the crime of Reckless Imprudence Resulting to Homicide after pleading guilty on the said information. DECISION OF THE TRIAL COURT: Finding therefore the accused guilty beyond reasonable doubt of the offense charged against him and taking into account the mitigating circumstances of voluntary surrender and plea of guilty which the prosecuting fiscal readily accepted, the Court hereby sentences the accused to suffer and undergo an imprisonment of 1 year and 1 day to 1 year and 8 months and to pay the heirs of the victim the sum of P50,000.00 for the death of the victim; P30,000.00 for actual damages incurred in connection with the burial and the nightly prayer of the deceased victim and P10,000.00 as attorneys fees. However, the Writ of Execution was returned unsatisfied for the reason that Elmer Ouano was unable to pay the monetary obligation. Forthwith, the private repondents filed a Motion for Subsidiary Execution with neither notice of hearing or notice to petitioner which was granted by the trial court. It was then, allegedly for the first time, that petitioner was informed of Ouanos conviction. Petitioner filed a motion to stay and to recall the subsidiary writ of execution principally anchored on the lack of prior notice to her and on the fact that the employers liability had yet to be established. Private respondents opposed the motion. The trial court denied petitioners motion; petitioners plea for reconsideration of the denial was likewise rejected. Petitioner promptly elevated the matter to the Court of Appeals for review. The appellate court initially restrained the implementation of the assailed orders and issued a writ of preliminary injunction upon the filing of a P10,000.00 bond. Ultimately, however, the appellate court, in its decision, dismissed the petition for lack of merit and thereby lifted the writ of preliminary injunction. The Court of Appeals ratiocinated: We are not unmindful of the ruling in the aforecited case of Lucia Pajarito vs. Seneris, supra. - that enforcement of the secondary or subsidiary liability of employer may be done by motion in the same criminal case, a recourse which presupposes a hearing. But even assuming that issuance of writ of subsidiary execution requires notice and hearing, we believe a hearing in the present case would be sheer rigmarole, an unnecessary formality, because, as employer, petitioner became subsidiarily liable upon the conviction of her accused driver, Elmer Ouano, and proof of the latters insolvency. And if she had any defense to free herself from such subsidiary liability, she could have ventilated and substantiated the same in connection with her (petitioners) motion to stay and recall the writ of subsidiary execution in question. But from her said motion, it can be gleaned that except for the protestation of violation of

due process, and absence of notice to her of the motion for issuance of a writ of subsidiary execution, petitioner intimated no defense which could absolve her of subsidiary liability under the premises. Then, too, after the denial of her motion to stay and recall subject writ, petitioner moved for reconsideration but in her motion for reconsideration, she averred no exculpatory facts which could save her from subsidiary liability, as employer of the convicted Elmer Ouano. ISSUE: Whether or not Ouanos conviction was not the result of a finding of proof beyond reasonable doubt but from his spontaneous plea of guilt. DECISION OF THE SUPREME COURT: We find merit in the petition. The statutory basis for an employers subsidiary liability is found in Article 103 of the Revised Penal Code. This Court has since sanctioned the enforcement of this subsidiary liability in the same criminal proceedings in which the employee is adjudged guilty, on the thesis that it really is a part of, and merely an incident in, the execution process of the judgment. But, execution against the employer must not issue as just a matter of course, and it behooves the court, as a measure of due process to the employer, to determine and resolve a priori, in a hearing set for the purpose, the legal applicability and propriety of the employers liability. The requirement is mandatory even when it appears prima facie that execution against the convicted employee cannot be satisfied. The court must convince itself that the convicted employee is in truth in the employ of the employer; that the latter is engaged in an industry of some kind; that the employee has committed the crime to which civil liability attaches while in the performance of his duties as such; and that execution against the employee is unsuccessful by reason of insolvency. The assumption that, since petitioner in this case did not aver any exculpatory facts in her motion to stay and recall, as well as in her motion for reconsideration, which could save her from liability, a hearing would be a futile and a sheer rigmarole is unacceptable. The employer must be given his full day in court. To repeat, the subsidiary liability of an employer under Article 103 of the Revised Penal Code requires (a) the existence of an employer-employee relationship; (b) that the employer is engaged in some kind of industry; (c) that the employee is adjudged guilty of the wrongful act and found to have committed the offense in the discharge of his duties (not necessarily any offense he commits while in the discharge of such duties); and (d) that said employee is insolvent. The judgment of conviction of the employee, of course, concludes the employer] and the subsidiary liability may be enforced in the same criminal case, but to afford the employer due process, the court should hear and decide that liability on the basis of the conditions required therefor by law. WHEREFORE, finding the order, dated 29 May 1992, as well as the order of 24 August 1992 to have been improvidently issued, said orders are hereby SET ASIDE. Petitioner shall be given the right to a hearing on the motion for the issuance of a writ of subsidiary execution filed by private respondents, and the case is REMANDED to the trial court for further proceedings conformably with our foregoing opinion. No costs. 181. GUILATCO VS CITY OF DAGUPAN

FACTS: Plaintiff Florentina Guilatco while she was about to board a motorized tricycle at a sidewalk located at Perez Blvd. (a National Road, under the control and supervision of the City of Dagupan) accidentally fell into a manhole located on said sidewalk, thereby causing her right leg to be fractured. As a result thereof, she had to be hospitalized, operated on, confined, at first at the Pangasinan Provincial Hospital, from July 25 to August 3, 1978 (or for a period of 16 days). She also incurred hospitalization, medication and other expenses to the tune of P 8,053.65 (Exh. H to H-60) or a total of P 10,000.00 in all, as other receipts were either lost or misplaced; during the period of her confinement in said two hospitals, plaintiff suffered severe or excruciating pain not only on her right leg which was fractured but also on all parts of her body; the pain has persisted even after her discharge from the Medical City General Hospital on October 9, 1978, to the present. Despite her discharge from the Hospital plaintiff is presently still wearing crutches and the Court has actually observed that she has difficulty in locomotion. From the time of the mishap on July 25, 1978 up to the present, plaintiff has not yet reported for duty as court interpreter, as she has difficulty of locomotion in going up the stairs of her office, located near the city hall in Dagupan City. She earns at least P 720.00 a month consisting of her monthly salary and other means of income, but since July 25, 1978 up to the present she has been deprived of said income as she has already consumed her accrued leaves in the government service. She has lost several pounds as a result of the accident and she is no longer her former jovial self, she has been unable to perform her religious, social, and other activities which she used to do prior to the incident. DECISION OF THE TRIAL COURT (1) Ordering defendant City of Dagupan to pay plaintiff actual damages in the amount of P 15,924 (namely P8,054.00 as hospital, medical and other expenses [Exhs. H to H-60], P 7,420.00 as lost income for one (1) year [Exh. F] and P 450.00 as bonus). P 150,000.00 as moral damages, P 50,000.00 as exemplary damages, and P 3,000.00 as attorney's fees, and litigation expenses, plus costs and to appropriate through its Sangguniang Panglunsod (City Council) said amounts for said purpose; (2) Dismissing plaintiffs complaint as against defendant City Engr. Alfredo G. Tangco; and (3) Dismissing the counterclaims of defendant City of Dagupan and defendant City Engr. Alfredo G. Tangco, for lack of merit. DECISION OF THE COURT OF APPEALS: On appeal by the respondent City of Dagupan, the appellate court reversed the lower court findings on the ground that no evidence was presented by the plaintiff- appellee to prove that the City of Dagupan had "control or supervision" over Perez Boulevard. ISSUE: Whether or not control or supervision over a national road by the City of Dagupan exists, in effect binding the city to answer for damages in accordance with article 2189 of the Civil Code. DECISION OF THE SUPREME COURT: condition of roads is expressed in the Civil Code as follows: Article 2189. Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any person by reason of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision.

It is not even necessary for the defective road or street to belong to the province, city or municipality for liability to attach. The article only requires that either control or supervision is exercised over the defective road or street. In the case at bar, this control or supervision is provided for in the charter of Dagupan and is exercised through the City Engineer who has the following duties: Sec. 22. The City Engineer--His powers, duties and compensation-There shall be a city engineer, who shall be in charge of the department of Engineering and Public Works. He shall receive a salary of not exceeding three thousand pesos per annum. He shall have the following duties: xxx (j) He shall have the care and custody of the public system of waterworks and sewers, and all sources of water supply, and shall control, maintain and regulate the use of the same, in accordance with the ordinance relating thereto; shall inspect and regulate the use of all private systems for supplying water to the city and its inhabitants, and all private sewers, and their connection with the public sewer system. There is, therefore, no doubt that the City Engineer exercises control or supervision over the public works in question. Hence, the liability of the city to the petitioner under article 2198 of the Civil Code is clear. Be all that as it may, the actual damages awarded to the petitioner in the amount of P 10,000.00 should be reduced to the proven expenses of P 8,053.65 only. The trial court should not have rounded off the amount. In determining actual damages, the court can not rely on "speculation, conjecture or guess work as to the amount. Without the actual proof of loss, the award of actual damages becomes erroneous. On the other hand, moral damages may be awarded even without proof of pecuniary loss, inasmuch as the determination of the amount is discretionary on the court. Though incapable of pecuniary estimation, moral damages are in the nature of an award to compensate the claimant for actual injury suffered but which for some reason can not be proven. However, in awarding moral damages, the following should be taken into consideration: (1) First, the proximate cause of the injury must be the claimee's acts. (2) Second, there must be compensatory or actual damages as satisfactory proof of the factual basis for damages. (3) Third, the award of moral damages must be predicated on any of the cases enumerated in the Civil Code. In the case at bar, the physical suffering and mental anguish suffered by the petitioner were proven. Witnesses from the petitioner's place of work testified to the degeneration in her disposition-from being jovial to depressed. She refrained from attending social and civic activities. Nevertheless the award of moral damages at P 150,000.00 is excessive. Her handicap was not permanent and disabled her only during her treatment which lasted for one year. Though evidence of moral loss and anguish existed to warrant the award of damages, the moderating hand of the law is called for. The Court has time and again

called attention to the reprehensible propensity of trial judges to award damages without basis, resulting in exhorbitant amounts. Although the assessment of the amount is better left to the discretion of the trial court under preceding jurisprudence, the amount of moral damages should be reduced to P 20,000.00. As for the award of exemplary damages, the trial court correctly pointed out the basis: To serve as an example for the public good, it is high time that the Court, through this case, should serve warning to the city or cities concerned to be more conscious of their duty and responsibility to their constituents, especially when they are engaged in construction work or when there are manholes on their sidewalks or streets which are uncovered, to immediately cover the same, in order to minimize or prevent accidents to the poor pedestrians. Too often in the zeal to put up "public impact" projects such as beautification drives, the end is more important than the manner in which the work is carried out. Because of this obsession for showing off, such trivial details as misplaced flower pots betray the careless execution of the projects, causing public inconvenience and inviting accidents. Pending appeal by the respondent City of Dagupan from the trial court to the appellate court, the petitioner was able to secure an order for garnishment of the funds of the City deposited with the Philippine National Bank, from the then presiding judge, Hon. Willelmo Fortun. This order for garnishment was revoked subsequently by the succeeding presiding judge, Hon. Romeo D. Magat, and became the basis for the petitioner's motion for reconsideration which was also denied. We rule that the execution of the judgment of the trial court pending appeal was premature. We do not find any good reason to justify the issuance of an order of execution even before the expiration of the time to appeal . WHEREFORE, the petition is GRANTED. The assailed decision and resolution of the respondent Court of Appeals are hereby REVERSED and SET ASIDE and the decision of the trial court, dated March 12, 1979 and amended on March 13, 1979, is hereby REINSTATED with the indicated modifications as regards the amounts awarded: (1) Ordering the defendant City of Dagupan to pay the plaintiff actual damages in the amount of P 15,924 (namely P 8,054.00 as hospital, medical and other expenses; P 7,420.00 as lost income for one (1) year and P 450.00 as bonus); P 20,000.00 as moral damages and P 10,000.00 as exemplary damages. The attorney's fees of P 3,000.00 remain the same. SO ORDERED. 182. PURITA MIRANDA VESTIL VS IAC FACTS: Theness Uy was bitten by a dog while she was playing with a child of the petitioners in the house of the late Vicente Miranda, the father of Purita Vestil, at F. Ramos Street in Cebu City. She was rushed to the Cebu General Hospital, where she was treated for "multiple lacerated wounds on the forehead" 1 and administered an antirabies vaccine by Dr. Antonio Tautjo. She was discharged after nine days but was

readmitted one week later due to "vomiting of saliva." The following day, on August 15, 1975, the child died. The cause of death was certified as broncho-pneumonia. Seven months later, the Uys sued for damages, alleging that the Vestils were liable to them as the possessors of "Andoy," the dog that bit and eventually killed their daughter. The Vestils rejected the charge, insisting that the dog belonged to the deceased Vicente Miranda, that it was a tame animal, and that in any case no one had witnessed it bite Theness. DECISION OF THE TRIAL COURT: After trial, Judge Jose R. Ramolete of the Court of First Instance of Cebu sustained the defendants and dismissed the complaint. DECISION OF THE COURT OF APPEALS: On appeal, the decision of the court a quo was reversed in favor of the Uys. The respondent court arrived at a different conclusion when the case was appealed. 5 It found that the Vestils were in possession of the house and the dog and so should be responsible under Article 2183 of the Civil Code for the injuries caused by the dog. It also held that the child had died as a result of the dog bites and not for causes independent thereof as submitted by the appellees. Accordingly, the Vestils were ordered to pay the Uys damages in the amount of P30,000.00 for the death of Theness, P12,000.00 for medical and hospitalization expenses, and P2,000.00 as attorney's fees. ISSUE: Whether or not Purita Vestil is liable for the damages caused by the dog owned by her deceased father. DECISION OF THE SUPREME COURT: What must be determined is the possession of the dog that admittedly was staying in the house in question, regardless of the ownership of the dog or of the house. Article 2183 reads as follows: The possessor of an animal or whoever may make use of the same is responsible for the damage which it may cause, although it may escape or be lost. 'This responsibility shall cease only in case the damages should come from force majeure from the fault of the person who has suffered damage. While it is true that she is not really the owner of the house, which was still part of Vicente Miranda's estate, there is no doubt that she and her husband were its possessors at the time of the incident in question. She was the only heir residing in Cebu City and the most logical person to take care of the property, which was only six kilometers from her own house. Moreover, there is evidence showing that she and her family regularly went to the house, once or twice weekly, according to at least one witness, and used it virtually as a second house. Interestingly, her own daughter was playing in the house with Theness when the little girl was bitten by the dog. The dog itself remained in the house even after the death of Vicente Miranda in 1973 and until 1975, when the incident in question occurred. It is also noteworthy that the petitioners offered to assist the Uys with their hospitalization expenses although Purita said she knew them only casually. The petitioners also argue that even assuming that they were the possessors of the dog that bit Theness there was no clear showing that she died as a result thereof. On the

contrary, the death certificate 17 declared that she died of broncho-pneumonia, which had nothing to do with the dog bites for which she had been previously hospitalized. the Court finds that the link between the dog bites and the certified cause of death has beep satisfactorily established. We also reiterate our ruling in Sison v. Sun Life Assurance Company of Canada, 20 that the death certificate is not conclusive proof of the cause of death but only of the fact of death. Indeed, the evidence of the child's hydrophobia is sufficient to convince us that she died because she was bitten by the dog even if the death certificate stated a different cause of death. The petitioner's contention that they could not be expected to exercise remote control of the dog is not acceptable. In fact, Article 2183 of the Civil Code holds the possessor liable even if the animal should "escape or be lost" and so be removed from his control. And it does not matter either that, as the petitioners also contend, the dog was tame and was merely provoked by the child into biting her. The law does not speak only of vicious animals but covers even tame ones as long as they cause injury. As for the alleged provocation, the petitioners forget that Theness was only three years old at the time she was attacked and can hardly be faulted for whatever she might have done to the animal. It is worth observing that the above defenses of the petitioners are an implied rejection of their original posture that there was no proof that it was the dog in their father's house that bit Theness. According to Manresa the obligation imposed by Article 2183 of the Civil Code is not based on the negligence or on the presumed lack of vigilance of the possessor or user of the animal causing the damage. It is based on natural equity and on the principle of social interest that he who possesses animals for his utility, pleasure or service must answer for the damage which such animal may cause. We sustain the findings of the Court of Appeals and approve the monetary awards except only as to the medical and hospitalization expenses, which are reduced to P2,026.69, as prayed for in the complaint. While there is no recompense that can bring back to the private respondents the child they have lost, their pain should at least be assuaged by the civil damages to which they are entitled. WHEREFORE, the challenged decision is AFFIRMED as above modified. The petition is DENIED, with costs against the petitioners. It is so ordered. 183. THE HOMEOWNERS ASSOCIATION OF EL DEPOSITO, BARRIO CORAZON DE JESUS, SAN JUAN RIZAL VS LOOD FACTS: Petitioners filed motions for of a writ of preliminary injunction to stay the demolition and removal of their houses and structures on a parcel of public land in barrios Corazon de Jesus and Halo Halo in San Juan, Rizal, (more popularly known as "El Deposito" from the Spanish times), which was denied by the repondent court. Petitioners' action below was one for declaratory relief to declare as null and void as ex post facto legislation, municipal ordinance No. 89, as amended, of respondent Municipality of San Juan, prohibiting squatting on public property and providing a penalty therefor, under which ordinance, petitioners claimed, respondents were summarily demolishing and removing their houses and improvements.

On April 20, 1970, upon issuance of summons requiring respondents to answer the petition, the Court issued a temporary restraining order restraining respondents, until further orders, "from proceeding with the summary destruction, removal and demolition of all other houses found in the premises of the land in barrio Corazon de Jesus and barrio Halo Halo, San Juan, Rizal, by reason of Ordinance No. 89-Amd. as amended, passed by the Municipal Council of San Juan, Rizal, on April 26, 1968 ... ." Respondents filed their answer in due course and the case was thereafter submitted for decision with the filing by the parties of their respective memoranda in lieu of oral argument. Hence this action for certiorari. ISSUE: Whether respondent judge "exceeded his authority and jurisdiction and gravely abused his discretion" in issuing the questioned orders of February 9, and March 30, 1970, denying the preliminary injunction sought to stay demolition and removal of petitioners' houses and structures. SUPREME COURTS DECISION: On the main issue at bar, the Court is satisfied that by no means may respondent court be said to have exceeded its authority or gravely abused its discretion in issuing its questioned orders denying petitioners' motion below for a writ of preliminary injunction allegedly "to maintain the status quo" and stay demolition and removal of their illegal constructions found to be public nuisances per se and serious hazards to public health, by virtue of the following principal considerations: 1. As found in respondent court's extended two-page order of February 9, 1970 and ten-page order of March 30, 1970 denying reconsideration, petitioners' motions to maintain the alleged status quo were based on the same grounds already reiterated before and denied by then Judge (now appellate associate justice) Andres Reyes who was then presiding over respondent court in an order dated September 19, 1968, which was upheld in a similar action for certiorari by the Court of Appeals in its decision of February 4, 1969. 2. In both said proceedings before Judge Reyes and the Court of Appeals, petitioners succeeded in obtaining restraining orders or preliminary writs of injunction to stay demolition, which were dissolved upon said court's handing down their order or decision on the merits of the injunction petitions submitted by petitioners. With petitioners definitely having lost their bid to reopen the cadastral proceedings to pursue their alleged claims of ownership over the lands occupied by their constructions, supra, no further reason or justification exists to continue the stay order against the removal and demolition of their constructions. 3. As was well stated in then Judge Reyes' order of September 19, 1968, petitioners failed after several hearings "to show that they have even a color of title to entitle them to exercise the right of possession to the premises in question. On the other hand, the land is admittedly public land and consequently the petitioners have no right to possession thereof....." 4. Petitioners' lack of right to the injunction sought by them was further shown in the Court of Appeals' decision of February 4, 1969, where it noted that "their very evidence, their documentary proof, would justify that their houses were built upon land of the Metropolitan Water District, that is to say, of the Philippine Government, therefore,

such tax declarations of petitioners' houses themselves are the best proof of their admission that their possession of the lands they occupy was not and could not be adverse" and that "their shanties pose a veritable danger to public health." 5. No error, much less abuse of authority or discretion, could be attributed to respondent court's statements and reasons for denying the injunction sought by petitioners, as per its order of March 30, 1970, denying reconsideration, as follows: ... The issues raised by the pleadings to determine whether or not the petitioners are entitled to a writ of preliminary injunction, or a status quo, in the words of the petitioners, had been resolved several times not only by this Court but also by the Court of Appeals, and this Court believes that insofar as the same grounds are concerned, they are res judicata xxx xxx xxx Lastly, the Court does not lose sight of the fact that the land in question is public land, in the sense that it is untitled. However, as the government now contends, the land in question is clothed with a public purpose to be utilized for public service by the government. This fact has not been denied and as a matter of fact, the petitioners admit that the land in question is public land. ... 6. The question of validity or unconstitutionality of municipal ordinance No. 89Amended need not be resolved in this proceeding, as it should first properly be submitted for resolution of the lower court in the action below. Suffice it to note that the Solicitor General appears to have correctly stated the actual situation in that petitioners do not dispute the authority of the San Juan council to pass ordinances providing for the summary abatement of public nuisances, and that the ordinance in question may not be faulted for being ex post facto in application since it "does not seek to punish an action done which was innocent before the passage of the same. Rather, it punishes the present and continuing act of unlawful occupancy of public property or properties intended for public use." At any rate, the decisive point is that independently of the said ordinance, petitioners' constructions which have been duly found to be public nuisances per se (without provision for accumulation or disposal of waste matters and constructed without building permits contiguously to and therefore liable to pollute one of the main water pipelines which supplies potable water to the Greater Manila area) may be abated without judicial proceedings under our Civil Code. As stated in Sitchon vs. Aquino, the police power of the state justifies the abatement or destruction by summary proceedings of public nuisances per se. No error, much less any abuse of discretion, grave or otherwise, may therefore be attributed against respondent court in having issued its orders denying for imperative reasons of public health and welfare the preliminary injunction sought again by petitioners to allow them to continue occupying the land in question with their condemned constructions and structures. ACCORDINGLY, judgment is hereby rendered dismissing the petition. The temporary restraining order heretofore issued on April 20, 1970 is hereby dissolved and such dissolution is declared immediately executory. No pronouncement as to costs. 184. FARRALES VS CITY MAYOR OF BAGUIO

FACTS: Plaintiff was the holder of a municipal license to sell liquor and sari-sari goods. When the temporary building where she had her stall was demolished in order that the city might construct a permanent building, Plaintiff was ordered to move her goods to another temporary place until the permanent building was completed. Instead, Plaintiff built a temporary shack at one end of the Rice Section, Baguio City Market without seeking prior permit from any city official. When the police threatened to demolish the shack, Plaintiff sought an injunction before the CFI which asked her that she present proper permit. Upon failure of petitioner to comply with the order, the CFI denied the petition for injunction, and the police then demolished the shack. DECISION OF THE TRIAL COURT: Denied the petition for injunction for lack of necessary permits. DECISION OF THE COURT OF APPEALS: Court of Appeals and subsequently certified to the Supreme Court for the reason that only questions of law are involved. ISSUES: (1) WON the shack or temporary stall was a nuisance; (2) WON the police officers are liable for damages in extrajudicially abating the nuisance. DECISION OF THE SUPREME COURT Judgment Affirmed. (1) The SC held that the shack was a nuisance. In the first place she had no permit to put up the temporary stall in question in the precise place where she did so. In the second place, its location on the cement passageway at the end of the Rice Section building was such that it constituted an obstruction to the free movement of people. (2) According to Article 707 of the CC, a public official extrajudicially abating a nuisance shall be liable for damages in only two cases: (a) if he causes unnecessary injury; or (b) if an alleged nuisance is later declared by the courts to be not a real nuisance. In the case at bar, no unnecessary injury was caused to the appellant, and not only was there no judicial declaration that the alleged nuisance was not really so but the trial court found that it was in fact a nuisance. Indeed it may be said that the abatement thereof was not summary, but through a judicial proceeding. The denial of petitioners petition for injunction was in effect an authority for the police to carry out the act which was sought to be enjoined. 185. SANGALANG VS IAC FACTS: On February 2, 1989, the Court issued a Resolution, requiring, among other things, Atty. Sangco to show cause why he should not be punished for contempt "for using intemperate and accusatory language." On March 2, 1989, Atty. Sangco filed an explanation. DECISION OF THE TRIAL COURT: To be sure, Atty. Sangco is entitled to his opinion, but not to a license to insult the Court with derogatory statements and recourses to argumenta ad hominem. In that event, it is the Court's duty "to act to preserve the honor and dignity ... and to safeguard the morals and ethics of the legal profession."

We are not satisfied with his explanation that he was merely defending the interests of his clients. As we held in Laureta, a lawyer's "first duty is not to his client but to the administration of justice; to that end, his client's success is wholly subordinate; and his conduct ought to and must always be scrupulously observant of law and ethics." And while a lawyer must advocate his client's cause in utmost earnest and with the maximum skill he can marshal, he is not at liberty to resort to arrogance, intimidation, and innuendo. ISSUE: Whether or not Atty. Sangco should be charged for contempt DECISION OF THE SUPREME COURT: The Court finds Atty. Sangco's remarks in his motion for reconsideration, disparaging, intemperate, and uncalled for. His suggestions that the Court might have been guilty of graft and corruption in acting on these cases are not only unbecoming, but comes, as well, as an open assault upon the Court's honor and integrity. In rendering its judgment, the Court yielded to the records before it, and to the records alone, and not to outside influences, much less, the influence of any of the parties. Atty. Sangco, as a former judge of an inferior court, should know better that in any litigation, one party prevails, but his success will not justify indictments of bribery by the other party. He should be aware that because of his accusations, he has done an enormous disservice to the integrity of the highest tribunal and to the stability of the administration of justice in general. As a former judge, Atty. Sangco also has to be aware that we are not bound by the findings of the trial court (in which his clients prevailed).lwph1.t But if we did not agree with the findings of the court a quo, it does not follow that we had acted arbitrarily because, precisely, it is the office of an appeal to review the findings of the inferior court. In our "show-cause" Resolution, we sought to hold Atty. Sangco in contempt, specifically, for resort to insulting language amounting to disrespect toward the Court within the meaning of Section 1, of Rule 71, of the Rules of Court. Clearly, however, his act also constitutes malpractice as the term is defined by Canon 11 of the Code of Professional Responsibility, as follows: CANON 11-A LAWYER SHALL OBSERVE AND MAINTAIN THE RESPECT DUE TO THE COURTS AND TO JUDICIAL OFFICERS AND SHOULD INSIST ON SIMILAR CONDUCT BY OTHERS. Rule 11.01... Rule 11.02... Rule 11.03-A lawyer shall abstain from scandalous, offensive or menacing language or behavior before the Courts. Rule 11.04-A lawyer should not attribute to a Judge motives not supported by the record or have no materiality to the case. Rule 11.05... Thus, aside from contempt, Atty. Sangco faces punishment for professional misconduct or malpractice. WHEREFORE Atty. J. Cezar Sangco is (1) SUSPENDED from the practice of law for three (3) months effective from receipt hereof, and (2) ORDERED to pay a fine of P 500.00 payable from receipt hereof. Let a copy of this Resolution be entered in his record.

IT IS SO ORDERED. Cases 177-185 RODRIGUEZ-ARORONG, LALAINE 186. COCA-COLA BOTTLERS PHILIPPINES, INC., vs. COURT OF APPEALS FACTS: Respondent Lydia Geronimo was the proprietess of Kindergarten Wonderland Canteen, engaged in the sale of soft drinks and other goods to the students of Kindergarten Wonderland and to the public. On August 12, 1989, some parents of the students complained that the Coke and Sprite soft drinks contained fiber-like matter and other foreign substances. She discovered the presence of some fiber-like substances in the contents of some unopened Coke bottles and a plastic matter in the contents of an unopened Sprite bottle. The Department of Health informed her that the samples she submitted are adulterated. Her sales of soft drinks plummeted, and not long after that, she had to close shop. She became jobless and destitute. She demanded from the petitioner the payment of damages but was rebuffed by it. She then filed a complaint before the RTC of Dagupan City, which granted the motion to dismiss filed by petitioner, on the ground that the complaint is based on contract, and not on quasidelict, as there exists pre-existing contractual relation between the parties. Thus, on the basis of Article 1571, in relation to Article 1562, the complaint should have been filed within six months from the delivery of the thing sold. The CA reversed the RTC decision and held that Geronimos complaint is one for quasi-delict because of petitioners act of negligently manufacturing adulterated food items intended to be sold for public consumption; and that the existence of contractual relations between the parties does not absolutely preclude an action by one against the other for quasi-delict arising from negligence in the performance of a contract. Hence, this petition. ISSUE: The honorable court of appeals committed a grave and reversible error in ruling that article 2176, the general provision on quasi-delicts, is applicable in this case when the allegations of the complaint clearly show that private respondent's cause of action is basedon breach of a seller's implied warranties under our law on sales. Corrolarily, the honorable court of appeals committed a grave and reversible error in overruling petitioner's argument that private respondent's cause of action had prescribed under article 1571 of the civil code. HELD: DECISION OF THE TRIAL COURT: Trial court granted the motion to dismiss. It ruled that the doctrine of exhaustion of administrative remedies does not apply as the existing administrative remedy is not adequate. It also stated that the complaint is based on a contract, and not on quasi-delict, as there exists pre-existing contractual relation between the parties; thus, on the basis of Article 1571, in relation to Article 1562, the complaint should have been filed within six months from the delivery of the thing sold. DECISION OF THE COURT OF APPEALS : The public respondent annulled the questioned orders of the RTC and directed it to conduct further proceedings in Civil Case No. D9629. In holding for the private respondent, it ruled that:

Petitioner's complaint being one for quasi-delict, and not for breach of warranty as respondent contends, the applicable prescriptive period is four years. It should be stressed that the allegations in the complaint plainly show that it is an action or damages arising from respondent's act of "recklessly and negligently manufacturing adulterated food items intended to be sold or public consumption" (p. 25, rollo). It is truism in legal procedure that what determines the nature of an action are the facts alleged in the complaint and those averred as a defense in the defendant's answer (I Moran 126; Calo v. Roldan, 76 Phil. 445; Alger Electric, Inc. v. CA, 135 SCRA 340). Secondly, despite the literal wording of Article 2176 of the Civil code, the existence of contractual relations between the parties does not absolutely preclude an action by one against the other forquasi-delict arising from negligence in the performance of a contract. In Singson v. Court of Appeals (23 SCRA 1117), the Supreme Court ruled: It has been repeatedly held: that the existence of a contract between the parties does not bar the commission of a tort by the one against the other and the consequent recovery of damages therefor . . . . Thus in Air France vs. Carrascoso, . . . (it was held that) although the relation between a passenger and a carrier is "contractual both in origin and in nature the act that breaks the contract may also be a tort. Significantly, in American jurisprudence, from which Our law on Sales was taken, the authorities are one in saying that he availability of an action or breach of warranty does not bar an action for torts in a sale of defective goods. Its motion for the reconsideration of the decision having been denied by the public respondent in its Resolution of 14 May 1993, the petitioner took his recourse under Rule 45 of the Revised Rules of Court. DECISION OF THE SUPREME COURT: The petitioner insists that a cursory reading of the complaint will reveal that the primary legal basis for private respondent's cause of action is not Article 2176 of the Civil Code on quasi-delict for the complaint does not ascribe any tortious or wrongful conduct on its part but Articles 1561 and 1562 thereof on breach of a seller's implied warranties under the law on sales. It contends the existence of a contractual relation between the parties (arising from the contract of sale) bars the application of the law on quasi-delicts and that since private respondent's cause of action arose from the breach of implied warranties, the complaint should have been filed within six months room delivery of the soft drinks pursuant to Article 171 of the Civil Code. In her Comment the private respondent argues that in case of breach of the seller's implied warranties, the vendee may, under Article 1567 of the Civil Code, elect between withdrawing from the contract or demanding a proportionate reduction of the price, with damages in either case. She asserts that Civil Case No. D-9629 is neither an action for rescission nor for proportionate reduction of the price, but for damages arising from a quasi-delict and that the public respondent was correct in ruling that the existence of a contract did not preclude the action for quasi-delict. As to the issue of prescription,

the private respondent insists that since her cause of action is based on quasi-delict, the prescriptive period therefore is four (4) years in accordance with Article 1144 of the Civil Code and thus the filing of the complaint was well within the said period. We find no merit in the petition. The public respondent's conclusion that the cause of action in Civil Case No. D-9629 is found on quasi-delict and that, therefore, pursuant to Article 1146 of the Civil Code, it prescribes in four (4) years is supported by the allegations in the complaint, more particularly paragraph 12 thereof, which makes reference to the reckless and negligent manufacture of "adulterated food items intended to be sold for public consumption." The vendee's remedies against a vendor with respect to the warranties against hidden defects of or encumbrances upon the thing sold are not limited to those prescribed in Article 1567 of the Civil Code which provides: Art. 1567. In the case of Articles 1561, 1562, 1564, 1565 and 1566, the vendee may elect between withdrawing from the contract and demanding a proportionate reduction of the price, with damages either case. The vendee may also ask for the annulment of the contract upon proof of error or fraud, in which case the ordinary rule on obligations shall be applicable. Under the law on obligations, responsibility arising from fraud is demandable in all obligations and any waiver of an action for future fraud is void. Responsibility arising from negligence is also demandable in any obligation, but such liability may be regulated by the courts, according to the circumstances. Those guilty of fraud, negligence, or delay in the performance of their obligations and those who in any manner contravene the tenor thereof are liable for damages. The vendor could likewise be liable for quasi-delict under Article 2176 of the Civil Code, and an action based thereon may be brought by the vendee. While it may be true that the pre-existing contract between the parties may, as a general rule, bar the applicability of the law on quasi-delict, the liability may itself be deemed to arise from quasi-delict, i.e., the acts which breaks the contract may also be a quasi-delict. Thus, in Singson vs. Bank of the Philippine Islands, this Court stated: We have repeatedly held, however, that the existence of a contract between the parties does not bar the commission of a tort by the one against the other and the consequent recovery of damages therefor. Indeed, this view has been, in effect, reiterated in a comparatively recent case. Thus, inAir France vs. Carrascoso, involving an airplane passenger who, despite hi first-class ticket, had been illegally ousted from his first-class accommodation and compelled to take a seat in the tourist compartment, was held entitled to recover damages from the air-carrier, upon the ground of tort on the latter's part, for, although the relation between the passenger and a carrier is "contractual both in origin and nature . . . the act that breaks the contract may also be a tort. Otherwise put, liability for quasi-delict may still exist despite the presence of contractual relations. Under American law, the liabilities of a manufacturer or seller of injury-causing products may be based on negligence, breach of warranty, tort, or other grounds such as fraud, deceit, or misrepresentation. Quasi-delict, as defined in Article 2176 of the Civil Code, (which is known in Spanish legal treaties asculpa aquiliana, culpa extra-contractual or

cuasi-delitos) is homologous but not identical to tort under the common law, which includes not only negligence, but also intentional criminal acts, such as assault and battery, false imprisonment and deceit. It must be made clear that our affirmance of the decision of the public respondent should by no means be understood as suggesting that the private respondent's claims for moral damages have sufficient factual and legal basis. IN VIEW OF ALL THE FOREGOING, the instant petition is hereby DENIED for lack of merit, with costs against the petitioner. SO ORDERED. 187. VIRGILIO M. DEL ROSARIO VS. COURT OF APPEALS FACTS: The Del Rosarios' complaint, filed on November 21, 1990, charged MFC with a violation of Section 3 of Act No. 3740, "An Act to Penalize Fraudulent Advertising, Mislabeling or Misbranding of Any Product, Stocks, Bonds, etc. After due proceedings, the DTI rendered judgment declaring that MFC had indeed misrepresented its product because "as the records showed," strong winds actually blew off part of the structure/roof of the Del Rosario Spouses and the same acted in when strong winds blew, a part remaining while another part was blown off. MFC was accordingly sentenced to pay an "administrative fine of P10,000.00", otherwise its "business name and registration. . . would be deemed suspended and its establishment closed until the fine was fully paid." As already stated, the decision of the DTI (of May 29, 1991) was, on appeal, affirmed in toto by the Office of the President on April 30, 1993; and the latter judgment was in turn affirmed by this Court on August 28, 1995 with a modification solely as to the fine, which was reduced to P5,000.00. In said judgment of August 28, 1995, this Court, stressing that the factual findings of such administrative bodies as the Office of the President are generally to be accorded respect, if not indeed invested with finality, pronounced as correct that Office's ruling. It appears that MFC replaced and repaired the roof free of charge, evidently acknowledging that the damage was covered by its one-year warranty on the materials and the installation. The repair work was observed and analyzed by the Esteban Adjusters and Valuers, Inc., which was engaged by the Del Rosarios to determine the cause of the destruction. 3 The repair; work was begun on October 23, 1989, with the delivery of replacement tiles, and completed on November 7, 1989. Thereafter the Esteban Adjusters and Valuers, Inc. submitted its report to the Del Rosarios, dated November 8, 1989, 4 in which it made the following conclusion: MFC however declined to concede liability for the other damages claimed by the Del Rosario Spouses to have been caused to the interior of their home. This prompted the latter to commence a civil action against MFC on April 16, 1990 in the Regional Trial Court of Manila. ISSUE: Whether or not there is a privity of contract between the parties.

whether or not upon the facts established by the evidence, MFC is answerable to the Del Rosarios for the damage caused to the latter's residence when its roof, made of shingles purchased from and installed by the former, was blown away by a typhoon. HELD: DECISION OF THE TRIAL COURT: The Trial Court held the corporation liable for breach of its contract for the supply and installation of the roofing materials in the Del Rosarios' residence. According to the Court: The following facts were duly established from the evidence supporting plaintiffs' claim for damages: "1 There was actually serious damages caused on plaintiffs' house on account of faulty or inferior installation; "2. Defendant himself admitted its liability by making partial repairs of the roofing of "Banawe" shingles, free of charge, after the typhoon. . . (Ruping); "3. There was an expressed warranty specified in the brochure that there should be two (2) metal screws for one (1) cleat but the same was violated by the defendant who only used one (1) 1-inch nail or a combination of one (1) metal screw to one (1) cleat; "4. There is ample evidence including the testimony of Engr. Puno that it was defendant Metal Forming Corporation who. . . (had) a contract with the plaintiffs for the supply and installation of roofing materials in plaintiffs' residential house located at No. 17 Tabuena Street, Corinthian Gardens, Quezon City; and "5. There was a declared warranty by the defendants relied upon by the plaintiffs and that the defendant was guilty of fraud and/or breach of warranty." DECISION OF THE COURT OF APPEALS: In its Decision promulgated on June 29, 1994. 14 said Court reversed the Trial Court's judgment, It ruled that there was no privity of contract between the Del Rosarios and MFC, for the following reasons: a. The contracts for the supply of materials and installation of the roof were signed by Engr. Puno. On the face of the contracts, it does not appear that the Del Rosarios were parties to it or that it was entered into for their benefit. It does not also appear that Engr. Puno acted as agent of the Del Rosarios nor of the corporation. b. The holding of the trial court that Engr. Puno was an agent of the corporation is not borne out by the records. There is no evidence, apart from Engr. Puno's testimony, to show that any agency exists. c. The nature of the relationship between the Del Rosarios and Engr. Puno is also not clear from the records of the case. d. While it may be implicit in the complaint of the Del Rosarios that there was a contract between them and the corporation, this is not supported by the evidence presented. There being no such privity, according to the Court of Appeals, the Del Rosarios had no cause of action against MFC for breach of warranties, there being no law allowing them to proceed directly against those whom their contractor had subcontracted to furnish materials and do part of the work that the latter was engaged to perform. DECISION OF THE SUPREME COURT: The Court rules that it is. The facts on record including those set forth in the final judgment of the Court En Banc involving the same parties, adverted to in the opening paragraph of this opinion, supra. 18 of which judgment official cognizance may properly be, as it is hereby, taken constitute adequate basis for a verdict against MFC. These are the following:

1. MFC was engaged in the business of selling to the public roofing materials known as "Banawe" shingles or metal tiles, and through extensive advertisements in media and in its brochures, made representations respecting the durability of its tiles and the sturdiness of roofing installed in accordance with its particularly described method, These representations included statements that the shingles are "STRUCTURALLY SAFE AND STRONG" and that the "BANAWE METAL TILEstructure acts as a single unit against wind and storm pressure due to the strong hook action on its overlaps." 2. After reading MFC's brochures and advertisements, the Del Rosario Spouses instructed their contractor, Engineer Puno, to use the "Banawe" shingles or metal tiles in the roofing of their house then under construction. 3. In other words, paraphrasing Article 1546 of the Civil Code, MFC, as seller to the general public had made a affirmations of fact and promises relating to its advertised product, the "Banawe" tiles, the natural tendency of which was to induce the buyers, as infact it did induce the Del Rosarios, to purchase the same, relying thereon. 4. Pursuant to the Del Rosarios' instructions. Puno placed orders with MFC and signed the pertinent contracts for the purchase of the shingles, accepted deliveries thereof and signed corresponding invoices, and made payments thereon with the spouses funds. 20 5. Deliveries of the "Banawe" metal tiles or shingles were made by MFC's employees to the construction site of the Del Rosarios' residence; and installation of the metal tiles in the roof of the Del Rosario's house was made by MFC's workers. 6. MFC "acted in bad faith and/or with gross negligence in failing to deliver the necessary accessories for the proper installation of the structure. . . and actually installed inferior roofing materials at (private respondents') residence, in violation of the proper installation procedure expressly specified in the former's brochures and advertisements for installation, i.e., the metal tile attached to the roof panels should be by two (2) self-drilling screws for one (1) metal cleat. . . (but) instead of conforming with this procedure, (petitioner) attached some of the metal cleats with only one (l)-inch ordinary nail each and others were fastened with only one (1) wood screw each. . ." 7. As a result, barely two (2) months after completion of the installation of the roof by MFC's workers, portions thereof were blown away by the winds of typhoon "Ruping," 8. MFC replaced the roof free of charge, in acknowledgment of its one-year warranty on the materials and their installation. All the quibbling about whether Engineer Puno acted as agent of MFC or of the spouses, is pointless. The matter is not a factor in determining MFC's liability for its workers' use of inferior materials and their defective installation of the "Banawe" metal tiles in the roof of the latter's residence, Prescinding from the persuasive proof on record that at all times material and with regard to the acquisition and installation of the metal tiles or shingles, Puno was in truth acting as contractor of the Del Rosarios and on their instructions, 22 ascertainment of the definite identity of the person who actually ordered the shingles from MFC is utterly inconsequential it might just as well have been a construction foreman, a trusted domestic, or any friend or acquaintance of the Del Rosarios in view of the indisputable fact not only (1) that the tiles were delivered to the Del Rosarios and used in fabricating the roof of their home, but also (2) that it was the employees and workers of MFC who (a) delivered the shingles or metal tiles to the construction site of the Del Rosarios' home, and (b) undertook and completed the installation thereof These they did in bad faith, using inferior materials and assembling them in a manner contrary to MFC's express representations in its brochures and advertisements circulated and broadcast to the general public which representations had, in the first place, induced the Del Rosarios to choose the metal tiles in question for

their roofing. In fine, since MFC, in bad faith and with gross negligence, infringed the express warranty made by it to the general public in connection with the "Banawe" tiles brought to and set up in the house of the Del Rosarios who had relied on the warranty, and thereby caused them considerable injury, the identity of the individual who actually dealt with MFC and asked the latter to make such delivery and installation is of little moment. Turning now to the matter of damages, it is the Del Rosarios' contention that the pecuniary detriment to their home amounted to P1,008,003.00, covering not only the destruction of the roof, but also substantial harm to the electrical wiring, ceiling, fixtures, walls, wallpaper, wood parquet flooring and furniture. 23 They rely on the Report of the Esteban Adjusters and Valuers, Inc., 24 to which the Regional Trial Court accorded full credit. But that report contains no statement whatever of the amount of the damage. Indeed, the testimony of Engineer Abril, the representative of the Esteban Adjusters and Valuers, Inc., is that his firm had been retained only to determine the cause of the damage, not to estimate and assess it. 25 A similar aridity as to the amount of the damage, unfortunately characterizes the testimony of Atty. Virgilio Del Rosario and the rest of the spouses' proofs. There is therefore no evidentiary foundation upon which to lay an award of actual damages. The Trial Court's grant thereof must be struck down. Lufthansa German Airlines vs. CA, et al., promulgated on April 21, 1995, inter alia ruled that: Actual or compensatory damages cannot be presumed, but must be duly proved and proved with reasonable degree of certainty. A court cannot rely on speculations, conjectures or guesswork as to the fact and amount of damages, but must depend upon competent proof that they have (been) suffered and on evidence of the actual amount thereof. Its grant of moral and exemplary damages was justified by the Trial Court as follows: Form the evidence presented, plaintiffs' sufferings have been duly and substantially proven by the defendant's fraudulent actuation and breach of warranty, and thereby entitled for the claim of damages and litigation costs as enunciated by the testimony of the plaintiff... that the damages to his house caused sufferings and feelings of shock. helplessness, fears, embarrassment and anger, thereby entitling him to Moral Damages which should be assessed at P500,000.00. "The moral damages. . . . (are awarded) for indemnity or reparation not punishment or correction, that is, an award to entitle the injured party to obtain means (of) diversions and amusement that will serve to alleviate the moral sufferings he has undergone by reason of defendant's culpable action. (RNB Surety and Ins. Co. v. IAC, G.R No. 64515, June 22, 1984, 129 SCRA 745)." That MFC did in truth act with bad faith, in flagrant breach of its express warranties made to the general public and in wanton disregard of the rights of the Del Rosarios who relied on those warranties, is adequately demonstrated by the recorded proofs. The law explicitly authorizes the award of moral damages "in breaches of contract where the defendant acted fraudulently or in bad faith." 28 There being, moreover, satisfactory evidence of the psychological and mental trauma actually suffered by the Del Rosarios, the grant to them of moral damages is warranted. Over a period of about a month. they experienced "feelings of shock, helplessness, fear, embarrassment and

anger." 29 As declared by this Court in Makabili v. Court of Appeals, 30 among other precedents: It is essential. . . . in the award of damages that the claimant must have satisfactorily proven during the trial the existence of the factual basis of the damages and its causal connection to defendant's acts. This is so because moral damages though incapable of pecuniary estimation, are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer (Enervida v. De la Torre, 55 SCRA 340 [1974.] and are allowable only when specifically prayed for in the complaint. (San Miguel Brewery, Inc. v. Magno, 21 SCRA 292 [1968]) As reflected in the records of the case, the Court of Appeals was in agreement with the findings of the trial court that petitioners suffered anguish, embarrassment and mental sufferings due to the failure of private respondent to perform its obligation to petitioners. According to the Court of Appeals, private respondent acted in wanton disregard of the rights of petitioners. These pronouncements lay the basis and justification for this Court to award petitioners moral and exemplary damages." This Court also agrees with the Trial Court that exemplary damages are properly exigible of MFC, "Article 2229 of the Civil Code provides that such damages may be imposed by way of example or correction for the public good, While exemplary damages cannot be recovered as a matter of right, they need not be proved, although plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded." 31 "Exemplary damages are imposed not to enrich one party or impoverish another but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions." However, the same statutory and jurisprudential standards just mentioned dictate reduction of the amounts of moral and exemplary damages fixed by the Trial Court. There is, to be sure, no hard and fast rule for determining what would be a fair amount of moral (or exemplary) damages, each case having to be governed by its attendant particulars, Generally, the amount of moral damages should be commensurate with the actual loss or injury suffered. In the case of PNB v. C.A, just cited, 33 this Court quoted with approval the following observation fromRCPI v. Rodriguez, viz.: . . . Nevertheless, we find the award of P100,000.00 as moral damages in favor of respondent Rodriguez excessive and unconscionable. In the case of Prudenciado v. Alliance Transport System,Inc. (148 SCRA 440 [1987]) we said: ". . . [I]t is undisputed that the trial courts are given discretion to determine the amount of moral damages (Alcantara v. Surro, 93 Phil. 472) and that the Court of Appeals can only modify or change the amount awarded when they are palpably and scandalously excessive "so as to indicate that it was the result of passion, prejudice or corruption on the part of the trial court" (Gellada v. Warner Barnes & Co., Inc., 57 O.G. [4] 7347, 7358; Sadie v. Bacharach Motors Co., Inc., 57 O.G. [4] 636 and Adone v. Bacharach Motor Co., Inc., 57 O.G. 656). But in more recent cases where the awards of moral and exemplary damages are far too excessive compared to the actual loses sustained by the aggrieved party, this Court ruled that they should be reduced to more reasonable amounts. In other words, the moral damages awarded must be commensurate with the loss or injury suffered.

In the same case (PNB v. CA), this Court 35 found the amount of exemplary damages required to be paid (P1,000,000.00) "too excessive" and reduced it to an "equitable level" (P25,000.00). . . . (T)he award of P1,000,000.00 exemplary damages is also far too excessive and should likewise be reduced to an equitable level. Exemplary damages are imposed not to enrich one party or impoverish another but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions. In another case involving strikingly analogous facts decided in 1994, Geraldez vs. CA., 36 where no actual damages were adjudicated but moral and exemplary damages in similar amounts (P500.000.00 and P300,000.00, respectively) were awarded by the Trial Court, as in this case, this Court reduced the amount of moral damages to P100,000.00 and of exemplary damages to P50,000.00. The Court sees no reason to adopt a different treatment in the case at bar, and accordingly reduces the moral damages from P500,000.00 to P100,000.00, and the exemplary damages from P300,000.00 to P50,000.00. Finally, like the adjudication of actual or compensatory damages, the award of attorney's fees must be deleted. The matter was dealt with only in the dispositive portion of the Trial Court's decision. Since the judgment does not say why attorney's fees are awarded, there is no basis for such award, which should consequently be removed. So did this Court rule, for instance, in Scott Consultants and Resource Development Corp., Inc. vs.CA, et al.: It is settled that the award of attorney's fees is the exception rather than the rule and counsel's fees are not to be awarded every time a party wins. The power of the court to award attorney's fees under Article 2208 of the Civil Code demands factual, legal, and equitable justification; its basis cannot be left to speculation or conjecture. Where granted. the court must explicitly state in the body of the decision, and not only in the dispositive portion thereof, the legal reason for the award of attorney's fees. WHEREFORE, the challenged Decision of the Court of Appeals of June 29, 1994 is REVERSED and SET ASIDE; and the Decision of the Regional Trial Court of November 18, 1991 is REINSTATED AND AFFIRMED, with the modification that the award of actual damages and attorney's fees is deleted, and the moral and exemplary damages awarded are reduced from P500,000.00 to P100,000.00, and from P300,000.00 to P50,000.00, respectively. 188. PHILIP S. YU VS. COURT OF APPEALS FACTS: Petitioner, the exclusive distributor of the House of Mayfair wallcovering products in the Philippines, cried foul when his former dealer of the same goods, herein private respondent, purchased the merchandise from the House of Mayfair in England through FNF Trading in West Germany and sold said merchandise in the Philippines. Both the court of origin and the appellate court rejected petitioner's thesis that private respondent was engaged in a sinister form of unfair competition within the context of Article 28 of the New Civil Code.

In the suit for injunction which petitioner filed before the Regional Trial Court of the National Capital Judicial Region stationed at Manila, petitioner pressed the idea that he was practically by-passed and that private respondent acted in concert with the FNF Trading in misleading Mayfair into believing that the goods ordered by the trading firm were intended for shipment to Nigeria although they were actually shipped to and sold in the Philippines. Private respondent professed ignorance of the exclusive contract in favor of petitioner. Even then, private respondent responded by asserting that petitioner's understanding with Mayfair is binding only between the parties thereto. ISSUE: Whether or not respondent appellate court correctly agree with the lower court in disallowing the writ solicited by herein petitioner HELD: DECISION OF THE TRIAL COURT: Resolving plaintiff's motion embodied in the complaint for the issuance of a writ of preliminary injunction after hearing, but without prejudging the merits of the case, and finding from the evidences adduced by the plaintiff, that the terms and conditions of the agency agreement, Exhibit "A-inj." between the plaintiff and The House of Mayfair of England for the exclusive distributorship by the plaintiff of the latter's goods, apertain to them; that there is no privity of contract between the plaintiff and the defendant; that the controversy in this case arose from a breach of contract by the FNF Trading of Germany, for having shipped goods it had purchased from The House of Mayfair to the Philippines: that as shown in Exh. "J-inj.", the House of Mayfair was demanding payment of 4,500.00 from the FNF Trading for restitution of plaintiff's alleged loss on account of the shipment of the goods in question here in the Philippines and now in the possession of the defendant; it appears to the Court that to restrain the defendant from selling the goods it has ordered from the FNF Trading of Germany, would be without legal justification. WHEREFORE, the motion for the issuance of a writ of preliminary injunction to restrain the defendant from selling the goods it has ordered from the FNF Trading of Germany is hereby DENIED. DECISION OF THE COURT OF APPEALS : According to the appellate court, petitioner was not able to demonstrate the unequivocal right which he sought to protect and that private respondent is a complete strangervis-a-vis the covenant between petitioner and Mayfair. Apart from these considerations, the reviewing authority noted that petitioner could be fully compensated for the prejudice he suffered judging from the tenor of Mayfair's correspondence to FNF Trading wherein Mayfair took the cudgels for petitioner in seeking compensation for the latter's loss as a consequence of private respondent's scheme DECISION OF THE SUPREME COURT: Did respondent appellate court correctly agree with the lower court in disallowing the writ solicited by herein petitioner? That the exclusive sales contract which links petitioner and the House of Mayfair is solely the concern of the privies thereto and cannot thus extend its chain as to bind private respondent herein is, We believe, beside the point. Verily, injunction is the appropriate remedy to prevent a wrongful interference with contracts by strangersto such contracts where the legal remedy is insufficient and the resulting injury is irreparable (Gilchrist vs. Cuddy, 29 Phil. 542 [1915]; 4-A Padilla, Civil Code Annotated, 1988 Ed., p. 90). The liability of private respondent, if any, does not emanate from the

four corners of the contract for undoubtedly, Unisia Merchandising Co., Inc. is not a party thereto but its accountability is "an independent act generative of civil liability" (Daywalt vs. Corporacion de PP. Agustinos Recoletos, 39 Phil. 587 [1919]; 4 Paras, Civil Code of the Philippines Annotated, 1981 10th Ed., p. 439; 4 Tolentino, Commentaries and Jurisprudence on the Civil Code, 1986 Ed., p. 439). These observations, however, do not in the least convey the message that We have placed the cart ahead of the horse, so to speak, by pronouncing private respondent's liability at this stage in view of the pendency of the main suit for injunction below. We are simply rectifying certain misperceptions entertained by the appellate court as regards the feasibility of requesting a preliminary injunction to enjoin a stranger to an agreement. To Our mind, the right to perform an exclusive distributorship agreement and to reap the profits resulting from such performance are proprietary rights which a party may protect (30 Am. Jur. Section 19, pp. 71-72: Jurado, Comments and Jurisprudence on Obligations and Contracts, 1983 8th Rev. Ed., p. 336) which may otherwise not be diminished, nay, rendered illusory by the expedient act of utilizing or interposing a person or firm to obtain goods from the supplier to defeat the very purpose for which the exclusive distributorship was conceptualized, at the expense of the sole authorized distributor (43 C.J.S. 597). Another circumstance which respondent court overlooked was petitioner's suggestion, which was not disputed by herein private respondent in its comment, that the House of Mayfair in England was duped into believing that the goods ordered through the FNF Trading were to be shipped to Nigeria only, but the goods were actually sent to and sold in the Philippines. A ploy of this character is akin to the scenario of a third person who induces a party to renege on or violate his undertaking under a contract, thereby entitling the other contracting party to relief therefrom (Article 1314, New Civil Code). The breach caused by private respondent was even aggravated by the consequent diversion of trade from the business of petitioner to that of private respondent caused by the latter's species of unfair competition as demonstrated no less by the sales effected inspite of this Court's restraining order. This brings Us to the irreparable mischief which respondent court misappreciated when it refused to grant the relief simply because of the observation that petitioner can be fully compensated for the damage. A contrario, the injury is irreparable where it is continuous and repeated since from its constant and frequent recurrence, no fair and reasonable redress can be had therefor by petitioner insofar as his goodwill and business reputation as sole distributor are concerned. Withal, to expect petitioner to file a complaint for every sale effected by private respondent will certainly court multiplicity of suits (3 Francisco, Revised Rules of Court, 1985 Edition, p. 261). WHEREFORE, the petition is hereby GRANTED. The decision of the Court of Appeals dated January 13, 1989 in CA-G.R. SP No. 16019 and the Order dated October 16, 1988 issued by the magistrate at the court of origin are hereby REVERSED and SET ASIDE. Let this case be remanded to the court of origin for issuance of a writ of preliminary injunction upon petitioner's posting of a bond in the sum of Fifty Thousand (P50,000.00) Pesos to be approved by said court, to remain effective during the trial on the merits until final determination of the case. The manager of private respondent. Frank Sia, is hereby ordered to pay to the Clerk of Court within five (5) days from notice hereof the fine of P500.00, as previously imposed on him, with a warning that failure to do so will be dealt with more severely.

Upon issuance of the writ of preliminary injunction, the restraining order issued on March 13, 1989 by this Court shall be deemed automatically lifted. SO ORDERED. 189. SO PING BUN vs. COURT OF APPEALS FACTS: SO In 1963, Tek Hua Trading Co, through its managing partner, So Pek Giok, entered into lease agreements with lessor Dee C. Chuan & Sons Inc. (DCCSI). Subjects of four (4) lease contracts were premises located at Nos. 930, 930-Int., 924-B and 924-C, Soler Street, Binondo, Manila. Tek Hua used the areas to store its textiles. The contracts each had a one-year term. They provided that should the lessee continue to occupy the premises after the term, the lease shall be on a month-to-month basis. When the contracts expired, the parties did not renew the contracts, but Tek Hua continued to occupy the premises. In 1976, Tek Hua Trading Co. was dissolved. Later, the original members of Tek Hua Trading Co. including Manuel C. Tiong, formed Tek Hua Enterprising Corp., herein respondent corporation. So Pek Giok, managing partner of Tek Hua Trading, died in 1986. So Pek Gioks grandson, petitioner So Ping Bun, occupied the warehouse for his own textile business, Trendsetter Marketing. On August 1, 1989, lessor DCCSI sent letters addressed to Tek Hua Enterprises, informing the latter of the 25% increase in rent effective September 1, 1989. The rent increase was later on reduced to 20% effective January 1, 1990, upon other lessees demand. Again on December 1, 1990, the lessor implemented a 30% rent increase. Enclosed in these letters were new lease contracts for signing. DCCSI warned that failure of the lessee to accomplish the contracts shall be deemed as lack of interest on the lessees part, and agreement to the termination of the lease. Private respondents did not answer any of these letters. Still, the lease contracts were not rescinded. On March 1, 1991, private respondent Tiong sent a letter to petitioner, which reads as follows: March 1, 1991 Mr. So Ping Bun 930 Soler Street Binondo, Manila Dear Mr. So, Due to my closed (sic) business associate (sic) for three decades with your late grandfather Mr. So Pek Giok and late father, Mr. So Chong Bon, I allowed you temporarily to use the warehouse of Tek Hua Enterprising Corp. for several years to generate your personal business. Since I decided to go back into textile business, I need a warehouse immediately for my stocks. Therefore, please be advised to vacate all your stocks in Tek Hua Enterprising Corp. Warehouse. You are hereby given 14 days to vacate the premises unless you have good reasons that you have the right to stay. Otherwise, I will be constrained to take measure to protect my interest.

Please give this urgent matter your preferential attention to avoid inconvenience on your part. Very truly yours, (Sgd) Manuel C. TiongPresident Petitioner refused to vacate. On March 4, 1992, petitioner requested formal contracts of lease with DCCSI in favor Trendsetter Marketing. So Ping Bun claimed that after the death of his grandfather, So Pek Giok, he had been occupying the premises for his textile business and religiously paid rent. DCCSI acceded to petitioners request. The lease contracts in favor of Trendsetter were executed. ISSUE: WHETHER THE APPELLATE COURT ERRED IN AFFIRMING THE TRIAL COURTS DECISION FINDING SO PING BUN GUILTY OF TORTUOUS INTERFERENCE OF CONTRACT? WHETHER THE APPELLATE COURT ERRED IN AWARDING ATTORNEYS FEES OF P200,000.00 IN FAVOR OF PRIVATE RESPONDENTS. HELD: DECISION OF THE TRIAL COURT: After trial, the trial court ruled: WHEREFORE, judgment is rendered: 1. Annulling the four Contracts of Lease (Exhibits A, A-1 to A-3, inclusive) all dated March 11, 1991, between defendant So Ping Bun, doing business under the name and style of Trendsetter Marketing, and defendant Dee C. Chuan & Sons, Inc. over the premises located at Nos. 924-B, 924-C, 930 and 930, Int., respectively, Soler Street, Binondo Manila; 2. Making permanent the writ of preliminary injunction issued by this Court on June 21, 1991; 3. Ordering defendant So Ping Bun to pay the aggrieved party, plaintiff Tek Hua Enterprising Corporation, the sum of P500,000.00, for attorneys fees; 4. Dismissing the complaint, insofar as plaintiff Manuel C. Tiong is concerned, and the respective counterclaims of the defendant; 5. Ordering defendant So Ping Bun to pay the costs of this lawsuit; This judgment is without prejudice to the rights of plaintiff Tek Hua Enterprising Corporation and defendant Dee C. Chuan & Sons, Inc. to negotiate for the renewal of their lease contracts over the premises located at Nos. 930, 930-Int., 924-B and 924-C Soler Street, Binondo, Manila, under such terms and conditions as they agree upon, provided they are not contrary to law, public policy, public order, and morals. DECISION OF THE COURT OF APPEALS: Court of Appeals upheld the trial court. On motion for reconsideration, the appellate court modified the decision by reducing the award of attorneys fees from five hundred thousand (P500,000.00) pesos to two hundred thousand (P200,000.00) pesos. DECISION OF THE SUPREME COURT: The foregoing issues involve, essentially, the correct interpretation of the applicable law on tortuous conduct, particularly unlawful interference with contract. We have to begin, obviously, with certain fundamental principles on torts and damages. Damage is the loss, hurt, or harm which results from injury, and damages are the recompense or compensation awarded for the damage suffered. 6 One becomes liable

in an action for damages for a nontrespassory invasion of another's interest in the private use and enjoyment of asset if (a) the other has property rights and privileges with respect to the use or enjoyment interfered with, (b) the invasion is substantial, (c) the defendant's conduct is a legal cause of the invasion, and (d) the invasion is either intentional and unreasonable or unintentional and actionable under general negligence rules. The elements of tort interference are: (1) existence of a valid contract; (2) knowledge on the part of the third person of the existence of contract; and (3) interference of the third person is without legal justification or excuse. A duty which the law of torts is concerned with is respect for the property of others, and a cause of action ex delicto may be predicated upon an unlawful interference by one person of the enjoyment by the other of his private property. This may pertain to a situation where a third person induces a party to renege on or violate his undertaking under a contract. In the case before us, petitioner's Trendsetter Marketing asked DCCSI to execute lease contracts in its favor, and as a result petitioner deprived respondent corporation of the latter's property right. Clearly, and as correctly viewed by the appellate court, the three elements of tort interference above-mentioned are present in the instant case. Authorities debate on whether interference may be justified where the defendant acts for the sole purpose of furthering his own financial or economic interest. One view is that, as a general rule, justification for interfering with the business relations of another exists where the actor's motive is to benefit himself. Such justification does not exist where his sole motive is to cause harm to the other. Added to this, some authorities believe that it is not necessary that the interferer's interest outweigh that of the party whose rights are invaded, and that an individual acts under an economic interest that is substantial, not merely de minimis, such that wrongful and malicious motives are negatived, for he acts in self-protection. Moreover justification for protecting one's financial position should not be made to depend on a comparison of his economic interest in the subject matter with that of others. It is sufficient if the impetus of his conduct lies in a proper business interest rather than in wrongful motives. As early as Gilchrist vs. Cuddy, we held that where there was no malice in the interference of a contract, and the impulse behind one's conduct lies in a proper business interest rather than in wrongful motives, a party cannot be a malicious interferer. Where the alleged interferer is financially interested, and such interest motivates his conduct, it cannot be said that he is an officious or malicious intermeddler. In the instant case, it is clear that petitioner So Ping Bun prevailed upon DCCSI to lease the warehouse to his enterprise at the expense of respondent corporation. Though petitioner took interest in the property of respondent corporation and benefited from it, nothing on record imputes deliberate wrongful motives or malice on him. Sec. 1314 of the Civil Code categorically provides also that, "Any third person who induces another to violate his contract shall be liable for damages to the other contracting party." Petitioner argues that damage is an essential element of tort interference, and since the trial court and the appellate court ruled that private

respondents were not entitled to actual, moral or exemplary damages, it follows that he ought to be absolved of any liability, including attorney's fees. It is true that the lower courts did not award damages, but this was only because the extent of damages was not quantifiable. We had a similar situation in Gilchrist, where it was difficult or impossible to determine the extent of damage and there was nothing on record to serve as basis thereof. In that case we refrained from awarding damages. We believe the same conclusion applies in this case. While we do not encourage tort interferers seeking their economic interest to intrude into existing contracts at the expense of others, however, we find that the conduct herein complained of did not transcend the limits forbidding an obligatory award for damages in the absence of any malice. The business desire is there to make some gain to the detriment of the contracting parties. Lack of malice, however, precludes damages. But it does not relieve petitioner of the legal liability for entering into contracts and causing breach of existing ones. The respondent appellate court correctly confirmed the permanent injunction and nullification of the lease contracts between DCCSI and Trendsetter Marketing, without awarding damages. The injunction saved the respondents from further damage or injury caused by petitioner's interference. Lastly, the recovery of attorney's fees in the concept of actual or compensatory damages, is allowed under the circumstances provided for in Article 2208 of the Civil Code. One such occasion is when the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest. But we have consistently held that the award of considerable damages should have clear factual and legal bases. In connection with attorney's fees, the award should be commensurate to the benefits that would have been derived from a favorable judgment. Settled is the rule that fairness of the award of damages by the trial court calls for appellate review such that the award if far too excessive can be reduced. This ruling applies with equal force on the award of attorney's fees. In a long line of cases we said, "It is not sound policy to place in penalty on the right to litigate. To compel the defeated party to pay the fees of counsel for his successful opponent would throw wide open the door of temptation to the opposing party and his counsel to swell the fees to undue proportions." Considering that the respondent corporation's lease contract, at the time when the cause of action accrued, ran only on a month-to-month basis whence before it was on a yearly basis, we find even the reduced amount of attorney's fees ordered by the Court of Appeals still exorbitant in the light of prevailing jurisprudence. Consequently, the amount of two hundred thousand (P200,000.00) awarded by respondent appellate court should be reduced to one hundred thousand (P100,000.00) pesos as the reasonable award or attorney's fees in favor of private respondent corporation. WHEREFORE, the petition is hereby DENIED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 38784 are hereby AFFIRMED, with MODIFICATION that the award of attorney's fees is reduced from two hundred thousand (P200,000.00) to one hundred thousand (P100,000.00) pesos. No pronouncement as to costs. SO ORDERED. 190. GARCIA vs. CORONA

FACTS: On November 5, 1997, this Court in Tatad v. Secretary of the Department of Energy and Lagman, et al., v. Hon.Ruben Torres, et al., 1 declared Republic Act No. 8180, entitled "An Act Deregulating the Downstream Oil Industry and For Other Purposes", unconstitutional, and its implementing Executive Order No. 392 void. R.A. 8180 was struck down as invalid because three key provisions intended to promote free competition were shown to achieve the opposite result. More specifically, this Court ruled that its provisions on tariff differential, stocking of inventories, and predatory pricing inhibit fair competition, encourage monopolistic power, and interfere with the free interaction of the market forces. Congress enacted Republic Act No. 8479, a new deregulation law without the offending provisions of the earlier law. Petitioner Enrique T. Garcia, a member of Congress, has now brought this petition seeking to declare Section 19 thereof, which sets the time of full deregulation, unconstitutional. After failing in his attempts to have Congress incorporate in the law the economic theory he espouses, petitioner now asks us, in the name of upholding the Constitution, to undo a violation which he claims Congress has committed. Petitioner contends that Section 19 of R.A. 8479, which prescribes the period for the removal of price control on gasoline and other finished products and for the full deregulation of the local downstream oil industry, is patently contrary to public interest and therefore unconstitutional because within the short span of five months, the market is still dominated and controlled by an oligopoly of the three (3) private respondents, namely, Shell, Caltex and Petron. The objective of the petition is deceptively simple. It states that if the constitutional mandate against monopolies and combinations in restraint of trade is to be obeyed, there should be indefinite and open-ended price controls on gasoline and other oil products for as long as necessary. This will allegedly prevent the "Big 3" Shell, Caltex and Petron from price-fixing and overpricing. Petitioner calls the indefinite retention of price controls as "partial deregulation". The grounds relied upon in the petition are: A. Sec. 19 OF R.A. NO. 8479 WHICH PROVIDES FOR FULL DEREGULATION FIVE (5) MONTHS OR EARLIER FOLLOWING THE EFFECTIVITY OF THE LAW, IS GLARINGLY PROOLIGOPOLY, ANTI-COMPETITION AND ANTI-PEOPLE, AND IS THEREFORE PATENTLY UNCONSTITUTIONAL FOR BEING IN GROSS AND CYNICAL CONTRAVENTION OF THE CONSTITUTIONAL POLICY AND COMMAND EMBODIED IN ARTCLE XII, SECTION 19 OF THE 1987 CONSTITUTION AGAINST MONOPOLIES AND COMBINATIONS IN RESTRAINT OF TRADE. B. SAID SECTION 19 OF R.A. No. 8479 IS GLARINGLY PRO-OLIGOPOLY, ANTICOMPETITION AND ANTI-PEOPLE, FOR THE FURTHER REASON THAT IT PALPABLY AND CYNICALLY VIOLATES THE VERY OBJECTIVE AND PURPOSE OF R.A. NO. 8479, WHICH IS TO ENSURE A TRULY COMPETITIVE MARKET UNDER A REGIME OF FAIR PRICES. C. SAID SECTION 19 OF R.A. No. 8479, BEING GLARINGLY PRO-OLIGOPOLY, ANTICOMPETITION AND ANTI-PEOPLE, BEING PATENTLY UNCONSTITUTIONAL AND BEING PALPABLY VIOLATIVE OF THE LAW'S POLICY AND PURPOSE OF ENSURING A TRULY COMPETITIVE MARKET UNDER A REGIME OF FAIR PRICES, IS A VERY GRAVE AND

GRIEVOUS ABUSE OF DISCRETION ON THE PART OF THE LEGISLATIVE AND EXECUTIVE BRANCHES OF GOVERNMENT. D. PREMATURE FULL DEREGULATION UNDER SECTION 19 OF R.A. NO. 8479 MAY AND SHOULD THEREFORE BE DECLARED NULL AND VOID EVEN AS THE REST OF ITS PROVISIONS REMAIN IN FORCE, SUCH AS THE TRANSITION PHASE OR PARTIAL DEREGULATION WITH PRICE CONTROLS THAT ENSURES THE PROTECTION OF THE PUBLIC INTEREST BY PREVENTING THE BIG 3 OLIGOPOLY'S PRICE-FIXING AND OVERPRICING. ISSUE: The issue is the timeliness or the wisdom of the date when full deregulation should be effective. HELD: Our ruling in Tatad is categorical that the Constitution's Article XII, Section 19, is anti-trust in history and spirit. It espouses competition. We have stated that only competition which is fair can release the creative forces of the market. We ruled that the principle which underlies the constitutional provision is competition. Thus: Sec. 19, Article XII of our Constitution is anti-trust in history and in spirit. It espouses competition. The desirability of competition is the reason for the prohibition against restraint of trade, the reason for the interdiction of unfair competition, and the reason for regulation of unmitigated monopolies. Competition is thus the underlying principle of section 19, Article XII of our Constitution which cannot be violated by R.A. No. 8180. We subscribe to the observation of Prof. Gellhorn that the objective of anti-trust law is "to assure a competitive economy, based upon the belief that through competition producers will strive to satisfy consumer wants at the lowest price with the sacrifice of the fewest resources. Competition among producers allows consumers to bid for goods and services, and thus matches their desires with society's opportunity costs." He adds with appropriateness that there is a reliance upon "the operation of the "market" system (free enterprise) to decide what shall be produced, how resources shall be allocated in the production process, and to whom the various products will be distributed. The market system relies on the consumer to decide what and how much shall be produced, and on competition, among producers to determine who will manufacture it." In his recital of the antecedent circumstances, petitioner repeats in abbreviated form the factual findings and conclusions which led the Court to declare R.A. 8180 unconstitutional. The foreign oligopoly or cartel formed by respondents Shell, Caltex and Petron, their indulging in price-fixing and overpricing, their blockade tactics which effectively obstructed the entry of genuine competitors, the dangers posed by the oil cartel to national security and economic development, and other prevailing sentiments are stated as axiomatic truths. They are repeated in capsulized context as the current background facts of the present petition. The empirical existence of this deplorable situation was precisely the reason why Congress enacted the oil deregulation law. The evils arising from conspiratorial acts of monopoly are recognized as clear and present. But the enumeration of the evils by our Tatad decision was not for the purpose of justifying continued government control, especially price control. The objective was, rather, the opposite. The evils were emphasized to show the need for free competition in a deregulated industry. And to be

sure, the measures to address these evils are for Congress to determine, but they have to meet the test of constitutional validity. The Court respects the legislative finding that deregulation is the policy answer to the problems. It bears stressing that R.A. 8180 was declared invalid not because deregulation is unconstitutional. The law was struck down because, as crafted, three key provisions plainly encouraged the continued existence if not the proliferation of the constitutionally proscribed evils of monopoly and restraint of trade. In sharp contrast, the present petition lacks a factual foundation specifically highlighting the need to declare the challenged provision unconstitutional. There is a dearth of relevant, reliable, and substantial evidence to support petitioner's theory that price control must continue even as Government is trying its best to get out of regulating the oil industry. The facts of the petition are, in the main, a general dissertation on the evils of monopoly. Petitioner overlooks the fact that Congress enacted the deregulation law exactly because of the monopoly evils he mentions in his petition. Congress instituted the lifting of price controls in the belief that free and fair competition was the best remedy against monopoly power. In other words, petitioner's facts are also the reasons why Congress lifted price controls and why the President accelerated the process. The facts adduced in favor of continued and indefinite price control are the same facts which supported what Congress believes is an exercise of wisdom and discretion when it chose the path of speedy deregulation and rejected Congressman Garcia's economic theory. The petition states that it is using the very thoughts and words of the Court in its Tatad decision. Those thoughts and words, however, were directed against the tariff differential, the inventory requirement, and predatory pricing, not against deregulation as a policy and not against the lifting of price controls. A dramatic, at times expansive and grandiloquent, reiteration of the same background circumstances narrated inTatad does not squarely sustain petitioner's novel thesis that there can be deregulation without lifting price controls. Petitioner may call the industry subject to price controls as deregulated. In enacting the challenged provision, Congress, on the other hand, has declared that any industry whose prices and profits are fixed by government authority remains a highly regulated one. Petitioner, therefore, engages in a legal paradox. He fails to show how there can be deregulation while retaining government price control. Deregulation means the lifting of control, governance and direction through rule or regulation. It means that the regulated industry is freed from the controls, guidance, and restrictions to which it used to be subjected. The use of the word "partial" to qualify deregulation is sugar-coating. Petitioner is really against deregulation at this time. Petitioner states that price control is good. He claims that it was the regulation of the importation of finished oil products which led to the exit of competitors and the consolidation and dominion of the market by an oligopoly, not price control. Congress and the President think otherwise.

The argument that price control is not the villain in the intrusion and growth of monopoly appears to be pure theory not validated by experience. There can be no denying the fact that the evils mentioned in the petition arose while there was price control. The dominance of the so-called "Big 3" became entrenched during the regime of price control. More importantly, the ascertainment of the cause and the method of dismantling the oligopoly thus created are a matter of legislative and executive choice. The judicial process is equipped to handle legality but not wisdom of choice and the efficacy of solutions. Petitioner engages in another contradiction when he puts forward what he calls a selfevident truth. He states that a truly competitive market and fair prices cannot be legislated into existence. However, the truly competitive market is not being created or fashioned by the challenged legislation. The market is simply freed from legislative controls and allowed to grow and develop free from government interference. R.A. 8479 actually allows the free play of supply and demand to dictate prices. Petitioner wants a government official or board to continue performing this task. Indefinite and open-ended price control as advocated by petitioner would be to continue a regime of legislated regulation where free competition cannot possibly flourish. Control is the antithesis of competition. To grant the petition would mean that the Government is not keen on allowing a free market to develop. Petitioner's "self-evident truth" thus supports the validity of the provision of law he opposes. New players in the oil industry intervened in this case. According to them, it is the free market policy and atmosphere of deregulation which attracted and brought the new participants, themselves included, into the market. The intervenors express their fear that this Court would overrule legislative policy and replace it with petitioner's own legislative program. The factual allegations of the intervenors have not been refuted and we see no reason to doubt them. Their argument that the co-existence of many viable rivals create free market conditions induces competition in product quality and performance and makes available to consumers an expanded range of choices cannot be seriously disputed. On the other hand, the pleadings of public and private respondents both put forth the argument that the challenged provision is a policy decision of Congress and that the wisdom of the provision is outside the authority of this Court to consider. We agree. As we have ruled in Morfe v. Mutuc (I)t is well to remember that this Court, in the language of Justice Laurel, "does not pass upon question or wisdom, justice or expediency of legislation." As expressed by Justice Tuason: "It is not the province of the courts to supervise legislation and keep it within the bounds of propriety and common sense. That is primarily and exclusively a legislative concern." There can be no possible objection then to the observation of Justice Montemayor: "As long as laws do not violate any Constitutional provision, the Courts merely interpret and apply them regardless of whether or not they are wise or salutary." For they, according to Justice Labrador, "are not supposed to override legitimate policy and . . . never inquire into the wisdom of the law." It is thus settled, to paraphrase Chief Justice Concepcion in Gonzales v. Commission on Elections, that only congressional power or competence, not the wisdom of the action taken, may be the basis for declaring a statute invalid. This is as it ought to be: The principle of separation of powers has in the main wisely allocated the respective

authority of each department and confined its jurisdiction to such a sphere. There would then be intrusion not allowable under the Constitution if on a matter left to the discretion of a coordinate branch, the judiciary would substitute its own. If there be adherence to the rule of law, as there ought to be, the last offender should be the courts of justice, to which rightly litigants submit their controversy precisely to maintain unimpaired the supremacy of legal norms and prescriptions. The attack on the validity of the challenged provision likewise insofar as there may be objections, even if valid and cogent, on its wisdom cannot be sustained. In this petition, Congressman Garcia seeks to revive the long settled issue of the timeliness of full deregulation, which issue he had earlier submitted to this Court by way of a Partial Motion for Reconsideration in the Tatadcase. In our Resolution dated December 3, 1997, which has long become final and executory, we stated: We shall first resolve petitioner Garcia's linchpin contention that the full deregulation decreed by R.A. No. 8180 to start at the end of March 1997 is unconstitutional. For prescinding from this premise, petitioner suggests that "we simply go back to the transition period, price control will be revived through the automatic pricing mechanism based on Singapore Posted Prices. The Energy Regulatory Board . . . would play a limited and ministerial role of computing the monthly price ceiling of each and every petroleum fuel product, using the automatic pricing formula. While the OPSF would return, this coverage would be limited to monthly price increases in excess of P0.50 per liter. We are not impressed by petitioner Garcia's submission. Petitioner has no basis in condemning as unconstitutional per se the date fixed by Congress for the beginning of the full deregulation of the downstream oil industry. Our Decision merely faulted the Executive for factoring the depletion of OPSF in advancing the date of full deregulation to February 1997. Nonetheless, the error of the Executive is now a non-issue for the full deregulation set by Congress itself at the end of March 1997 has already come to pass. March 1997 is not an arbitrary date. By that date, the transition period has ended and it was expected that the people would have adjusted to the role of market forces in shaping the prices of petroleum and its products. The choice of March 1997 as the date of full deregulation is a judgment of Congress and its judgment call cannot be impugned by this Court. Reduced to its basic arguments, it can be seen that the challenge in this petition is not against the legality of deregulation. Petitioner does not expressly challenge deregulation. The issue, quite simply, is the timeliness or the wisdom of the date when full deregulation should be effective. In this regard, what constitutes reasonable time is not for judicial determination. Reasonable time involves the appraisal of a great variety of relevant conditions, political, social and economic. They are not within the appropriate range of evidence in a court of justice. It would be an extravagant extension of judicial authority to assert judicial notice as the basis for the determination. We repeat that what petitioner decries as unsuccessful is not a final result. It is only a beginning. The Court is not inclined to stifle deregulation as enacted by Congress from its very start. We leave alone the program of deregulation at this stage. Reasonable time will prove the wisdom or folly of the deregulation program for which Congress and not the Court is accountable.

Petitioner argues further that the public interest requires price controls while the oligopoly exists, for that is the only way the public can be protected from monopoly or oligopoly pricing. But is indefinite price control the only feasible and legal way to enforce the constitutional mandate against oligopolies? Art. 186 of the Revised Penal Code, as amended, punishes as a felony the creation of monopolies and combinations in restraint of trade. The Solicitor General, on the other hand, cites provisions of R.A. 8479 intended to prevent competition from being corrupted or manipulated. Section 11, entitled "Anti-Trust Safeguards", defines and prohibits cartelization and predatory pricing. It penalizes the persons and officers involved with imprisonment of three (3) to seven (7) years and fines ranging from One million to Two million pesos. For this purpose, a Joint Task Force from the Department of Energy and Department of Justice is created under Section 14 to investigate and order the prosecution of violations. Sec. 8 and 9 of the Act, meanwhile, direct the Departments of Foreign Affairs, Trade and Industry, and Energy to undertake strategies, incentives and benefits, including international information campaigns, tax holidays and various other agreements and utilizations, to invite and encourage the entry of new participants. Section 6 provides for uniform tariffs at three percent (3%). Sec. 13 of the Act provides for "Remedies", under which the filing of actions by government prosecutors and the investigation of private complaints by the Task Force is provided. Sections 14 and 15 provide how the Department of Energy shall monitor and prevent the occurrence of collusive pricing in the industry. It can be seen, therefore, that instead of the price controls advocated by the petitioner, Congress has enacted anti-trust measures which it believes will promote free and fair competition. Upon the other hand, the disciplined, determined, consistent and faithful execution of the law is the function of the President. As stated by public respondents, the remedy against unreasonable price increases is not the nullification of Section 19 of R.A. 8479 but the setting into motion of its various other provisions. For this Court to declare unconstitutional the key provision around which the law's antitrust measures are clustered would mean a constitutionally interdicted distrust of the wisdom of Congress and of the determined exercise of executive power. Having decided that deregulation is the policy to follow, Congress and the President have the duty to set up the proper and effective machinery to ensure that it works. This is something which cannot be adjudicated into existence. This Court is only an umpire of last resort whenever the Constitution or a law appears to have been violated. There is no showing of a constitutional violation in this case. WHEREFORE, the petition is DISMISSED. SO ORDERED. II. 1. DAMAGES PEOPLE vs. BALLESTEROS

FACTS: In the warm summer evening of May 28, 1991, Carmelo Agliam, his half-brother Eduardo Tolentino, Ronnel Tolentino, Vidal Agliam, his brother Jerry Agliam, Robert Cacal, Raymundo Bangi and Marcial Barid converged at a carinderia owned by Ronnel Tolentino at Ganayao, Pasuquin, Ilocos Norte. They proceeded to the barangay hall at Carusipan to attend a dance. The group did not tarry for long at the dance because they sensed some hostility from Cesar Galo and his companions who were giving them dagger looks. In order to avoid trouble, especially during the festivity, they decided to head for home instead of reacting to the perceived provocation of Galo and his companions. The group had barely left when, within fifty meters from the dance hall, their owner jeep was fired upon from the rear. Vidal Agliam was able to jump out from the eastern side of the "topdown" jeep and landed just beside it. He scurried to the side of the road and hid in the ricefield. His younger brother Jerry also managed to jump out, but was shot in the stomach and died. Carmelo Agliam, Robert Cacal and Ronnel Tolentino sustained injuries in the right foot, back of the right thigh, and legs and thighs, respectively. The stunned Eduardo Tolentino was not even able to move from his seat and was hit with a bullet which punctured his right kidney. He did not survive. The precipitate attack upon the jeep left two people dead and four others injury. All pleaded not guilty. Paraffin tests conducted on Galo and Ballesteros produced positive results. Bulusan was not tested for nitrates. In his testimony, Galo claimed that he did not even talk to Bulusan or any of his companions at the basketball court, as alleged by the complainants. Having been found with gunpowder residue in his hands, Galo attempted to exculpate himself from the results by confessing that he had been a cigarette smoker for the past ten years and had, in fact, just consumed eight cigarette sticks prior to the test. He further asserted that paraffin tests are not infallible, and that his hand may have been contaminated by a nitrogenous compound, the source of which is urine. Lastly, he said that he was not even present at the crime scene when the firing incident took place; hence, he could not have been one of those who strafed the jeep. For his part, Ballesteros interposed the defense of alibi, narrating to the court that, on May 28, 1991, at around 7:00 o'clock in the evening, he went to a nearby store to purchase some cigarettes. He returned home within thirty minutes and cleaned his garlic bulbs before retiring at 9:00 o'clock. The next morning, he busied himself with some chores, which included fertilizing his pepper plants with sulfate. He handled the fertilizers without gloves. To counter the finding of traces of nitrates on his left hand, Ballesteros maintained that he uses his left hand in lighting cigarettes, as it was very painful for him to use his right hand. He likewise informed the trial court that he had no motive to kill the victims. Bulusan echoed the defense of alibi of Galo and Ballesteros, stating that he saw only Galo on the evening of the dance but did not talk to him. He denied joining the two later that night because after the dance, he went straight to the house of Michael Viloria, where he spent the night he went to work at 7:00 o'clock in the morning of the following day ISSUE: Whether or not the lower court is correct in finding accused-appellants guilty beyond reasonable doubt. Whether or not the award of damages is correct

HELD: DECISION OF THE TRIAL COURT: the Regional Trial Court of Bangui, Ilocos Norte, Branch 19, finding the accused guilty beyond reasonable doubt of murder, qualified by treachery, as charged under Article 248 of the Revised Penal Code, as amended, to wit: WHEREFORE, the Court finds the three accused guilty beyond reasonable doubt of murder, qualified by treachery, as charged, defined and penalized under Article 248 of the Revised Penal Code, as amended, and applying Article 248 of the Revised Penal Code hereby sentences them toreclusion perpetua, with all the accessory penalties provided by law, and further sentencing them to pay jointly and solidarily 1. The heirs of Jerry Agliam compensatory damages in the amount of FIFTY THOUSAND PESOS (P50,000.00), moral damages in the amount of TWENTY THOUSAND PESOS (P20,000.00), and actual damages in the amount of THIRTY FIVE THOUSAND SEVEN HUNDRED FIFTY-FIVE PESOS (P35,755.00), with interest; 2. The heirs of the late Eduardo Tolentino, Sr., compensatory damages in the amount of FIFTY THOUSAND PESOS (P50,000.00), moral damages in the amount of TWENTY THOUSAND PESOS (P20,000.00), and actual damages in the total amount of SIXTY-ONE THOUSAND SEVEN HUNDRED EIGHTY-FIVE PESOS (P61,785.00), with interest; 3. Carmelo Agliam, actual damages in the amount of TWO THOUSAND AND THREE PESOS AND FORTY CENTAVOS (P2,003.40), and moral damages in the amount of TEN THOUSAND PESOS (P10,000.00), with interest; 4. Vidal Agliam Jr., Robert Cacal and Ronnel Tolentino, moral damages in the amount of FIVE THOUSAND PESOS (P5,000.00) each, with interest. 5. The costs. The accused shall be credited in the service of their sentence the full time during which they had undergone preventive imprisonment, if they agreed voluntarily in writing to abide by the same disciplinary rules imposed upon convicted prisoners, otherwise, they shall be credited in the service thereof with only four-fifths of the time during which they had undergone preventive imprisonment. DECISION OF THE SUPREME COURT We answer in the affirmative. Accused-appellants insist that the trial court erred in finding that Carmelo and Vidal Agliam recognized them as the assailants. This claim is unmeritorious. In their testimonies, Carmelo and Vidal Agliam both described the area to be well illumined by the moon. The shooting took place on a small road in the mountainous terrains of Ilocos Norte, where the air is free from darkening elements and turbidity. It being a summer evening, there could not have been any fog to becloud the atmosphere and hamper the vision of the victims, which would have prevented them from clearly seeing their assailants. They pinpointed the location of the malefactors to be approximately three meters from where they stood. Considering the luminescence of the moon and the proximity between them, the victims could distinctly identify their assailants. It must be noted that Carmelo was acquainted with Galo and his brother, a butcher, since he used to deal with them in his business of buying and selling cattle. Bulusan was a classmate of Vidal at Cadaratan School. Generally, people in rural communities know each other both by face and name. Bulusan and Agliam were, not only townmates, but former classmates as well. The constant interaction between them through the years would

necessarily lead to familiarity with each other such that, at the very least, one would have been able to recognize the other easily. That accused-appellants had no motive in perpetrating the offense is irrelevant. A distinction is herein timely made between motive and intent. Motive is the moving power which impels one to action for a definite result. Intent, on the other hand, is the purpose to use a particular means to effect such result. Motive alone is not proof of a crime. In order to tip the scales in its favor, intent and not motive must be established by the prosecution. Motive is hardly ever an essential element of a crime. A man driven by extreme moral perversion may be led to commit a crime, without a real motive but a just for the sake of committing it. Along the same line, a man who commits a crime with an apparent motive may produce different results, for which he is punished. As held in a line of cases, the rule is well-settled that the prosecution need not prove motive on the part of the accused when the latter has been positively identified as the author of the crime. Lack or absence of motive for committing the crime does not preclude conviction thereof where there were reliable witnesses who fully and satisfactorily identified the accused as the perpetrator of the felony. Accused-appellant's attempt to offer wild excuses regarding the source of the gunpowder traces found on their hands is futile. Experts confirm the possibility that cigarettes, fertilizers and urine may leave traces of nitrates, but these are minimal and, unlike those found in gunpowder, may be washed off with tap water. The hackneyed defense of alibi interposed by accused-appellants must likewise fail. As consistently enunciated by this Court, the established doctrine is that, for the defense of alibi to prosper, the accused must prove, not only that he was at some other place at the time of the commission of the crime, but also that it was physically impossible for him to be at the locus delicti or within its immediate vicinity. This accused-appellants failed to satisfactorily prove. On the night of May 28, 1991, Galo and Bulusan attended the dance at the barangay hall. After the dance, they went their separate ways but remained within the barangay. Galo lingered in the premises. Bulusan slept over at the house of Michael Viloria, which was within walking distance from the dance hall. The defense of alibi must be established by positive, clear and satisfactorily evidence, the reason being that it is easily manufactured and usually so unreliable that it can rarely be given credence. This is especially true in case of positive identification of the culprit by reliable witnesses, which renders their alibis worthless. Positive identification prevails over denials and alibis. Accused-appellants are under the common misconception that proof beyond reasonable doubt requires total freedom from any quantum of doubt. This is not so. Under Section 2, Rule 133 of the Rules of Court, (p)roof beyond reasonable doubt does not mean such a degree of proof as, excluding possibility of error, produces absolute certainty. Moral certainty only is required, or that degree of proof which produces conviction in an unprejudiced mind. Absolute certainty of guilt is not demanded by law to convict a person of a criminal charge. The doubt to the benefit of which an accused is entitled in a criminal trial is a reasonable doubt, not a whimsical or fanciful doubt based on imagined but wholly improbable possibilities and unsupported by evidence. Reasonable doubt is that engendered by an investigation of the whole proof and inability, after such

investigation, to let the mind rest easy upon the certainty of guilt. A precise example would be the uncorroborated alibi of accused in the case at bar where accusedappellants individually interposed the wavering defense of alibi. Galo failed to elucidate on his whereabouts after the dance, whereas Bulusan claimed to have slept in the house of one Michael Viloria. Ballesteros attested that he was not at the dance hall at all. None of them, however, attempted to corroborate their alibi through the testimony of witnesses. In fact, they never attempted to present as witnesses those who would have testified to having seen them elsewhere on the night in question. Had they done so, the presentation of corroborative testimony would have reenforced their defense of alibi. As held in People vs. Ligotan, an alibi must be supported by credible corroboration from disinterested witnesses, and where such defense is not corroborated, it is fatal to the accused. The Court correctly ruled in finding that the offense was qualified by treachery. Under Paragraph 16, Article 14 of the Revised Penal Code, "(t)here is treachery when the offender commits any of the crimes against the person employing means, methods or forms in the execution thereof which tend directly and specially to insure its execution without risk to himself arising from the defense which the offended party might make." The requisites of treachery are twofold: (1) (t)hat at the time of the attack, the victim was not in a position to defend himself ; and (2) that the offender consciously adopted the particular means, method or form of attack employed by him. As regards the second requisite, the accused must make some preparation to kill his victim in such a manner at to insure the execution of the crime or to make it impossible or hard for the person attacked to defend himself or retaliate. There must be evidence that such form of attack was purposely adopted by the accused. Here, it is obvious that the accusedappellants had sufficient opportunity to reflect on their heinous plan. The facts show that the attack was well-planned and not merely a result of the impulsiveness of the offenders. Manifestations of their evil designs were already apparent as early as the time of the dance. They were well-armed and approached the homebound victims, totally unaware of their presence, from behind. There was no opportunity for the latter to defend themselves, the attack being so sudden and Eduardo Tolentino was shot right where he sat. The trial court was also correct in the award of damages to the heirs of the victims. Damages may be defined as the pecuniary compensation, recompense, or satisfaction for an injury sustained, or as otherwise expressed, the pecuniary consequences which the law imposes for the breach of some duty or the violation of some right. Actual or compensatory damages are those awarded in satisfaction of, or in recompense for, loss or injury sustained, whereas moral damages may be invoked when the complainant has experienced mental anguish, serious anxiety, physical suffering, moral shock and so forth, and had furthermore shown that these were the proximate result of the offender's wrongful act or omission. In granting actual or compensatory damages, the party making a claim for such must present the best evidence available, viz., receipts, vouchers, and the like, as corroborated by his testimony. Here, the claim for actual damages by the heirs of the victims is not controverted, the same having been fully substantiated by receipts accumulated by them and presented to the court. Therefore, the award of actual damages is proper. However, the order granting compensatory damages to the heirs of Jerry Agliam and Eduardo Tolentino Sr. must be amended. Consistent with the policy of this Court, the amount of fifty thousand pesos (P50,000.00) is given to the heirs of the victims by way of indemnity, and not as compensatory damages. As regards moral damages, the amount of psychological pain, damage and

injury caused to the heirs of the victims, although inestimable, may be determined by the trial court in its discretion. Hence, we see no reason to disturb its findings as to this matter. WHEREFORE, premises considered, the decision appealed from is hereby AFFIRMED WITH MODIFICATION. No pronouncement as to costs. SO ORDERED. 1. BARITUA vs. COURT OF APPEALS FACTS: The facts show that on June 26, 1989 private respondent Roy R. Domingo, represented by his attorney-in-fact, Crispin A. Domingo, filed with the Regional Trial Court, Branch 53, Resales, Pangasinan a complaint against petitioner Jose Baritua as owner and operator of the J.B. Bus Lines. Private respondent sought to recover actual and exemplary damages after a bus owned by petitioner rammed private respondent's car along the Maharlika Highway, Sto. Tomas, Batangas on January 19, 1988. In his complaint, private respondent alleged that: 1. He is a Filipino, of legal age, married and a resident of Poblacion Resales, Pangasinan before he went to the United States where he now lives at 4525 Leata Lane, La Cantada LA 91011. He is being represented by his attorney-in-fact Crispin A. Domingo, a Filipino, of legal age, married and resident of No. 47 Yale St., Cubao, Quezon City. Defendant is also a Filipino, of legal age, married and doing business under the business name "J.B. Bus Lines" with business address at Tramo Street, Pasay City where said defendant could be served summons. Petitioner moved to dismiss the complaint for improper venue. He alleged that since private respondent was not a resident of the Philippines, the complaint should be filed in the place where petitioner, the defendant, resides which is in Gubat, Sorsogon. Petitioner claims that: A. RESPONDENT COURT OF APPEALS COMMITTED GROSS ERROR AND GRAVE ABUSE OF DISCRETION WHEN IT DISMISSED THE PETITION DESPITE PETITIONER'S OVERWHELMING EVIDENCE THAT THE VENUE OF PRIVATE RESPONDENT'S ACTION (CIVIL CASE NO. 915-R) WAS IMPROPERLY LAID; B. INSPITE ALSO OF THE ADMITTED FACT THAT PRIVATE RESPONDENT ROY DOMINGO HAS REMAINED AN ACTUAL RESIDENT OF 4525 LEATA LANE, LA CANTADA, LA 91011, U.S.A., AT LEAST SINCE FEBRUARY 18, 1988, UP TO THE PRESENT. ISSUE: Whether private respondent had his actual residence in Rosales, Pangasinan or in Los, Angeles, California at the time the complaint was filed before the Regional Trial Court of Resales, Pangasinan HELD: DECISION OF THE TRIAL COURT: The trial court denied the motion to dismiss after finding that private respondent was merely temporarily out of the country and did not lose his legal residence in Rosales, Pangasinan

DECISION OF THE COURT OF APPEALS: The Court of Appeals affirmed the trial court. Hence this petition for certiorari and prohibition. DECISION OF THE SUPREME COURT: It is undisputed that private respondent left for the United States on April 25, 1988 before the complaint was filed on June 26, 1989. This fact is expressly admitted in the complaint itself where private respondent states that he "is [sic] . . . a resident of Poblacion Rosales, Pangasinan before he went to the United States where he now lives in 4525 Leata Lane, La Cantada, LA 91011." Furthermore, the special power of attorney in favor of Crispin A. Domingo was drawn and executed by private respondent on February 18, 1988 before the Philippine Consul in Los Angeles, California. In said special power of attorney, private respondent declared that he was a resident of Los Angeles, California. Private respondent was not a mere transient or occasional resident of the United States. He fixed his place of abode in Los Angeles, California and stayed there continuously and consistently for over a year at the time the complaint was filed in Rosales, Pangasinan. Contrary to the lower courts' finding, the temporary nature of private respondent's "working non-immigrant" visa did not make him a non-resident of the United States. There is no showing as to the date his temporary employment in the United States ended. There is likewise no showing, much less any allegation, that after the filing of the complaint, private respondent actually returned to the Philippines and resumed residence in Rosales, Pangasinan. In fact, petitioner's claim that private respondent resided in the United States continuously and consistently since 1988 until the present has not been refuted. We previously held that: We are fully convinced that private respondent Coloma's protestations of domicile in San Nicolas, Ilocos Norte, based on his manifested intention to return there after the retirement of his wife from government service to justify his bringing of an action for damages against petitioner in the C.F.I. of Ilocos Norte, is entirely of no moment since what is of paramount importance is where he actually resided or where he may be found at the time he brought the action, to comply substantially with the requirements of Sec. 2(b) of Rule 4, Rules of Court, on venue of personal actions. It is fundamental that the situs for bringing real and personal civil actions is fixed by the rules to attain the greatest convenience possible to parties litigants and their witnesses by affording them maximum accessibility to the courts of justice. The choice of venue is given to the plaintiff but is not left to his caprice. It cannot unduly deprive a resident defendant of the rights conferred upon him by the Rules of Court. When the complaint was filed in Rosales, Pangasinan, not one of the parties was a resident of the town. Private respondent was a resident of Los Angeles, California while his attorney-in-fact was a resident of Cubao, Quezon City. Petitioner's "business address" according to private respondent is in Pasay City, although petitioner claims he resides in Gubat, Sorsogon The venue in Rosales, Pangasinan was indeed improperly laid. IN VIEW WHEREOF, the petition is granted and the decision of the Court of Appeals in CA-G.R. SP No. 20737 is reversed and set aside. The complaint in Civil Case No. 915-R is dismissed for improper venue. No costs. SO ORDERED.

2. HEIRS OF SIMEON BORLADO vs. COURT OF APPEALS FACTS: The records show that plaintiffs-appellants (petitioners) are the heirs of Simeon Borlado whose parents were Serapio Borlado and Balbina Bulan. The original owner of the lot in question, Lot No. 2097 of the Pontevedra Cadastre, Maayon, Capiz, was Serapio Borlado, grandfather of petitioners. On 15 April 1942, Serapio sold the lot to Francisco Bacero for Three Hundred Pesos (P300.00). After the death of Francisco on 26 February 1948, his widow Amparo Dionisio Vda. de Bacero, in her capacity as legal guardian of her minor children, namely: Nicolas, Valentin and Luzviminda, all surnamed Bacero and forced heirs of Francisco Bacero sold it (the lot) to the Spouses Bienvenido Bulan and Salvacion Borbon, through a Deed of Absolute Sale dated 27 August 1954 Upon the execution of the Deed of Sale and even prior thereto, actual possession of Lot No. 2057 was with the vendees-spouses Bulans in view of a loan obtained by Francisco Bacero from them in December 1947. Exercising their right of ownership under the Deed of Sale, Salvacion Borbon Vda. de Bulan declared the lot in her name in 1900 for taxation purposes under Tax Declaration No. 2232 Salvacion and her co-defendantsappellees' possession of the lot was continuous, peaceful, uninterrupted, adverse and exclusive until November 4, 1972, when petitioners forcibly entered and wrested physical possession thereof from them. On 23 November 1972, respondents filed with the Municipal Court of Maayon, Capiz a complaint for ejectment docketed as Civil Case No. A-1, against petitioners. The ejectment case was decided in favor of the respondents whereby the petitioners, their agents, tenants, privies and members of their families were ordered to vacate Lot No. 2079 and deliver possession to the respondents together with all improvements and standing crops; to pay said respondents One Hundred (100) cavans of palay annually from 1972 to the present or in the total amount of One Thousand One Hundred (1,100) cavans of palay; and to pay the sum of Five Thousand (P5,000.00) Pesos as reimbursement for the amount respondents had paid their lawyer to protect their rights; and, the costs of suit (Exh. "57", pp. 256-261, id.). Instead of appealing the adverse decision to the Court of First Instance (now RTC), on 8 November 1983, petitioners filed the present case with the Regional Trial Court, Branch 18, Roxas City, docketed as Civil Case No. V-4887. ISSUE: The issue raised is whether the Court of Appeals erred in ruling that respondents were the owners of the lot in question. HELD: DECISION OF THE TRIAL COURT: This case was dismissed for lack of cause of action in a decision, the decretal portion of which was quoted earlier. DECISION OF THE COURT OF APPEALS: the Court of Appeals affirming the decision of the trial court, the dispositive portion of which reads:

"WHEREFORE, judgment is rendered dismissing plaintiffs' complaint for lack of cause of action and ordering as vacated the restraining order and writ of preliminary injunction issued in this case; and "1. Plaintiffs to be jointly and solidarily liable to defendants the quantity of one hundred (100) cavans of palay every year from 1972 until plaintiffs vacate the premises of the land in question; "2. Declaring defendants as owner of the land and entitled to possession; "3. Ordering plaintiffs to pay defendants the sum of P5,000.00 as attorney's fees and the sum of P5,000.00 as litigation expenses; and "4. To pay the costs of the suit. "SO ORDERED. "Roxas City, Philippines, March 18, 1988. "(Sgd.) JONAS A. ABELLAR "Judge" DECISION OF THE SUPREME COURT: We deny the petition. The issue is factual. In an appeal via certiorari, we may not review the findings of fact of the Court of Appeals. When supported by substantial evidence, the findings of fact of the Court of Appeals are conclusive and binding on the parties and are not reviewable by this Court, unless the case falls under any of the exceptions to the rule. Petitioner failed to prove that the case falls within the exceptions. The Supreme Court is not a trier of facts. It is not our function to review, examine and evaluate or weigh the probative value of the evidence presented. A question of fact would arise in such event. Questions of fact cannot be raised in an appeal via certiorari before the Supreme Court and are not proper for its consideration. Nevertheless, as a matter of law, the trial court and the Court of Appeals erred in holding petitioners liable to pay respondents one hundred (100) cavans of palay every year from 1972 until they vacate the premises of the land in question. The one hundred cavans of palay was awarded as a form of damages. We cannot sustain the award. "Palay" is not legal tender currency in the Philippines. El Fallo del Tribunal WHEREFORE, the Court DENIES the petition and AFFIRMS the decision of the Court of Appeals in CA-G.R. CV No. 18980 with modification that petitioners' liability to pay respondents one hundred (100) cavans of palay every year from 1972 until petitioners vacate the land in question is deleted, for lack of basis. No costs. SO ORDERED. 3. CUSTODIO vs. COURT OF APPEALS FACTS: Respondents owned a parcel of land wherein a two-door apartment was erected. Said property was surrounded by other immovables owned by petitioners, spouses Custodio and spouses Santos. As an access to P. Burgos Street from the subject property, there are two possible passageways. The first passageway is approximately one meter wide and is about 20 meters distant from Mabasas residence to P. Burgos Street. Such path is passing in between the previously mentioned row of houses.

The second passageway is about 3 meters in width and length from plaintiff Mabasas residence to P. Burgos Street; it is about 26 meters. In passing thru said passageway, a less than a meter wide path through the septic tank and with 5-6 meters in length, has to be traversed. Petitioners constructed an adobe fence in the first passageway making it narrower in width. Said adobe fence was first constructed by defendants Santoses along their property which is also along the first passageway. Defendant Morato constructed her adobe fence and even extended said fence in such a way that the entire passageway was enclosed. As a result, the tenants left the apartment because there was no longer a permanent access to the public street. Respondents then filed an action for the grant of an easement of right of way. The trial court ordered the petitioner to give respondents a permanent access to the public street and that in turn, the respondent will pay a sum of Php 8,000.00 to the petitioner as an indemnity for the permanent use of the passageway. On appeal by the respondent to the CA, the decision of the trial court was affirmed, such that a right of way and an award of actual, moral and exemplary damages were given to the respondents. Hence, this petition. ISSUE: Whether or not the award of damages is proper? HELD: DECISION OF THE TRIAL COURT: the trial court, with this dispositive part: Accordingly, judgment is hereby rendered as follows: 1) Ordering defendants Custodios and Santoses to give plaintiff permanent access ingress and egress, to the public street; 2) Ordering the plaintiff to pay defendants Custodios and Santoses the sum of Eight Thousand Pesos (P8,000) as indemnity for the permanent use of the passageway. The parties to shoulder their respective litigation expenses DECISION OF THE COURT OF APPEALS : On July 8, 1994, the Court of Appeals denied petitioner's motion for reconsideration.6 Petitioners then took the present recourse to us, raising two issues, namely, whether or not the grant of right of way to herein private respondents is proper, and whether or not the award of damages is in order. DECISION OF THE SUPREME COURT: With respect to the first issue, herein petitioners are already barred from raising the same. Petitioners did not appeal from the decision of the court a quo granting private respondents the right of way, hence they are presumed to be satisfied with the adjudication therein. With the finality of the judgment of the trial court as to petitioners, the issue of propriety of the grant of right of way has already been laid to rest. For failure to appeal the decision of the trial court to the Court of Appeals, petitioners cannot obtain any affirmative relief other than those granted in the decision of the trial court. That decision of the court below has become final as against them and can no longer be reviewed, much less reversed, by this Court. The rule in this jurisdiction is that whenever an appeal is taken in a civil case, an appellee who has not himself appealed may not obtain from the appellate court any affirmative relief other than what was granted in the decision of the lower court. The appellee can only advance any argument that he may deem necessary to defeat the appellant's claim or to uphold the decision

that is being disputed, and he can assign errors in his brief if such is required to strengthen the views expressed by the court a quo. These assigned errors, in turn, may be considered by the appellate court solely to maintain the appealed decision on other grounds, but not for the purpose of reversing or modifying the judgment in the appellee's favor and giving him other affirmative reliefs. However, with respect to the second issue, we agree with petitioners that the Court of Appeals erred in awarding damages in favor of private respondents. The award of damages has no substantial legal basis. A reading of the decision of the Court of Appeals will show that the award of damages was based solely on the fact that the original plaintiff, Pacifico Mabasa, incurred losses in the form of unrealized rentals when the tenants vacated the leased premises by reason of the closure of the passageway. However, the mere fact that the plaintiff suffered losses does not give rise to a right to recover damages. To warrant the recovery of damages, there must be both a right of action for a legal wrong inflicted by the defendant, and damage resulting to the plaintiff therefrom. Wrong without damage, or damage without wrong, does not constitute a cause of action, since damages are merely part of the remedy allowed for the injury caused by a breach or wrong. There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. These situations are often called damnum absque injuria. In order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted from a breach of duty which the defendant owed to the plaintiff a concurrence of injury to the plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort damages is the premise that an individual was injured in contemplation of law. Thus, there must first be the breach of some duty and the imposition of liability for that breach before damages may be awarded; it is not sufficient to state that there should be tort liability merely because the plaintiff suffered some pain and suffering. Many accidents occur and many injuries are inflicted by acts or omissions which cause damage or loss to another but which violate no legal duty to such other person, and consequently create no cause of action in his favor. In such cases, the consequences must be borne by the injured person alone. The law affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong. In other words, in order that the law will give redress for an act causing damage, that act must be not only hurtful, but wrongful. There must be damnum et injuria. If, as may happen in many cases, a person sustains actual damage, that is, harm or loss to his person or property, without sustaining any legal injury, that is, an act or omission which the law does not deem an injury, the damage is regarded as damnum absque injuria. In the case at bar, although there was damage, there was no legal injury. Contrary to the claim of private respondents, petitioners could not be said to have violated the principle of abuse of right. In order that the principle of abuse of right provided in Article 21 of

the Civil Code can be applied, it is essential that the following requisites concur: (1) The defendant should have acted in a manner that is contrary to morals, good customs or public policy; (2) The acts should be willful; and (3) There was damage or injury to the plaintiff. The act of petitioners in constructing a fence within their lot is a valid exercise of their right as owners, hence not contrary to morals, good customs or public policy. The law recognizes in the owner the right to enjoy and dispose of a thing, without other limitations than those established by law. It is within the right of petitioners, as owners, to enclose and fence their property. Article 430 of the Civil Code provides that "(e)very owner may enclose or fence his land or tenements by means of walls, ditches, live or dead hedges, or by any other means without detriment to servitudes constituted thereon." At the time of the construction of the fence, the lot was not subject to any servitudes. There was no easement of way existing in favor of private respondents, either by law or by contract. The fact that private respondents had no existing right over the said passageway is confirmed by the very decision of the trial court granting a compulsory right of way in their favor after payment of just compensation. It was only that decision which gave private respondents the right to use the said passageway after payment of the compensation and imposed a corresponding duty on petitioners not to interfere in the exercise of said right. Hence, prior to said decision, petitioners had an absolute right over their property and their act of fencing and enclosing the same was an act which they may lawfully perform in the employment and exercise of said right. To repeat, whatever injury or damage may have been sustained by private respondents by reason of the rightful use of the said land by petitioners is damnum absque injuria. A person has a right to the natural use and enjoyment of his own property, according to his pleasure, for all the purposes to which such property is usually applied. As a general rule, therefore, there is no cause of action for acts done by one person upon his own property in a lawful and proper manner, although such acts incidentally cause damage or an unavoidable loss to another, as such damage or loss is damnum absque injuria. When the owner of property makes use thereof in the general and ordinary manner in which the property is used, such as fencing or enclosing the same as in this case, nobody can complain of having been injured, because the incovenience arising from said use can be considered as a mere consequence of community life. The proper exercise of a lawful right cannot constitute a legal wrong for which an action will lie, although the act may result in damage to another, for no legal right has been invaded. One may use any lawful means to accomplish a lawful purpose and though the means adopted may cause damage to another, no cause of action arises in the latter's favor. An injury or damage occasioned thereby is damnum absque injuria. The courts can give no redress for hardship to an individual resulting from action reasonably calculated to achieve a lawful means. WHEREFORE, under the compulsion of the foregoing premises, the appealed decision of respondent Court of Appeals is hereby REVERSED and SET ASIDE and the judgment of the trial court is correspondingly REINSTATED. Cases 186-190, 1, 1-3

PUBLICO, LOVELI ANNE B. 4. PHILIPPINE RACING CLUB, vs. BONIFACIO FACTS: This is a petition for review of a decision of the Court of Appeals relieving respondents from the civil liability ascribed to them by the trial court. In a race held at the Sta. Ana Hippodrome belonging to the Philippine Racing Club, Inc. on July 23, 1950, the competing horses went off to a faulty start. When the winning horses as well as the corresponding dividends were announced, the betting public showed its disapproval of the result. A commotion resulted which reached the knowledge of the members of the Commission on Races who were then seated in the dining room of the club. When they noticed the uproar and were informed of its cause, they sent for the stewards and made an on the spot investigation. Convinced that the start of the race was faulty, they decided to cancel it and had their decision announced to the public. In the meantime, while the investigation was going on, the holders of the winning the tickets were able to cash the same at the ticket windows. The result was that while the club paid the dividends on the winning tickets it had to refund to the holders of the losing ones the sum of P5,032.00. ISSUE: The remaining question, therefore, that needs to be determined is whether the action of the Board of Stewards in not cancelling the race notwithstanding the bad start which raised a howl of protest from the public was final and irrevocable in the sense that it could no longer be revised by the Commission on Races in the exercise of the power of supervision it has over all horse races in the Philippines. HELD: The law governing the operation of horse races in the Philippines is Republic Act No. 309. This Act creates a Commission on Races which is charged with the supervision and regulation of horse races in the Philippines. Under said Act, the Commission is charged with the supervision and regulation of horse races in the Philippines. Under said Act, the Commission is charged with the duty to enforce the laws, rules and regulations relating to horse races, to require that race tracks be properly constructed and maintained, and in general, "it shall have supervision over all race track or racing club officials or employees authorized or required to be appointed under this Act and over all horse races" (Section 2). The Commission may also exercise such other powers as may be prescribed by law or regulation (Section 2). We are, therefore, of the opinion that the action taken by the Commission on Races cancelling or annulling the race held on July 23, 1950 for the reason that there was a faulty start on the part of some horses was in excess of the authority granted to it by law. It is true, as already stated, that the Commission on Races has the supervision over all horse races and over all race officials and employees having connection with their operations, but such power of supervision cannot be extended to functions which belong to other officials as delimited by law. As defined by this Court, supervision only means overseeing or the power or authority to see that subordinate officers perform their duties. It is different from control which includes the power to alter, nullify or set aside what a subordinate officer may do in the performance of his duties, as well as to substitute the judgment of the superior for that of his subordinate (Mondano vs. Silvosa, 97 Phil., 143; 51 Off. Gaz., [6] 2884). This power of control has been withheld from the Commission.

However, considering that respondents have acted in their official capacity in the honest belief that they had such power as in fact they acted on the matter only after an on the spot investigation, we hold that they cannot be held liable for damages. In this sense, the decision of the Court of Appeals should be affirmed. Wherefore, the decision appealed from is affirmed, without costs. 5. AUYONG HIAN vs. COURT OF TAX APPEALS FACTS: Motion for reconsideration filed by respondent Consolidated Tobacco Industries of the Philippines, Inc. (CTIP) of the decision in this case promulgated on September 12, 1974 insofar only as said decision refrains from ruling on the matter of the refund to said respondent of the storage charges alleged to have been advanced by it in order to secure the release of the tobacco sold to it at the public auction sale thereof after having been seized and confiscated by the government, the same having been illegally imported, as ruled in the very decision in this case, and directs that said matter be prosecuted administratively. It is prayed that such directive be withdrawn and that the Court itself decide the issue of whether or not movant is entitled to said refund. ISSUE: whether or not movant is entitled to said refund. HELD: The Government contends also that it would not be equitable to make the Bureau of Customs hable for the refund demanded by movant, since the auction sale netted only P1.5 M, whereas if the importation were allowed in 1961, the Government would have realized not less than P3 M. The argument is not persuasive, if only because the Court has precisely found the importation to be illegal We cannot see how any consideration of inequity can be predicated on the hypothesis that something judicially declared illegal was legal Quite the other way around, the stand of the Government is what appears to be inequitable, for whereas, the amount of P1.5 M paid by movant fully covers all the items enumerated in Section 2605, including the amount paid by movant for private storage fees, still the Government refuses to refund movant, notwithstanding that the provisions just cited expressly ordains that the said amount for storage fees is deductible from the accepted bid price. In effect, the Government is trying to unjustly enrich itself at the expense of movant. IN VIEW OF ALL THE FOREGOING, the decision of this Court in the above-entitled case of September 12, 1974 is hereby modified only in the sense that the administrative remedy therein suggested for the refund of storage fees above discussed is hereby declared unnecessary and the Collector of Customs and/or the Commissioner of Customs are hereby ordered to refund to movant Consolidated Tobacco Industries of the Philippines, Inc. CTIP the amount of Eight Hundred Twenty-Three Thousand Seven Hundred SixtyEight Pesos and Twenty Centavos (P823,768.20) paid by said movant to Luzon Stevedoring Corporation on September 13, 1967, without interest. In all other respects, the said decision stands. 6. FAROLAN vs. SOLMAC MARKETING CORPORATION FACTS: Private respondent Solmac Marketing Corporation is a corporation organized and existing under the laws of the Philippines. It was the assignee, transferee, and

owner of an importation of Clojus Recycling Plastic Products of 202,204 kilograms of what is technically known as polypropylene film, valued at US$69,250.05. The subject importation, consisting of seventeen (17) containers, arrived in December, 1981. Upon application for entry, the Bureau of Customs asked SOLMAC for its authority from any government agency to import the goods described in the bill of lading. SOLMAC presented a Board of Investment (BOI) authority for polypropylene film scrap. However, upon examination of the shipment by the National Institute of Science and Technology (NIST), it turned out that the fibers of the importation were oriented in such a way that the materials were stronger than OPP film scrap. In other words, the Clojus shipment was not OPP film scrap, as declared by the assignee SOLMAC to the Bureau of Customs and BOI Governor Lilia R. Bautista, but oriented polypropylene the importation of which is restricted, if not prohibited, under Letter of Instructions (LOI) No. 658-B. Considering that the shipment was different from what had been authorized by the BOI and by law, petitioners Parayno and Farolan withheld the release of the subject importation. ISSUE: whether or not the petitioners acted in good faith in not immediately releasing the questioned importation, or, simply, can they be held liable, in their personal and private capacities, for damages to the private respondent. HELD: When a public officer takes his oath of office, he binds himself to perform the duties of his office faithfully and to use reasonable skill and diligence, and to act primarily for the benefit of the public. Thus, in the discharge of his duties, he is to use that prudence, caution, and attention which careful men use in the management of their affairs. In the case at bar, prudence dictated that petitioners first obtain from the BOI the latter's definite guidelines regarding the disposition of the various importations of oriented polypropylene (OPP) and polypropylene (PP) then being withheld at the Bureau of Customs. These cellophane/film products were competing with locally manufactured polypropylene and oriented polypropylene as raw materials which were then already sufficient to meet local demands, hence, their importation was restricted, if not prohibited under LOI 658-B. Consequently, the petitioners can not be said to have acted in bad faith in not immediately releasing the import goods without first obtaining the necessary clarificatory guidelines from the BOI. As public officers, the petitioners had the duty to see to it that the law they were tasked to implement, was faithfully complied with. Whatever damage they may have caused as a result of such an erroneous interpretation, if any at all, is in the nature of a damnum absque injuria. Mistakes concededly committed by public officers are not actionable absent any clear showing that they were motivated by malice or gross negligence amounting to bad faith. After all, "even under the law of public officers, the acts of the petitioners are protected by the presumption of good faith. Petition GRANTED. 7. SABA VS. COURT OF APPEALS FACTS: Pedro de la Cruz is a grantee of a lease of a portion of marshy land in Laoang, Northern Samar awarded to him by the Bureau of Lands under Miscellaneous Lease Application No. 810 for 2,050 square meters. The award of lease was granted in 1934 (TSN, Nov. 8, 1976, p. 5). The award of lease to Pedro de la Cruz was not presented in court but its existence was not disputed by the parties. In 1939, Gregoria Nalazon, wife of Pedro de la Cruz, died and the estate became the subject of an intestate estate proceeding in Special Proceedings No. 2 of the CFI of Laoang, Northern Samar. The

leasehold (MLA No. 810) was included in this special proceeding wherein 50% thereof was adjudicated pro-indiviso to Pedro de la Cruz while the other 50% was adjudicated pro-indiviso to the children, namely: Jesus, Alfredo, Lourdes, Amada, Josefa, Genaro, Eufemio and Ramon, all surnamed de la Cruz. The improvements introduced by Pedro de la Cruz consisted of rock fillings and three warehouses. In 1953, private respondent Jose Ongchuan leased the warehouse from Pedro de la Cruz (Exhibit K). In 1959 or so, the seven children of Pedro de la Cruz, namely: Jesus, Alfredo, Amada, Josefa, Genaro, Eufemio and Ramon, all surnamed de la Cruz sold their leasehold rights (7/8 of the 50% of MLA 810) to private respondent Emil Ong, while Lourdes C. Agbayani sold her leasehold right (1/8) pro-indiviso to petitioner Isidro V. Saba in March 1966 (Exhibit J). In 1961, the warehouse which was being leased by private respondent Jose Ongchuan was levelled to the ground by fire (TSN, May 18, 1976, p. 13). After the fire, private respondent Emil Ong constructed a new building on the same area formerly occupied by the burned warehouse (TSN, March 25, 1983, p. 3). Later, Lourdes C. Agbayani sent a letter to private respondents notifying them of the sale of her 1/8 share in the leasehold to petitioner and requested that payment of rentals be given to the new owner instead of her. Private respondents did not heed the request. Petitioner reiterated the demand of Lourdes C. Agbayani several times yet private respondents ignored said demand. ISSUE: whether or not (1) petitioner has a cause of action against private respondents and (2) the award of damages is proper. HELD: As aforestated, the award of lease was granted to Pedro de la Cruz in 1934. The Secretary of Agriculture and Commerce set the maximum period of his lease at fifteen (15) years (Exhibit 16). Therefore, the period of lease was up to 1949 only. There is no evidence on record of renewal of the term of the lease. Evidently, when Lourdes C. Agbayani sold her leasehold right (1/8) pro-indiviso to petitioner in 1966, there was no longer a leasehold right that she conveyed. Corollarily, petitioner did not acquire any right from her that can be enforced against the private respondents or anybody for that matter. In this regard, the affirmance of the dismissal of the complaint was correct. Moral damages may be awarded to compensate one for diverse injuries such as mental anguish, besmirched reputation, wounded feelings and social humiliation. It is however not enough that such injuries have arisen; it is essential that they have sprung from a wrongful act or omission, fraud, malice, or bad faith which was the proximate cause thereof (see Guita v. Court of Appeals, et al., G.R. No. 60409, November 11, 1985, 139 SCRA 576 cited in Suario v. Bank of the Philippine Islands, et al., G.R. No. 50459, August 25, 1989; R & B Surety & Insurance Co., Inc. v. Intermediate Appellate Court, et al., G.R. No. 64515, June 22, 1984, 129 SCRA 736). The adverse result of an action does not per se make the action wrongful and subject the actor to make payment of damages, for the law could not have meant to impose a penalty on the right to litigate (Rubio v. Court of Appeals, et al., G.R. No. 50911, March 12, 1986, 141 SCRA 488). One who exercises his rights does no injury. Qui jure suo utitur nullum damnum facit. If damage results from a persons exercising his legal rights, it is damnumabsque injuria (Auyong Hian v. Court of Tax Appeals, et al., G.R. No. L-28782, September 12, 1974, 59 SCRA 110 cited in The Ilocos Norte Electric Company v. Hon. Court of Appeals, et al., G.R. No. 53401, November 6, 1989). Petitioner was in good faith when he filed the collection suit against private respondents. He thought that by virtue of the sale of Lourdes C. Agbayanis leasehold

right to him (Exhibit J), her right to 1/8 pro-indiviso of the property has already been transferred to him, which includes the right to collect rentals. Lourdes C. Agbayani even notified the private respondents that the property being rented by them has been sold to petitioner and effective April 1, 1966, petitioner became the proprietor of her property (Exhibit N). The failure by private respondents to pay the rentals prompted petitioner to file a complaint against them. A person may have erred but error alone is not a ground for moral damages (Lagman, et al. v. Honorable Intermediate Appellate Court, et al., G.R. No. 72281, October 28, 1988, 166 SCRA 734). And although cases were previously filed one after another by petitioner against private respondents, no evidence was adduced that these cases were baseless and intended merely to harass private respondents. The acts performed by petitioner cannot be said to have disparaged the reputation of private respondents (see Litam v. Espiritu, et al., 100 Phil. 364). Lastly, whatever worries, anxieties and expenses private respondents may have suffered were only such as are usually caused to a party haled into court as a defendant in a litigation (see Philippine National Bank v. The Hon. Court of Appeals, et al., G.R. No. L-45770, March 30, 1988, 159 SCRA 433). Clearly, there is no sufficient justification for the award of moral damages, exemplary damages and attorneys fees. We find it unnecessary to resolve the other issues raised by petitioner, being extraneous to the present case. ACCORDINGLY, the petition is hereby PARTLY GRANTED. The decision of the respondent Court of Appeals is MODIFIED insofar as the award of moral damages, exemplary damages and attorneys fees is concerned, which is DELETED. 8. SPOUSES CRISTINO and BRIGIDA CUSTODIO vs. COURT OF APPEALS FACTS: The plaintiff owns a parcel of land with a two-door apartment erected thereon situated at Interior P. Burgos St., Palingon, Tipas, Taguig, Metro Manila. Said property may be described to be surrounded by other immovables pertaining to defendants herein. Taking P. Burgos Street as the point of reference, on the left side, going to plaintiffs property, the row of houses will be as follows: That of defendants Cristino and Brigido Custodio, then that of Lito and Maria Cristina Santos and then that of Ofelia Mabasa. On the right side (is) that of defendant Rosalina Morato and then a Septic Tank (Exhibit D). As an access to P. Burgos Street from plaintiffs property, there are two possible passageways. The first passageway is approximately one meter wide and is about 20 meters distan(t) from Mabasas residence to P. Burgos Street. Such path is passing in between the previously mentioned row of houses. The second passageway is about 3 meters in width and length from plaintiff Mabasas residence to P. Burgos Street; it is about 26 meters. In passing thru said passageway, a less than a meter wide path through the septic tank and with 5-6 meters in length has to be traversed. Sometime in February, 1982. one of said tenants vacated the apartment and when plaintiff Mabasa went to see the premises, he saw that there had been built an adobe fence in the first passageway making it narrower in width. Said adobe fence was first constructed by defendants Santoses along their property which is also along the first passageway. Defendant Morato constructed her adobe fence and even extended said fence in such a way that the entire passageway was enclosed (Exhibit 1-Santoses and Custodios, Exh. D for plaintiff, Exhs. 1-C, 1-D and I -E) And it was then that the remaining tenants of said apartment vacated the area.

ISSUE:1.) whether or not the grant of right of way to herein private respondents is proper, and 2.) whether or not the award of damages is in order. HELD: With respect to the first issue, herein petitioners are already barred from raising the same. Petitioners did not appeal from the decision of the court a quo granting private respondents the right of way, hence they are presumed to be satisfied with the adjudication therein. With the finality of the judgment of the trial court as to petitioners, the issue of propriety of the grant of right of way has already been laid to rest. However, the mere fact that the plaintiff suffered losses does not give rise to a right to recover damages. To warrant the recovery of damages, there must be both a right of action for a legal wrong inflicted by the defendant, and damage resulting to the plaintiff therefrom. Wrong without damage, or damage without wrong, does not constitute a cause of action, since damages are merely part of the remedy allowed for the injury caused by a breach or wrong. There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. These situations are often called damnum absque injuria. In order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted from a breach of duty which the defendant owed to the plaintiff a concurrence of injury to the plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort damages is the premise that an individual was injured in contemplation of law. Thus, there must first be the breach of some duty and the imposition of liability for that breach before damages may be awarded; it is not sufficient to state that there should be tort liability merely because the plaintiff suffered some pain and suffering). WHEREFORE, under the compulsion of the foregoing premises, the appealed decision of respondent Court of Appeals is hereby REVERSED and SET ASIDE and the judgment of the trial court is correspondingly REINSTATED. 9. CASTRO vs. ACRO TAXICAB CO., INC. FACTS: This a petition for certiorari and habeas corpus, the pertinent facts, as disclosed by the record, are as follows: 1. That petitioner-appellant had been originally accused, on May 17, 1945, in the municipal court of the City of Manila, of the crime of qualified theft of eight (8) cases of storage batteries of the total value of P40. Said petitioner had been released on bail since May 15, 1945. 2. At the trial of the case, a witness for the prosecution testified that the value of said storage batteries, which were not produced in court, could have been P240, and not P40, as alleged in the information. ISSUE: whether or not, under existing law, the municipal court of the City of Manila has jurisdiction to try cases of qualified theft, when the value of the property alleged to have been stolen is P40, or does not exceed P200.

HELD: That the municipal court of the City of Manila has jurisdiction to try cases of qualified theft, as long as the amount involved does not exceed P200, is a question which has been settled, in the affirmative by this Court, in several cases, because it is the value of the property stolen, and not the punishment that may be meted out, that has been made the basis of jurisdiction (People vs. De Leon, 49 Phil. 437; People vs. Kaw Liong, 57 Phil. 839, 841, 842; People vs. Acha, 40 O.G. 2d Supp., No. 5, p. 252; People vs. Del Mundo, SC-G. R. No. 46531, Oct. 18, 1939; People vs. San Juan, 40 O.G. 6th Supp., No. 10, p. 48). (See also 2 Moran, Rules of Court, pp. 763, 764.) Petitioner-appellant also contends that, as there is evidence that the value of the property stolen could have been P240, and not P40, as alleged in the information, the municipal court of the City of Manila had no jurisdiction to try and decide this case. As already stated, the respondent municipal judge found herein petitioner-appellant guilty of the crime of qualified theft, as charged, impliedly and evidently finding that the value of the stolen property was P40, as alleged in the information, after considering the facts and circumstances of the case, using its own discretion (U. S. vs. Galanco, 11 Phil. 575); as the testimony given by the witness concerning the value of the stolen property is not binding upon the courts. Furthermore, said finding made by the respondent municipal judge is more properly reviewable in an appeal than in a certiorari petition. The petition is dismissed. 10. PNOC SHIPPING AND TRANSPORT CORPORATION vs. HON. COURT OF APPEALS FACTS: M/V Maria Efigenia XV, owned by private respondent Maria Efigenia Fishing Corporation, collided with the vessel Petro parcel which at the time was owned by the Luzon Stevedoring Corporation (LSC).- After investigation was conducted by the Board of Marine Inquiry, Philippine Coast Guard Commandant Simeon N. Alejandro rendered a decision finding the Petro parcel at fault. Based on this finding by the Board and after unsuccessful demands on petitioner private respondent sued the LSC and the Petro parcel captain, Edgardo Doruelo, before the then CFI of Caloocan City. In particular, private respondent prayed for an award of P692,680.00,allegedly representing the value of the fishing nets, boat equipment and cargoes of M/V Maria Efigenia XV. Meanwhile, during the pendency of the case, PNOC Shipping and Transport Corporation sought to besubstituted in place of LSC as it had already acquired ownership of the Petro parcel.Private respondent later sought the amendment of its complaint on the ground that the original complaint failed to plead for the recovery of the lost value of the hull of M/V Maria Efigenia XV. Accordingly, in the amended complaint, private respondent averred that M/V Maria Efigenia XV had an actual value of P800,000.00 and that, after deducting the insurance payment of P200,000.00, the amount of P600,000.00should likewise be claimed. Furthermore, on account of the sinking of the vessel, private respondent supposedly incurred unrealized profits and lost business opportunities that would thereafter be proven.- The lower court its decision in favor of the plaintiff and against the defendant PNOC Shipping & Transport Corporation, to pay the plaintiff the sum of P6,438,048.00 representing the value of the fishing boat with interest from the date of the filing of the complaint at the rate of 6% per annum. HELD: Under Article 2199 of the Civil Code, actual or compensatory damages are those awarded in satisfaction of, or in recompense for, loss or injury sustained. They proceed

from a sense of natural justice and are designed to repair the wrong that has been done, to compensate for the injury inflicted and not to impose a penalty. In actions based on torts or quasi-delicts, actual damages include all the natural and probable consequences of the act or omission complained of. There are two kinds of actual or compensatory damages: one is the loss of what a person already possesses (dao emergente), and the other is the failure to receive as a benefit that which would have pertained to him (lucro cesante). Thus: "Where goods are destroyed by the wrongful act of the defendant the plaintiff is entitled to their value at the time of destruction, that is, normally, the sum of money which he would have to pay in the market for identical or essentially similar goods, plus in a proper case damages for the loss of use during the period before replacement. In other words, in the case of profit-earning chattels, what has to be assessed is the value of the chattel to its owner as a going concern at the time and place of the loss, and this means, at least in the case of ships, that regard must be had to existing and pending engagements. If the market value of the ship reflects the fact that it is in any case virtually certain of profitable employment, then nothing can be added to that value in respect of charters actually lost, for to do so would be pro tanto to compensate the plaintiff twice over. On the other hand, if the ship is valued without reference to its actual future engagements and only in the light of its profit-earning potentiality, then it may be necessary to add to the value thus assessed the anticipated profit on a charter or other engagement which it was unable to fulfill. What the court has to ascertain in each case is the `capitalized value of the vessel as a profit-earning machine not in the abstract but in view of the actual circumstances,' without, of course, taking into account considerations which were too remote at the time of the loss." - Nominal damages are awarded in every obligation arising from law, contracts, quasicontracts, acts or omissions punished by law, and quasi-delicts, or in every case where property right has been invaded.[Arts. 2222 & 1157, Civil Code.] Under Article 2223 of the Civil Code, "(t)he adjudication of nominal damages shall preclude further contest upon the right involved and all accessory questions, as between the parties to the suit, or their respective heirs and assigns." 11. INTEGRATED PACKAGING CORP vs. COURT OF APPEALS FACTS: Plaintiff Lydia Cuba is a grantee of a Fishpond Lease Agreement. She obtained loans from DBP. As security for said loans, plaintiff Lydia P. Cuba executed two Deeds of Assignment of her Leasehold Rights.- Plaintiff failed to pay her loan. Without foreclosure proceedings, DBP appropriated the leasehold Rights of Cuba over the fishpond in question. After which defendant DBP, in turn, executed a Deed of Conditional Sale of the Leasehold Rights in favor Cuba over the same fishpond.- In the negotiation for repurchase, plaintiff Lydia Cuba addressed two letters to the Manager DBP, Dagupan City thereafter accepted the offer to repurchase in a letter addressed to CUBA.- After the Deed of Conditional Sale was executed in favor of Cuba, a new Fishpond Lease Agreement was issued by the Ministry of Agriculture and Food .- Cuba failed to pay the amortizations stipulated in the Deed of Conditional Sale. After which she entered with the DBP a temporary arrangement whereby inconsideration for the deferment of the Notarial Rescission of Deed of Conditional Sale, Cuba promised to make certain payments as stated in temporary Arrangement.- DBP thereafter sent a Notice of Rescission thru Notarial Act and which was received by Cuba. After the Notice of Rescission, DBP took possession of the Leasehold Rights of the fishpond in question;That after defendant DBP took possession of the Leasehold Rights over the fishpond in

question, DBP thereafter executed a Deed of Conditional Sale in favor of Caperal.Thereafter, Caperal was awarded Fishpond Lease Agreement by the Ministry of Agriculture and Food.- CUBA filed complaint questioning the act of DBP in appropriating to itself CUBA's leasehold rights over the fishpond in question without foreclosure proceedings. TC ruled in favor of petitioner and granted actual damages in the amount of P1,067,500 representing lost equipment and dead fish due to DBPs forecloseure of fishpond and ejectment of laborers.- CA regarding damages granted ruled that CUBA was not entitled to loss of profits for lack of evidence, but agreed with the trial court as to the actual damages of P1,067,500. It, however, deleted the amount of exemplary damages and reduced the award of moral damages from P100,000 to P50,000 and attorney's fees, from P100.00 to P50,000 ISSUE: WON the damages granted to CUBA are valid HELD: NO- Article 2199 provides: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. Such compensation is referred to as actual or compensatory damages- Actual or compensatory damages cannot be presumed, but must be proved with reasonable degree of certainty. A court cannot rely on speculations, conjectures, or guesswork as to the fact and amount of damages, but must depend upon competent proof that they have been suffered by the injured party and on the best obtainable evidence of the actual amount thereof.- In the present case, the trial court awarded in favor of CUBA P1,067,500 as actual damages consisting of P550,000 which represented the value of the alleged lost articles of CUBA and P517,500 which represented the value of the 230,000 pieces of bangus allegedly stocked in 1979 when DBP first ejected CUBA from the fishpond and the adjoining house.- We find that the alleged loss of personal belongings and equipment was not proved by clear evidence. Other than the testimony of CUBA and her caretaker, there was no proof as to the existence of those items before DBP took over the fishpond in question. As pointed out by DBP, there was no "inventory of the alleged lost items before the loss which is normal in a project which sometimes, if not most often, is left to the care of other persons." Neither was a single receipt or record of acquisition presented.- in her complaint dated 17 May 1985, CUBA included "losses of property" as among the damages resulting from DBP's take-over of the fishpond. Yet, it was only in September 1985 when she came to know of the alleged loss of several articles. Such claim for "losses of property," having been made before knowledge of the alleged actual loss, was therefore speculative. The alleged loss could have been a mere afterthought or subterfuge to justify her claim for actual damages With regard to the award of P517,000 representing the value of the alleged 230,000 pieces of bangus which died when DBP took possession of the fishpond in March 1979, the same was not called for. Such loss was not duly proved; besides, the claim there for was delayed unreasonably. From 1979 until after the filingof her complaint in court in May 1985, CUBA did not bring to the attention of DBP the alleged loss- The award of actual damages should, therefore, bestruck down for lack of sufficient basis.- In view however, of DBP's act of appropriating CUBA's leasehold rights which was contrary to law and public policy, as well as its false representation to the then Ministry of Agriculture and Natural Resources that it had "foreclosed the mortgage," an award of moral damages in the amount of P50,000- Exemplary or corrective damages in the amount of P25,000 should likewise be awarded by way of example or correction for the public good. 20 There being an award of exemplary damages, attorney's fees are also recoverable.

12. KIERULF vs. COURT OF APPEALS FACTS - About 7:45 pm, 28 Feb 1987: a Pantranco bus was traveling along EDSA from Congressional Avenue towards Clover Leaf, Balintawak. Before it reached the corner of Oliveros Drive, the driver lost control of the bus, causing it to swerve to the left, and then to flyover the center island occupying the east-bound lane of EDSA. The front of the bus bumped the front portion of an Isuzu pickup driven by Porfirio Legaspi, which wasmoving along Congressional Avenue heading towards Roosevelt Avenue.- As a result, the points of contact of both vehicles were damaged and physical injuries were inflicted on Legaspi and his passenger Lucila Kierulf. The bus also hit and injured a pedestrian who was then crossing EDSA.- Despite the impact, said bus continued to move forward and its front portion rammed against a Caltex gasoline station, damaging its building and gasoline dispensing equipment.- As a consequence of the incident, Lucila sufferedinjuries which required major surgeries and prolonged treatment by specialists. Legaspi also suffered injuries. The front portion of the pickup truck, owned by Spouses Kierulf was smashed to pieces. (cost of repair estimated at P107,583.50.)- The victims of the vehicular mishap pray for an increase in the award of damages, over and above those granted by the appellate court. Victor, husband of Lucila, claims compensation/damages for the loss of his right to marital consortium which, according to him, has been diminished due to the disfigurement suffered by his wife.- Pantranco asks for exoneration by invoking an alleged fortuitous event as the cause of the mishap. They say that while bus driven by Jose Malanum was cruising along EDSA, a used engine differential accidentally and suddenly dropped from a junk truck in front of the bus. Said differential hit the under chassis of the bus, throwing Malanum off his seat and making him lose control of said bus. The bus swerved to the left, hit the center island, and bumped the pickup of the spouses. ISSUES: 1. WON the bus driver was negligent and such negligence (and not a fortuitous event) was the proximate cause of the accident 2. WON Victors claim for deprivation of the right to marital consortium as a factor for the award of moral damages is proper 3. WON social and financial standing of Lucila can be considered in awarding moral damages 4. WON exemplary damages should be awarded 5. WON loss of earnings may be a component of damages in this case 6. WON the 10% reduction of the estimated actual damages on the pickup was proper HELD: 1. Negligence and proximate cause are factual issues which SC can not pass upon in the absence of conflict between the findings of the trial court and the CA. 2. NO- For lack of factual basis, such claim of deprivation of the right to consortium cannot be ruled upon by this Court at this time.- Petitioners cited a California case, Rodriguez vs .Bethlehem Steel Corporation as authority for the claim of damages by reason of loss of marital consortium, i.e. loss of conjugal fellowship and sexual relations. In the Rodriguez case ,it was ruled that when a person is injured to the extent that he/she is no longer capable of giving love, affection, comfort and sexual relations to his or her spouse, that spouse has suffered a direct and real personal loss. The loss is immediate and consequential rather than remote and unforeseeable; it is personal to

the spouse and separate and distinct from that of the injured person.- Whether Rodriguez may be cited as authority to support the award of moral damages to Victor &/or Lucila Kierulf for "loss of consortium" cannot be properly considered in this case. Victor's claim, although argued before CA, is not supported by the evidence on record. 3. NO- The social and financial standing of a claimant of moral damages may be considered in awarding moral damages only if he or she was subjected to contemptuous conduct despite the offender's knowledge of his or her social and financial standing. - But, it is still proper to award moral damages to Lucila for her physical sufferings, mental anguish, fright, serious anxiety and wounded feelings. She sustained multiple injuries on the scalp, limbs and ribs. She lost all her teeth. She had to undergo several corrective operations and treatments. She suffered sleepless nights and shock as a consequence of the vehicular accident. And it has taken 10yrs to prosecute the complaint and this appeal! 4. YES- in view of CAs finding of gross negligence on the part of Pantranco: "Public utility operators like the defendant, have made a mockery of our laws, rules and regulations governing operations of motor vehicles and have ignored either deliberately or through negligent disregard of their duties to exercise extraordinary degree of diligence for the safety of the travelling public and their passengers."-Batangas Transportation Company vs. Caguimbal: "it is high time to impress effectively upon public utility operators the nature and extent of their responsibility in respect of the safety of their passengers and their duty to exercise greater care in the selection of drivers. Exemplary damages are designed to permit the courts to mould behavior that has socially deleterious consequences, and its imposition is required by public policy to suppress the wanton acts of an offender. However, it cannot be recovered as a matter of right. It is based entirely on the discretion of the court. 5. For Lucila, NO.- CA already considered this when it stated that the award of P25k included compensation for "mental anguish and emotional strain of not earning anything with a family to support."- Lucila's claim of loss of earning capacity has not been duly proven with ITRs. The alleged loss must be established by factual evidence for it partakes of actual damages. A party is entitled to adequate compensation for such pecuniary loss actually suffered and duly proved. Such damages, to be recoverable, must not only be capable of proof, but must actually be shown with a reasonable degree of certainty.- For Legaspi, YES. Pantranco failed to rebut the claim of Legaspi that he had been incapacitated for 10months and that during said period he did not have any income. 6. YES- SC takes judicial notice of the propensity of motor repair shops to exaggerate their estimates. An estimate is not an actual expense incurred or to be incurred in the repair. The reduction made by respondent court is reasonable considering that in this instance such estimate was secured by the complainants themselves Cases 4-12 BARONA, SHERIELYN 13. DEVELOPMENT BANK OF THE PHILIPPINES, vs.COURT OF APPEALS

FACTS: On July 20, 1981, herein petitioner Development Bank of the Philippines (DBP) executed a "Deed of Absolute Sale" in favor of respondent spouses Celebrada and Abner Mangubat over a parcel of unregistered land .On June 8, 1964, Luciano Sarmiento sold the land to Pacifico Chica.On April 27, 1965, Pacifico Chica mortgaged the land to DBP to secure a loan of P6,000.00. However, he defaulted in the payment of the loan, hence DBP caused the extrajudicial foreclosure of the mortgage. Pacifico Chica failed to redeem the property, and DBP consolidated its ownership over the same.On October 14, 1980, respondent spouses offered to buy the property for P18,599.99. DBP made a counter-offer of P25,500.00 which was accepted by respondent spouses. The parties further agreed that payment was to be made within six months thereafter for it to be considered as cash payment. On July 20, 1981, the deed of absolute sale, which is now being assailed herein, was executed by DBP in favor of respondent spouses. Said document contained a waiver of the seller's warranty against eviction. Thereafter, respondent spouses applied for an industrial tree planting loan with DBP. The latter required the former to submit a certification from the Bureau of Forest Development that the land is alienable and disposable. However, on October 29, 1981, said office issued a certificate attesting to the fact that the said property was classified as timberland, hence not subject to disposition. The loan application of respondent spouses was nevertheless eventually approved by DBP in the sum of P140,000.00, despite the aforesaid certification of the bureau, on the understanding of the parties that DBP would work for the release of the land by the former Ministry of Natural Resources. To secure payment of the loan, respondent spouses executed a real estate mortgage over the land on March 17, 1982, which document was registered in the Registry of Deeds pursuant to Act No. 3344.The loan was then released to respondent spouses on a staggered basis. After a substantial sum of P118,540.00 had been received by private respondents, they asked for the release of the remaining amount of the loan. It does not appear that their request was acted upon by DBP, ostensibly because the release of the land from the then Ministry of Natural Resources had not been obtained.On July 7, 1983, respondent spouses, as plaintiffs, filed a complaint against DBP in the trial court 4 seeking the annulment of the subject deed of absolute sale on the ground that the object thereof was verified to be timberland and, therefore, is in law an inalienable part of the public domain. They also alleged that petitioner, as defendant therein, acted fraudulently and in bad faith by misrepresenting itself as the absolute owner of the land and in incorporating the waiver of warranty against eviction in the deed of sale. RULINGS OF THE TRIAL COURT AND COURT OF APPEALS -On May 25, 1990, the trial court rendered judgment annulling the subject deed of absolute sale and ordering DBP to return the P25,500.00 purchase price, plus interest; to reimburse to respondent spouses the taxes paid by them, the cost of the relocation survey, incidental expenses and other damages in the amount of P50,000.00; and to further pay them attorney's fees and litigation expenses in the amount of P10,000.00, and the costs of suit. -As substantially stated at the outset, respondent Court of Appeals rendered judgment modifying the disposition of the court below by deleting the award for damages, attorney's fees, litigation expenses and the costs, but affirming the same in all its other aspects. 9 On April 7, 1993, said appellate court also denied petitioner's motion for reconsideration. ISSUES BEFORE THE SUPREME COURT

1. Whether or not private respondent spouses Celebrada and Abner Mangubat should be ordered to pay petitioner DBP their loan obligation due under the mortgage contract executed between them and DBP; and 2. Whether or not petitioner should reimburse respondent spouses the purchase price of the property and the amount of P11,980.00 for taxes and expenses for the relocation Survey. RULING OF THE SUPREME COURT: Considering that neither party questioned the legality and correctness of the judgment of the court a quo, as affirmed by respondent court, ordering the annulment of the deed of absolute sale, such decreed nullification of the document has already achieved finality. We only needThe Court of Appeals, after an extensive discussion, found that there had been no bad faith on the part of either party, and this r, therefore, to dwell on the effects of that declaration of nullity.emains uncontroverted as a fact in the case at bar. Correspondingly, respondent court correctly applied the rule that if both parties have no fault or are not guilty, the restoration of what was given by each of them to the other is consequently in order. This is because the declaration of nullity of a contract which is void ab initio operates to restore things to the state and condition in which they were found before the execution thereof. We also find ample support for said propositions in American jurisprudence. The effect of an application of the aforequoted rule with respect to the right of a party to recover the amount given as consideration has been passed upon in the case of Leather Manufacturers National Bank vs. Merchants National Bank where it was held that: "Whenever money is paid upon the representation of the receiver that he has either a certain title in property transferred in consideration of the payment or a certain authority to receive the money paid, when in fact he has no such title or authority, then, although there be no fraud or intentional misrepresentation on his part, yet there is no consideration for the payment, the money remains, in equity and good conscience, the property of the payer and may be recovered back by him."Therefore, the purchaser is entitled to recover the money paid by him where the contract is set aside by reason of the mutual material mistake of the parties as to the identity or quantity of the land sold. And where a purchaser recovers the purchase money from a vendor who fails or refuses to deliver the title, he is entitled as a general rule to interest on the money paid from the time of payment. A contract which the law denounces as void is necessarily no contract whatever, and the acts of the parties in an effort to create one can in no wise bring about a change of their legal status. The parties and the subject matter of the contract remain in all particulars just as they did before any act was performed in relation thereto. An action for money had and received lies to recover back money paid on a contract, the consideration of which has failed. As a general rule, if one buys the land of another, to which the latter is supposed to have a good title, and, in consequence of facts unknown alike to both parties, he has no title at all, equity will cancel the transaction and cause the purchase money to be restored to the buyer, putting both parties in status quo.Thus, on both local and foreign legal principles, the return by DBP to respondent spouses of the purchase price, plus corresponding interest thereon, is ineluctably called for. Petitioner likewise contends that the trial court and respondent Court of Appeals erred in ordering the reimbursement of taxes and the cost of the relocation survey, there being no factual or legal basis therefor. It argues that private respondents merely submitted a "list of damages" allegedly incurred by them, and not official receipts of expenses for taxes and said survey. Furthermore, the same list has allegedly not been identified or even presented at any stage of the proceedings, since it was vigorously objected to by DBP.Contrary to the claim of petitioner, the list of damages was presented in the trial court and was correspondingly marked as "Exhibit

P." The said exhibit was, thereafter, admitted by the trial court but only as part of the testimonial evidence for private respondents, as stated in its Order dated August 16, 1988. However, despite that admission of the said list of damages as evidence, we agree with petitioner that the same cannot constitute sufficient legal basis for an award of P4,000.00 and P7,980.00 as reimbursement for land taxes and expenses for the relocation survey, respectively. The list of damages was prepared extrajudicially by respondent spouses by themselves without any supporting receipts as bases thereof or to substantiate the same. That list, per se, is necessarily self-serving and, on that account, should have been declared inadmissible in evidence as the factum probans.In order that damages may be recovered, the best evidence obtainable by the injured party must be presented. Actual or compensatory damages cannot be presumed, but must be duly proved, and so proved with a reasonable degree of certainty. A court cannot rely on speculation, conjecture or guesswork as to the fact and amount of damages, but must depend upon competent proof that they have been suffered and on evidence of the actual amount thereof. If the proof is flimsy and unsubstantial, no damages will be awarded. Turning now to the issue of whether or not private respondents should be made to pay petitioner their loan obligation amounting to P118,540.00, we answer in the affirmative.In its legal context, the contract of loan executed between the parties is entirely different and discrete from the deed of sale they entered into. The annulment of the sale will not have an effect on the existence and demandability of the loan. One who has received money as a loan is bound to pay to the creditor an equal amount of the same kind and quality.The fact that the annulment of the sale will also result in the invalidity of the mortgage does not have an effect on the validity and efficacy of the principal obligation, for even an obligation that is unsupported by any security of the debtor may also be enforced by means of an ordinary action. Where a mortgage is not valid, as where it is executed by one who is not the owner of the property, or the consideration of the contract is simulated or false, the principal obligation which it guarantees is not thereby rendered null and void. That obligation matures and becomes demandable in accordance with the stipulations pertaining to it. Under the foregoing circumstances, what is lost is only the right to foreclose the mortgage as a special remedy for satisfying or settling the indebtedness which is the principal obligation. In case of nullity, the mortgage deed remains as evidence or proof of a personal obligation of the debtor, and the amount due to the creditor may be enforced in an ordinary personal action. It was likewise incorrect for the Court of Appeals to deny the claim of petitioner for payment of the loan on the ground that it failed to present the promissory note therefor. While respondent court also made the concession that its judgment was accordingly without prejudice to the filing by petitioner of a separate action for the collection of that amount, this does not detract from the adverse effects of that erroneous ruling on the proper course of action in this case.The fact is that a reading of the mortgage contract executed by respondent spouses in favor of petitioner, dated March 17, 1982, will readily show that it embodies not only the mortgage but the complete terms and conditions of the loan agreement as well. The provisions of said contract, specifically paragraphs 16 and 28 thereof, are so precise and clear as to thereby render unnecessary the introduction of the promissory note which would merely serve the same purpose. Furthermore, respondent Celebrada Mangubat expressly acknowledged in her testimony that she and her husband are indebted to petitioner in the amount of P118,000.00, more or less. Admissions made by the parties in the pleadings or in the

course of the trial or other proceedings do not require proof and can not be contradicted unless previously shown to have been made through palpable mistake. Thus, the mortgage contract which embodies the terms and conditions of the loan obligation of respondent spouses, as well as respondent Celebrada Mangubat's admission in open court, are more than adequate evidence to sustain petitioner's claim for payment of private respondents' aforestated indebtedness and for the adjudication of DBP's claim therefor in the very same action now before us.It is also worth noting that the adjustment and allowance of petitioner's demand by counterclaim or set-off in the present action, rather than by another independent action, is favored or encouraged by law. Such a practice serves to avoid circuitry of action, multiplicity of suits, inconvenience, expense, and unwarranted consumption of the time of the court. The trend of judicial decisions is toward a liberal extension of the right to avail of counterclaims or set-offs.The rules on counterclaim are designed to achieve the disposition of a whole controversy of the conflicting claims of interested parties at one time and in one action, provided all parties can be brought before the court and the matter decided without prejudicing the rights of any party. WHEREFORE, the judgment appealed from is hereby MODIFIED, by deleting the award of P11,980.00 as reimbursement for taxes and expenses for the relocation survey, and ordering respondent spouses Celebrada and Abner Mangubat to pay petitioner Development Bank of the Philippines the amount of P118,540.00, representing the total amount of the loan released to them, with interest of 15% per annum plus charges and other expenses in accordance with their mortgage contract. In all other respects, the said judgment of respondent Court of Appeals is AFFIRMED. SO ORDERED. 14. LUFTHANZA GERMAN AIRLINES VS. COURT OF APPEALS FACTS: On 16 May 1985, plaintiff-appellee (Don Ferry) purchased from the defendantappellant a San Francisco/ New York/ Paris/ Frankfurt/Manila first class open dated ticket. There was no carrier indicated for the San Francisco/New York/Paris portions of the journey. On June 3, 1985, plaintiff-appellee went to Lufthansa's San Francisco office allegedly to get Lufthansa to endorse the San Francisco/New York portion of his journey to Trans World Airlines. But, there was no need to secure said endorsement since no carrier was indicated in the ticket for the San Francisco/New York leg of the journey. Instead of going to TWA as advised, plaintiff requested Mrs. Egger for a different routing which omitted the New York/Paris leg of his original itinerary. Said new routing would require the endorsement of the ticket. Hence, Mrs. Egger advised the plaintiff-appellee that she would need to get an authorization from Lufthansa's Manila office in order to endorse plaintiff-appellee's ticket, She also explained to plaintiff-appellee the procedure for obtaining the authorization and the reason why it was required. Upon being advised that securing the necessary authorization could possibly take a day or more, plaintiffappellee advised Mrs. Egger that he could not wait. Thereafter. plaintiff-appellee settled on a new routing. On June 12, 1985, plaintiff-appeIlee went to the Frankfurt Airport. The CPA ticket agent informed the plaintiff that an endorsement from the defendantappellant Lufthansa was required for him to travel on CPA. aintiff-appellee then proceeded to the Lufthansa's ticket counter at the Frankfurt Airport. Plaintiff-appellee met with Miss Petra Wilhelm, Lufthansa's ticket agent therein. Miss Wilhelm reiterated Ms. Egger's previous advise that due to currency restrictions, authorization from Lufthansa's Manila office was required before she could endorse plaintiffs ticket to CPA. The reason for the need to get an endorsement from Lufthansa's Manila office and the

procedure for obtaining such endorsement was fully explained to the plaintiff-appellee for the second time by Miss Wilhelm. Since it would take Miss Wilhelm sometime to communicate and obtain the endorsement from the defendant's Manila office, it was obvious at that time that plaintiff-appellee would be unable to board the CPA flight which he booked. Consequently, upon plaintiff-appellee's request Miss Wilhelm booked him on a Lufthansa flight leaving Frankfurt Airport in the afternoon of the same day, 12 June 1985 for Bangkok and for the Bangkok/Manila portion of his journey, Miss Wilhelm booked plaintiff on a Thai Airways flight. Plaintiff-appellee was able to depart Frankfurt Airport in the afternoon of 12 June 1985 on the Lufthansa flight and was able to board the Thai Airways flight from Bangkok to Manila, arriving thereat in the afternoon of the following day. Evidently in the belief that the facts created a right of action in his favor, Don Ferry filed a complaint against Lufthansa on April 1,1986 in the Regional Trial Court of Makati, for recovery of damages arising from breach of contract. RULINGS OF THE TRIAL COURT AND COURT OF APPEALS -On July 25, 1988, the trial court rendered its decision earlier adverted to, awarding to private respondent the amount of damages prayed for in his complaint. - The decision was affirmed in toto by the Court of Appeals. ISSUES BEFORE THE SUPREME COURT: Whether or not the Court of Appeals committed errors of law RULING OF THE SUPREME COURT: The established rule is that the findings of the trial court as to the credibility of witnesses are accorded much respect, if not indeed conclusive effect, save only in those exceptional instances where they are clearly shown to be arbitrary. 5 In the case at bench, the Trial Court refused to accord any credit to petitioner Airline's "three (3) foreign witnesses" because they are "all long-time employees of defendant which also shouldered all their expenses" (in coming to this country to give evidence) and hence, their testimonies "are tained polluted and should be seen with disfavor. While it may be true, as the trial court opines, "that testimony of employees of a party is 'of course open to the criticism that they would naturally testify, as far as they possibly could in favor of their employers; and in weighing testimony such a relation between a witness and a party is frequently noticed by the court, 7 it is equally true that the fact that the witness is an employee or an overseer of a party is not of itself sufficient to discredit his testimony. This Court has intensively analyzed the testimonies of petitioner's saidthree (3) witnesses and found them to be clear, straightforward and convincing. They spoke authoritatively of their respective lines of work, and candidly of their dealings with private respondent, without betraying any trace of falsehood or partiality, or any attempt to exculpate petitioner from the alleged breach of contract; in fact, it may even be said that some of their statements were somewhat damaging to their employer's cause.That petitioner paid for its witnesses expenses in coming to the Philippines to testify, is not a valid cause for disbelieving their testimonies; it seems but natural and reasonable under the peculiar circumstances of the case that petitioner should do so. For the record, however, only the expenses of Mrs. Ingrid Egger and Mrs. Petra Wilhelm were shouldered by petitioner, the third witness, Mr. Berndt Loewe, then being based in Manila as petitioner's passenger sales manager. Considering the known disinclination of persons to be involved in court litigations, even if it be only as witnesses. it is hardly reasonable to expect petitioner's witnesses to agree to bear the cost of flying to and staying in Manila to testify in the case. At any rate, there is no showing whatever that petitioner's witnesses were otherwise so materially benefited by their travel to the Philippines, or were so

fanatically loyal to Lufthansa, as to be motivated to distort the thruth and testify falsely in the latter's favor.The trial court as well as the appellate court gravely erred therefore, in totally disregarding the testimonies of petitioner's witnesses on the basis alone of the employment relationship between them. Their factual findings cannot consequently be accorded binding effect, and this Court is thus constrained to itself weigh and evaluate the evidence presented by the parties.To begin with, private respondent was bound by the conditions of the contract of carriage purchased by him from Lufthansa. The ticket did not indicate any carrier for the San Francisco/New York leg of respondent Ferry's journey. He was therefore free to choose his airline for that leg. With respect, however, to the Paris/Frankfurt /manila portion of his journey, private respondent was deemed to have agreed to fly Lufthansa as shown by the letters "LH" written on the carrier box.Thus, in San Francisco, when private respondent chose to take a TWA flight to New York, no endorsement from petitioner Airline was required because, as just mentioned, his ticket did not indicate any carrier for the San Francisco/New York leg. It was only in the Paris/Frankfurt/Manila leg that an endorsement was needed if private respondent desired to fly with an airline other than Lufthansa. The reason no endorsement was given was that there was no requirement for such endorsement. At this point, petitioner Airline did not refuse to give him an endorsement being required by TWA. It is one thing to say that petitioner airline refused to give a required endorsement, and another to say that since no endorsement was needed, none was given.The same cannot, however, be said with respect to the Frankfurt/Manila portion of respondent Ferry's journey. Petitioner's witness, Mr. Berndt Loewe, admitted that the Baden-Baden GMBH was a Lufthansa-appointed travel agent, authorized to make reservations and confirmations, Private respondent having previously obtained a flight confirmation from a Lufthansaappointed travel agent, there was no reason why the Frankfurt Lufthansa office should not give the endorsement needed by private respondent fly Cathay Pacific Airways. That confirmation necessarily carried with it the prior approval of Lufthansa for private respondent to employ another airline so that all that was needed was the actual, physical signification of said approval through an endorsement which should have been given as a matter of course. Petitioner's failure in this regard constituted breach of its contract of carriage with private respondent.The breach was not attended by fraud or bad faith, however. When Petra Wilhelm; petitioner airline's ticket agent at its Frankfurt Airport office, informed private respondent that an authorization from Manila was needed before she could give an endorsement, what was foremost in her mind was the policy regarding currency restrictions in effect at that time, which was made known and explained to private respondent in San Francisco. Apparently, the significance of the previously confirmed reservation completely escaped Mrs. Wilhelm on that occasion. The omission or failure of petitioner airline then to give private respondent the required endorsement was thus evidently due to a misappreciation of the significance of private respondent's previously confirmed reservation, and not to any willful desire to deny private respondent the night to utilize another airline.Where the defendant is not shown to have acted fraudulently or in bad faith in breaching the contract, liability for damages is limited to the natural and probable consequences of the breach of the obligation, and which the parties had foreseen or could reasonably have foreseen. In such a case, liability would not include the payment of moral and exemplary damages. Under Article 2232 of the Civil Code, in a contractual or quasi-contractual relationship, moral or exemplary damages may be awarded only if the defendant had acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. 20The trial Court's award of actual damages for unrealized profits in the amount of US$75,000.00, must also be disallowed, private respondent's claim thereto being highly speculative. The realization of profits by respondent Ferry from a real estate development project in

Foster City was not a certainty, but depended on a number of factors, foremost of which was his ability to invite investors and to win the bid. Actual or compensatory damages cannot be presumed, but must be duly proved, and proved with reasonable degree of certainty. A court cannot rely on speculations, conjecture or guesswork as to the fact and amount of damages, but must depend upon competent proof that they have (been) suffered and on evidence of the actual amount thereof." 22There is no room to doubt that some species of injury was caused to private respondent because of petitioner airline's failure to endorse his ticket to Cathay Pacific Airways. In the absence of competent proof on the actual damage suffered, private respondent is "entitled to nominal damages which, as the law says, is adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated and recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered." 23 We consider the amount of P50,000.00 just and reasonable under the circumstances.An award of P20,000.00 for and as attorney's fees is likewise just and equitable, private respondent having been compelled to incur expenses to protect his interests. WHEREFORE, the decision of the Court of Appeals in CA-G.R. CV No. 22494 dated January 29, 1993 is hereby MODIFIED by the deletion of the awards of actual, moral and exemplary damages, as well as the interest thereon. Petitioner Lufthansa German Airlines is hereby ORDERED to pay private respondent Don Ferry the amount of P50,000.00 as nominal damages and the amount of P20,000.00 as and for attorney's fees. No pronouncement as to costs. SO ORDERED. 15. BARZAGA, vs. COURT OF APPEALS FACTS: The Fates ordained that Christmas 1990 be bleak for Ignacio Barzaga and his family. On the nineteenth of December Ignacio's wife succumbed to a debilitating ailment after prolonged pain and suffering. Forewarned by her attending physicians of her impending death, she expressed her wish to be laid to rest before Christmas day to spare her family from keeping lonely vigil over her remains, but her last wish did not happened because the delivery of the supplies has not been delivered on the said date hence the filing of the case in the trial court. RULINGS OF THE TRIAL COURT AND COURT OF APPEALS - the trial court ordered respondent Alviar to pay petitioner (a) P2,110.00 as refund for the purchase price of the materials with interest per annum computed at the legal rate from the date of the filing of the complaint, (b) P5,000.00 as temperate damages, (c) P20,000.00 as moral damages, (d) P5,000.00 as litigation expenses, and (e) P5,000.00 as attorney's fees. - Court of Appeals reversed the lower court and ruled that there was no contractual commitment as to the exact time of delivery since this was not indicated in the invoice receipts covering the sale ISSUES BEFORE THE SUPREME COURT: Whether or not there is contractual commitment as to the exact time of the delivery since it was not indicated in the receipts.

RULING OF THE SUPREME COURT: We sustain the trial court. An assiduous scrutiny of the record convinces us that respondent Angelito Alviar was negligent and incurred in delay in the performance of his contractual obligation. This sufficiently entitles petitioner Ignacio Barzaga to be indemnified for the damage he suffered as a consequence of delay or a contractual breach. The law expressly provides that those who in the performance of their obligation are guilty of fraud, negligence, or delay and those who in any manner contravene the tenor thereof, are liable for damages. Contrary to the appellate court's factual determination, there was a specific time agreed upon for the delivery of the materials to the cemetery. Petitioner went to private respondent's store on 21 December precisely to inquire if the materials he intended to purchase could be delivered immediately. But he was told by the storekeeper that if there were still deliveries to be made that afternoon his order would be delivered the following day. With this in mind Barzaga decided to buy the construction materials the following morning after he was assured of immediate delivery according to his time frame. The argument that the invoices never indicated a specific delivery time must fall in the face of the positive verbal commitment of respondent's storekeeper. Consequently it was no longer necessary to indicate in the invoices the exact time the purchased items were to be brought to the cemetery. In fact, storekeeper Boncales admitted that it was her custom not to indicate the time of delivery whenever she prepared invoices. Private respondent invokes fortuitous event as his handy excuse for that "bit of delay" in the delivery of petitioner's purchases. He maintains that Barzaga should have allowed his delivery men a little more time to bring the construction materials over to the cemetery since a few hours more would not really matter and considering that his truck had a flat tire. Besides, according to him, Barzaga still had sufficient time to build the tomb for his wife.This is a gratuitous assertion that borders on callousness. Private respondent had no right to manipulate petitioner's timetable and substitute it with his own. Petitioner had a deadline to meet. A few hours of delay was no piddling matter to him who in his bereavement had yet to attend to other pressing family concerns. Despite this, respondent's employees still made light of his earnest importunings for an immediate delivery. As petitioner bitterly declared in court " x x x they (respondent's employees) were making a fool out of me."We also find unacceptable respondent's justification that his truck had a flat tire, for this event, if indeed it happened, was forseeable according to the trial court, and as such should have been reasonably guarded against. The nature of private respondent's business requires that he should be ready at all times to meet contingencies of this kind. One piece of testimony by respondent's witness Marina Boncales has caught our attention - that the delivery truck arrived a little late than usual because it came from a delivery of materials in Langcaan, Dasmarias, Cavite. Significantly, this information was withheld by Boncales from petitioner when the latter was negotiating with her for the purchase of construction materials. Consequently, it is not unreasonable to suppose that had she told petitioner of this fact and that the delivery of the materials would consequently be delayed, petitioner would not have bought the materials from respondent's hardware store but elsewhere which could meet his time requirement. The deliberate suppression of this information by itself manifests a certain degree of bad faith on the part of respondent's storekeeper.The appellate court appears to have belittled petitioner's submission that under the prevailing circumstances time was of the essence in the delivery of the materials to the grave site. However, we find petitioner's assertion to be anchored on solid ground. The niche had to be constructed at the very least on the twenty-second of December considering that it would take about two (2) days to finish the job if the interment was to take place on the twenty-fourth of the month. Respondent's delay in

the delivery of the construction materials wasted so much time that construction of the tomb could start only on the twenty-third. It could not be ready for the scheduled burial of petitioner's wife. This undoubtedly prolonged the wake, in addition to the fact that work at the cemetery had to be put off on Christmas day.This case is clearly one of nonperformance of a reciprocal obligation. In their contract of purchase and sale, petitioner had already complied fully with what was required of him as purchaser, i.e., the payment of the purchase price of P2,110.00. It was incumbent upon respondent to immediately fulfill his obligation to deliver the goods otherwise delay would attach.We therefore sustain the award of moral damages. It cannot be denied that petitioner and his family suffered wounded feelings, mental anguish and serious anxiety while keeping watch on Christmas day over the remains of their loved one who could not be laid to rest on the date she herself had chosen. There is no gainsaying the inexpressible pain and sorrow Ignacio Barzaga and his family bore at that moment caused no less by the ineptitude, cavalier behavior and bad faith of respondent and his employees in the performance of an obligation voluntarily entered into.We also affirm the grant of exemplary damages. The lackadaisical and feckless attitude of the employees of respondent over which he exercised supervisory authority indicates gross negligence in the fulfillment of his business obligations. Respondent Alviar and his employees should have exercised fairness and good judgment in dealing with petitioner who was then grieving over the loss of his wife. Instead of commiserating with him, respondent and his employees contributed to petitioner's anguish by causing him to bear the agony resulting from his inability to fulfill his wife's dying wish.We delete however the award of temperate damages. Under Art. 2224 of the Civil Code, temperate damages are more than nominal but less than compensatory, and may be recovered when the court finds that some pecuniary loss has been suffered but the amount cannot, from the nature of the case, be proved with certainty. In this case, the trial court found that plaintiff suffered damages in the form of wages for the hired workers for 22 December 1990 and expenses incurred during the extra two (2) days of the wake. The record however does not show that petitioner presented proof of the actual amount of expenses he incurred which seems to be the reason the trial court awarded to him temperate damages instead. This is an erroneous application of the concept of temperate damages. While petitioner may have indeed suffered pecuniary losses, these by their very nature could be established with certainty by means of payment receipts. As such, the claim falls unequivocally within the realm of actual or compensatory damages. Petitioner's failure to prove actual expenditure consequently conduces to a failure of his claim. For in determining actual damages, the court cannot rely on mere assertions, speculations, conjectures or guesswork but must depend on competent proof and on the best evidence obtainable regarding the actual amount of loss.We affirm the award of attorney's fees and litigation expenses. Award of damages, attorney's fees and litigation costs is left to the sound discretion of the court, and if such discretion be well exercised, as in this case, it will not be disturbed on appeal. WHEREFORE, the decision of the Court of Appeals is REVERSED and SET ASIDE except insofar as it GRANTED on a motion for reconsideration the refund by private respondent of the amount of P2,110.00 paid by petitioner for the construction materials. Consequently, except for the award of P5,000.00 as temperate damages which we delete, the decision of the Regional Trial Court granting petitioner (a) P2,110.00 as refund for the value of materials with interest computed at the legal rate per annum from the date of the filing of the case; (b) P20,000.00 as moral damages; (c) P10,000.00 as exemplary damages; (d) P5,000.00 as litigation expenses; and (4) P5,000.00 as attorney's fees, is AFFIRMED. No costs. SO ORDERED.

16. PEOPLE vs. GUTIERREZ FACTS: That on or about the 14th day of December 1989 in Kalookan City, Metro Manila and within the jurisdiction of this Honorable Court, the above-named accused, motivated by a desire for revenge, with deliberate intent to cause damage, did then and there wilfully, unlawfully and feloniously set fire to the house of one JOSEFA ARROYO y ALANO, thereby causing damage to the front wooden-made walling located at the groundfloor thereof in the amount of P500.00, to the damage and prejudice of the latter in the amount of P500.00. According to Joselito Arroyo, Josefa's son, it was his eldest sister, Carolina, who lodged the complaint with the police. Carolina informed the witness that a carpenter placed the cost for the repair of the house at P500.00. Rulings of the Trial Court and Court of Appeals -In its 28th February 1991 decision, the trial court found the accused guilty beyond reasonable doubt of the offense charged; it concluded: WHEREFORE, the Court renders judgment CONVICTING the herein accused EDGAR GUTIERREZ y CORTEZ for the crime of Arson punishable under the Revised Penal Code, as amended by Presidential Decree 1613 and sentences him to suffer the maximum penalty of RECLUSION PERPETUA; to pay the owner of the house Josefa Arroyo the sum of Five Hundred (P500.00) Pesos as actual damages and to pay the costs. SO ORDERED. ISSUES BEFORE THE SUPREME COURT: Whether or not corpus delicti of the crime of arson has been established. RULING OF THE SUPREME COURT: Proof of the corpus delicti, indeed, is indispensable in the prosecution of arson as in all kinds of criminal offenses as well. Corpus delicti means the substance of the crime; it is the fact that a crime has actually been committed. In arson, the corpus delicti rule rule is generally satisfied by proof of the bare occurrence of the fire and of its having been intentionally caused. Even the uncorroborated testimony of a single eyewitness, if credible, may be enough to prove the corpus delicti and to warrant conviction. In this case, the charge against appellant was amply supported in evidence by the eyewitness accounts of Felipe Enriquez and Mario Alano. Also offered in evidence were copies of the police "blotters" of two barangays reflecting the report that appellant had thrown a bag of gasoline at the house of Mario Alano, then lit it and, after setting a portion of the house on fire, fled. As regards appellant's identity, Enriquez testified that he and appellant's brother and sister were near a Meralco post when appellant went past them 15 Enriquez followed appellant and saw how the latter threw the substance he was carrying at Alano's house. The conditions of visibility were favorable. Indeed, even the recognition by Mario Alano of appellant's voice could have sufficed to pin down culpability. The evidence against appellant is simply too overwhelming for it to be easily overcome by an invocation of alibi. Besides, the essential requirements of distance and the impossibility of an accused being at the scene of the crime at the crucial time must be attendant so as to give this defense any serious consideration.Appellant assails the credibility of Enriquez by an assertion that his testimony is "ill-motivated." The Court itself has reviewed Enriquez's testimony, and it is satisfied that his statements disclose frankness, cohesiveness, and an absence of any serious dissemblance or inconsistency.

Moreover, the trial court's assessment on the credibility of the witnesses, which has had the opportunity of observing how they have comported themselves at the witness stand, cannot just be ignored. The information charges appellant with "'violation of P.D. 1613" without specifying the particular provision breached. The information having failed to allege whether or not the burnt house is inhabited, and not having been established that the house is situated in a populated or congested area, appellant should be deemed to have only been charged with plain arson under Section 1 of the decree. Kalookan City might be a densely populated part of the metropolis but its entire territory cannot be said to be congested. Although the whole 2-storey wood and galvanized iron house has not been completely gutted by the fire, the crime committed is still consummated arson. It is enough that a portion thereof is shown to have been destroyed. Under Section 1 of the decree, the offense of simple arson committed is punishable by prision mayor. The Court feels that the trial court should not have appreciated the "special" aggravating circumstance, under Section 4(3) of the decree, of the offender having been "motivated by spite or hatred towards the owner or occupant of the property burned." The prosecution does not dispute the mauling of appellant by a son of Mario Alano just a few hours before the incident. It would appear to us to be more of impulse, heat of anger or risen temper, rather than real spite or hatred, that has impelled appellant to give vent to his wounded ego.The prosecution tried to establish the actual amount of damage caused to the house through the testimony of Joselito Arroyo, the owner's son, who apparently was only told by his sister that, according to a carpenter, the repair of the house would cost some P500.00. The evidence, being clearly hearsay, may not be a basis for an award.There being neither aggravating nor mitigating circumstances to consider, the prescribed penalty is the medium period of prision mayor or from 8 years and 1 day to 10 years. Applying the Indeterminate Sentence Law, the prison term that may be imposed on appellant is anywhere within the range of prision correccional from 6 months and 1 day to 6 years, as minimum. up to anywhere within the medium period of prision mayor from 8 years and 1 day to 10 years, as maximum. WHEREFORE, the questioned decision finding appellant Edgar Gutierrez y Cortez guilty beyond reasonable doubt of the crime of arson is AFFIRMED; however, the sentence imposed on him by the court a quo is MODIFIED in that appellant should now instead suffer the indeterminate penalty of imprisonment from a minimum of 2 years, 4 months and 1 day of prision correccional to a maximum of 8 years and 1 day of prision mayor. The award made by the trial court of P500 by way of actual damage in favor of Mario and/or Josefa Arroyo is deleted. Costs against appellant. SO ORDERED. 17. GATCHALIAN V DELIM FACTS: On July 11, 1973, petitioner Reynalda Gatchalian boarded as paying passenger a minibus owned by respondents. While the bus was running along the highway, a snapping sound was heard, and after a short while, the bus bumped a cement flower pot, turned turtle and fell into a ditch. The passengers were confined in the hospital, and their bills were paid by respondents spouse on July 14. Before Mrs. Delim left, she had the injured passengers sign an already prepared affidavit waiving their claims against respondents. Petitioner was among those who signed. Notwithstanding the said document, petitioner filed a claim to recover actual and moral damages for loss of employment opportunities, mental suffering and inferiority complex caused by the scar

on her forehead. Respondents raised in defense force majeure and the waiver signed by petitioner. The trial court upheld the validity of the waiver and dismissed the complaint. The appellate court ruled that the waiver was invalid, but also that the petitioner is not entitled to damages. Rulings of the Trial Court and Court of Appeals - The trial court upheld the validity of the waiver and dismissed the complaint - The appellate court ruled that the waiver was invalid, but also that the petitioner is not entitled to damages. ISSUES BEFORE THE SUPREME COURT (1) Whether there was a valid waiver (2) Whether the respondent was negligent (3) Whether the petitioner is entitled to actual and moral damages RULING OF THE SUPREME COURT: We agree with the majority of the Court of Appeals who held that no valid waiver of her cause of action had been made by petitioner. The relevant language of the Joint Affidavit may be quoted again: That we are no longer interested to file a complaint, criminal or civil against the said driver and owner of the said Thames, because it was an accident and the said driver and owner of the said Thames have gone to the extent of helping us to be treated upon our injuries. (Emphasis supplied) A waiver, to be valid and effective, must in the first place be couched in clear and unequivocal terms which leave no doubt as to the intention of a person to give up a right or benefit which legally pertains to him. A waiver may not casually be attributed to a person when the terms thereof do not explicitly and clearly evidence an intent to abandon a right vested in such person. The degree of explicitness which this Court has required in purported waivers is illustrated in Yepes and Susaya v. Samar Express Transit (supra), where the Court in reading and rejecting a purported waiver said: . . . It appears that before their transfer to the Leyte Provincial Hospital, appellees were asked to sign as, in fact, they signed the document Exhibit I wherein they stated that "in consideration of the expenses which said operator has incurred in properly giving us the proper medical treatment, we hereby manifest our desire to waive any and all claims against the operator of the Samar Express Transit." Even a cursory examination of the document mentioned above will readily show that appellees did not actually waive their right to claim damages from appellant for the latter's failure to comply with their contract of carriage. All that said document proves is that they expressed a "desire" to make the waiver which obviously is not the same as making an actual waiver of their right. A waiver of the kind invoked by appellant must be clear and unequivocal (Decision of the Supreme Court of Spain of July 8, 1887) which is not the case of the one relied upon in this appeal. (Emphasis supplied) If we apply the standard used in Yepes and Susaya, we would have to conclude that the terms of the Joint Affidavit in the instant case cannot be regarded as a waiver cast in "clear and unequivocal" terms. Moreover, the circumstances under which the Joint Affidavit was signed by petitioner Gatchalian need to be considered. Petitioner testified

that she was still reeling from the effects of the vehicular accident, having been in the hospital for only three days, when the purported waiver in the form of the Joint Affidavit was presented to her for signing; that while reading the same, she experienced dizziness but that, seeing the other passengers who had also suffered injuries sign the document, she too signed without bothering to read the Joint Affidavit in its entirety. Considering these circumstances there appears substantial doubt whether petitioner understood fully the import of the Joint Affidavit (prepared by or at the instance of private respondent) she signed and whether she actually intended thereby to waive any right of action against private respondent. Finally, because what is involved here is the liability of a common carrier for injuries sustained by passengers in respect of whose safety a common carrier must exercise extraordinary diligence, we must construe any such purported waiver most strictly against the common carrier. For a waiver to be valid and effective, it must not be contrary to law, morals, public policy or good customs. To uphold a supposed waiver of any right to claim damages by an injured passenger, under circumstances like those exhibited in this case, would be to dilute and weaken the standard of extraordinary diligence exacted by the law from common carriers and hence to render that standard unenforceable. We believe such a purported waiver is offensive to public policy. Petitioner Gatchalian also argues that the Court of Appeals, having by majority vote held that there was no enforceable waiver of her right of action, should have awarded her actual or compensatory and moral damages as a matter of course. We have already noted that a duty to exercise extraordinary diligence in protecting the safety of its passengers is imposed upon a common carrier. In case of death or injuries to passengers, a statutory presumption arises that the common carrier was at fault or had acted negligently "unless it proves that it [had] observed extraordinary diligence as prescribed in Articles 1733 and 1755." In fact, because of this statutory presumption, it has been held that a court need not even make an express finding of fault or negligence on the part of the common carrier in order to hold it liable. To overcome this presumption, the common carrier must slow to the court that it had exercised extraordinary diligence to prevent the injuries. The standard of extraordinary diligence imposed upon common carriers is considerably more demanding than the standard of ordinary diligence, i.e., the diligence of a good paterfamilias established in respect of the ordinary relations between members of society. 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 to all the circumstances". Thus, the question which must be addressed is whether or not private respondent has successfully proved that he had exercised extraordinary diligence to prevent the mishap involving his mini-bus. The records before the Court are bereft of any evidence showing that respondent had exercised the extraordinary diligence required by law. Curiously, respondent did not even attempt, during the trial before the court a quo, to prove that he had indeed exercised the requisite extraordinary diligence. Respondent did try to exculpate himself from liability by alleging that the mishap was the result of force majeure. But allegation is not proof and here again, respondent utterly failed to substantiate his defense of force majeure. To exempt a common carrier from liability for death or physical injuries to passengers upon the ground of force majeure, the carrier must clearly show not only that the efficient cause of the casualty was entirely

independent of the human will, but also that it was impossible to avoid. Any participation by the common carrier in the occurrence of the injury will defeat the defense of force majeure. In Servando v. Philippine Steam Navigation Company, 12 the Court summed up the essential characteristics of force majeure by quoting with approval from the Enciclopedia Juridica Espaola: Thus, where fortuitous event or force majeure is the immediate and proximate cause of the loss, the obligor is exempt from liability non-performance. The Partidas, the antecedent of Article 1174 of the Civil Code, defines "caso fortuito" as 'an event that takes place by accident and could not have been foreseen. Examples of this are destruction of houses, unexpected fire, shipwreck, violence of robber. In its dissertation on the phrase "caso fortuito" the Enciclopedia Juridica Espaola says: 'In legal sense and, consequently, also in relation to contracts, a "caso fortuito" presents the following essential characteristics: (1) the cause of the unforeseen and unexpected occurence, or of the failure of the debtor to comply with his obligation, must be independent of the human will; (2) it must be impossible to foresee the event which constitutes the "caso fortuito", or if it can be foreseen, it must be impossible to avoid; (3) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (4) the obligor must be free from any participation in the aggravation of the injury resulting to the creditor. Upon the other hand, the record yields affirmative evidence of fault or negligence on the part of respondent common carrier. In her direct examination, petitioner Gatchalian narrated that shortly before the vehicle went off the road and into a ditch, a "snapping sound" was suddenly heard at one part of the bus. One of the passengers, an old woman, cried out, "What happened?" ("Apay addan samet nadadaelen?"). The driver replied, nonchalantly, "That is only normal" ("Ugali ti makina dayta"). The driver did not stop to check if anything had gone wrong with the bus. Moreover, the driver's reply necessarily indicated that the same "snapping sound" had been heard in the bus on previous occasions. This could only mean that the bus had not been checked physically or mechanically to determine what was causing the "snapping sound" which had occurred so frequently that the driver had gotten accustomed to it. Such a sound is obviously alien to a motor vehicle in good operating condition, and even a modicum of concern for life and limb of passengers dictated that the bus be checked and repaired. The obvious continued failure of respondent to look after the roadworthiness and safety of the bus, coupled with the driver's refusal or neglect to stop the mini-bus after he had heard once again the "snapping sound" and the cry of alarm from one of the passengers, constituted wanton disregard of the physical safety of the passengers, and hence gross negligence on the part of respondent and his driver. We turn to petitioner's claim for damages. The first item in that claim relates to revenue which petitioner said she failed to realize because of the effects of the vehicular mishap. Petitioner maintains that on the day that the mini-bus went off the road, she was supposed to confer with the district supervisor of public schools for a substitute teacher's job, a job which she had held off and on as a "casual employee." The Court of Appeals, however, found that at the time of the accident, she was no longer employed in a public school since, being a casual employee and not a Civil Service eligible, she had been laid off. Her employment as a substitute teacher was occasional and episodic, contingent upon the availability of vacancies for substitute teachers. In view of her employment status as such, the Court of Appeals held that she could not be said to have in fact lost any employment after and by reason of the accident. 13 Such was the factual

finding of the Court of Appeals, a finding entitled to due respect from this Court. Petitioner Gatchalian has not submitted any basis for overturning this finding of fact, and she may not be awarded damages on the basis of speculation or conjecture. Petitioner's claim for the cost of plastic surgery for removal of the scar on her forehead, is another matter. A person is entitled to the physical integrity of his or her body; if that integrity is violated or diminished, actual injury is suffered for which actual or compensatory damages are due and assessable. Petitioner Gatchalian is entitled to be placed as nearly as possible in the condition that she was before the mishap. A scar, especially one on the face of the woman, resulting from the infliction of injury upon her, is a violation of bodily integrity, giving raise to a legitimate claim for restoration to her conditio ante. If the scar is relatively small and does not grievously disfigure the victim, the cost of surgery may be expected to be correspondingly modest. In Araneta, et al. vs. Areglado, et al., this Court awarded actual or compensatory damages for, among other things, the surgical removal of the scar on the face of a young boy who had been injured in a vehicular collision. The Court there held: We agree with the appellants that the damages awarded by the lower court for the injuries suffered by Benjamin Araneta are inadequate. In allowing not more than P1,000.00 as compensation for the "permanent deformity and something like an inferiority complex" as well as for the "pathological condition on the left side of the jaw" caused to said plaintiff, the court below overlooked the clear evidence on record that to arrest the degenerative process taking place in the mandible and restore the injured boy to a nearly normal condition, surgical intervention was needed, for which the doctor's charges would amount to P3,000.00, exclusive of hospitalization fees, expenses and medicines. Furthermore, the operation, according to Dr. Dio, would probably have to be repeated in order to effectuate a complete cure, while removal of the scar on the face obviously demanded plastic surgery. The father's failure to submit his son to a plastic operation as soon as possible does not prove that such treatment is not called for. The damage to the jaw and the existence of the scar in Benjamin Araneta's face are physical facts that can not be reasoned out of existence. That the injury should be treated in order to restore him as far as possible to his original condition is undeniable. The father's delay, or even his negligence, should not be allowed to prejudice the son who has no control over the parent's action nor impair his right to a full indemnity. . . . Still, taking into account the necessity and cost of corrective measures to fully repair the damage; the pain suffered by the injured party; his feelings of inferiority due to consciousness of his present deformity, as well as the voluntary character of the injury inflicted; and further considering that a repair, however, skillfully conducted, is never equivalent to the original state, we are of the opinion that the indemnity granted by the trial court should be increased to a total of P18,000.00. (Emphasis supplied) Petitioner estimated that the cost of having her scar surgically removed was somewhere between P10,000.00 to P15,000.00. 16 Upon the other hand, Dr. Fe Tayao Lasam, a witness presented as an expert by petitioner, testified that the cost would probably be between P5,000.00 to P10,000.00. 17 In view of this testimony, and the fact that a considerable amount of time has lapsed since the mishap in 1973 which may be expected to increase not only the cost but also very probably the difficulty of removing

the scar, we consider that the amount of P15,000.00 to cover the cost of such plastic surgery is not unreasonable. Turning to petitioner's claim for moral damages, the long-established rule is that moral damages may be awarded where gross negligence on the part of the common carrier is shown. 18 Since we have earlier concluded that respondent common carrier and his driver had been grossly negligent in connection with the bus mishap which had injured petitioner and other passengers, and recalling the aggressive manuevers of respondent, through his wife, to get the victims to waive their right to recover damages even as they were still hospitalized for their injuries, petitioner must be held entitled to such moral damages. Considering the extent of pain and anxiety which petitioner must have suffered as a result of her physical injuries including the permanent scar on her forehead, we believe that the amount of P30,000.00 would be a reasonable award. Petitioner's claim for P1,000.00 as atttorney's fees is in fact even more modest. WHEREFORE, the Decision of the Court of Appeals dated 24 October 1980, as well as the decision of the then Court of First Instance of La Union dated 4 December 1975 are hereby REVERSED and SET ASIDE.Respondent is hereby ORDERED to pay petitioner Reynalda Gatchalian the following sums: 1) P15,000.00 as actual or compensatory damages to cover the cost of plastic surgery for the removal of the scar on petitioner's forehead; 2) P30,000.00 as moral damages; and 3) P1,000.00 as attorney's fees, the aggregate amount to bear interest at the legal rate of 6% per annum counting from the promulgation of this decision until full payment thereof. Costs against private respondent. SO ORDERED. 18. RAAGAS vs TRAYA FACTS: - spouses Raagas filed a complaint with the CFI Leyteagainst spouses Traya and Bienvenido Canciller.- Complaint alleges that on or about April 9, 1958, whileCanciller was "recklessly" driving a truck owned by the Traya spouses, the vehicle ran over the Raagas' three-year old son Regino, causing his instantaneous death. Rulings of the Trial Court and Court of Appeals - On June 24 it rendered a judgment on the pleadings,condemning the defendants, jointly and severally, topay damages, attorneys fees and costs of suit. -The Court of Appeals certified thecase to SC because the issues raised are purely of law ISSUES BEFORE THE SUPREME COURT : Whether or not the court a quo acted correctly when it rendered judgment on the pleadings RULING OF THE SUPREME COURT: The plaintiffs' claim for actual, moral, nominal and corrective damages, was controverted by the avermentin the answer to the effect that the defendants "haveno knowledge or information sufficient to form a belief as to the truth of the allegations" as to such damages,"the truth of the matter being that the death of ReginoRaagas was occasioned by an unforeseen event and/orby the fault of the small boy Regino Raagas or hisparents." Such averment has the effect of tendering avalid issue.In a long line of cases, SC has consistently held thateven if the allegations regarding the amount of damages in the complaint are not specifically denied in the answer, such damages are not deemedadmitted.in no uncertain terms that actual

damages must beproved, and that a court cannot rely on "speculation,conjecture or guesswork" as to the fact and amountof damages, but must depend on actual proof thatdamages had been suffered and on evidence of theactual amount.although an allegation is not necessary in order that moral damages may be awarded, 19. FUENTES VS COURT OF APPEALS FACTS: At four o clock in the morning of 24 June 1989 Julieto Malaspina together with Godofredo Llames, Honorio Osok and Alberto Toling, was at a benefit dance at Dump Site, Tudela, Trento, Agusan del Sur. Petitioner called Malaspina and placed his right arm on the shoulder of the latter saying, Before, I saw you with a long hair but now you have a short hair.[2] Suddenly petitioner stabbed Malaspina in the abdomen with a hunting knife. Malaspina fell to the ground and his companions rushed to his side. Petitioner fled. Before the victim succumbed to the gaping wound on his abdomen he muttered that Alejandro Fuentes, Jr., stabbed him. Rulings of the Trial Court and Court of Appeals - The Regional Trial Court of Prosperidad, Agusan del Sur, found petitioner guilty of murder qualified by treachery and imposed on him an indeterminate prison term of ten (10) years and one (1) day of prision mayor as minimum to seventeen (17) years and four (4) months of reclusion temporal as maximum, to indemnify the heirs of the victim Julieto Malaspina the amount of P50,000.00 and to pay P8,300.00 as actual damages plus costs. - Court of Appeals affirmed ISSUES BEFORE THE SUPREME COURT 1. Whether or not the appellate court erred when it held that petitioner was positively and categorically identified asthe killer of Malaspina, in affirming the judgnment of conviction 2. Whether or not the Court of Appeals erred in holding petitioner liable for damages to the heirs of the victim RULING OF THE SUPREME COURT: One of the recognized exceptions to the hearsay rule is that pertaining to declarations made against interest. Sec. 38 of Rule 130 of the Rules of Court provides that (t)he declaration made by a person deceased, or unable to testify, against the interest of the declarant, if the fact asserted in the declaration was at the time it was made so far contrary to declarants own interest, that a reasonable man in his position would not have made the declaration unless he believed it to be true, may be received in evidence against himself or his successors in interest and against third persons. The admissibility in evidence of such declaration is grounded on necessity and trustworthiness.There are three (3) essential requisites for the admissibility of a declaration against interest: (a) the declarant must not be available to testify; (b) the declaration must concern a fact cognizable by the declarant; and (c) the circumstances must render it improbable that a motive to falsify existed.In the instant case, we find that the declaration particularly against penal interest attributed to Zoilo Fuentes Jr. is not admissible in evidence as an exception to the hearsay rule. We are not unaware of People Toledo,[12] a 1928 case, where Justice Malcolm writing for the Court endeavored to reexamine the declaration of third parties made contrary to their penal interest. In that case, the protagonists Holgado and Morales engaged in a bob duel. Morales was killed almost instantly. Holgado who was seriously wounded gave a sworn

statement (Exh. 1) before the municipal president declaring that when he and Morales fought there was nobody else present. One (1) month later Holgado died from his wounds. While the Court was agreed that Toledo, who reportedly intervened in the fight and dealt the mortal blow, should be exonerated on reasonable doubt, the members did not reach an accord on the admissibility of Exh. 1. One group would totally disregard Exh. 1 since there was ample testimonial evidence to support an acquittal. The second group considered Exh. 1 as part of the res gestae as it was made on the same morning when the fight occurred. A third group, to which Justice Malcolm belonged, opined that the court below erred in not admitting Exh. 1 as the statement of a fact against penal interest. For all its attempt to demonstrate the arbitrariness behind the rejection in certain cases of declarations against penal interest, the Toledo case cannot be applied in the instant case which is remarkably different. Consider this factual scenario: the alleged declarant Zoilo Fuentes Jr., a cousin of accused-appellant, verbally admitted to the latter, and later to their common uncle Felicisimo Fuentes, that he (Zoilo) killed the victim because of a grudge, after which he disappeared. One striking feature that militates against the acceptance of such a statement is its patent untrustworthiness. Zoilo who is related to accused-appellant had every motive to prevaricate. The same can be said of accused-appellant and his uncle Felicisimo. Secondly, we need not resort to legal rhetorics to find that the admission of such a statement may likewise be, according to Wigmore, shocking to the sense of justice. Let us assume that the trial court did admit the statement of Zoilo and on that basis acquitted accused-appellant. Let us assume further that Zoilo was subsequently captured and upon being confronted with his admission of guilt readily repudiated the same. There is nothing, absolutely nothing, that can bind Zoilo legally to that statement.But more importantly, the far weightier reason why the admission against penal interest cannot be accepted in the instant case is that the declarant is not unable to testify. There is no showing that Zoilo is either dead, mentally incapacitated or physically incompetent which Sec. 38 obviously contemplates. His mere absence from the jurisdiction does not make him ipso facto unavailable under this rule.[14] For it is incumbent upon the defense to produce each and every piece of evidence that can break the prosecution and assure the acquittal of the accused. Other than the gratuitous statements of accused-appellant and his uncle to the effect that Zoilo admitted having killed Malaspina, the records show that the defense did not exert any serious effort to produce Zoilo as a witness. Lest we be misunderstood, the Court is always for the admission of evidence that would let an innocent declaration of guilt by the real culprit. But this can be open to abuse, as when the extrajudicial statement is not even authenticated thus increasing the probability of its fabrication; it is made to persons who have every reason to lie and falsify; and it is not altogether clear that the declarant himself is unable to testify. Thus, for this case at least, exclusion is the prudent recourse as explained in Toledo -The purpose of all evidence is to get at the truth. The reason for the hearsay rule is that the extrajudicial and unsworn statement of another is not the best method of serving this purpose. In other words, the great possibility of the fabrication of falsehoods, and the inability to prove their untruth, requires that the doors be closed to such evidence. The Court of Appeals as well as the trial court correctly determined the crime to be murder qualified by treachery. The suddenness of the attack, without any provocation from the unsuspecting victim, made the stabbing of Malaspina treacherous. However, the court a quo erred in imposing an indeterminate prison term of ten (10) years and one (1) day of prision mayor as minimum to seventeen (17) years and four (4) months of reclusion temporal as maximum. Murder under Art. 248 of The Revised Penal Code is punishable by reclusion temporal in its maximum period to death. Since aside from

treachery qualifying the crime to murder there is no other modifying circumstance proved, the medium period of the penalty, i.e. reclusion perpetua, should have been imposed on petitioner. Petitioner maintains that assuming that he committed the crime it is error to hold him answerable for P8,300.00 as actual damages on the basis of the mere testimony of the victims sister, Angelina Serrano, without any tangible document to support such claim. This is a valid point. In crimes and quasi-delicts, the defendant is liable for all damages which are the natural and probable consequences of the act or omission complained of. To seek recovery for actual damages it is essential that the injured party proves the actual amount of loss with reasonable degree of certainty premised upon competent proof and on the best evidence available. Courts cannot simply rely on speculation, conjecture or guesswork in determining the fact and amount of damages. The award by the court a quo of P8,300.00 as actual damages is not supported by the evidence on record. We have only the testimony of the victims elder sister stating that she incurred expenses of P8,300.00 in connection with the death of Malaspina.However, no proof of the actual damages was ever presented in court. Of the expenses alleged to have been incurred, the Court can only give credence to those supported by receipts and which appear to have been genuinely expended in connection with the death of the victim. Since the actual amount was not substantiated, the same cannot be granted. WHEREFORE, the judgment appealed from finding petitioner ALEJANDRO FUENTES JR. guilty of MURDER and directing him to indemnify the heirs of Julieto Malaspina in the amount of P50,000.00 plus costs is AFFIRMED with the modification that the penalty imposed should be as it is corrected to reclusion perpetua, and the award of actual damages is deleted. SO ORDERED. 20. SUMMA INSURANCE CORPORATION vs. COURT OF APPEALS FACTS: On November 22, 1981, the S/S Galleon Sapphire, a vessel owned by the National Galleon Shipping Corporation (NGSC), arrived at Pier 3, South Harbor, Manila, carrying a shipment consigned to the order of Caterpillar Far East Ltd. with Semirara Coal Corporation (Semirara) as notify party. The shipment, including a bundle of PC 8 U blades, was covered by marine insurance under Certificate No. 82/012-FEZ issued by petitioner and Bill of Lading No. SF/MLA 1014. The shipment was discharged from the vessel to the custody of private respondent, formerly known as E. Razon, Inc., the exclusive arrastre operator at the South Harbor. Accordingly, three good-order cargo receipts were issued by NGSC, duly signed by the ships checker and a representative of private respondent.On February 24, 1982, the forwarder, Sterling International Brokerage Corporation, withdrew the shipment from the pier and loaded it on the barge Semirara 8104. The barge arrived at its port of destination, Semirara Island, on March 9, 1982. When Semirara inspected the shipment at its warehouse, it discovered that the bundle of PC8U blades was missing.On March 15, 1982, private respondent issued a shortlanded certificate stating that the bundle of PC8U blades was already missing when it received the shipment from the NGSC vessel. Semirara then filed with petitioner, private respondent and NGSC its claim for P280,969.68, the alleged value of the lost bundle.On September 29, 1982, petitioner paid Semirara the invoice value of the lost shipment. Semirara thereafter executed a release of claim and subrogation receipt.

Consequently, petitioner filed its claims with NGSC and private respondent but it was unsuccessful. Petitioner then filed a complaint with the Regional Trial Court Rulings of the Trial Court and Court of Appeals - On August 2, 1984, the trial court rendered a decision absolving NGSC from any liability but finding private respondent liable to petitioner. - On appeal, the Court of Appeals modified the decision of the trial court and reduced private respondents liability to P3,500.00 as follows1[3]: WHEREFORE, the judgment appealed from is MODIFIED in that defendant Metro Port Service, Inc., is ordered to pay plaintiff Summa Insurance Corporation: (1) the sum of P3,500.00, with legal interest from November 22, 1982, until fully paid; and (2) the sum of P7,000.00, as and for attorneys fees. Costs against defendant Metro Port Service, Inc. ISSUES BEFORE THE SUPREME COURT (1) Is the private respondent legally liable for the loss of the shipment in question? (2) If so, what is the extent of its liability? RULING OF THE SUPREME COURT The First Issue: Liability for Loss of Shipment Petitioner was subrogated to the rights of the consignee. The relationship therefore between the consignee and the arrastre operator must be examined. This relationship is much akin to that existing between the consignee or owner of shipped goods and the common carrier, or that between a depositor and a warehouseman. In the performance of its obligations, an arrastre operator should observe the same degree of diligence as that required of a common carrier and a warehouseman as enunciated under Article 1733 of the Civil Code and Section 3(b) of the Warehouse Receipts Law, respectively. Being the custodian of the goods discharged from a vessel, an arrastre operators duty is to take good care of the goods and to turn them over to the party entitled to their possession. In this case, it has been established that the shipment was lost while in the custody of private respondent. We find private respondent liable for the loss. This is an issue of fact determined by the trial court and respondent Court, which is not reviewable in a petition under Rule 45 of the Rules of Court. The Second Issue: Extent of Liability In the performance of its job, an arrastre operator is bound by the management contract it had executed with the Bureau of Customs. However, a management contract, which is a sort of a stipulation pour autrui within the meaning of Article 1311 of the Civil Code, is also binding on a consignee because it is incorporated in the gate pass and delivery receipt which must be presented by the consignee before delivery can be effected to it. The insurer, as successor-in-interest of the consignee, is likewise bound by the management contract. Indeed, upon taking delivery of the cargo, a consignee (and necessarily its successor-in- interest) tacitly accepts the provisions of the management contract, including those which are intended to limit the liability of one of the contracting parties, the arrastre operator.

However, a consignee who does not avail of the services of the arrastre operator is not bound by the management contract. Such an exception to the rule does not obtain here as the consignee did in fact accept delivery of the cargo from the arrastre operator. Section 1, Article VI of the Management Contract between private respondent and the Bureau of Customs1[9] provides: 1. Responsibility and Liability for Losses and Damages - The CONTRACTOR shall, at its own expense handle all merchandise in the piers and other designated places and at its own expense perform all work undertaken by it hereunder diligently and in a skillful workmanlike and efficient manner; that the CONTRACTOR shall be solely responsible as an independent CONTRACTOR, and hereby agrees to accept liability and to promptly pay to the steamship company, consignee, consignor or other interested party or parties for the loss, damage, or non-delivery of cargoes to the extent of the actual invoice value of each package which in no case shall be more than Three Thousand Five Hundred Pesos (P3,500.00) for each package unless the value of the importation is otherwise specified or manifested or communicated in writing together with the invoice value and supported by a certified packing list to the CONTRACTOR by the interested party or parties before the discharge of the goods, as well as all damage that may be suffered on account of loss, damage, or destruction of any merchandise while in custody or under the control of the CONTRACTOR in any pier, shed, warehouse, facility or other designated place under the supervision of the BUREAU, x x x Interpreting a similar provision in the management contract between private respondents predecessor, E. Razon, Inc. and the Bureau of Customs, the Court said in E. Razon Inc. vs. Court of Appeals Indeed, the provision in the management contract regarding the declaration of the actual invoice value before the arrival of the goods must be understood to mean a declaration before the arrival of the goods in the custody of the arrastre operator, whether it be done long before the landing of the shipment at port, or immediately before turn-over thereof to the arrastre operators custody. What is essential is knowledge beforehand of the extent of the risk to be undertaken by the arrastre operator, as determined by the value of the property committed to its care that it may define its responsibility for loss or damage to such cargo and to ascertain compensation commensurate to such risk assumed. In the same case, the Court added that the advance notice of the actual invoice of the goods entrusted to the arrastre operator is for the purpose of determining its liability, that it may obtain compensation commensurable to the risk it assumes, (and) not for the purpose of determining the degree of care or diligence it must exercise as a depository or warehouseman since the arrastre operator should not discriminate between cargoes of substantial and small values, nor exercise care and caution only for the handling of goods announced to it beforehand to be of sizeable value, for that would be spurning the public service nature of its business. On the same provision limiting the arrastre operators liability, the Court held in Northern Motors, Inc. v. Prince Line: Appellant claims that the above quoted provision is null and void, as it limits the liability of appellee for the loss, destruction or damage of any merchandise, to P500.00 per package, contending that to sustain the validity of the limitation would be to

encourage acts of conversion and unjust enrichment on the part of the arrastre operator. Appellant, however, overlooks the fact that the limitation of appellees liability under said provision, is not absolute or unqualified, for if the value of the merchandise is specified or manifested by the consignee, and the corresponding arrastre charges are paid on the basis of the declared value, the limitation does not apply. Consequently, the questioned provision is neither unfair nor abitrary, as contended, because the consignee has it in his hands to hold, if he so wishes, the arrastre operator responsible for the full value of his merchandise by merely specifying it in any of the various documents required of him, in clearing the merchandise from the customs. For then, the appellee arrastre operator, by reasons of the payment to it of a commensurate charge based on the higher declared value of the merchandise, could and should take extraordinary care of the special or valuable cargo. In this manner, there would be mutuality. What would, indeed, be unfair and arbitrary is to hold the arrastre operator liable for the full value of the merchandise after the consignee has paid the arrastre charges only (on) a basis much lower than the true value of the goods. In this case, no evidence was offered by petitioner proving the amount of arrastre fees paid to private respondent so as to put the latter on notice of the value of the cargo. While petitioner alleged that prior to the loss of the package, its value had been relayed to private respondent through the documents the latter had processed, petitioner does not categorically state that among the submitted documents were the pro forma invoice value and the certified packing list. Neither does petitioner pretend that these two documents were prerequisites to the issuance of a permit to deliver or were attachments thereto. Even the permit to deliver, upon which petitioner anchors its arguments, may not be considered by the Court because it was not identified and formally offered in evidence. In civil cases, the burden of proof is on the party who would be defeated if no evidence is given on either side. Said party must establish his case by a preponderance of evidence, which means that the evidence as a whole adduced by one side is superior to that of the other. Petitioner having asserted the affirmative of the issue in this case, it should have presented evidence required to obtain a favorable judgment. On the other hand, on top of its denial that it had received the invoice value and the packing list before the discharge of the shipment, private respondent was able to prove that it was apprised of the value of the cargo only after its discharge from the vessel, ironically through petitioners claim for the lost package to which were attached the invoice and packing list. All told, petitioner failed to convince the Court that the requirement of the management contract had been complied with to entitle it to recover the actual invoice value of the lost shipment. Anent the attorneys fees, we find the award to be proper considering that the acts and omissions of private respondent have compelled petitioner to litigate or incur expenses to protect its rights. However, as to the amount of the award, we find no reason to reexamine the appellate courts determination thereon in view of the amount of the principal obligation. Otherwise, we would be disregarding the doctrine that discretion, when well exercised, should not be disturbed. WHEREFORE, the petition for review on certiorari is DENIED and the decision of the Court of Appeals is AFFIRMED. Costs against petitioner. SO ORDERED.

21. TALISAY SILAY V ASSOCIACION FACTS: On 15 February 1966, Talisay-Silay Milling Co., Inc.("TSMC") and TalisaySilay Industrial CooperativeAssociation, Inc. ("TSICA") instituted an action fordamages against defendants Asociacion de Agricultoresde Talisay-Silay, Inc. ("AATSI"), et. al.- On 4 March 1972 Rulings of the Trial Court and Court of Appeals - the Court of First Instance of Rizal rendered its decision condemning the defendants jointly and severally to pay plaintiff TalisaySilayIndustrial Cooperative Association the amount of P6,609,714.32 and to plaintiff Talisay-Silay Milling Co.,Inc. the sum of P8,802,612.89 with legal rate of interestfrom the filing of the complaint until fully paid. - The Court of Appeal rendered a decision affirmingwith modification the decision of the court a quo byreducing the amount of damages due plaintiffs-appellees TSMC and TSICA from approximately P15.4million to only P1 million. ISSUES BEFORE THE SUPREME COURT: WON the reduction of damages was proper RULING OF THE SUPREME COURT: In reducing the amount of damages awarded by thecourt a quo to petitioners TSMC and TSICA from roughlyP15.4 million to only P1 million, the Court of Appeals,citing Malayan Insurance Co.. Inc. v. Manila Port Servicereasoned that the reduction was dictated by the failureor TSMC and TSICA to comply with Section 5, Rule 10 of the Rule of Court, i.e., TSMC and TSICA's failure toamend their complaint to conform to the evidencepresented during trial which showed that TSMC and TSICA suffered damages amounting to more than P1million by virtue of the illegal transfer of export sugarquota from TSMC to FFMCI. We are unable to agreewith the Court of Appeals on this point.- A court may rule and render judgment on the basis of the evidence before it even though the relevantpleading had not been previously amended, so long asno surprise or prejudice is thereby caused to theadverse party. Put a little differently, so long as the basic requirements of fair play had been met, as wherelitigants were given full opportunity to support theirrespective contentions and to object to or refute eachother's evidence, the court may validly treat thepleadings as if they had been amended to conform tothe evidence and proceed to adjudicate on the basis of all the evidence before it.- The record of the instant case shows that TSMC and TSICA formally offered as evidence documents whichset out in detail the estimated unrealized incomesuffered by TSMC and TSICA during four (4) consecutivecrop years, i.e., (CYs) 1964-1965, 1965-1966, 1966-1967 and 1967-1968, the failure of realization beingattributed to the transfer by AATSI, et al. of their sugarquota to FFMCI. These documents, along with thecorroborative testimony of one Ricardo Yapjoco, aCertified Public Accountant and Internal Auditor of TSMC, were the basis of the trial court's award of P8,802,612.89 to TSMC and of P6,609,714.32 to TSICA.It is noteworthy that the joint record on appeal revealsthat AATSI, et al. objected to the Offer of Evidence of TSMC and TSICA not on the basis that such evidencefell outside the scope of the issues as defined in thepleadings as they then stood, but rather on the basisthat such evidence was "incompetent" and speculativein character, i.e., as "being mere estimates prepared bywitness Yapjoco" and constituting merely his "opinion."It should also be noted that the testimony of Mr. Yapjoco was subjected to extensive cross-examinationby counsel for AATSI, et al. The trial court did notexpressly overrule

AATSI, et al.'s objection to the Offerof Evidence of TSMC and TSICA; it is nevertheless clearthat the trial court did not accord much weight to thatobjection.- The point that may be here underscored is that AATSI,et al., having been given the opportunity and having infact been able to register their objections to theevidence formally offered by TSMC and TSICA were notin any way prejudiced by the discrepancy between theallegations in the complaint filed and the propositionswhich the evidence submitted by TSMC and TSICAtended to establish. We conclude that the Court of Appeals erred when it failed to treat the amended andsupplemental complaint of TSMC and TSICA as if suchcomplaint had in fact been amended to conform to theevidence, and when it limited the damages due to TSMC and TSICA to the amount prayed for in theiroriginal complaint. A review of the damages actually awarded to TSMCand TSICA by the trial court on the one hand and theCourt of Appeals on the other, reveals the need for amore careful and thorough examination of the matter. As earlier noted, the Court of Appeals' award of P1million based simply on the amount set out in theoriginal complaint of TSMC and TSICA must be discarded. Upon the other hand, the award by the trialcourt of damages to TSMC and TSICA was arrived atmerely by totalling up the unrealized income sustainedby TSMC and TSICA over the relevant four (4) crop yearperiod:- "Because on the refusal of the defendants planters toreturn to TSMC, plaintiff TSMC [and TSICA] suffered anunrealized profit; of P1,934,847.73 in 1964-65 while for1965-66 crop year, in the amount of P3,033,301.16, for1966-67 in the amount of P4,656,643.20, and for 19671968, in the amount of P4,805,472.12.- The plaintiff TSMC failed to realize P3,015,077.77 andplaintiff TASICA failed to realize P6,609,714.32 or atotal of P9,624,792.09. In 1967-68 after the lease to TASICA has expired, TSMC failed to realize a net incomeof P4,805,514.12."- We believe, in other words, that the figures andcomputations utilized by the trial court in its award ondamages need further examination and refinement. Forinstance, the award of damages rendered by the trialcourt took into account the loss of income suffered by TSMC and TSICA when AATSI, et al. transferred two (2)of sugar quota: the "domestic quota" and the "exportquota." The consent of the sugar central was notrequired for the validity of a transfer of the domesticsugar quota. Accordingly, the transfer by AATSI, et al.of their domestic sugar quota must be regarded asvalid and the loss of income attributable to the transferof such domestic sugar quota from TSMC and TSICA toFFMCI must be deducted from the aggregate amount of damages due to TSMC and TSICA. A second example:Exhibits "P-1" and "W-1" embody figures relating to"molasses." Molasses are a by-product of milled sugar,whether that sugar be covered by a "domestic quota"or by an "export quota." The amount of income losttraceable to molasses that would have been extractedfrom domestic sugar must be deducted from theaggregate damages due to TSMC and TSICA. Disposition Decision and Resolution of the Court of Appeals MODIFIED insofar as the award of actualdamages due Talisay-Silay Milling Co., Inc. and Talisay-Silay Industrial Cooperative Association, Inc. areconcerned. Subject to the rulings referred to herein,this case is REMANDED to the Court of Appeals for thedetermination, with all deliberate dispatch, of theamount of damages due Talisay-Silay Milling Co., Inc.and Talisay-Silay Industrial Cooperative Association,Inc. Cases 13-21 HIRANG, LEOMARIE F.

22. DAYWALT vs. LA CORPORACION DE LOS PADRES AGUSTINOS RECOLETOS FACTS OF THE CASE: Teodorica Endencia obligated herself to sell a parcel of land to the plaintiff. It was agreed that the final deed of sale will be executed when the land was registered in Endencias name. Subsequently, the Torrens Title for the land was issued in her favor but in the course of the proceedings for registration it was found that the land involved in the sale contained a greater area than what Endencia originally thought and she became reluctant to consummate the sale of the land to the plaintiff. This reluctance was due to the advice of the defendant which exercised a great moral influence over her. However, in advising Endencia that she was not bound by her contract with the plaintiff, the defendant was not actuated with improper motives but did so in good faith believing that, under the circumstances, Endencia was not really bound by her contract with the plaintiff. In view of Endencias refusal to make the conveyance, the plaintiff instituted a complaint for specific performance against her and, upon appeal, the Supreme Court held that she was bound by the contract and she was ordered to make the conveyance of the land in question to the plaintiff. The plaintiff then instituted an action against the defendant to recover the following damages: (1) The amount of Pesos 24,000.00 for the use and occupation of the land in question by reason of the pasturing of cattle therein during the period that the land was not conveyed by Endencia to the plaintiff; (2) The amount of Pesos 500,000.00 for plaintiffs failure to sell the land in question to a sugar growing and milling enterprise. The lower court held that the defendant was liable to the plaintiff for the use and occupation of the land in question and condemned the defendant to pay the plaintiff Pesos 2,497.00 as damages. The Supreme Court affirmed this adjudication of the lower court. With respect to the claim of Pesos 500,000.00 damages, the Supreme Court. ISSUE: Whether the damages which the plaintiff seeks to recover under this head are too remote and speculative to be the subject of recovery. RULING: The discussion contained in the opinion of the court in that case leads to the conclusion that the damages recoverable in case of the breach of a contract are two sorts, namely, (1) the ordinary, natural, and in a sense necessary damage; and (2) special damages.chanroblesvirtualawlibrary chanrobles virtual lOrdinary damages is found in all breaches of contract where there are no special circumstances to distinguish the case specially from other contracts. The consideration paid for an unperformed promise is an instance of this sort of damage. In all such cases the damages recoverable are such as naturally and generally would result from such a breach, "according to the usual course of things." In case involving only ordinary damage no discussion is ever indulged as to whether that damage was contemplated or not. This is conclusively presumed from the immediateness and inevitableness of the damage, and the recovery of such damage follows as a necessary legal consequence of the breach. Ordinary damage is assumed as a matter of law to be within the contemplation of the parties.chanroblesvirtualawlibrary Special damage, on the other hand, is such as follows less directly from the breach than ordinary damage. It is only found in case where some external condition, apart from the actual terms to the contract exists or intervenes, as it were, to give a turn to affairs and to increase damage in a way that the promisor, without actual notice of that external condition, could not reasonably be expected to foresee. Concerning this sort of damage, Hadley vs. Baxendale (1854) [supra] lays down

the definite and just rule that before such damage can be recovered the plaintiff must show that the particular condition which made the damage a possible and likely consequence of the breach was known to the defendant at the time the contract was made.chanroblesvirtualawlibrary chanrobles virtual law library The statement that special damages may be recovered where the likelihood of such damages flowing from the breach of the contract is contemplated and foreseen by the parties needs to be supplemented by a proposition which, though not ennciated in Hadley vs. Baxendale, is yet clearly to be drawn from subsequent cases. This is that where the damage which a plaintiff seeks to recover as special damage is so far speculative as to be in contemplation of law remote, notification of the special conditions which make that damage possible cannot render the defendant liable therefor. To bring damages which would ordinarily be treated as remote within the category of recoverable special damages, it is necessary that the condition should be made the subject of contract in such sense as to become an express or implied term of the engagement. Horne vs. Midland R. Co. (L. R., 8 C. P., 131) is a case where the damage which was sought to be recovered as special damage was really remote, and some of the judges rightly places the disallowance of the damage on the ground that to make such damage recoverable, it must so far have been within the contemplation of the parties as to form at least an implied term of the contract. But others proceeded on the idea that the notice given to the defendant was not sufficiently full and definite. The result was the same in either view. The facts in that case were as follows: The plaintiffs, shoe manufacturers at K, were under contract to supply by a certain day shoes to a firm in London for the French government. They delivered the shoes to a carrier in sufficient time for the goods to reach London at the time stipulated in the contract and informed the railroad agent that the shoes would be thrown back upon their hands if they did not reach the destination in time. The defendants negligently failed to forward the good in due season. The sale was therefore lost, and the market having fallen, the plaintiffs had to sell at a loss. In the preceding discussion we have considered the plaintiff's right chiefly against Teodorica Endencia; and what has been said suffices in our opinion to demonstrate that the damages laid under the second cause of action in the complaint could not be recovered from her, first, because the damages laid under the second cause of action in the complaint could not be recovered from her, first, because the damages in question are special damages which were not within contemplation of the parties when the contract was made, and secondly, because said damages are too remote to be the subject of recovery. This conclusion is also necessarily fatal to the right of the plaintiff to recover such damages from the defendant corporation, for, as already suggested, by advising Teodorica not to perform the contract, said corporation could in no event render itself more extensively liable than the principle in the contract. Our conclusion is that the judgment of the trial court should be affirmed, and it is so ordered, with costs against the appellant.c 23. CHING vs. COURT OF APPEALS FACTS OF THE CASE: On May 1960, spouses Nofuente and Lumandan was issued a TCT covering a parcel of land at Rizal which was reconveyed to the Nofuentes. On September 1961 by virtue of sale the ownership was transferred to Ching Leng and the original TCT cancelled.

On October 1965 Ching Leng died so his Son Alfredo Ching became the administrator of his estate. 13 years after Ching Lengs death, a suit against him was commenced by Pedro Asedillo with the RTC of Rizal for reconveyance of abovesaid property and since Ching is nowhere to be found and after due publication, the court allowed presentation of evidence ex-parte. On june 15 1979, a judgement by default against Ching was rendered by the RTC. Upon knowledge of Alfredo Ching, he filed a motion before the trial court but was denied. He then filed a petition for certiorari but same was dismissed. ISSUE: Whether or not the Court of Appeals has decided a question of substance in a way probably not in accord with law or with the applicable decisions of the Supreme Court. RULING: The petition is impressed with merit. An action to redeem, or to recover title to or possession of, real property is not an action in rem or an action against the whole world, like a land registration proceeding or the probate of a will; it is an action in personam, so much so that a judgment therein is binding only upon the parties properly impleaded and duly heard or given an opportunity to be heard. Actions in personam and actions in rem differ in that the former are directed against specific persons and seek personal judgments, while the latter are directed against the thing or property or status of a person and seek judgments with respect thereto as against the whole world. An action to recover a parcel of land is a real action but it is an action in personam, for it binds a particular individual only although it concerns the right to a tangible thing (Ang Lam v. Rosillosa,supra).chanroblesvirtualawlibrary chanrobles virtual law library Private respondent's action for reconveyance and cancellation of title being in personam, the judgment in question is null and void for lack of jurisdiction over the person of the deceased defendant Ching Leng. Verily, the action was commenced thirteen (13) years after the latter's death. As ruled by this Court in Dumlao v. Quality Plastic Products, Inc. (70 SCRA 475 [1976]) the decision of the lower court insofar as the deceased is concerned, is void for lack of jurisdiction over his person. He was not, and he could not have been validly served with summons. He had no more civil personality. His juridical personality, that is fitness to be subject of legal relations, was lost through death (Arts. 37 and 42 Civil Code). The same conclusion would still inevitably be reached notwithstanding joinder of Ching Leng's estate as co-defendant. it is a well-settled rule that an estate can sue or be sued through an executor or administrator in his representative capacity (21 Am. Jr. 872). Contrary to private respondent's claims, deceased Ching Leng is a resident of 44 Libertad Street, Pasay City as shown in his death certificate and T. C. T. No. 91137 and there is an on-going intestate proceedings in the same court, Branch III commenced in 1965, and notice of hearing thereof duly published in the same year. Such misleading and misstatement of facts demonstrate lack of candor on the part of private respondent and his counsel, which is censurable. The complaint for cancellation of Ching Leng's Torrens Title must be filed in the original land registration case, RTC, Pasig, Rizal, sitting as a land registration court in accordance

with Section 112 of the Land Registration Act (Act No. 496, as amended) not in CFI Pasay City in connection with, or as a mere incident in Civil Case No. 6888-P (Estanislao v. Honrado, 114 SCRA 748 [1982]). Section 112 of the same law requires "notice to all parties in interest." Since Ching Leng was already in the other world when the summons was published he could not have been notified at all and the trial court never acquired jurisdiction over his person. The ex-parte proceedings for cancellation of title could not have been held (Estanislao v. Honrado, supra). The cited case of Perkins v. Dizon, supra is inapplicable to the case at bar since petitioner Perkins was a non-resident defendant sued in Philippine courts and sought to be excluded from whatever interest she has in 52,874 shares of stocks with Benguet Consolidated Mining Company. The action being a quasi in rem summons by publication satisfied the constitutional requirement of due process. The petition to set aside the judgment for lack of jurisdiction should have been granted and the amended complaint of private respondent based on possession and filed only in 1978 dismissed outrightly. Ching Leng is an innocent purchaser for value as shown by the evidence adduced in his behalf by petitioner herein, tracing back the roots of his title since 1960, from the time the decree of registration was issued. The sole remedy of the landowner whose property has been wrongfully or erroneously registered in another's name-after one year from the date of the decree-is not to set aside the decree, but respecting the decree as incontrovertible and no longer open to review, to bring an ordinary action in the ordinary court of justice for damages if the property has passed unto the hands of an innocent purchaser for value (Sy, Sr. v. Intermediate Appellate Court, G.R. No. 66742; Teoville Development Corporation v. IAC, et al., G.R. No. 75011, June 16, 1988). Failure to take steps to assert any rights over a disputed land for 19 years from the date of registration of title is fatal to the private respondent's cause of action on the ground of laches. Laches is the failure or neglect, for an unreasonable length of time to do that which by exercising due diligence could or should have been done, earlier; it is negligence or omission to assert a right within a reasonable time warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it (Bailon-Casilao v. Court of Appeals, G.R. No. 78178, April 15, 1988; Villamor v. Court of Appeals, G.R. No. 41508, June 27, 1988). The real purpose of the Torrens system is to quiet title to land and to stop forever any question as to its legality. Once a title is registered, the owner may rest secure, without the necessity of waiting in the portals of the court, or sitting on the "mirador su casa," to avoid the possibility of losing his land (National Grains Authority v. IAC, 157 SCRA 388 [1988]). A Torrens title is generally a conclusive evidence of the ownership of the land referred to therein (Section 49, Act 496). A strong presumption exists that Torrens titles are regularly issued and that they are valid. A Torrens title is incontrovertible against any "information possessoria" or title existing prior to the issuance thereof not annotated on the title (Salamat Vda. de Medina v. Cruz, G.R. No. 39272, May 4, 1988).

PREMISES CONSIDERED, (1) the instant petition is hereby GRANTED; (2) the appealed decision of the Court of Appeals is hereby REVERSED and SET ASIDE; (3) the trial court's decision dated June 15, 1979 and the Order dated September 2, 1980 reinstating the same are hereby declared NULL and VOID for lack of jurisdiction and (4) the complaint in Civil Case No. 6888-P is hereby DISMISSED.chan 24. LUZON CONCRETE PRODUCTS, INC., vs. COURT OF APPEALS FACTS OF THE CASE: On June 29, 1966, private respondents Eutiquiano M. Baula and twelve others filed a Complaint for rescission of contract, stating that the corporation would issue shares of stocks to the plaintiffs the value of which would be commensurate to the contribution of the plaintiffs to the corporation and in addition, the corporation would assume the payments and amortizations on the obligation of the plaintiffs to the DEVELOPMENT BANK OF THE PHILIPPINES in the amount of P165,000.00 in turn of their contributions (including properties) to the corporation, before the Court of First Instance of Pampanga against Luzon Concrete Products, Inc., and its incorporators, all petitioners herein. Petitioners-defendants moved to dismiss for lack of cause of action and the non existence of any pre-incorporation agreement, much less a commitment to issue corporation shares in favor of the Heirs but was denied by the trial court. The trial court ruled in favor of the plaintiffs rescinding the contract and sentencing the defendants jointly and severally to pay reasonable compensation or rent for the use of the said properties, to pay the DBP, return the said properties, attorneys fees, and legal rates of interest. After the petitioners motion for reconsideration before the trial was denied twice, they filed a petition before the CA but was also denied. So they filed a petition before this court. ISSUE: Whether or not the amounts granted by the trial court were justifiable. RULING: The fairness of the award made by the Trial Court in favor of the Heirs also calls for appellate determination, for, with the "reasonable compensation" of P880,000.00 ordered paid for the period from August, 1964 to November, 1971, plus the monthly rentals of P10,000.00 required to be paid thereafter until physical possession is delivered to the Heirs, the total collectible amount would reach the staggering amount of P2,450,000.00 as of December 1984 (245 months from August, 1964, excluding interest, for machineries originally worth P165,000.00 and which must have outlived their lifetime). The judgment also orders the return of the machineries to the Heirs "in the same good operating condition" that they were at the time petitioners-defendants took possession thereof, or approximately 20 years ago, which is an impossible condition. All told, in addition to procedural considerations, the broader interests of substantial justice would be better subserved if the appeal were allowed.

ACCORDINGLY, the Petition is granted and this case is hereby ordered remanded to the now Intermediate Appellate Court for determination of petitioners-defendants' appeal on the merits. 25. KAIRUZ vs. PACIO FACTS OF THE CASE: On or before April of 1950 the plaintiffs spouse had a timber concession granted by the Government which was managed by the wife, Elena Pacio. During the first days of April, 1950, plaintiff Elena S. Pacio and defendant Miguel Kairuz entered into verbal contract by virtue of which Kairuz delivered to Pacio a G.M.C. motor engine and some spare parts to be used by Pacio in hauling logs from the timber concession on condition that she would sell the logs thus cut and hauled to Kairuz at the rate of P12.50 per cubic meter. When the motor was delivered it was not in good condition but was then repaired at the cost of Kairuz. Pacio then commenced with her business and started cutting logs and from April 22, 1950 to May 21, 1951 sold them to Kairuz. The total amount that Elena S. Pacio was indebted to petitioner Kairuz, corresponding to the value of the motor including the repairs formerly paid by Kairuz was paid by Elena on May 21,1951 for a total of P1,552.95. On June 28, 1951 Kairuz took possession of said motor upon learning that Elena S. Pacio was selling her logs or posts to another person thus suspending the operation of their timber concession for 161 days, and were able to resume their logging operations only on November 5, 1951, when they acquired a new motor. So the case for recovery and for damages was filed. The trial court and the CA rendered judgment in favor of Elena Pacio. ISSUES: Whether or not additional actual and compensatory damage, are highly speculative, contingent and arbitrary. RULING: The Court of Appeals in justifying its award of these damages of P7.00 per day indulges in a quite extensive commentary or discussion, citing various provisions of the Civil Code. And petitioner-appellant to counteract and meet that commentary and discussion, also now saw fit to devote many pages of his brief to extensive citations of authorities. After a careful study of the legal issue involved, we find no extensive discussion or commentary necessary, and we agree with counsel for petitionerappellant that the damages at the rate of P7.00 a day from November 5, 1951 until the motor engine was returned or its value of P1,552.95 was paid to plaintiff-respondents, are highly speculative, contingent, arbitrary and unjust. Just to show how speculative and uncertain that amount of P10.00 is, at the hearing before the trial court plaintiff declared that she could have rented the motor engined at the rate of P20.00 a day, and what she suffered as damages for the loss of said engine. The Court of Appeals did not believe her and fixed the said amount at P10.00 a day. On motion for reconsideration, this amount further reduced to P7.00 by the Court of Appeals itself. There is no reliable basis for fixing said amount of the damages. The plaintiffs had no use for said engine even if they had it in their possession because they already had a new one. Neither could they have possibly rented it out to another party because it was used only in a timber concession for hauling logs, and not yet everyone has have their own motor engines for hauling timber from the forest, and probably new ones at that. The petitioner-appellant himself could not have used the motor engine because he was not a timber concessionaire. So, in all probability, he just kept or dumped it in a corner. Furthermore, the motor engine in question is not too valuable a property. It was surplus property which Kairuz had acquired for P150.00 and which he sold to the plaintiff for

P245.00 To put it in good running condition, many spare parts had to be bought and placed in it and the services of a mechanic had to be availed of. So all in all, it came to cost P1,552.95. That was in 1950 and it had been used by plaintiff herself for over a year. Machinery, specially engines, deteriorate fast and their rate of depreciation is quite high. That is the reason why car owners from experience find it more profitable after using a car for two or three years, to trade it in or sell it and buy a new one because the repair and overhauling of an old car, specially and old model, would in the long run cost more than acquiring a new one. That is the reason why assuming that if the plaintiffs had this motor engine in their possession on November 5, 1951, and assuming further that they could have rented it to another party, the amount of the rent would have been hard to determine, much more the period for the lease because running a motor engine everyday, as already stated, could not last forever. Spare parts have to be bought or it may have to be overhauled, and the time will come when the engine itself will be completely useless. That is the reason why damages awarded on this basis are highly speculative, contingent, and arbitrary. And to give an idea of the injustice of the award of damages on said basis, according to counsel for petitioner, as of the writing on his brief on December 20, 1958, the damages would amount to over P18,000.00. And as of the writing of this opinion, at the rate of P7.00 a day from November 5, 1951, the damages would amount to over P24,000.00. The most practical basis for assessing damages would to the payment of legal interest on the value of the engine. It will be remembered that the judgment against defendantpetitioner was to return the motor engine or to pay its value of P1,552.95. This form or basis of damages is widely accepted and employed. When a piece of personal property, say, a jeep, is the subject of estafa or theft, the accused if found guilty, is sentenced to return to property stolen or misappropriated, or to pay its value. Even interest is seldom, if at all, ordered. And when a party defendant is declared liable to pay a certain amount of money which he owes, he sentenced to pay said amount with legal interest from the date that he was supposed to have paid the same, or when the action to collect was brought in court. No speculative damages as to the profit money, its investment, etc., is allowed. In the present case, the petitioner-appellant should and is hereby ordered to pay legal interest from November 5, 1951 on the amount of P1,552.25 until the motor engine is returned or its value of P1,552.25 is paid to respondent-appellee. This is in lieu of the payment of P7.00 a day from November 5, 1951, ordered in the appealed decision. 26. ROGELIO E. RAMOS vs. COURT OF APPEALS FACTS: Erlinda Ramos, 47, was normal except for her experiencing occasional pain due to the presence of stone in her gall bladder. She was advised to undergo an operation for its removal. The results in the examinations she underwent indicate that she was fit for the operation. She and her husband Rogelio met Dr. Hosaka, one of the defendants, who advised that she should undergo cholecystectomy. Dr. Hosaka assured them that he will get a good anaesthesiologist. At 7:30 a.m. on the day of the operation at Delos Santos Medical Center, Herminda Cruz, Erlindas sister-in-law and the dean of the College of Nursing in Capitol Medical Center, was there to provide moral support. Dr. Perfecta Gutierrez was to administer the anaesthesia. Dr. Hosaka arrived only at 12:15 p. m. Herminda saw Dr. Gutierrez intubating the patient, and heard the latter say Ang hirap ma-intubate nito, mali yata ang pagkakapasok. O, lumalaki ang tiyan. Herminda saw bluish discoloration of the nailbeds of the patient. She heard Dr. Hosaka issue an

order for someone to call Dr. Calderon. The doctor arrived and placed the patient in trendelenburg position, wherein the head of the patient is positioned lower than the feet, which indicates a decrease of blood supply in the brain. Herminda knew and told Rogelio that something wrong was happening. Dr. Calderon was able to intubate the patient. Erlinda was taken to the ICU and became comatose. Rogelio filed a civil case for damages. The trial court ruled in his favor, finding Dr. Gutierrez, Dr. Hosaka, and the hospital, guilty of negligence, but the Court of Appeals reversed the decision. ISSUE: Whether a surgeon, an anaesthesiologist, and a hospital, should be made liable for the unfortunate comatose condition of a patient scheduled for cholecystectomy. RULING: Res ipsa loquitur is a Latin phrase which literally means "the thing or the transaction speaks for itself." The phrase "res ipsa loquitur'' is a maxim for the rule that the fact of the occurrence of an injury, taken with the surrounding circumstances, may permit an inference or raise a presumption of negligence, or make out a plaintiff's prima facie case, and present a question of fact for defendant to meet with an explanation. Where the thing which caused the injury complained of is shown to be under the management of the defendant or his servants and the accident is such as in ordinary course of things does not happen if those who have its management or control use proper care, it affords reasonable evidence, in the absence of explanation by the defendant, that the accident arose from or was caused by the defendant's want of care. It is grounded in the superior logic of ordinary human experience and on the basis of such experience or common knowledge, negligence may be deduced from the mere occurrence of the accident itself. However, much has been said thatres ipsa loquitur is not a rule of substantive law and, as such, does not create or constitute an independent or separate ground of liability. Mere invocation and application of the doctrine does not dispense with the requirement of proof of negligence. It is simply a step in the process of such proof, permitting the plaintiff to present along with the proof of the accident, enough of the attending circumstances to invoke the doctrine, creating an inference or presumption of negligence, and to thereby place on the defendant the burden of going forward with the proof. Still, before resort to the doctrine may be allowed, the following requisites must be satisfactorily shown. (1) The accident is of a kind which ordinarily does not occur in the absence of someone's negligence; (2) It is caused by an instrumentality within the exclusive control of the defendant or defendants; and (3) The possibility of contributing conduct which would make the plaintiff responsible is eliminated. Medical malpractice cases do not escape the application of this doctrine. Thus, res ipsa loquitur has been applied when the circumstances attendant upon the harm are themselves of such a character as to justify an inference of negligence as the cause of that harm. Although generally, expert medical testimony is relied upon in malpractice suits to prove that a physician has done a negligent act or that he has deviated from the standard medical procedure, when the doctrine of res ipsa loquitur is availed by the plaintiff, the need for expert medical testimony is dispensed with because the injury itself provides the proof of negligence. Hence, in cases where the res ipsa loquitur is applicable, the court is permitted to find a physician negligent upon proper proof of injury to the patient, without the aid of expert testimony, where the court from its fund

of common knowledge can determine the proper standard of care. When the doctrine is appropriate, all that the patient must do is prove a nexus between the particular act or omission complained of and the injury sustained while under the custody and management of the defendant without need to produce expert medical testimony to establish the standard of care. Resort to res ipsa loquitur is allowed because there is no other way, under usual and ordinary conditions, by which the patient can obtain redress for injury suffered by him. Res ipsa loquitur is not a rigid or ordinary doctrine to be perfunctorily used but a rule to be cautiously applied, depending upon the circumstances of each case. A distinction must be made between the failure to secure results, and the occurrence of something more unusual and not ordinarily found if the service or treatment rendered followed the usual procedure of those skilled in that particular practice. The real question, therefore, is whether or not in the process of the operation any extraordinary incident or unusual event outside of the routine performance occurred which is beyond the regular scope of customary professional activity in such operations, which, if unexplained would themselves reasonably speak to the average man as the negligent cause or causes of the untoward consequence. We find the doctrine of res ipsa loquitur appropriate in the case at bar. Erlinda submitted herself for cholecystectomy and expected a routine general surgery to be performed on her gall bladder. On that fateful day she delivered her person over to the care, custody and control of private respondents who exercised complete and exclusive control over her. At the time of submission, Erlinda was neurologically sound and, except for a few minor discomforts, was likewise physically fit in mind and body. However, during the administration of anesthesia and prior to the performance of cholecystectomy she suffered irreparable damage to her brain. Thus, without undergoing surgery, she went out of the operating room already decerebrate and totally incapacitated. Obviously, brain damage, which Erlinda sustained, is an injury which does not normally occur in the process of a gall bladder operation. In fact, this kind of situation does not in the absence of negligence of someone in the administration of anesthesia and in the use of endotracheal tube. Furthermore, the instruments used in the administration of anesthesia, including the endotracheal tube, were all under the exclusive control of private respondents, who are the physicians-in-charge. Likewise, petitioner Erlinda could not have been guilty of contributory negligence because she was under the influence of anesthetics which rendered her unconscious. Negligence of the Anaesthesiologist The pre-operative evaluation of a patient prior to the administration of anesthesia is universally observed to lessen the possibility of anesthetic accidents. Respondent Dra. Gutierrez' act of seeing her patient for the first time only an hour before the scheduled operative procedure was, therefore, an act of exceptional negligence and professional irresponsibility. Her failure to follow this medical procedure is, therefore, a clear indicia of her negligence. Erlinda's case was elective and this was known to respondent Dra. Gutierrez. Thus, she had all the time to make a thorough evaluation of Erlinda's case prior to the operation and prepare her for anesthesia. However, she never saw the patient at the bedside. She herself admitted that she had seen petitioner only in the operating room, and only on the actual date of the cholecystectomy. She negligently failed to take advantage of this important opportunity. As such, her attempt to exculpate herself must fail.

Opinion of Expert Witness An anesthetic accident caused by a rare drug-induced bronchospasm properly falls within the fields of anesthesia, internal medicine-allergy, and clinical pharmacology. The resulting anoxic encephalopathy belongs to the field of neurology. While admittedly, many bronchospastic-mediated pulmonary diseases are within the expertise of pulmonary medicine, Dr. Jamora's field, the anesthetic drug-induced, allergic mediated bronchospasm alleged in this case is within the disciplines of anesthesiology, allergology and pharmacology. On the basis of the foregoing transcript, in which the pulmonologist himself admitted that he could not testify about the drug with medical authority, it is clear that the appellate court erred in giving weight to Dr. Jamora's testimony as an expert in the administration of Thiopental Sodium. Generally, to qualify as an expert witness, one must have acquired special knowledge of the subject matter about which he or she is to testify, either by the study of recognized authorities on the subject or by practical experience. Clearly, Dr. Jamora does not qualify as an expert witness based on the above standard since he lacks the necessary knowledge, skill, and training in the field of anesthesiology. Oddly, apart from submitting testimony from a specialist in the wrong field, private respondents' intentionally avoided providing testimony by competent and independent experts in the proper areas. Proximate Cause Proximate cause has been defined as that which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces injury, and without which the result would not have occurred. An injury or damage is proximately caused by an act or a failure to act, whenever it appears from the evidence in the case, that the act or omission played a substantial part in bringing about or actually causing the injury or damage; and that the injury or damage was either a direct result or a reasonably probable consequence of the act or omission. Instead of the intended endotracheal intubation what actually took place was an esophageal intubation. During intubation, such distention indicates that air has entered the gastrointestinal tract through the esophagus instead of the lungs through the trachea. Entry into the esophagus would certainly cause some delay in oxygen delivery into the lungs as the tube which carries oxygen is in the wrong place. That abdominal distention had been observed during the first intubation suggests that the length of time utilized in inserting the endotracheal tube (up to the time the tube was withdrawn for the second attempt) was fairly significant. Due to the delay in the delivery of oxygen in her lungs Erlinda showed signs of cyanosis. Responsibility of the Surgeon As the so-called "captain of the ship," it is the surgeon's responsibility to see to it that those under him perform their task in the proper manner. Respondent Dr. Hosaka's negligence can be found in his failure to exercise the proper authority in not determining if his anesthesiologist observed proper anesthesia protocols. In fact, no evidence on record exists to show that respondent Dr. Hosaka verified if respondent Dra. Gutierrez properly intubated the patient. Furthermore, it does not escape us that respondent Dr. Hosaka had scheduled another procedure in a different hospital at the same time as Erlinda's cholecystectomy, and was in fact over three hours late for the latter's operation. Because of this, he had little or no time to confer with his anesthesiologist regarding the anesthesia delivery. This indicates that he was remiss in his professional duties towards his patient. Thus, he shares equal responsibility for the events which resulted in Erlinda's condition.

Responsibility of the Hospital Hospitals hire, fire and exercise real control over their attending and visiting "consultant" staff. While "consultants" are not, technically employees, a point which respondent hospital asserts in denying all responsibility for the patient's condition, the control exercised, the hiring, and the right to terminate consultants all fulfill the important hallmarks of an employer-employee relationship, with the exception of the payment of wages. In assessing whether such a relationship in fact exists, the control test is determining. Accordingly, on the basis of the foregoing, we rule that for the purpose of allocating responsibility in medical negligence cases, an employer-employee relationship in effect exists between hospitals and their attending and visiting physicians. The basis for holding an employer solidarily responsible for the negligence of its employee is found in Article 2180 of the Civil Code which considers a person accountable not only for his own acts but also for those of others based on the former's responsibility under a relationship of patria potestas. Such responsibility ceases when the persons or entity concerned prove that they have observed the diligence of a good father of the family to prevent damage. In the instant case, respondent hospital, apart from a general denial of its responsibility over respondent physicians, failed to adduce evidence showing that it exercised the diligence of a good father of a family in the hiring and supervision of the latter. It failed to adduce evidence with regard to the degree of supervision which it exercised over its physicians. In neglecting to offer such proof, or proof of a similar nature, respondent hospital thereby failed to discharge its burden under the last paragraph of Article 2180. Having failed to do this, respondent hospital is consequently solidarily responsible with its physicians for Erlinda's condition. Damages At current levels, the P8000/monthly amount established by the trial court at the time of its decision would be grossly inadequate to cover the actual costs of home-based care for a comatose individual. The calculated amount was not even arrived at by looking at the actual cost of proper hospice care for the patient. What it reflected were the actual expenses incurred and proved by the petitioners after they were forced to bring home the patient to avoid mounting hospital bills. And yet ideally, a comatose patient should remain in a hospital or be transferred to a hospice specializing in the care of the chronically ill for the purpose of providing a proper milieu adequate to meet minimum standards of care. Given these considerations, the amount of actual damages recoverable in suits arising from negligence should at least reflect the correct minimum cost of proper care, not the cost of the care the family is usually compelled to undertake at home to avoid bankruptcy. Our rules on actual or compensatory damages generally assume that at the time of litigation, the injury suffered as a consequence of an act of negligence has been completed and that the cost can be liquidated. However, these provisions neglect to take into account those situations, as in this case, where the resulting injury might be continuing and possible future complications directly arising from the injury, while certain to occur, are difficult to predict. Temperate damages can and should be awarded on top of actual or compensatory damages in instances where the injury is chronic and continuing. And because of the unique nature of such cases, no incompatibility arises when both actual and temperate damages are provided for. The reason is that these damages cover two distinct phases. As it would not be equitable - and certainly not in the best interests of the administration of justice - for the victim in such cases to constantly come before the courts and invoke their aid in seeking adjustments to the

compensatory damages previously awarded - temperate damages are appropriate. The amount given as temperate damages, though to a certain extent speculative, should take into account the cost of proper care. In the instant case, petitioners were able to provide only home-based nursing care for a comatose patient who has remained in that condition for over a decade. Having premised our award for compensatory damages on the amount provided by petitioners at the onset of litigation, it would be now much more in step with the interests of justice if the value awarded for temperate damages would allow petitioners to provide optimal care for their loved one in a facility which generally specializes in such care. They should not be compelled by dire circumstances to provide substandard care at home without the aid of professionals, for anything less would be grossly inadequate. Under the circumstances, an award of P1,500,000.00 in temperate damages would therefore be reasonable. Petitioner Erlinda Ramos was in her mid-forties when the incident occurred. She has been in a comatose state for over fourteen years now. The burden of care has so far been heroically shouldered by her husband and children, who, in the intervening years have been deprived of the love of a wife and a mother. Meanwhile, the actual physical, emotional and financial cost of the care of petitioner would be virtually impossible to quantify. Even the temperate damages herein awarded would be inadequate if petitioner's condition remains unchanged for the next ten years. The husband and the children, all petitioners in this case, will have to live with the day to day uncertainty of the patient's illness, knowing any hope of recovery is close to nil. They have fashioned their daily lives around the nursing care of petitioner, altering their long term goals to take into account their life with a comatose patient. They, not the respondents, are charged with the moral responsibility of the care of the victim. The family's moral injury and suffering in this case is clearly a real one. For the foregoing reasons, an award of P2,000,000.00 in moral damages would be appropriate. Finally, by way of example, exemplary damages in the amount of P100,000.00 are hereby awarded. Considering the length and nature of the instant suit we are of the opinion that attorney's fees valued at P100,000.00 are likewise proper. WHEREFORE, the decision and resolution of the appellate court appealed from are hereby modified so as to award in favor of petitioners, and solidarily against private respondents the following: 1) P1,352,000.00 as actual damages computed as of the date of promulgation of this decision plus a monthly payment of P8,000.00 up to the time that petitioner Erlinda Ramos expires or miraculously survives; 2) P2,000,000.00 as moral damages, 3) P1,500,000.00 as temperate damages; 4) P100,000.00 each as exemplary damages and attorney's fees; and, 5) the costs of the suit. 27. SPOUSES RENATO S. ONG VS. COURT OF APPEALS FACTS: On February 9, 1987, petitioners boarded as paying passengers an Inland bus which was owned and operated by Inland Trailways under a Lease Agreement with Philtranco. Around 3:50 in the morning of said date, when the Inland bus slowed down to avoid a stalled cargo truck in Tiaong, Quezon, it was bumped from the rear by another bus, owned and operated by Philtranco, causing injuries to the spouses.

On December 22, 1988, petitioners filed an action for damages against Philtranco and Inland presenting documentary evidence of their expenses but failed to present the police report as evidence. On May 7, 1991, the trial court rendered its judgment in favor of the petitioners absolving Inland Trailways, Inc., from any liability whatsoever, and against Philtranco Service Enterprise, Inc. based on culpa aquiliana which was amended by the Court of Appeals absolving Philtranco Service Enterprise, Inc. from liability instead against Inland based on culpa contractual and reducing the amount of moral damages, medical and miscellaneous expenses and disallowing the award of unearned income. ISSUES: (1) Whether the Police Report, which was not formally offered in evidence, could be used to establish a claim against Philtranco based on culpa aquiliana. (2) Whether the reduction in the amounts of damages awarded was proper. RULING: First Issue: Requirement of Formal Offer of Evidence Petitioners take exception to the rule requiring documents to be formally offered in evidence before they can be given any probative value, arguing that the parties agreed to submit the case for resolution based on the July 5, 1989 Order of the trial court. Because of the agreement, petitioners assumed that all the pieces of documentary evidence, including the Complaint and its Annexes, as well as those in the respective Answers of the private respondents, were deemed admitted. We disagree. Section 34, Rule 132 of the Rules of Court, provides that the court shall consider no evidence which has not been formally offered. A formal offer is necessary, since judges are required to base their findings of fact and their judgment solely and strictly upon the evidence offered by the parties at the trial. To allow parties to attach any document to their pleadings and then expect the court to consider it as evidence, even without formal offer and admission, may draw unwarranted consequences. Opposing parties will be deprived of their chance to examine the document and to object to its admissibility. On the other hand, the appellate court will have difficulty reviewing documents not previously scrutinized by the court below. In adhering to this rule, the appellate court cannot be faulted with reversible error, as it held. The burden of proof lies with the plaintiff in establishing fault or negligence on the part of the defendant (Ong vs. Metropolitan Water). This, however, plaintiff-appellees failed to establish. Albeit, there was a police investigation report finding the driver of PHILTRANCO negligent which became the basis of the court a quo holding PHILTRANCO liable, this piece of evidence was merely attached as Annex 1 of INLANDs answer, nothing more. It was not presented and even offered as evidence by INLAND nor utilized by plaintiffs-appellees. Thus, even assuming arguendo that the same had been identified in court, it would have no evidentiary value. Identification of documentary evidence must be distinguished from its formal offer as an exhibit. The first is done in the course of the trial and is accompanied by the marking of the evidence as an exhibit. The second is done only when the party rests its case and not before. The mere fact that a particular document is identified and marked as an exhibit does not mean it will be or has been offered as part of the evidence of the party. The party may decide to offer it if it believes

this will advance the cause, and then again it may decide not to do so at all (People vs. Santito, Jr., 201 SCRA 87). In the case at bar, the defendant INLAND and plaintiffs-appellees did not identify the said Annex 1 or the Police Investigation Report as evidence. Thus, under Section 35 of Rule 132 of the Revised Rules on Evidence, the court shall consider no evidence which has not been formally offered. Corollary, the Police Investigation Report of Annex 1 cannot be given any evidentiary value. Absent Annex 1 which was the basis of the trial court in finding PHILTRANCO liable, the latter is thus exonerated from liability. Petitioners similarly erred in presuming that said Annex was admitted in evidence by virtue of the Order of July 5, 1989. Their presumption has no basis. The Order required counsel for the petitioners to submit his formal offer of evidence, furnishing copies thereof to defendants who shall have five (5) days from their receipt within which to submit comments after which the same shall be deemed submitted for resolution. In compliance, petitioners filed a written offer of evidence on July 12, 1989. Such offer led the trial court, in its Order of August 2, 1989, to formally admit in evidence Exhibits A-O. Clearly, the Police Report was neither offered by the petitioners nor admitted by the trial court. Moreover, the petitioners allegations in their Complaint did not establish a cause of action against Philtranco. They similarly failed to make any reference to said Police Report during the presentation of their case. This is precisely why Respondent Philtranco opted not to present further evidence. A document or an article is valueless unless it is formally offered in evidence, and the opposing counsel is given an opportunity to object to it and to cross-examine any witness called to present or identify it. Evidence not formally offered before the trial court cannot be considered on appeal, for to consider them at such stage will deny the other parties their right to rebut them. There is no agreement to submit the case based on the pleading, as contended by the petitioners. The parties had no such intention, nor did said Order evince such an agreement. Second Issue: Damages Require Evidence Petitioners aver that there was grave abuse of discretion when the amount of actual damages awarded was reduced from P10,000 to P3,977, even if the original amount did not even include the medical expenses that Francia continued to incur; and when the award of P48,000 as unrealized income was deleted despite her testimony which was given credence by the trial court. The Court disagrees. Granting arguendo that there was an agreement to submit the case for decision based on the pleadings, this does not necessarily imply that petitioners are entitled to the award of damages. The fundamental principle of the law on damages is that one injured by a breach of contract (in this case, the contract of transportation) or by a wrongful or negligent act or omission shall have a fair and just compensation, commensurate with the loss sustained as a consequence of the defendants acts. Hence, actual pecuniary compensation is the general rule, except where the circumstances warrant the allowance of other kinds of damages.

Actual damages are such compensation or damages for an injury that will put the injured party in the position in which he had been before he was injured. They pertain to such injuries or losses that are actually sustained and susceptible of measurement. Except as provided by law or by stipulation, a party is entitled to adequate compensation only for such pecuniary loss as he has duly proven. To be recoverable, actual damages must be pleaded and proven in Court. In no instance may the trial judge award more than those so pleaded and proven. Damages cannot be presumed. The award thereof must be based on the evidence presented, not on the personal knowledge of the court; and certainly not on flimsy, remote, speculative and nonsubstantial proof. Article 2199 of the Civil Code expressly mandates 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 lack of basis for such award was patent in the trial court Decision: The records will show that from the documentary evidence, petitioners have jointly spent the sum of P3,977.00. Respondent, Philtranco has not presented any evidence that it has advanced any amount for medicine, hospitalization and doctors fees, but on the contrary, petitioners have testified that they paid for their expenses except at the initial stage wherein a representative of respondent Philtranco went to the hospital to get the receipts of medicines only and paid. Considering the claim of the petitioners, as alleged in their complaint they spent P10,000.00 representing medical and miscellaneous expenses considering that they have gone for consultation to at least two (2) different doctors, this Court may take judicial notice of the fact that miscellaneous expenses [are] bound to be incurred to cover transportation and food, and therefore, finds the amount ofP10,000.00 as actual damages to be reasonable. Damages, after all, are not intended to enrich the complainant at the expense of the defendant. Moral Damages and Diminution of Use of Francias Arm Petitioners protest the deletion of the amount of P50,000 earlier awarded by the trial court because of the diminution of the use of Francias right arm, arguing that she stated during direct examination that it could no longer perform its normal functions, and that private respondents impliedly admitted this matter when they failed to present controverting evidence. A person is entitled to the physical integrity of his or her body, and if that integrity is violated, damages are due and assessable. However, physical injury, like loss or diminution of use of an arm or a limb, is not a pecuniary loss. Indeed, it is not susceptible of exact monetary estimation. Thus, the usual practice is to award moral damages for physical injuries sustained. In Mayo v. People, the Court held that the permanent scar on the forehead and the loss of the use of the right eye entitled the victim to moral damages. The victim, in said case, was devastated by mental anguish, wounded feelings and shock, which she experienced as a result of her false eye and the scar on her forehead. Furthermore, the loss of vision in her right eye hampered her professionally for the rest of her life. In the case at bar, it was sufficiently shown during the trial that Francias right arm could not function in a normal manner and that, as a result, she suffered mental anguish and

anxiety. Thus, an increase in the amount of moral damages awarded, from P30,000 to P50,000, appears to be reasonable and justified. Renato also suffered mental anxiety and anguish from the accident. Thus, he should be separately awarded P30,000 as moral damages. In some instances, the Court awards the cost of medical procedures to restore the injured person to his or her former condition. However, this award necessitates expert testimony on the cost of possible restorative medical procedure. In Gatchalian v. Delim, the Court, reasoning that a scar resulting from the infliction of injury on the face of a woman gave rise to a legitimate claim for restoration to her conditio ante, granted P15,000 as actual damages for plastic surgery. It bears emphasis that the said amount was based on expert testimony. In another case, the Court granted actual or compensatory damages in the sum of P18,000 for the surgical intervention necessary to arrest the degeneration of the mandible of a young boy. Again, there was an expert testimony that such medical procedure would cost P3,000 and would have to be repeated several times to restore him to nearly normal condition. In the case at bar, petitioner failed to present evidence regarding the feasibility or practicability and the cost of a restorative medical operation on her arm. Thus, there is no basis to grant her P48,000 for such expense. Unrealized Income Protesting the deletion of the award for Francias unrealized income, petitioners contend that Francias injuries and her oral testimony adequately support their claim. The Court disagrees. Although actual damages include indemnification for profits which the injured party failed to obtain (lucro cesante or lucrum cesans), the rule requires that said person produce the best evidence of which his case is susceptible. The bare and unsubstantiated assertion of Francia that she usually earned P200 a day from her market stall is not the best evidence to prove her claim of unrealized income for the eight-month period that her arm was in plaster cast. Her testimony that it was their lessor who filed their income tax returns and obtained business licenses for them does not justify her failure to present more credible evidence of her income. Furthermore, after her ten-day confinement at the San Pablo Hospital, she could have returned to her work at the public market despite the plaster cast on her right arm, since she claimed to have two nieces as helpers. Clearly, the appellate court was correct in deleting the award for unrealized income, because of petitioners utter failure to substantiate her claim. Attorneys Fees Counsel for petitioner deeply laments the reduction in the award of attorneys fees. He alleges that he had to use his own money for transportation, stenographic transcriptions and other court expenses, and for such reason, avers that the award of 25 percent attorneys fees made by the trial court was proper. Under the Civil Code, an award of attorneys fees is an indemnity for damages ordered by a court to be paid by the losing party to the prevailing party, based on any of the cases authorized by law. It is payable not to the lawyer but to the client, unless the two

have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof. The Court has established a set of standards in fixing the amount of attorneys fees: (1) [T]he amount and character of the services rendered; (2) labor, time and trouble involved; (3) the nature and importance of the litigation or business in which the services were rendered; (4) the responsibility imposed; (5) the amount of money or the value of the property affected by the controversy or involved in the employment; (6) the skill and experience called for in the performance of the services; (7) the professional character and social standing of the attorney; (8) the results secured, it being a recognized rule that an attorney may properly charge a much larger fee when it is contingent than when it is not. Counsels performance, however, does not justify the award of 25 percent attorneys fees. It is well-settled that such award is addressed to sound judicial discretion and subject to judicial control. We do not see any abuse thereof in the case at bar. In fact, the appellate court had been generous to petitioners counsel, considering that the nature of the case was not exceptionally difficult, and he was not required to exert Herculean efforts. All told, his handling of the case was sorely inadequate, as shown by his failure to follow elementary norms of civil procedure and evidence. WHEREFORE, the assailed Decision is AFFIRMED with the MODIFICATION that Renato and Francia Ong are separately awarded moral damages in the amount of P30,000 and P50,000, respectively. The ten percent (10%) attorneys fees shall be based on the total modified award. 28. MANZANARES vs. MORETA FACTS OF THE CASE: On the morning of March 5, 1916, a male child, 8 or 9 years of age, was run over along Solana Street by an automobile driven and managed by the defendant causing his death. The mother of the dead boy is a widow, a poor washerwoman. She brings action against the defendant to recover damages for her loss in the amount of P5,000. Without there having been tendered any special proof of the amount of damages suffered, the trial court found the defendant responsible and condemned him to pay to plaintiff the sum of P1,000. From this judgment, an appeal was taken by the defendant after his motion for a new trial had been overruled, and the case is now before this court by bill of exceptions. ISSUES: (1) Whether or not the defendant was negligent. (2) Whether or not the amount granted by the trial court was equitable. RULING: 1st issue: If it were true that the defendant, in coming from the southern part of Solana Street, had to stop his auto before crossing Real Street, because he had met vehicles which were going along the latter street or were coming from the opposite direction along Solana street, it is to be believed that, when he against stated to run his auto across said Real Street and to continue its way along Solana Street northward, he should have adjusted the speed of the auto which he was operating until he had fully crossed Real

Street and had completely reached a clear way on Solana Street. But, as the child was run over by the auto precisely at the entrance of Solana Street, this accident could not have occurred, if the auto had been running at a slow speed, aside form the fact that the defendant, at the moment of crossing Real Street and entering Solana Street, in a northward direction, could have seen the child in the act of crossing the latter street from the sidewalk on the right to that on the left; and if the accident had occurred in such a way that after the automobile had run over the body of the child, and the child's body had already been stretched out on the ground, the automobile still moved along a distance of about 2 meters, this circumstance shows the fact that the automobile entered Solana Street form Real Street, at a high speed without the defendant having blown the horn. If these precautions had been taken by the defendant, the deplorable accident which caused the death of the child would not have occurred. 2nd Issue: As may be seen, this jurisprudence (of Spain) is in accordance with the legal precept of the code that only those damages actually caused may be awarded, and, therefore, to enable the court to decide what damages have been caused, it is necessary to prove the real existence of the damages and the corresponding facts from which the court can deduce the amount thereof. Of course, the plaintiff makes a claim only for herself for pecuniary loss sustained by her on account of the death of her son, and the boy himself does not make any claim because he did not live to do so; hence the mother would never have been entitled to any other damages than those arising out of the loss of the services of her son, and never to those damages which he himself might have been entitled to claim had he not died, or arising from the injuries that he himself might have suffered on account of the accident. The damages which would give the plaintiff in this case a right to recovery against the defendant are only the loss of support, or contributions thereto, which the son was accustomed to make to his mother from his earnings and of which she may have been deprived by his death. But does the evidence introduced by the plaintiff support her claim to recover such damages? We are of the opinion that it does not, because she has not proven that her son was really earning the amount alleged in the complaint, nor any other sum whatever, no alleged in the complaint, nor any other sum whatever, nor alleged in the complaint, nor any other sum whatever, nor how much money he was earning preceding his death or at any time. And we are of the opinion that this is a necessary requisite, because, as the Civil Code declares that recovery may be had for the damage caused, the damages accruing to the plaintiff must be shown so that the trial judge may have data on which to base his decision. To force the plaintiff to prove her loss exactly would be to ask the impossible - would be in effect to return to the old common law rule which prohibits a recovery. Physical and gross criteria, as the hewing of wood and carrying of water, are indeed no standards at all. Even if the case was to be reopened, the plaintiff could with extreme difficulty present any better evidence than that now before us. As we have the basis of satisfactory facts from which to infer the amount of damage, as the law presumes a pecuniary loss because of the death, and as the trial judge has made an intelligent computation, we should rest here, with knowledge that, within the ken of human wisdom, justice has been done.

On a careful consideration of the entire field of the law on the subject of damages, we come to the conclusion that the amount, in the nature of an indemnity allowed by the trial court, is neither excessive nor immoderately inadequate, and should stand.chanroblesvirtualawlibrary chanrobles virtual law lJudgment, therefore, should be affirmed. 29. GREGORIO PESTAO V. SPOUSES PAZ FACTS: At around 2:00 o'clock on the afternoon of August 9, 1986, Ananias Sumayang was riding a motorcycle along the national highway in Ilihan, Tabagon, Cebu. Riding with him was his friend Manuel Romagos. As they came upon a junction where the highway connected with the road leading to Tabagon, they were hit by an overtaking passenger bus driven by Gregorio Pestao and owned by Metro Cebu Autobus Corporation, which had tried to overtake them, sending the motorcycle and its passengers hurtling upon the pavement causing their death. Apart from the institution of criminal charges against Gregorio Pestao, the heirs of Ananias Sumayang, filed a civil action for damages against Gregorio Pestao, as driver of the passenger bus, Metro Cebu, as owner and operator of the said bus, and Perla Compania de Seguros, as insurer of Metro Cebu which was consolidated upon motion of petitioner. In judgment, the lower court found petitioners liable to the respondents. Pestao to have been negligent in driving the passenger bus that hit the deceased and Metro Cebu directly and primarily liable, along with Pestao, under Article 2180 of the Civil Code for allowing the bus to ply its route despite the defective speedometer. the Court of Appeals affirmed the lower courts decision and increasing the indemnity for death of the victim from P30,000 to P50,000. ISSUES: (1) Whether the CA erred 1 in applying Section 45 of RA 4136 when it ruled that negligence in driving was the proximate cause of the accident. (2) Whether or not the CA erred in increasing the civil indemnity from P30,000 to P50,000. (3) Whether or not the CA erred in using the life expectancy of the deceased instead of the life expectancies of respondents. RULING: First Issue: Negligence Petitioners contend that Pestao was not under any obligation to slow down when he overtook the motorcycle, because the deceased had given way to him upon hearing the bus horn. Seeing that the left side of the road was clearly visible and free of oncoming traffic, Pestao accelerated his speed to pass the motorcycle. Having given way to the bus, the motorcycle driver should have slowed down until he had been overtaken. They further contend that the motorcycle was not in the middle of the road nearest to the junction as found by the trial and the appellate courts, but was on the inner lane. This explains why the damage on the bus were all on the right side - the right end of the

bumper and the right portion of the radiator grill were bent and dented. Hence, they insist that it was the victim who was negligent. We disagree. Petitioners are raising a question of fact based on Pestao's testimony contradicting that of Eyewitness Ignacio Neis and on the location of the dents on the bumper and the grill. Neis testified that as the two vehicles approached the junction, the victim raised his left arm to signal that he was turning left to Tabagon, but that the latter and his companion were thrown off the motorcycle after it was bumped by the overspeeding bus. These contentions have already been passed upon by the trial and the appellate courts. We find no cogent reason to reverse or modify their factual findings. The CA agreed with the trial court that the vehicular collision was caused by Pestao's negligence when he attempted to overtake the motorcycle. As a professional driver operating a public transport bus, he should have anticipated that overtaking at a junction was a perilous maneuver and should thus have exercised extreme caution. Factual findings of the CA affirming those of the trial court are conclusive and binding on this Court. Petitioners failed to demonstrate that this case falls under any of the recognized exceptions to this rule.Indeed, the issue of negligence is basically factual and, in quasi-delicts, crucial in the award of damages. Petitioners aver that the CA was wrong in attributing the accident to a faulty speedometer and in implying that the accident could have been avoided had this instrument been properly functioning. This contention has no factual basis. Under Articles 2180 and 2176 of the Civil Code, owners and managers are responsible for damages caused by their employees. When an injury is caused by the negligence of a servant or an employee, the master or employer is presumed to be negligent either in the selection or in the supervision of that employee. This presumption may be overcome only by satisfactorily showing that the employer exercised the care and the diligence of a good father of a family in the selection and the supervision of its employee. The CA said that allowing Pestao to ply his route with a defective speedometer showed laxity on the part of Metro Cebu in the operation of its business and in the supervision of its employees. The negligence alluded to here is in its supervision over its driver, not in that which directly caused the accident. The fact that Pestao was able to use a bus with a faulty speedometer shows that Metro Cebu was remiss in the supervision of its employees and in the proper care of its vehicles. It had thus failed to conduct its business with the diligence required by law. Second Issue: Life Indemnity Petitioners aver that the CA erred in increasing the award for life indemnity from P30,000 to P50,000, without specifying any aggravating circumstance to justify the increment as provided in the Civil Code. This contention is untenable. The indemnity for death caused by a quasi-delict used to be pegged at P3,000, based on Article 2206 of the Civil Code. However, the amount has been gradually increased through the years because of the declining value of our currency. At present, prevailing jurisprudence fixes the amount at P50,000.

Third Issue: Loss of Earning Capacity Petitioners cite Villa Rey Transit, Inc. v. Court of Appeals, which held: "The determination of the indemnity to be awarded to the heirs of a deceased person has therefore no fixed basis. . . . The life expectancy of the deceased or of the beneficiary, whichever is shorter, is an important factor . . . " They contend that the CA used the wrong basis for its computation of earning capacity. We disagree. The Court has consistently computed the loss of earning capacity based on the life expectancy of the deceased, and not on that of the heir. Even Villa Rey Transit did likewise. The award for loss of earning capacity is based on two factors: (1) the number of years on which the computation of damages is based and (2) the rate at which the loss sustained by the heirs is fixed. The first factor refers to the life expectancy, which takes into consideration the nature of the victim's work, lifestyle, age and state of health prior to the accident. The second refers to the victim's earning capacity minus the necessary living expenses. Stated otherwise, the amount recoverable is that portion of the earnings of the deceased which the beneficiary would have received the net earnings of the deceased. WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution AFFIRMED. Cost against petitioners. 30. MONZON, vs. INTERMEDIATE APPELLATE COURT FACTS OF THE CASE: Prior to April 8, 1967, a Piper Aztec aircraft PI-C766, owned by Dole Philippines met a slight accident during a landing causing the bending of the blades of its left propeller. The pilot, Jose Quimpo, together with his companions, straightened the bent blades with the use of hammers. On April 8, 1967, Quimpo brought the plane to the maintenance shop of respondent Theo H. Davies & Co., Far East Ltd. (Davies for short) at the Manila Domestic Airport and had it repaired, then proceeded to its ordinary course of business. On September 13, 1967, at around 7:00 o'clock in the morning, the plane crashed killing all 6 passengers including the pilot and Arturo Monzon causing the petitioners to file a case against Dole and Davies. Dole entered into a compromise agreement while Davies proceeded with the case. The trial court ruled in favor of the plaintiffs and upon motion granted the following: P12,000.00 for indemnity; P5,691,726.84 for loss of earning capacity; both sums to earn interest at 6% per annum from December 26, 1969 up to and including July 28, 1974, and at 12% per annum from July 29, 1974 until fully paid; ; P2,250,000.00 for moral damages; P250,000.00 for exemplary damages; and P100,000.00 for attorney's fees and expenses of litigation. On appeal, the respondent court reduced the amounts from P5,691,726.84 to P2,500,000.00; P2,250,000.00 to P350,000.00 and P250,000.00 to P50,000.00 and striking out the order to pay 12% interest. Upon denial of motion of the plaintiffs, hence the present appeal by certiorari.

ISSUE: Whether or not the reduction of the amounts of damages and the exoneration of the payment of interest on compensatory damages was proper. RULING: We find the instant petition impressed with merit. It is worth noting that Arturo Monzon, at the time of his death, was 40 years old and in good health. He left a widow and 8 children with ages from 5 to 19. He had a flourishing legal practice, specializing in taxation and was retained by a number of large companies. He had a total net income, as formally declared in his tax returns, P213,493.13 for the year 1967. Pursuant to the formula established and repeatedly applied by this Court (Villa Rey Transit v. Court of Appeals, 31 SCRA 511; Davila vs. Philippine Airlines, 49 SCRA 497; Abeto v. Philippine Airlines, 115 SCRA 389; Philippine Airlines v. Court of Appeals, 106 SCRA 391), the loss of earning capacity (as provided for in Article 2206, New Civil Code) arising from the death of Arturo Monzon was computed by the trial court in the following manner: Loss of earning capacity equals 2/3 x [80-40] x P 213,493.13 equals P5,691,726.84. Inevitably, We cannot disturb the findings of the lower court as to the amount of compensatory damages recoverable by petitioners for the same were in accordance with the law and jurisprudence. In trying to justify the reduction of damages, respondent court stated in its decision that plaintiffs-appellees (petitioners herein) previously asked for a lower compensation than in their later demand in the lower court However, respondent court failed to point out that the request was made "by way of amicable settlement." (p. 11, Rollo) Obviously, the complaint which was filed with the lower court subsequent to respondent Davies' refusal to enter into an amicable settlement would represent a higher amount. In further attempting to justify its reduction of damages, respondent court went on to say: Moreover, the determination of life expectancy of a person who perishes in an accident like the case at bar cannot be definite as it fluctuates with several factors and for this reason the amount always lies within the discretion of the courts (Bernabe vs. Phil. National Railways, 66 OG Nov. 15, 1970). The deceased in this case was a practicing lawyer. True he was bright and still young, but he did not have a fixed income; it depended largely on cases that come in and their outcome. We have no fixed standard or yardstick for accurately measuring more or less his expected income had he lived except some rough estimate based on experience and expectation. The income tax returns may give an Idea of the earning capacity of a person for a particular year, but such return is by no means fixed or permanent for the many uncertain years that follow later. (p. 4 respondent court's Resolution promulgated on August 29, 1985, Annex III attached; p. 12, Rollo) We agree with respondent court in saying that life expectancy "fluctuates with several factors" (p. 72, Rollo) but it is for that very reason that a generally accepted formula cited earlier was established by this court in a long line of cases. Otherwise stated, while respondent court suggests that Arturo Monzon might have lived for less than 26.4 years more, or until the age of 66, there is also the possibility that he would have lived for

much more than 26.4 years. Hence, the need of the formula by way of arriving at a logical and workable average. Furthermore, it would be most unfair and illogical for respondent court to have reduced the compensation due petitioners for the loss of the earning capacity of Arturo Monzon by discarding the well established formula by taking a pessimistic and depressed view of every situation instead of an average standard. Moreover, as a man grows older, and gains more experience, his income generally increases, with each passing year. Respondent court likewise premised the reduction of the amount representing the loss of earning capacity by more than 50 per centum to the fact the petitioners agreed to compromise with Dole where the latter paid One Million (P l,000,000.00) Pesos to the former in effect sustaining the claim of respondent Davies that the amount paid by Dole must be credited to its account. However, such position does not hold water. Respondent Davies and Dole are not joint tortfeasors. There was no evidence whatsoever that Dole was responsible with respondent Davies for quasi-delict, nor did respondent Davies pursue its cross-claim against Dole.chanroblesvirtualawlibrary chanrobles virtual law lSimilarly, respondent court erred in reducing the award of moral and exemplary damages to petitioners. While it is true that the amount of moral and exemplary damages may be discretionary upon the court, the circumstances attendant in the case at bar such as the wanton negligence of respondent Davies; its repeated violations of law and aircraft industry established practice; the social standing of the deceased and his heirs; and the present lack of purchasing power of the peso more than justify the restoration of the damages to the original amounts. In this light, the pronouncement of the trial court in awarding moral and exemplary damages of P2,250,000.00 and P250,000.00 respectively is of equal importance: Plaintiff Ramon Monzon estimates the sum of half a million peso for each of the plaintiffs for the extreme mental anguish and sorrow inflicted on them for the death of the deceased on whom they were dependent for support and maintenance and whose death suddenly necessarily deprived plaintiffs of his support and maintenance, consortium and companionship, as well as guidance, protection, care and comfort. Considering, however, that the compensatory damages awarded is already substantial, the Court believes that a reasonable figure for moral damages would be only P250,000.00 for each plaintiff." (p. 21, Rollo) Thus, the flight of the widow and her eight (8) children resulting from the untimely death of Arturo Monzon present a case deserving of moral and exemplary damages. c Finally, the elimination of the interest on the various damages from the date of the filing of the suit was clearly unwarranted. It must be borne in mind that interest begins to accrue upon demand, extrajudicial or judicial. A complaint is a judicial demand. WHEREFORE, We hereby REINSTATE the dispositive portion of the decision of the trial court with the modification that the death indemnity of P12,000.00 is hereby increased to P30,000.00 conformably with recent jurisprudence (People v. Managquil, 132 SCRA 196). Cases 22-30 BALAGOT, JESSIE C.

31. PEOPLE VS SUITOS FACTS: In the afternoon of September 5, 1987, accused Wilson Suitos, Alvaro Suitos alias Barang and Boy Villar, all armed with short firearms, approached the deceased and without any word, Wilson Suitos shot Jesus Ylarde on the forehead. Thereupon, Alvaro Suitos fired at the victim followed by Boy Villar. After the three accused fired their guns they ran towards the west direction, and moments thereafter, Vic Suitos and Rey Suitos riding in a tricycle followed them towards the same direction. The Regional Trial Court found the accused Alvaro Suitos guilty of the crime of murder and, to indemnify the heirs of Jesus Ylarde, the sum of P20,000.00 as actual damages, P200,000.00 as the amount of support they receive or would have received from the deceased had he not died as a result of the killing and P30,000.00 as moral damages, without subsidiary imprisonment in case of insolvency and to pay the costs. The others are at large. ISSUE: Whether or not the RTC erred in the computation of damages? RULING: After reviewing the records of the case, We find that a modification in the indemnity awarded is in order. Actual damages were proved in the amount of P11,575 and not P20,000 as found by the trial court. In determining the loss of earning capacity of 49 year old Ylarde, We use the formula for life expectancy adopted in Davila v. CA: 2/3 x (80-49) = life expectancy of 20 years. This figure is multiplied by the annual net income of the deceased (P16,000), equivalent to P320,000 to fix the amount of loss of earning capacity. Death indemnity in the amount of P50.000 is also awarded. The award of indemnity to the heirs of Jesus Ylarde is modified and accused is hereby ordered to pay: actual damages in the amount of P11,575; death indemnity in the amount of P50,000; loss of earning capacity in the amount of P320,000; and moral damages in the amount of P20,000 without subsidiary imprisonment in case of insolvency. 32. PEOPLE VS CORDERO FACTS: Edgar Cordero,security guard of GP building where Gary Salvosa lived, together with Ernesto Pinlac, Jimmy Salazar, Elpidio Batac, Domingo Batac, Sales Sabadao, Marlon Angco, Fred Batac, Ben Balocon, and other John Does conspired to rob Gary Salvosa. Gary arrived at the GP Building on board his Nissan pickup. Cordero opened the gate and padlocked it. Cordero then poked a gun at Gary and ordered to lie down or be killed. At that instance, Fred Batac, Domingo Batac, Salazar, and Marlon appeared. Domingo also poked his .45 caliber pistol at Gary. With the help of Fred, he frisked Gary. Domingo got from Gary an Uzi and his wallet. Fred took Gary's 9 mm .45 caliber pistol. Salazar got Gary's wristwatch but Domingo snatched it from him and wore it. Salazar tied Gary's arms at the back with a clothesline wire. Cordero, Domingo and Fred led Gary upstairs. They ordered Salazar to stay downstairs to drive the victim's Nissan pickup. Cordero went downstairs and instructed Salazar to start the pickup's engine. Fred killed Gary to prevent his identification.

The RTC found Cordero, Pinlac, Salazar, Domingo Batac and Fred Batac guilty as principal, while, Sales Sabado was held Liable as accomplice. Elpidio Batac was acquitted for insufficiency of evidence. All appellants were also adjudged civilly liable and ordered to return the stolen property. Also To indemnify jointly and solidarily the legal heirs for consequential damages as follows: P950,000.00 representing lost earnings of the victim for 19 years, since he was only 41 years old when killed and the life expectantly of an average Filipino is now 60 years old. At P50,000.00 income a year, for Gary Salvosa alone, times 19 years, equals P950,000.00; P86,371.00 representing actual and compensatory damages; P1,000,000.00 as moral damages; and 100,000.00 as exemplary damages. ISSUE: Whether or not the RTC erred in computing the loss of earning capacity when the judge fixed at sixty the life expectancy of the victim. RULING: The computation is erroneous. The formula consistently used by this Court in determining life expectancy is (2/3 x [80 - age of the victim at the time of death]). Thus, the victim's income of P50,000.00 should be multiplied by twenty six (26) years, not nineteen (19) years. Accordingly, the award for loss of earning capacity should be P1,300,000.00. The actual damages awarded in the amount of P86,371.00 should also be corrected because some of the expenses included in the computation are not in accord with the guidelines set in People vs. Degoma and Taborada. We disallow the amount of P9,000.00 spent by Ray Dean Salvosa, brother of the victim, in connection with the investigation of the case, and the amount of P42.00 representing snacks for lawyers. Thus, the award for actual damages is reduced to P77,329.00. In Degoma, we held: . . . Of the expenses allegedly incurred, the Court can only give credence to those supported by receipt and which appear to have been genuinely incurred in connection with the death, wake or burial of the victim. Thus, the Court cannot take account of receipts showing expenses incurred before the date of the slaying of the victim; those incurred after a considerable lapse of time from the burial of the victim and which do not have any relation to the death, wake or burial of the victim; those incurred for purely aesthetic or social purposes, such as the lining with marble of the tomb of the victim; those which appear to have been modified to show an increase in the amount of expenditure . . . ; those expenditures which could not be reasonably itemized or determined to have been incurred in connection with the death, wake or burial of the victim; those which, nonetheless, would have been incurred despite the death, wake and burial of the victim, the death, wake and burial being merely incidental; and those which were not in fact shouldered by the immediate heirs of the victim, such as plane tickets by relatives or in-laws. . . 33. PEOPLE VS ARINGUE FACTS: On August 5, 1989, the victim Nicomedes A. Salas, together with his wife Leticia and daughter Lotlot attended a school party at St. Joseph Institute of Technology (SJIT) of which he was President. In the evening, they left SJIT and proceeded to their jeep. Outside SJIT, Mrs. Salas was about to board the jeep when she heard a gunshot coming from her left side. She turned her head towards that direction and saw her husband fall on the ground face down. At the same time, she noticed Percivirando Pitao running

away. In a split second, Michael Cabal, pointed his gun at her. The man did not shoot her, but fired at Mr. Salas, hitting him on the chest. Amora also saw the shooting. They brought Mr. Salas to Santos Clinic where he died. Cabal stated that, Guillermo A. Aringue paid him and Pitao P5,000 to kill Nicomedes A. Salas because allegedly he refused to deliver his share in the profits in SJIT. The RTC found Cabal and Pitao guilty of murder and to indemnify, jointly and severally, the heirs of the victim Nicomedes A. Salas in the sum of P536,113 as actual damages and lumped together the awards of moral damages, attorney's fees and lost earnings of the victim for a total sum of two P2,000,000.Accused Guillermo Aringue is acquitted on reasonable doubt. ISSUE: Whether or not the RTC judge commit an error in his decision to lumped together the awards of moral damages, attorneys fees and lost of earnings and awarding an actual damages? RULING: This is an error, for the aforementioned awards are different in nature, and hence require separate determination. Leticia Salas testified that the victim was 49 years old at the time he died. He was serving the first year of his three-year term, as member of the Sangguniang Panlalawigan, for which he received a monthly salary of P14,185.00. His gross income for the next three years would be P553,215.00. Allowing a deduction of 50% from his gross income as his reasonable and necessary living expense, his lost earnings as councilor for three years would be P276,607.50. As president and founder of San Jose Institute of Technology (SJIT), the victim received an income of P5,000.00 a month. His gross annual income would amount to P65,000. Applying the formula: net earning capacity = life expectancy x [gross annual income - reasonable and necessary living expenses (50%)], we determine his lost earnings to be P671,666.64. In its totality, the lost earnings of the victim amount to P948,274.14. We set aside the award of P536,113.00 as actual damages for lack of basis. During the trial, private complainant Leticia Salas testified that the following amounts were spent as a consequence of her husband's untimely death: P33,000.00 for food during the eleven (11) days of prayer; P70,000.00 for the funeral parlor; P30,000.00 for food during the burial; P500.00 for the fees to the church; P5,000.00 for mourning clothes; P20,000.00 for food during the 40th day service; P5,000.00 for tomb construction; P1,000.00 for gasoline; P495.00 for the hospitalization of Nicomedes Salas; and P200.00 for telegrams. These expenses totalled P165,195.00. We find the award of P2,000,000.00 as moral damages to be excessive. Although no proof of pecuniary loss is required in the assessment of moral damages, the award is essentially by way of indemnity or reparation. Moral damages are not awarded to punish the defendant but to compensate the victim.The award is not meant to enrich the victim at the expense of the defendant. We find that an award of P50,000.00 is commensurate to the emotional suffering of the victim's heirs. Additionally, we award P50,000.00 as indemnity by reason of the death of the victim in accord with Article 2206 of the Civil Code and prevailing jurisprudence. The award of attorney's fees is set at P25,000.00 which is reasonable considering that the proceedings at the lower court lasted four years.

34. PEOPLE VS GALVEZ FACTS: At midnight of April 30, 1993, while Venus, 14 years old, was sleeping at their house together with her brothers, she was awakened because she felt Rodrigo Galvez, her father, on top of her. She noticed that the latter was removing or pulling down her panty. She resisted but Rodrigo succeeded in removing her panty. Thereafter, he inserted his penis inside her vagina. On June 25, 1994, evening, she was again awakened from her sleep when she felt her father on top of her. By then, she noticed that her panty was already removed and he inserted his penis inside her vagina. He threatened her not to report what happened to anybody, especially to her mother and neighbors, otherwise, something bad will happen to her and to those who will be told. Virginia, her mother, noticed that Venus' monthly periods had stopped coming and she was becoming healthy. Virginia then confronted her daughter and Venus revealed that it was Rodrigo Galvez who raped her several times and thus she was pregnant. A complaint was filed against Rodrigo. The RTC found him guilty of rape and ordered to pay Venus P50,000.00 as moral damages in each case. ISSUE: Whether or not the RTC erred in awarding only moral damages? RULING: The Court notes that while the trial court awarded moral damages, it did not award any civil indemnity which is mandatory upon the finding of rape. Civil indemnity is distinct from and should not be denominated as moral damages which are based on different jural foundations and assessed by the court in the exercise of sound discretion. Current case law fixes indemnity ex delicto in case of simple rape at P50,000.00. Given the prevailing facts of this case, exemplary damages in each case of rape, pegged at P25,000.00 in line with controlling case law and recently reiterated in People v. Catubig, must likewise be awarded to deter other fathers with perverse tendencies and aberrant sexual behavior from preying upon and sexually abusing their daughters. 35. PLEYTO VS LOMBOY FACTS:On May 16, 1995, Pleyto tried to overtake Esguerras tricycle but hit it instead. Pleyto then swerved into the left opposite lane. Coming down the lane, a car driven by Arnulfo Asuncion with his passengers, Rhino, Ricardo Lomboy and her daughter Carmela Lomboy. The bus driven by Pleyto smashed head-on the car driven by Asuncion, killing Arnulfo and Ricardo instantly. Carmela and Rhino suffered injuries, but only Carmela required hospitalization. On November 29, 1995, Maria and Carmela Lomboy filed an action for damages against PRBL and its driver, Pleyto, with the RTC of Dagupan City. The Lomboys prayed that they be indemnified for the untimely death of Ricardo Lomboy, his lost earnings, the medical and hospitalization expenses of Carmela, and moral damages.

RTC rendered in favor of the plaintiffs and against the defendants ordering the defendants to pay solidarily Maria and Carmela. The RTC also found Pleyto negligent and lacking in precaution. The CA affirmed the decision of the trial court, with modification in award for actual damages from P59,000.00 to P39,550.00 for funeral and religious services and for medical expenses of Carmela Lomboy from P52,000.00 to P27,000.00; and the award for loss of earning capacity is accordingly corrected from P1,642,521.00 to P1,152,000.00. ISSUE: Whether or not the CA erred in pegging the monthly living expenses at 50% of gross earnings; and Whether or not documentary evidence is indispensable to a claim for loss of earning capacity. RULING: In considering the earning capacity of the victim as an element of damages, the net earnings, which is computed by deducting necessary expenses from the gross earnings, and not the gross earnings, is to be utilized in the computation. Note that in the present case, both the Court of Appeals and the trial court used net earnings, not gross earnings in computing loss of earning capacity. The amount of net earnings was arrived at after deducting the necessary expenses (pegged at 50% of gross income) from the gross annual income. This computation is in accord with settled jurisprudence, including the Villa Rey case. Petitioners claim that no substantial proof was presented to prove Ricardo Lomboys gross income lacks merit. Failure to present documentary evidence to support a claim for loss of earning capacity of the deceased need not be fatal to its cause. Testimonial evidence suffices to establish a basis for which the court can make a fair and reasonable estimate of the loss of earning capacity. Hence, the testimony of respondent Maria Lomboy, Ricardos widow, that her husband was earning a monthly income of P8,000 is sufficient to establish a basis for an estimate of damages for loss of earning capacity. It is well-settled in jurisprudence that the factors that should be taken into account in determining the compensable amount of lost earnings are: (1) the number of years for which the victim would otherwise have lived; and (2) the rate of loss sustained by the heirs of the deceased. Jurisprudence provides that the first factor, i.e., life expectancy, is computed by applying the formula (2/3 x [80 - age at death]) adopted in the American Expectancy Table of Mortality or the Actuarial Combined Experience Table of Mortality. As to the second factor, it is computed by multiplying the life expectancy by the net earnings of the deceased, i.e., the total earnings less expenses necessary in the creation of such earnings or income and less living and other incidental expenses. The net earning is ordinarily computed at fifty percent (50%) of the gross earnings. Thus, the formula used by this Court in computing loss of earning capacity is: Net Earning Capacity = [2/3 x (80 age at time of death) x (gross annual income reasonable and necessary living expenses)]. It was established that Ricardo Lomboy was 44 years old at the time of his death and is earning a monthly income of P8,000 or a gross annual income (GAI) of P96,000. Using the cited formula, the Court of Appeals correctly computed the Loss of Net Earning Capacity as P1,152,000, net of and after considering a reasonable and necessary living

expenses of 50% of the gross annual income or P48,000. A detailed computation is as follows: NET EARNING CAPACITY (X) X X X X GROSS LIFE EXPECTANCY ANNUAL = [2/3 (80-age at the x INCOME time of death)] (GAI) = [2/3 (80-44)] = [2/3 (36)] = 24 = P 1,152,000.00 x [P96,000 x [P96,000 x 48,000 LIVING EXPENSES (50% of GAI) (50% P96,000) x

48,000]

Thus, no reversible error may be attributed to the court a quo in fixing the loss of earning capacity at said amount. We likewise sustain the reduction of the award of actual damages from P59,550 for funeral and burial expenses of Ricardo and P52,000 for medical expenses of Carmela Lomboy to P39,550 and P27,000, respectively, as only these latter amounts were duly supported by receipts. To justify an award of actual damages, there must be competent proof of the actual amount of loss, credence can be given only to claims which are duly supported by receipts. However, while the award of P50,000 as moral damages to Carmela Lomboy is sustained, the award for moral damages of P500,000 to the heirs of Ricardo Lomboy should be reduced for being excessive. Under Article 2206 of the Civil Code, the spouse, legitimate children and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased. However, we must stress that moral damages, though incapable of pecuniary estimation, are in the category of an award designed to compensate the claimant for actual injury and are not meant to enrich complainant at the expense of defendant. Moral damages are awarded to enable the injured party to obtain means, diversions or amusements that will serve to alleviate the moral suffering he/she has undergone, by reason of the defendants culpable action. Its award is aimed at restoration, as much as possible, of the spiritual status quo ante; thus it must be proportionate to the suffering inflicted. Under the circumstances of this case, an award of P100,000 to the heirs of Ricardo Lomboy would be justified and in keeping with the purpose of the law and jurisprudence in allowing moral damages. The indemnification award of P50,000 is also sustained. 36. PEOPLE VS MATARO FACTS: On October 23, 1992, SPO 1 Enrique Castillo, Jr., stop a light brown Toyota Corona. Mataro and Perucho disembarked and talked to Castillo. After a while, Mataro and Perucho went to their car and returned with an armalite and a .45 cal. firearm.

Castillo raised his hands and motioned the two accused to move along and forget their citation. The two accused shot him instead. And as a result Castillo died. RTC found them guilty of murder and to pay jointly and severally the heirs of Enrique Castillo the following: P725,000.00 as actual damages; P1,000,000.00 as moral damages; and to pay the cost. ISSUE: Whether or not the RTC correctly award the above-mentioned damages and may temperate damages be awarded? RULING: In our view, the amount of damages awarded must be modified. An appeal in a criminal case opens the entire case for review on any question including one not raised by the parties. The trial court awarded P725,000.00 as actual damages and P1,000,000.00 as moral damages. In arriving at P725,000.00 as actual damages, the trial court added the loss of earning capacity of the victim which it computed to be P660,000.00 and the other expenses incurred by the heirs of the victim as a result of his death. We agree that the life expectancy formula should be applied. However, the loss of earning capacity should not be based on the net monthly income of the deceased. The proper computation should be based on the gross annual income of the victim minus the necessary and incidental living expenses which the victim would have incurred if he were alive, estimated at 50% of the gross annual income. The prosecution proved through the Certification of Employment and Compensation that the gross annual income (including 13th month pay and bonus) of the deceased is P65,906.00. Deducting from this the estimated necessary and incidental living expenses, the net annual income is P32,953.00. Multiplying this by the computed life expectancy of the victim which is 22 years, the amount of loss of earning capacity should be P724,966.00. With respect to actual damages, we have consistently ruled that the recovery of actual damages must be premised upon competent proof and best evidence obtainable by the injured party showing the actual expenses incurred in connection with the death, wake or burial of the victim. Courts cannot simply assume that damages are sustained by the injured party, nor can it rely on speculation or guesswork in determining the fact and amount of damages. In this case, of the expenses summarized by the injured party, only the one incurred for funeral services amounting to P25,000.00 is duly evidenced by a receipt. The trial court's award of P1,200.00 for hospital bills, P43,800.00 for funeral services and P20,000.00 for transportation and representation expenses lacks sufficient basis and should be deleted. In line with People vs. Suplito, 314 SCRA 493 (1999), however, temperate damages may be awarded, it appearing that the victim's heirs had suffered pecuniary losses other than the actual damage but the amount thereof cannot be proved with certainty. Taking into consideration the medical and burial services for the victim, an award of P30,000.00 by way of temperate damages should suffice in this regard. The award of P1,000,000.00 as moral damages should be reduced, bearing in mind that the purpose for making such award is not to enrich the heirs of the victim but to compensate them however inexact for injuries to their feelings. In line with current jurisprudence on moral damages, an award of P50,000.00 is in order. Likewise, based on

prevailing case laws P50,000.00 is awarded as indemnity for wrongful death. Attorney's fees of P24,000.00 is also proper. 37. PEOPLE VS NULLAN FACTS: On July 26, 1995, the Hi-Ace van which would fetch Benito Gotanci from his office-store arrived and parked in front. Minutes later Benito Gotanci emerged from his office-store. As Benito Gotanci was about to board his vehicle Alberto Nullan and Edgar Maligaya surreptitiously approached Benito from behind, and Nullan shot twice Benito Gotanci from his handgun and fled the scene together with Maligaya. Benito was rushed to the hospital but declared dead on arrival. RTC found them guilty of murder and ordered to pay jointly and solidarily the sum of P92,851.96 for actual damages; the amount of P50,000.00 as death indemnity; P1,000,000.00 for loss of earning capacity; and P100,000.00 for moral damages. ISSUE: Whether or not RTC erred in determining the facts and amount of damages? RULING: With respect to damages, the recovery of actual damages must be premised upon competent proof and best evidence obtainable by the injured party showing the actual expenses incurred in connection with the death, wake or burial of the victim. Courts cannot simply assume that damages are sustained by the injured party, nor can it rely on speculation or guesswork in determining the fact and amount of damages. In the case at bench, the Court accepts as having been incurred the amount of P52,851.96 for doctor fees, hospital bills, funeral cremation, burial services and the cost of the tomb of the victim for which supporting receipts are on record. The alleged reasonable miscellaneous expenses of P40,000.00 are disallowed for not having been sufficiently proved. The actual damages awarded by the trial court should be thus reduced to only P52,851.96. Relative to the amount of damages for loss of earnings, the trial court has fixed the amount of P1,000,000.00 based on the victim's life expectancy of 65 years. This Court has consistently used the formula: [2/3 x (80 - age of the victim at the time of death)] in determining life expectancy. The victim in this case therefore can be said to have had a life expectancy of [2/3 x (80 - 46)] 23 years. The trial court has aptly estimated his annual income to be close to P120,000.00 from which amount should be deducted the necessary and incidental expenses which the victim would have incurred if he were alive, estimated at 50%, to about a balance of P60,000.00 net annual income. In computing the loss of earning capacity of the victim, several factors are considered besides the mathematical computation of annual income times life expectancy. Allowance are also made for circumstances which could reduce the computed life expectancy of the victim like the nature of his work, his lifestyle, age and state of health prior to his death, and the rate of loss sustained by the heirs of the victim. All taken, the sum of P1,000,000.00 for loss of earning capacity of the deceased victim awarded by the trial court must be increased to P1,380,000.00. The award of moral damages of P100,000.00 arising from the mental anguish suffered by the surviving spouse, Julie Gotanci, and testified to by her, is reasonable. The award of the civil indemnity ex-delicto of P50,000.00 to the heirs of the victim is consistent with prevailing jurisprudence.

WHEREFORE, except for the reduction of actual damages from P92,851.96 to P52,851.96, and the increase of the loss of earning capacity from P1,000,000.00 to P1,380,000.00, the decision of the trial court is AFFIRMED in all respects. 38. PEOPLE VS LISTERIO FACTS: On August 14, 1991, a group composed of Agapito Listerio, Samson dela Torre, George dela Torre, Marlon dela Torre and Bonifacio Bancaya, blocked the path and attacked Jeonito Araque and Marlon Araque, with lead pipes and bladed weapons. Agapito Listerio, Marlon dela Torre and George dela Torre, who were armed with bladed weapons, stabbed Jeonito Araque from behind and Marlon Araque was hit in the head by Samson dela Torre and Bonifacio Bancaya with lead pipes and momentarily lost consciousness. When he regained consciousness, Jeonito was already dead and their assailants fled. Marlon sustained injuries in the arm and back and was brought to a hospital. The RTC found Listerio Guilty and was ordered to indemnify the heirs of Jeonito Arague and damages sustained by Marlon Arague including moral damages of P5,000. Samson dela Torre escaped during the presentation of the prosecutions evidence and he was not tried in absentia and the others are at large. ISSUE: Whether or not the RTC is correct in awarding moral damages? RULING: The award for moral damages must be struck down as the victim himself did not testify as to the moral suffering he sustained as a result of the assault on his person. For lack of competent proof such an award is improper. The award for exemplary damages must, however, be retained considering that under Article 2230 of the Civil Code, such damages may be imposed when the crime is committed with one or more aggravating circumstances. Finally, this Court has observed that the trial court did not render judgment against accused Samson dela Torre, notwithstanding that he was arraigned and pleaded not guilty to both charges. Under the circumstances, he should be deemed to have been tried in absentia and, considering the evidence presented by the prosecution against him, convicted of the crime charged together with appellant Agapito Listerio. 39. PEOPLE VS SANCHEZ FACTS: On April 13, 1991, Malabanan, Peradillas, Averion and Corcolon waited for Penalosa during a party near the house of Dr. Velicina. When Penalosa was leaving riding his jeep, The group followed him Corcolon ordered Averion to overtake Pealosa's jeep. As the car overtook the jeep, Peradillas and Corcolon fired at Pealosa's jeep, using M-16 and baby armalite rifles, executed in automatic firing mode. Rickson Pealosa, son of Nelson Pealosa, fell from the jeep. The jeep, however, continued running in a zigzag position until it overturned in front of Irais Farm. After the shooting, the accused proceeded to the house of mayor Sanchez and reported to mayor Sanchez that Pealosa was already dead.

RTC found them guilty of murder and odered to pay jointly and severally, the heirs of the victims each the sum of P100,000.00 for the death of Nelson Pealosa and Rickson Pealosa, P50,000.00 as actual damages and moral damages of P50,000.00 and exemplary damages of P30,000.00 and to pay the costs. ISSUE: Whether or not the RTC was correct in awarding actual damages and loss of capacity of earnings in the absent of proofs; Whether or not the common law wife is entitled to share in the award of moral damages. RULING: The P50,000.00 award as actual damages should be deemed as indemnity for the untimely demise of the victims. We have held that only expenses supported by receipts and which appear to have been actually expended in connection with the death of the victims may be allowed. No proof was presented to sustain the award of actual damages. Similarly, we can not award damages for loss of earning capacity. All that was presented in evidence was the testimony of the common law wife, Adelina Pealosa, that Nelson earned P1,000,000.00 a year. We have held that "for lost income due to death, there must be unbiased proof of the deceased's average income. Self-serving, hence unreliable statement, is not enough." Considering the attendance of aggravating circumstances, we sustain the award of exemplary damages of P30,000.00, per victim, in accordance with Article 2230 of the Civil Code. As regards moral damages, we affirm the P50,000.00 awarded to the heirs of Rickson Pealosa. His mother, Adelina Pealosa, testified to the suffering caused by his death. We also sustain the award of moral damages to the heirs of Nelson Pealosa. His common law wife testified to the mental anguish suffered by the family due to Nelson's death. Under Article 2206 of the Civil Code, the spouse, legitimate and illegitimate descendancts and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased. However, the common law wife is not entitled to share in the award of moral damages. Cases 31-39 BASUNGIT, ANTONIO JR. 40.PEOPLE vs. EFREN MINDANAO FACTS: On October 2, 1993, at around twelve o'clock in the morning, Apolonio Hornilla a meat vendor, was weighing meat at his stall in the Urbano Velasco Public Market in Pasig, Metro Manila. In the area was Perfecto de Jesus who was waiting for his turn to buy meat. While Apolonio was weighing beef, Perfecto saw a man approach Apolonio from Apolonio's left side.The man pulled out a gun and fired at Apolonio twice, hitting him on the nape. Apolonio collapsed. The assailant left. Perfecto approached Apolonio and brought him to the Rizal Medical Center. After taking Apolonio to the hospital, Perfecto

went to buy medicine. Along the way, Perfecto learned that policemen apprehended Apolonio's assailant. Perfecto proceeded to the police precinct and identified accused from a line-up of around ten (10) detainees. On October 2, 1994, Perfecto executed a sworn statement before the police investigators. In the statement, he identified accused as the person who shot Apolonio. On October 5, 1993, Third Assistant City Prosecutor Quezon B. Alejandro filed with the Regional Trial Court, Pasig, an information for frustrated murder and an information for illegal possession of firearms against accused. On November 4, 1993, accused was arraigned for violation of P. D. 1866 (Illegal Possession of Firearms) and frustrated murder. He pleaded "not guilty" to both charges. Apolonio was hospitalized in Pasig for a month. He was transferred to the Batangas Regional Hospital where he stayed for twenty-seven (27) days. On December 23, 1993, Apolonio died. On February 2, 1994, the prosecution amended the information murder due to Apolonio's supervening death. On March 17, 1994, accused entered a plea of "not guilty" to the amended charge. At the trial, accused's defense was alibi and denial. He averred that when the shooting occurred, he was unloading vegetables from a jeep. His testimony was uncorroborated. The trial court did not believe him. On June 26, 1995, the trial court rendered a decision convicting accused of murder and acquitting him of illegal possession of firearms sentenced the accuseds to Reclusion Perpetua in its medium period or an imprisonment ranging from Twenty-Six (26) Years, Eight (8) Months and One (1) Day, as minimum, to Thirty-Three (33) Years and Four (4) Months, as maximum; to indemnify the offended party in the aggregate amount of P222,748.22; to suffer all the accessory penalties provided for by law; and to pay the costs.. On July 26, 1995, accused filed a notice of appeal. However, the notice was erroneously forwarded to the Court of Appeals. ISSUE: Whether or not the award of damages by the trial court is meritorious. SC RULING: The trial court awarded damages in the amount of P222,748.22. This is erroneous. We grant an award of civil indemnity, in the amount of P50,000.00, automatically to the heirs of the victim without need of proof other than the fact of commission of the crime. We also grant actual damages. For Apolonio's hospitalization from October 2 to November 27, 1993, Lucia spent a total of P78,526.27. This expense is supported by receipts. Other receipts show that the family spent P8,000.00 for funeral

services,P3,222.00 for the tomb and the amount of P10.00 for the municipal burial permit. The expenses evidenced by all the receipts amount to P89,758.27. The amount of P15,000.00 for "other expenses", which Apolonio's heirs claimed were incurred during Apolonio's confinement at the Rizal Medical Center and the Batangas Provincial Hospital were not covered by receipts and must be disallowed. Every pecuniary loss must be established by credible evidence before it may be awarded. The award of attorney's fees is likewise erroneous. There is no record that victim's family hired a private prosecutor. All throughout the proceedings public prosecutors represented them. In line with current jurisprudence, we further award moral damages in the amount of P50,000.00. When Apolonio died, he left his widow Lucia with three children aged five, three and one, hurt and destitute. The award is therefore adequate and reasonable, taking the pain and anguish of the victim's family into consideration. Damages for loss of earning capacity cannot be granted. The prosecution did not present income tax returns or receipts. The testimony of the victim's wife as to her husband's income is not competent proof. WHEREFORE, the decision of the Regional Trial Court, Branch 167, Pasig dated June 26, 1995 is AFFIRMED insofar as it finds accused-appellant Efren Mindanao y Gumabao guilty beyond reasonable doubt of murder for the killing of Apolonio Hornilla. However, the decision is MODIFIED as follows: (a) accused-appellant shall suffer the indivisible penalty of reclusion perpetua, with the accessory penalties of the law; (b) he is ORDERED to pay to the heirs of the victim civil indemnity for the death of Apolonio Hornilla in the amount of P50,000.00, actual damages in the amount of P89,758.27 and moral damages in the amount of P50,000.00. The award of attorney's fees is DELETED. With costs. 41.PEOPLE vs. VERDE FACTS: Francisco Gealon was shot dead at around 9 oclock in the evening, on March 19, 1991, while sleeping inside his tricycle in front of the house of Jose Bandiola in Binalbagan, Negros Occidental. He was taken to the Himamaylan Hospital where he was pronounced dead on arrival. Accused-appellant pleaded not guilty to the charge upon being arraigned on November 25, 1991. Trial then ensued, with the prosecution presenting its first witness. For his defense, accused-appellant interposed alibi. On May 11, 1994, the trial court rendered a decision, the dispositive portion of which reads: WHEREFORE, premises considered, the court hereby finds accused Mariano Verde GUILTY beyond reasonable doubt of the crime of murder and sentences him to a prison term of reclusion perpetua and to indemnify the heirs of the victim in the amount of

P100,000.00 as compensatory damages and P100,000.00 as moral damages without subsidiary imprisonment in case of insolvency. ISSUE: WHETHER OR NOT the award of damages by the trial court amounting to two hundred thousand is correct. SC RULING: The award of damages is modified. There is, however, a need to modify the award of damages made by the trial court to the heirs of the victim. The indemnity for death under our current ruling is P50,000.00. Consequently, the award ofP100,000.00 made by the trial court is excessive and should be correspondingly reduced. The award of P100,000.00 as moral damages should likewise be reduced, bearing in mind that the purpose for making such award is not to enrich the heirs of the victim but to compensate them for injuries to their feelings. For this reason, an award of P50,000.00 would be adequate and reasonable. In addition, the heirs of the victim should be ordered paid P50,000.00 by way of actual damages for the funeral and burial expenses they have incurred and which are amply supported by receipts (Exhs. C-2 and D-1). The heirs are also entitled to damages for the loss of earning capacity of the deceased Francisco Gealon. The fact that the prosecution did not present documentary evidence to support its claim for damages for loss of earning capacity of the deceased does not preclude recovery of said damages. The testimony of the victims wife, Delia Gealon, as to the earning capacity of her husband Francisco Gealon sufficiently establishes the basis for making such an award. It was established that Francisco Gealon was 48 years old at the time of his death in 1991. His average income was P200.00 a day. Hence, in accordance with the American Expectancy Table of Mortality adopted in several cases decided by this Court, the loss of his earning capacity is to be calculated as follows: Net earning capacity (x) = life expectancy x expenses(50% of gross annual income) Finally, the victims heirs should be ordered paid P24,000.00 as attorneys fees. WHEREFORE, the decision of the Regional Trial Court is hereby AFFIRMED, with the modification that accused-appellant is ordered to pay the heirs of the victim: death indemnity moral damages actual damages loss of earning capacity attorneys fees SO ORDERED. 42. PEOPLE VS. PEDRO PERRERAS FACTS: On the night of 21 July 1998 in Bacayao Norte, Dagupan City, Pedro Perreras and Boy Fernandez, his nephew, approached Leonardo Salazar who was engaged in idle banter with some barriomates at the neighborhood waiting shed. Pedro asked Leonardo

if Manoling Pastoral was home. When Leonardo nodded, Pedro asked for directions to go to Manoling's house. Feeling almost suffocated in the crowded waiting shed, Leonardo excused himself and walked towards the house of Estanislao Salo ten (10) meters away for some refreshing air. Soon after Pedro and Boy followed, each holding a bottle of beer. The two (2) approached the son of Estanislao by the name of Joel and asked him also for Manoling's house. Pedro then stopped by the window of the Estanislao's house which was just adjacent to the house of Manoling. The place was lighted by a mercury lamp about twelve (12) meters from the house of Estanislao. As soon as Pedro saw Estanislao, he rolled up his sleeves, drew a gun from his waist, and fired at Estanislao, hitting him on the head. Leonardo had a clear view of Estanislao sitting on a chair and watching TV when fired upon as he was only about ten (10) meters away from the shooter and the victim. Fearing for his life, Leonardo hid behind a chair. Leonora Salo, Estanislao's wife, heard the gunshot. She rushed to the living room and saw her husband slumped on the floor. She looked out the window and saw Pedro Perreras alias "Pepot" holding a gun staring at her husband's body. After Pedro and Boy left, Leonardo Salazar ran to the house of Saturnino Maramba, a barangay councilor, and reported to him, in between gasps, the shooting and narrated the details of what he had witnessed. Estanislao was rushed to the Villaflor Hospital for treatment but it was too late. He died at 5:30 the following morning, 22 July 1998. On 22 August 1998 accused-appellant was arrested while in hiding in Echague, Isabela. The Regional Trial Court finding accused-appellant PEDRO PERRERAS alias "Pepot" guilty of murder, imposing on him the death penalty and ordering him to pay the heirs of ESTANISLAO SALO P75,000.00 as civil indemnity, P91,803.59 in actual and compensatory damages, P1,728,000.00 in lost earnings, and P100,000.00 in moral damages. ISSUE: WHETHER OR NOT the award of the trial court regarding the amount of damages is correct. SC RULING: The award of damages was modified. Of the amount of P91,803.59 awarded for actual damages, only P61,813.15 may be granted as only so much for medical and burial expenses are supported by the evidence on record. Actual damages must be substantiated by documentary evidence, such as receipts, in order to prove expenses incurred as a result of the death of the victim. The heirs of the deceased may recover damages for loss of earning capacity. Although the prosecution did not present documentary evidence to support this claim, testimonial evidence is sufficient to establish a basis for which the court can make a fair and reasonable estimate of damages for loss of earning capacity, and the unrebutted testimony of Leonora Salo is sufficient basis for the award. She testified that the victim was fifty (50) years old at the time of his death and earned a basic salary of P130.00 a day but including tips as waiter in a restaurant he was earning a total average of P9,000.00 per month. Under the American Expectancy Table of Mortality adopted by this Court in several cases, loss of earning capacity is computed according to the following formula:

Net Earning Capacity (X) = Life Expectancy x Gross Annual Income - Living Expenses (50% of Gross Annual Income) where life expectancy = 2/3 x (80 - [age of deceased]); and Gross Annual Income = Monthly Earnings x number of months (12) Therefore, The award of P75,000.00 as civil indemnity is reduced to P50,000.00 since murder was not qualified by any circumstance under which the death penalty is authorized. The testimony of Leonora that she suffered sleepless nights and mental anxiety as a result of her husband's murder sufficiently justifies moral damages, although the award of P100,000.00 may be considered excessive hence must be lowered to P50,000.00 to conform with current jurisprudence. WHEREFORE, the Decision of the Regional Trial Court in Crim. Case No. 98- 02303-D finding accused-appellant PEDRO PERRERAS alias "Pepot" guilty of murder, imposing on him the death penalty and ordering him to pay the heirs of ESTANISLAO SALO P75,000.00 as civil indemnity, P91,803.59 in actual and compensatory damages, P1,728,000.00 in lost earnings, and P100,000.00 in moral damages is MODIFIED. Accused-appellant PEDRO PERRERAS is found guilty of murder and sentenced instead to reclusion perpetua and to pay the heirs of ESTANISLAO SALO P50,000.00 as civil indemnity, P61,813.15 as actual damages, P1,080,000.00 in lost earnings and P50,000.00 as moral damages. No costs. 43. PEOPLE vs. UGANAP FACTS: On January 6, 1990, in the City of Davao, Felix Uganap, Salvador Uganap, Faustino Uganap, Nonoy Panday, Tirso Arang, and four John Does, armed with firearm and a bladed weapon, stabbed and shot with said weapons Pedro Arang. The cause of the conflict between Faustino Uganap and the victim was a piece of land. Pedro wanted to build his house therein but Faustino opposed it. All the accused interposed denials and alibis. They denied that they were together on the night of the incident, or that they went to the house of Pedro Arang. Faustino said he was making copra with his nephew, Margarito Arang. Nonoy Panday and Tirso Arang said that they were not in town. Accused-appellant stated that he reported to work at Crown Fruits, where he remained on duty as a guard the whole night. Faustino Uganap, Nonoy Panday, and Tirso Arang for failure of the prosecution to prove conspiracy as against them, the RTC held that only Felix Uganap and Salvador Uganap were proved culpable. As to accused Felix Uganap, his guilt having been established beyond reasonable doubt of the crime of Murder under Art. 248 of the Revised Penal Code, he is hereby sentenced to suffer a penalty of reclusion perpetua. Accused Felix Uganap is further ordered to indemnify the family of Pedro Arang the following:

1. P50,000.00 for the death of Pedro Arang; 2. For loss of income, what was proved on record is that the victim, at the time of his death, was 36 years old, in good health, and working at a hacienda with wage of P1,000.00 per month. Hence, using the formula repeatedly adopted by the Supreme Court: [2/3 x (80 age of victim at time of death) x a reasonable portion of the net income which would have been received by the heirs as support], this Court fixes the award for loss of earning capacity of the victim at P90,000.00; and 3. P5,000.00 for burial expenses. ISSUE: WHETHER OR NOT the damages was properly imposed by the trial court in computing loss of earning capacity. RULING: On the damages awarded for loss of earning capacity, we are inclined to grant the same despite the non-availability of documentary evidence. In People vs. Dizon, we stated that oral testimony will suffice to prove net earning capacity where the victim was employed as a daily wage worker earning less than the minimum wage under current labor laws. Pedro Arang, a hacienda worker receiving wages of P1,000.00 a month, was certainly earning far less than the minimum wage. The trial court correctly adopted the formula used by this Court in computing loss of earning capacity. Thus: Net earning capacity = [2/3 x (80 age at time of death) x (gross annual income reasonable and necessary living expenses)] As there is no proof of living expenses of the deceased, the net income is estimated to be 50% of the gross annual income. Hence, in the instant case, the damages payable for loss of earning capacity is computed as follows: Net earning capacity = [2/3 x (80 - 36) x (P12,000.00 P6,000.00)] = 2/3 x 44 x P6,000.00 = P176,000.00 Based on the foregoing, the damages representing loss of earning capacity is set at P176,000.00. The award of P5,000.00 as actual damages, representing burial expenses, is sustained. WHEREFORE, the appealed decision is AFFIRMED with the above modifications. Accused-appellant Felix Uganap is hereby declared guilty of murder and sentenced to suffer the penalty of reclusion perpetua. He is further required to pay the heirs of Pedro Arang P50,000.00 as death indemnity, P176,000.00 as damages for loss of earning capacity, and P5,000.00 as actual damages. SO ORDERED. 44. SMITH BELL DODWELL SHIPPING AGENCY CORPORATION vs. CATALINO BORJA FACTS: On September 23, 1987, Smith Bell filed a written request with the Bureau of Customs for the attendance of the latters inspection team on vessel M/T King Family which was due to arrive at the port of Manila on September 24, 1987. Said vessel contained 750 metric tons of alkyl benzene and methyl methacrylate monomer.

On the same day, Supervising Customs Inspector Manuel Ma. D. Nalgan instructed Catalino Borja to board said vessel and perform his duties as inspector upon the vessels arrival until its departure. At that time, Borja was a customs inspector of the Bureau of Customs receiving a salary of P31,188.25 per annum."At about 11 oclock in the morning on September 24, 1987, while M/T King Family was unloading chemicals unto two (2) barges owned by ITTC, a sudden explosion occurred setting the vessels afire. Upon hearing the explosion, Borja, who was at that time inside the cabin preparing reports, ran outside to check what happened. Again, another explosion was heard.Seeing the fire and fearing for his life, Borja hurriedly jumped over board to save himself. However, the water was likewise on fire due mainly to the spilled chemicals. Despite the tremendous heat, Borja swam his way for one (1) hour until he was rescued by the people living in the squatters area and sent to San Juan De Dios Hospital.After weeks of intensive care at the hospital, his attending physician diagnosed Borja to be permanently disabled due to the incident. Borja made demands against Smith Bell and ITTC for the damages caused by the explosion. However, both denied liabilities and attributed to each other negligence. The trial court (RTC) ruled in favor of Respondent Borja and held petitioner liable for damages and loss of income. The RTC disposed as follows: WHEREFORE, premises considered, judgment is hereby rendered ordering [Petitioner] Smith Bell Dodwell [S]hipping Agency Corporation to pay [Borja]: 1.The amount of P495,360.00 as actual damages for loss of earning capacity: 2.The amount of P100,000.00 for moral damages; and 3.The amount of P50,000.00 for and as reasonable attorneys fees. The cross-claim of [Petitioner] Smith Bell Dodwell Shipping Agency Corporation against co-defendant International Towage and Transport Corporation and the latters counterclaim against [Borja] and cross-claim with compulsory counterclaim against Smith Bell are hereby ordered dismissed. Contrary to the claim of petitioner that no physical evidence was shown to prove that the explosion had originated from its vessel, the CA held that the fire had originated from M/T King Family. This conclusion was amply supported by the testimonies of Borja and Eulogio Laurente (the eyewitness of International Towage and Transport Corporation or ITTC) as well as by the investigation conducted by the Special Board of Marine Inquiry and affirmed by the secretary of the Department of National Defense. On the other hand, the RTC, which the CA sustained, had not given probative value to the evidence of petitioner, whose sole eyewitness had not shown up for crossexamination ISSUE: Assuming without admitting that Respondent Catalino Borja is entitled to damages, whether Respondent Borja is entitled to the amount of damages awarded to him by the trial court. SC RULING: The amount recoverable is not the loss of the entire earning, but rather the loss of that portion of the earnings which the beneficiary would have received. Hence, in fixing the amount of the said damages, the necessary expenses of the deceased

should be deducted from his earnings. Only net earnings, not gross earnings, are to be considered; that is, the total of the earnings less expenses necessary in the creation of such earnings or income, less living and other incidental expenses. When there is no showing that the living expenses constituted a smaller percentage of the gross income, we fix the living expenses at half of the gross income. To hold that one would have used only a small part of the income, with the larger part going to the support of ones children, would be conjectural and unreasonable. Counsel for Respondent Borja is also correct in saying that life expectancy should not be based on the retirement age of government employees, which is pegged at 65. In Negros Navigation Co, Inc. v. CA, the Court resolved that in calculating the life expectancy of an individual for the purpose of determining loss of earning capacity under Article 2206(1) of the Civil Code, it is assumed that the deceased would have earned income even after retirement from a particular job.Respondent Borja should not be situated differently just because he was a government employee. Private employees, given the retirement packages provided by their companies, usually retire earlier than government employees; yet, the life expectancy of the former is not pegged at 65 years. Petitioner avers that Respondent Borja died nine years after the incident and, hence, his life expectancy of 80 years should yield to the reality that he was only 59 when he actually died. We disagree. The Court uses the American Experience/Expectancy Table of Mortality or the Actuarial or Combined Experience Table of Mortality, which consistently pegs the life span of the average Filipino at 80 years, from which it extrapolates the estimated income to be earned by the deceased had he or she not been killed. Respondent Borjas demise earlier than the estimated life span is of no moment. For purposes of determining loss of earning capacity, life expectancy remains at 80. Otherwise, the computation of loss of earning capacity will never become final, being always subject to the eventuality of the victims death. The computation should not change even if Borja lived beyond 80 years. Fair is fair.Based on the foregoing discussion, the award for loss of earning capacity should be computed as follows: Loss of earning = [2 (80-50)] x [(P2,752x12)-16,512] capacity 3 = P330,240 Having been duly proven, the moral damages and attorneys fees awarded are justified under the Civil Codes Article 2219, paragraph 2; and Article 2208, paragraph 11, respectively. WHEREFORE, the Petition is PARTLY GRANTED. The assailed Decision is AFFIRMED with the following MODIFICATIONS: petitioner is ordered to pay the heirs of the victim damages in the amount ofP320,240 as loss of earning capacity, moral damages in the amount of P100,000, plus another P50,000 as attorneys fees. Costs against petitioner. 45. PEOPLE vs. ELGER GUZMAN FACTS: Elmer Aquino was married to Rodalyn Aquino, who was in Singapore. They have two (2) children. Elmer Aquino was a farmer earning Fourteen Thousand Pesos (P14,000.00) per cropping.

On November 18, 1995, in Ilagan, Isabela, Philippines, Elger Guzman , unlawfully, assault, attack and stab with a Fan Knife (Balisong) Elmer Aquino, inflicting upon him a stab wound on his body, which directly caused his death. Dr. Rodelmar De Leon, Municipal Health Officer of San Isidro, Isabela, conducted an autopsy of the victim and found one stab wound on the upper lobe of the victims left lung, which was fatal. The cause of death was hypovolemic shock secondary to massive bleeding. There was also a four-centimeter incised wound at the base of the right thumb of the victim, which could have been caused by a sharp object like a knife. When arraigned on July 29, 1997, accused-appellant Elger Guzman, assisted by counsel, pleaded not guilty. Thereafter, trial on the merits ensued. On September 30, 1997, the Regional Trial Court rendered judgment, the dispositive portion of which reads: WHEREFORE, in view of the foregoing findings and considerations, the prosecution having proved the guilt of the accused beyond reasonable doubt for the offense charged, and there being no aggravating nor mitigating circumstance to consider, the Court hereby sentences the accused to RECLUSION PERPETUA, with all the accessory penalties provided for by law; to indemnify the heirs of the deceased victim the sum of P20,000.00 for funeral expenses; P600,000.00 for lost earnings and an additional P300,000.00 by way of moral and exemplary damages, and to pay the costs. SO ORDERED ISSUE: WHETHER OR NOT the Trial Court correctly award the proper amount of damages. RULING: The court a quo correctly awarded actual damages to the heirs of the victim in the total amount of Twenty Thousand Pesos (P20,000.00) as the defense admitted that the victims family incurred funeral expenses of Ten Thousand Pesos (P10,000.00) and expenses for the nine-day wake in the amount of Ten Thousand Pesos (P10,000.00). Although, the court a quo awarded the heirs of the victim loss of earning capacity of the deceased, the amount of Six Hundred Thousand Pesos (P600,000.00) should be reduced to Three Hundred Seventy Thousand Pesos (P370,000.00). Thefather of the victim, Salcedo Aquino, testified that Elmer Aquino was a farmer who earned Fourteen Thousand Pesos (P14,000.00) per cropping but failed to adduce evidence to substantiate his claim. Nevertheless, Article 2206 of the Civil Code provides, 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 x x x unless the deceased on account of permanent physical disability not caused by the defendant, had no earning capacity at the time of his death. In the instant case, since there is no indication that the deceased had no earning capacity at the time of his death, we are inclined to give credit to Salcedo Aquinos testimony. Salcedo Aquino, however, did not testify regarding the number of croppings the deceased victim had in a year. Nonetheless, the court a quo ruled that [e]arning about Twenty Thousand Pesos (P20,000.00) a year as a tiller is considered reasonable x x x. Adopting the lower courts assessment that the deceased earned about Twenty Thousand Pesos (P20,000.00), we deduct therefrom his necessary and incidental expenses estimated at fifty per cent

(50%), leaving a balance of Ten Thousand Pesos (P10,000.00). We then multiply his net annual income of P10,000.00 by his life expectancy of 37 years to arrive at the amount of Three Hundred Seventy Thousand Pesos (P370,000.00), which represents the loss of earning capacity of the deceased. The court a quo also awarded moral damages and exemplary damages in the amount of Three Hundred Thousand Pesos (P300,000.00) to the heirs of the victim. While moral damages under Article 2206, paragraph 3, of the Civil Code may be awarded by the court for the mental anguish suffered by the heirs of the victim by reason of the victims death, which was testified to by the father of the victim, the amount should, however, be reduced to Fifty Thousand Pesos (P50,000.00) in accordance with prevailing jurisprudence. The purpose for making such an award is not to enrich the heirs of the victim but to compensate them for injuries to their feelings. With regard to the award of exemplary damages, Article 2230 of the Civil Code provides that in criminal offenses, exemplary damages as a part of the civil liability may be imposed when the crime was committed with one or more aggravating circumstances. In the instant case, no aggravating circumstance attended the commission of the crime; hence, the award of exemplary damages should be deleted. Further, appellant should be made to pay the heirs of the victim the sum of Fifty Thousand Pesos (P50,000.00) as civil indemnity, which is granted without need of proof other than the commission of the crime. WHEREFORE, the assailed Decision of the Regional Trial Court in Criminal Case No. 2527 is AFFIRMED with the MODIFICATION that accused-appellant Elger Guzman is found guilty of homicide only, and is hereby sentenced to suffer an indeterminate prison term ranging from six (6) years and eight (8) months of prision mayor, as minimum, to twelve (12) years and one (1) day of reclusion temporal, as maximum. Accused-appellant is also ordered to pay the heirs of the victim, Elmer Aquino, Twenty Thousand Pesos (P20,000.00) as actual damages; Fifty Thousand Pesos (P50,000.00) as civil indemnity; Fifty Thousand Pesos (P50,000.00) as moral damages; Three Hundred Seventy Thousand Pesos (P370,000.00) as loss of earning capacity of the deceased; and to pay the costs. 46. PEOPLE vs. MAYOR ANTONIO L. SANCHEZ FACTS: The RTC found accused Antonio L. Sanchez, Luis Corcolon y Fadialan, Landrito "Ding" Peradillas and Artemio Averion guilty beyond reasonable doubt of murder committed Nelson Pealosa and Rickson Pealosa. On April 13, 1991, accused Mayor Sanchez ordered the three other accused to kill Nelson Pealosa, one of the political leaders of Dr. Virvilio Velecina, the latter being Sanchezs opponent in the mayoralty seat. On the same night, while Nelson and Rickson Pealosa were leaving the birthday party of Dr. Velecina, the accused fired at the victims while they were pursuing the Pealosas. Inside the pursuing car were Peradillas, Averion, Corcolon and the witness, Vivencio Malabanan. Later, both the victims died of gunshot wounds. The trial court considered the crime as a complex crime of double murder punishable under Article 48 of the Revised Penal Code. The Regional Trial Court rendered the following decision:

. . . to suffer the maximum penalty of reclusion perpetua for each of the seven offenses or a total of seven reclusion perpetua for each accused. In addition, the Court hereby orders all the accused to jointly and severally pay the victims respective families the following sums by way of civil indemnity: ISSUE: WHETHER OR NOT the award of damages by the lower court is properly computed. SC RULING: The Court, in its decision dated January 25, 1999, affirmed in toto the decision of the lower court. However, we also ordered each accused-appellant to pay the respective heirs of Eileen Sarmenta and Allan Gomez an additional indemnity of P350,000.00 each, stating that since each accused-appellant had been found guilty of seven counts of rape with homicide, jurisprudence dictated that for each count, each accused-appellant is liable for civil indemnity of P50,000.00, or a total of P350,000.00. Since the trial courts award of actual damages to the Gomez and Sarmenta families already included civil indemnity in the amount of P50,000.00, to order each accusedappellant to pay an additional P350,000.00 as civil indemnity would be double recovery of damages on the part of the Gomez and Sarmenta families for the same act or omission. Thus, the amount of P50,000.00 awarded by the trial court must each be deducted from the amount of actual damages due to the Gomez and Sarmenta families. As for funeral expenses, the Court had occasion to declare in People vs. Timon (281 SCRA 577 [1997]) that burial expenses, which are by nature actual expenses must be proved. Since no proof of burial expenses was ever presented in the instant case, its award will not be allowed. It is a settled rule that there must be proof that actual or compensatory damages have been suffered and evidence of its actual amount (People vs. Nablo, 319 SCRA 784 [1999]). While the funeral expenses incurred by the Sarmenta family were supported by the appropriate receipts, the same is not true for the funeral expenses incurred by the Gomez family. Not having been duly receipted, the amount of P74,000.00 awarded to the Gomez family as funeral expenses must, perforce, be deleted. However, as the heirs of Allan Gomez clearly incurred funeral expenses, P10,000.00 by way of nominal damages should be awarded. This award is adjudicated so that a right which has been violated may be recognized or vindicated,and not for the purpose of indemnification (see People vs. Candare, 333 SCRA 338 [2000]). The award of P3,276,000.00 and P3,360,000.00, representing the alleged loss of earning capacity of Sarmenta and Gomez, respectively, also merit review. Eileen Sarmenta, at the time of her death, was a graduating student of the College of Agriculture of the University of the Philippines at Los Baos (UPLB), majoring in Food and Nutrition for Large Animals. Allan Gomez was likewise a senior student of the College of Agriculture of UPLB, majoring in Beef Production. The trial court, using the American Expectancy Table of Mortality, pegged the life expectancy of Sarmenta, 21 years old at the time of her death, and Gomez, 19 years old at the time of his death, at 39.1 and 40.6 years, respectively. Believing that the victims would have earned a monthly salary of P15,000.00 and incurred living expenses of P8,000.00 per month, the trial court awarded P3,276,000.00 and P3,360,000.00 as the amount recoverable by the Sarmenta and Gomez families, respectively, for the loss of the earning capacity of Eileen and Allan.

While accused-appellant Sanchez contends that the awards of P3,276,000.00 and P3,360,000.00 are baseless in fact and law, no evidence having been adduced to prove that the victims had any actual income at the time of their demise, it is well-settled that to be compensated for loss of earning capacity, it is not necessary that the victim, at the time of injury or death, be gainfully employed. Compensation of this nature is awarded not for loss of earnings but for loss of capacity to earn money (People vs. Teehankee, supra). Likewise, the fact that the prosecution did not present documentary evidence to support its claim for damages for loss of earning capacity of the deceased does not preclude recovery of the same (People vs. Quilang, 312 SCRA 314 [1999]; People vs. Verde, 302 SCRA 690 [1999]). On the part of Eileen Sarmenta, her mother testified that Eileen had an offer for employment from Monterey Farms. On the other hand, Allan Gomezs mother testified that her deceased son planned to work on a private farm after graduation. Moreover, in Cariaga et al. vs. LTB and Manila Railroad Co. (110 Phil. 346 [1960]), the Court awarded compensatory damages for the loss of earning capacity to Edgardo Cariaga, a 4th year medical student at UST, stating that while his scholastic record may not have been first rate, it was, nevertheless, sufficient to justify the assumption that he could have finished the course, would have passed the board in due time, and that he could have possibly earned as a medical practitioner the minimum monthly income of P300.00. Both Sarmenta and Gomez were senior agriculture students at UPLB, the countrys leading educational institution in agriculture. As reasonably assumed by the trial court, both victims would have graduated in due course. Undeniably, their untimely death deprived them of their future time and earning capacity. For these deprivation, their heirs are entitled to compensation. Difficulty, however, arises in measuring the value of Sarmentas and Gomezs lost time and capacity to earn money in the future, both having been unemployed at the time of death. While the law is clear that the deceased has a right to his own time which right cannot be taken from him by a tortfeasor without compensation the law is also clear that damages cannot be awarded on the speculation, passion, or guess of the judge or the witnesses. In this case, Eileen Sarmentas mother testified that for a new graduate of UPLB, the basic salary was more or less P15,000.00 per month. Allan Gomezs mother, on the other hand, testified that her son could have easily gotten P10,000.00 to P15,000.00 per month. Clearly, the testimony of said witnesses are speculative, insufficient to prove that in 1993, Sarmenta and Gomez would have indeed earned P15,000.00 a month had they managed to graduate. However, considering that Sarmenta and Gomez would have graduated in due time from a reputable university, it would not be unreasonable to assume that in 1993 they would have earned more than the minimum wage. All factors considered, the Court believes that it is fair and reasonable to fix the monthly income that the two would have earned in 1993 at P8,000.00 per month (or P96,000.00/year) and their deductible living and other incidental expenses at P3,000.00 per month (or P36,000.00/year). Hence, in accordance with the formula adopted by the Court in Villa Rey Transit, Inc. vs. CA (31 SCRA 511 [1970]), and using the American Expectancy Table of Mortality, the loss of Sarmenta and Gomezs earning capacity is to be computed as follows: Net earning capacity = Life expectancy x (Gross Annual Income Living Expenses) where:

Life expectancy = 2/3 (80 the age of the deceased) Heirs of Eileen Sarmenta: = 2/3 (80-21) x (96,000 36,000) = 39.353 x 60,000 = P2,361,180.00 Heirs of Allan Gomez: = 2/3 (80-19) x (96,000 36,000) = 40.687 x 60,000 = P2,441,220.00 As to the award of P2,000,000.00 each as moral damages to the Sarmenta and Gomez families, these must also be reduced, the same being excessive. While the assessment of moral damages is left to the discretion of the court according to the circumstances of each case (Article 2216, Civil Code), the purpose of moral damagesis essentially indemnity or reparation, not punishment or correction. Moral damages are emphatically not intended to enrich a complainant at the expense of a defendant; they are awarded only to enable the injured party to obtain means, diversions or amusements that will serve to alleviate the moral suffering he has undergone by reason of the defendants culpable action. In other words, 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 (Dela Serna vs. CA, 233 SCRA 325 [1994]). 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 whatever with the wealth or the means of the offender. The death caused by a beggar is felt by the parents of the victim as intensely as that caused by the action of a wealthy family. The Court, in the exercise of its discretion, thus reduces the amount of moral damages awarded to the heirs of Eileen Gomez and Allan Sarmenta to P1,000,000.00 each. As to the award of attorneys fees and litigation expenses, the same is reasonable and justified, this case having dragged on for over eight years. WHEREFORE, premises considered, we AFFIRM the conviction of accused- appellants for seven counts of rape with homicide and the sentence of reclusion perpetua imposed upon them for each of said counts, with MODIFICATION that the accused be ordered to pay the heirs of the victims as follows: To the heirs of Eileen Sarmenta: 1. Death indemnity 2. Moral damages 3. Funeral expenses 4. Loss of earning capacity 5. Attorneys fees & litigation expenses P 350,000.00 1,000,000.00 106,650.00 2,361,180.00 164,250.00 ---------------------Total To the heirs of Allan Gomez:

1. Death indemnity P350,000.00 2. Moral damages 1,000,000.00 3. Nominal damages 10,000.00 4. Loss of earning capacity 2,441,220.00 5. Attorneys fees & litigation expenses ---------------------Total SO ORDERED. 47. PESTAO vs. Spouses SUMAYANG FACTS: At around 2:00 oclock on the afternoon of August 9, 1986, Ananias Sumayang was riding a motorcycle along the national highway in Ilihan, Tabagon, Cebu. Riding with him was his friend Manuel Romagos. As they came upon a junction where the highway connected with the road leading to Tabagon, they were hit by a passenger bus driven by Gregorio Pestao and owned byMetro Cebu Autobus Corporation (Metro Cebu), which had tried to overtake them, sending the motorcycle and its passengers hurtling upon the pavement. Both Ananias Sumayang and Manuel Romagos were rushed to the hospital in Sogod, where Sumayang was pronounced dead on arrival. Romagos was transferred to the Cebu Doctors Hospital, but he succumbed to his injuries the day after. The lower court found petitioners liable to the respondents, in the amounts of P30,000.00 for death indemnity, P829,079 for loss of earning capacity of the deceased Ananias Sumayang, and P36,000.00 for necessary interment expenses. The CA affirmed respondents liability for the accident and for Sumayangs death. Pestao was negligent when he tried to overtake the victims motorcycle at the Tabagon junction. As a professional driver operating a public transport vehicle, he should have taken extra precaution to avoid accidents, knowing that it was perilous to overtake at a junction, where adjoining roads had brought about merging and diverging traffic. The appellate court opined that Metro Cebu had shown laxity in the conduct of its operations and in the supervision of its employees. By allowing the bus to ply its route despite the defective speedometer, said petitioner showed its indifference towards the proper maintenance of its vehicles. Having failed to observe the extraordinary diligence required of public transportation companies, it was held vicariously liable to the victims of the vehicular accident. In accordance with prevailing jurisprudence, the CA raised to P50,000 the granted indemnity for the death of the victim. It also affirmed the award of loss of earning capacity based on his life expectancy. Such liability was assessed, not as a pension for the claiming heirs, but as a penalty and an indemnity for the drivers negligent act. ISSUE: WHETHER OR NOT the life expectancy of the deceased or life expectancies of respondents would be used as basis for the computation of loss of earning capacity. P 3,992,220.00

SC RULING: Petitioners cite Villa Rey Transit, Inc. v. Court of Appeals, which held: The determination of the indemnity to be awarded to the heirs of a deceased person has therefore no fixed basis. x x x The life expectancy of the deceased or of the beneficiary, whichever is shorter, is an important factor. x x x.They contend that the CA used the wrong basis for its computation of earning capacity. We disagree. The Court has consistently computed the loss of earning capacity based on the life expectancy of the deceased, and not on that of the heir. Even Villa Rey Transit did likewise. The award for loss of earning capacity is based on two factors: (1) the number of years on which the computation of damages is based and (2) the rate at which the loss sustained by the heirs is fixed. The first factor refers to the life expectancy, which takes into consideration the nature of the victims work, lifestyle, age and state of health prior to the accident. The second refers to the victims earning capacity minus the necessary living expenses. Stated otherwise, the amount recoverable is that portion of the earnings of the deceased which the beneficiary would have received -- the net earnings of the deceased. WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution AFFIRMED. Cost against petitioners. 48. CONSOLIDATED DAIRY PRODUCTS CO vs. COURT OF APPEALS FACTS: On November 13, 1974, Dexco wrote Consolidated Philippines that it was cancelling effective January 25, 1975 the license granted to Consolidated Philippines to use the tradename Darigold . Mr. Augusto Syjuco, in his behalf and in behalf of Syjuco, Inc., the minority stockholder in Consolidated Philippines, protested the cancellation of the license. Subsequently, Dr. Louis Arrigoni, speaking as President of Consolidated Seattle, offered Syjuco, Inc. to sell Consolidated Seattle's share in Consolidated Philippines for P 1.00 or to buy Syjuco, Inc.'s share in Consolidated Philippines or to file bankruptcy proceedings for Consolidated Philippines. Left with no better choice, Syjuco, Inc. chose to sell its 49% equity in Consolidated Philippines to Consolidated Seattle. Consequently, on October 8, 1976, Syjuco, Inc. executed a memorandum agreement by virtue of which it agreed to sell to Consolidated Seattle all its Interest in Consolidated Philippines and to dissolve Consolidated Philippines, subject to the condition that the right of plaintiff to submit claims it may have shall be respected in case Consolidated Philippines is not dissolved. Accordingly, Consolidated Seattle bought the entire interest of Syjuco, Inc. and its stockholdings Consolidated Philippines and proceeded to dissolve Consolidated Philippines.

Before Consolidated Philippines could be dissolved, however, Dexco theMwholly owned subsidiary of Consolidated Seattle took over the marketing activities of Consolidated Philippines and proceeded to sell milk under the tradename Darigold upon the dissolution of Consolidated Philippines. Earlier, however, on November 3, 1976, E.L. Benitez, then general manager of Consolidated Philippines, notified plaintiff that it was cancelling the can supply contract of April 2, 1959, prompting plaintiff to demand reimbursement for the separation pay of the employees concerned due to the cessation of their operation on November 15, 1976 in the amount of P1,022,472.59 and payment of unrealized profits Since plaintiff's demands were rejected, it was constrained to file this case and t engage the services of counsel for 25% of all recoveries. After the parties presented their respective evidence, the trial court rendered judgment in favor of Standard. The dispositive portion of which reads: IN VIEW OF THE FOREGOING, this Court hereby orders the defendants, namely, Consolidated Dairy Products Company of Seattle, Washington, U.S.A. and/ or its alter ego Dairy Export Company Inc., as well as Consolidated Philippines. Inc. (represented by its Acting Trustees Jesus B. Bito and Federico B. Guilas) to pay plaintiff, jointly and severally, the following: a) P1,022,472.59 representing the separation pay that plaintiff had to pay its employees plus 6% interest per annum computed from the date of the filing of this case on April 4, 1977 until the defendants fully pay their obligation; b) P8,107,931.13 representing plaintiff's aggregate unrealized profit from the years 1974 to 1981 plus 6% interest per annum computed from April 4, 1977, the date of the filing of this case until defendants fully pay their obligation; c) Pl,150,197.80 representing inventory losses suffered by plaintiff plus 6% interest per annumcomputed from April 4, 1977 until defendants fully settle their obligation; and d) Pl,000,000.00 as exemplary damages, considering the damages caused the plaintiff and the fraudulent scheme used by the defendants, plus 25% of all the abovementioned amounts as attorney's fees. The counterclaim of the defendants Consolidated Philippines and Dexco are denied for lack of merit. Not satisfied with the decision of the trial court, Consolidated Seattle and Consolidated Philippines, thru its acting trustees, appealed to the Court of Appeals. On April 19, 1991, the Court of Appeals rendered a decision affirming the decision of the trial court in toto. ISSUE: WHETHER OR NOT the lower court correctly imposed the award of damages against the herein petitioner. SC RULING: We now go to the propriety of the award of damages. The trial court received evidence to support private respondent's claim for damages. It should be emphasized here that the damages claimed by private respondents do not refer to claims which were already due from the can supply contract. The claims here are for damages caused by the fraudulent termination by petitioners of the can supply contract four (4) years before the end of its term and for such a short notice. We reproduce

herein the findings of the trial court and adopt them with modifications as regards the amount: Plaintiff's first claim is for reimbursement for the separation pay it paid its employees due to the termination of the can supply agreement in the amount of Pl,022,472.59. The evidence supports plaintiff's claim above. The amount actually paid by plaintiffs to the separated employee is P929,520.54. To this was added 10% since 10% must be added to costs of production, thus making the total of P1,022,472.59. There is no question that Standard paid these amounts to their separated employees. It was obliged to do so by virtue of the CBA it signed with the employees. The second claim of plaintiff is for unrealized profit amounting to P8,101,931.13. In support of this claim plaintiff showed that from 1971 to 1975 It made an aggregate profit of P 8,107,931.13), and argued that since the can supply contract had another five (5) years to go (1977 to 1981) plaintiff would have earned that much. Indemnification for damages shall comprehend not only the value of the loss suffered, but also that of the profits which the obligee failed to obtain (Art. 2200 NCC). The presumption that Standard would earn exactly the same profit as it did five (5) years before its closure is speculative. A more reasonable amount would be the average of the yearly profit for the five years preceding the closure (1971-1975) multiplied by the number of years remaining as provided for in the contract. The average yearly profit for 1971 to 1975 is P1,041,095.76 . This amount multiplied by five (years) amounts to P5,205,478.80. We also affirm the findings of the appellate court on inventory losses as it is sufficiently supported by evidence, to wit: The financial statement of plaintiff further shows that it incurred inventory losses in the year 1977 due to cans which rusted and could not have been disposed of, administrative expenses connected with the cost of the cans, cost of raw materials and depreciated portion of the machinery all amounting to P1,150,197.80. These losses were due to the cancellation of the can supply contract before its agreed expiration date.It is only right that defendants be held liable for them. There is no doubt that the breach committed by the petitioners was made in a wanton and fraudulent manner. There was no reason for petitioners to terminate the can supply contract with Standard. The latter was purposely organized for the benefit of Consolidated Philippines. Neither was there a need to close Consolidated Philippines because Consolidated Seattle had all the intentions of continuing its business only this time to be undertaken by its sole subsidiary, Dexco to the prejudice of Standard. Where a defendant violates a contract with plaintiff, the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive and malevolent manner (Art. 2232, Civil Code). The claim for attorney's fees of 25% percent of all recoveries is unconscionable. It is hereby reduced to 15%.

ACCORDINGLY, the decision of respondent Court of Appeals is affirmed with modification on the amount of damages awarded as discussed above. SO ORDERED. Cases 40-48 PIAGA, RICHARD S. 49. ALGARRA VS. SANDEJAS FACTS: The case involves the determination of the damages to be allowed since the negligence of the defendant who was driving his car was not questioned. Plaintiff claims that his earning capacity was P50 per month but because of the injuries he sustained it was reduced to P15 per month. He also paid for his medical treatment in the hospital and after discharged he attended by private practitioner where he spent P8 and P2 for the medicine. All in all amounting to P110 and claimed two months payment would be sufficient for the actual lost of his work. Resolution of the lower court: The lower court, while recognizing the justness of the claim, refused to allow him anything for injury to his business due to his enforced absence thereof. The trial court's opinion appears to be based upon the following quotation from Viada (vol. 1 p. 539), quoted in that decision: ". . . with regard to the offense of lesiones, for example, the civil liability is almost always limited to indemnity for damage to the party aggrieved for the time during which he was incapacitated for work; . . ." and there were no evidence offered by the plaintiff. ISSUE: Whether or not the lower was correct in not allowing damages for plaintiffs lost of business due to his absence thereof because of the injuries sustained. RESOLUTION OF THE SC: The case at bar involves actual incapacity of the plaintiff for two months, and loss of the greater portion of his business. As to the damages resulting from the actual incapacity of the plaintiff to attend to his business there is no question. They are, of course, to be allowed on the basis of his earning capacity, which in this case, is P50 per month. The difficult question in the present case is to determine the damage which has results to his business through his enforced absence. In Sanz vs. Lavin Bros. (6 Phil. Rep., 299), this court, citing numerous decisions of the supreme court of Spain, held that evidence of damages "must rest upon satisfactory proof of the existence in reality of the damages alleged to have been suffered." But, while certainty is an essential element of an award of damages, it need not be a mathematical certainty. That this is true is adduced not only from the personal injury cases from the supreme court of Spain which we have discussed above, but by many cases decided by this court, reference to which has already been made. As stated in Joyce on Damages, section 75, "But to deny the injured party the right to recover any actual damages in cases f torts because they are of such a nature a cannot be thus certainly measured, would be to enable parties to profit by and speculate upon their own wrongs; such is not the law." We are of the opinion that the lower court had before it sufficient evidence of the damage to plaintiff's business in the way of prospective loss of profits to justify it in calculating his damages as to his item. That evidence has been properly elevated to this court of review. Under section 496 of the Code of Civil Procedure, we are authorized to

enter final judgment or direct a new trial, as may best sub serves the ends of justice. We are of the opinion that the evidence presented as to the damage done to plaintiff's business is credible and that it is sufficient and clear enough upon which to base a judgment for damages. Plaintiff having had four years' experience in selling goods on commission, it must be presumed that he will be able to rebuild his business to its former proportions; so that at some time in the future his commissions will equal those he was receiving when the accident occurred. Aided by his experience, he should be able to rebuild this business to its former proportions in much less time than it took to establish it as it stood just prior to the accident. One year should be sufficient time in which to do this. The profits which plaintiff will receive from the business in the course of its reconstruction will gradually increase. The injury to plaintiff's business begins where these profits leave off, and, as a corollary, there is where defendant's liability begins. Upon this basis, we fix the damages to plaintiff's business at P250. The judgment of the lower court is set aside, and the plaintiff is awarded the following damages; ten pesos for medical expenses; one hundred pesos for the two months of his enforced absence from his business; and two hundred and fifty pesos for the damage done to his business in the way of loss of profits, or a total of three hundred and sixty pesos. No costs will be allowed in this instance. 50. QUIRANTE VS. IAC FACTS: In a suit filed by the late DR. Casasola thru his counsel atty. John Quirante for a breach of contract against contractor Norman Guerrero and Philippine American General Insurance Com. Inc. (Philamgen) acting as a bondsman.teh lower court favored Dr.Casaola and ordered Guerrero and Philamgen to pay the plaintiff actual, moral, exemplary and attorneys fees. On appeal to the CA Dr. Casasola died leaving his widow and some children as his survivors. Later, atty. Quirante filed with the trial court for the confirmation his Attorneys fees by virtiue of an oral agreement with the late Dr. Casasola and which was confirmed in writing by the widow and some children of Dr. Casasola. Resolution of the lower court: The trial court granted the motion despite opposition. However, it ruled that such is premature because of a petition for review on certiorari filed by Philamgen may or may not ultimately result in the granting to the casasola family of the total amount of damages awarded by the court. ISSUE: whether or not there is a pre mature confirmation of attorney fees. RESOLUTION OF THE SC: What is being claimed here as attorney's fees by petitioners is, however, different from attorney's fees as an item of damages provided for under Article 2208 of the Civil Code, wherein the award is made in favor of the litigant, not of his counsel, and the litigant, not his counsel, is the judgment creditor who may enforce the judgment for attorney's fees by execution. Here, the petitioner's claims are based on an alleged contract for professional services, with them as the creditors and the private respondents as the debtors. In filing the motion for confirmation of attorney's fees, petitioners chose to assert their claims in the same action. This is also a proper remedy under our jurisprudence. Nevertheless, we agree with the respondent court that the confirmation of attorney's

fees is premature. As it correctly pointed out, the petition for review on certiorari filed by PHILAMGEN in this Court (G.R. No. 64834) "may or may not ultimately result in the granting to the Casasola (sic) family of the total amount of damages" awarded by the trial court. This especially true in the light of subsequent developments in G.R. No. 64334. In a decision promulgated on May 21, 1987, the Court rendered judgment setting aside the decision of May 4, 1983 of the Intermediate Appellate Court in AC-G.R. No. 00202 and ordering the respondent Regional Since the main case from which the petitioner's claims for their fees may arise has not yet become final, the determination of the propriety of said fees and the amount thereof should be held in abeyance. This procedure gains added validity in the light of the rule that the remedy for recovering attorney's fees as an incident of the main action may be availed of only when something is due to the client. Thus, it was ruled that: ... an attorney's fee cannot be determined until after the main litigation has been decided and the subject of recovery is at the disposition of the court. The issue over attorney's fee only arises when something has been recovered from which the fee is to be paid. It is further observed that the supposed contract alleged by petitioners as the basis for their fees provides that the recovery of the amounts claimed is subject to certain contingencies. It is subject to the condition that the fee shall be P30,000.00 in case of recovery of the P120,000.00 surety bond, plus an additional amount in case the award is in excess of said P120,000.00 bond, on the sharing basis hereinbefore stated. With regard to the effect of the alleged confirmation of the attorney's fees by some of the heirs of the deceased. We are of the considered view that the orderly administration of justice dictates that such issue is likewise determined by the court a quo inasmuch as it also necessarily involves the same contingencies in determining the propriety and assessing the extent of recovery of attorney's fees by both petitioners herein. The court below will be in a better position, after the entire case shall have been adjudicated, inclusive of any liability of PHILAMGEN and the respective participations of the heirs of Dr. Casasola in the award, to determine with evidentiary support such matters like the basis for the entitlement in the fees of petitioner Dante Cruz and as to whether the agreement allegedly entered into with the late Dr. Casasola would be binding on all his heirs, as contended by petitioner Quirante. We, therefore, take exception to and reject that portion of the decision of the respondent court which holds that the alleged confirmation to attorney's fees should not adversely affect the non-signatories thereto, since it is also premised on the eventual grant of damages to the Casasola family, hence the same objection of prematurity obtains and such a holding may be pre-emptive of factual and evidentiary matters that may be presented for consideration by the trial court. WHEREFORE, with the foregoing observation, the decision of the respondent court subject of the present recourse is hereby AFFIRMED. 51. AGUSTIN VS. CA FACTS: Plaintiff-appellee, being a subdivision developer agreed to sell said parcel of land to defendants-appellants on a package deal together with a residential house per House Plan Model B-203 to be constructed thereon for the sum of P202, 980.00 . As therein

stipulated, the defendants-appellants were to pay P42, 980.00 as equity-P30, 133.00 as down payment and the balance of P12, 847.00 upon completion and de very of the property, the other P160,000.00 to have been funded through a Pag-Ibig Fund loan to be applied for by defendants-appellants. One agreed in the stipulation is that there will be an ipso facto cancellation of the contract upon failure of the vendee to comply with its obligation and if transferred in the latters name then it will automatically revert to the vendor. The plaintiff now filed civil case for reconveyance and damages. Resolution of the trial court: It ruled in favor of the plaintiff ordered defendant to pay including the following damages; to pay plaintiff the sum of P20, 000.00 as exemplary damages; to pay plaintiff the sum of P5,000.00 as attorney's fees, plus costs of the suit. The CA affirmed the decision but deleted the award of exemplary damages ISSUE: whether or not exemplary damages and attorneys fees awarded is proper. RESOLUTION OF THE SC: The award to private respondent of attorney's fees, however, must be disallowed considering that the award of exemplary damages was eliminated by respondent court and the text of the decision of the trial court, which was aimed by the Court of Appeals, is bereft of any findings of fact and law to justify such award. The accepted rule is that the reason for the award of attorney's fees must be stated in the text of the court's decision; otherwise, if it is stated only in the dispositive portion of the decision, the same must be disallowed on appeal. The award of attorney's fees being an exception rather than the general rule, it is necessary for the court to make findings of facts and law that would bring the case within the exception and justify the grant of such award. WHEREFORE, except for the award of attorney's fees which is hereby deleted, the decision of respondent Court of Appeals is hereby AFFIRMED. 52. BICARME VS. CA FACTS: In a suit involving parcels of land (corn and rice land) Cristina Bicarme sued her aunt Maria Bicarme from her hereditary share from those lands. Plaintiff Cristina obtained a favorable judgment and was awarded attorneys fees by the lower court. ISSUE: whether or not the award of attorneys fees is proper. RESOLUTION OF THE SC: We eliminate the award on attorney's fees in the absence of any specific allegation thereon in her complaint, or that the same is covered by any of the eleven (11) exceptions enumerated in Art. 2208 of the New Civil Code. Even if We were to concede exercise of judicial discretion in the award of attorney's fees under Art. 2208, par. 11, this provision "demands a factual, legal or equitable justification. Without such justification, the award is a conclusion without a premise, its basis being improperly left to speculation and conjecture." (Mirasol v. De la Cruz, G.R. L-32552, July 31, 1978; 84 SCRA 337.) Likewise, "the matter of attorney's fees cannot be touched once and only in the dispositive portion of the decision. The text itself must expressly state the reason why attorney's fees are being awarded" (ibid). In the present case, the

matter of such fees was touched but once and appears only in the dispositive portion of the decision. ACCORDINGLY, the petition for review is DENIED and the appealed decision as affirmed by the Court of Appeals is hereby AFFIRMED with the modification that the award on attorney's fees is eliminated. Cost against petitioner. This decision is immediately executory. 53. PEOPLE VS. BERGANTE FACTS: In a criminal case filed against the defendant Bergante et al. the lower court awarded the following damages; on the strength of the testimonies of the witnesses for the prosecution and of the victim's dying declaration, the trial court, in its decision of 26 December 1994, convicted all the three appellants of murder and sentenced them to suffer the penalty of reclusion perpetua and to pay the heirs of the victim in the sum of P80,000 as actual damages and P100,000 as moral and exemplary damages, plus costs. It also convicted appellant Rex Bergante of illegal possession of firearms and sentenced him to suffer 18 years of imprisonment. ISSUE: whether or not the trial court erred in not awarding civil indemnity. RESOLUTION OF THE SC: The trial court erred in not awarding in favor of the victim's heirs civil indemnity under Article 2206 of the Civil Code, which current jurisprudence has fixed at P50,000. In Criminal Case No. 86-6371 the trial court ordered the appellants to pay the heirs of the late Donato Genanda, Sr., in the amount of P80,000 as actual damages and P100,000 as moral and exemplary damages. These awards stand modification. The victim's widow, Leonora Genanda, declared that she spent more or less P12,000 for the wake; P16,000 for "transporting the body"; P24,000 for fares in going to and from the court for the hearing of the cases; P20,000 for attorney's fees; P2,000 for her lawyer's travel expenses; and P8,000 for her lawyer's appearance fees. The aggregate of these is P82,000. The recovery of attorney's fees in the concept of actual or compensatory damage is allowed under the circumstances provided for in Article 2208 of the Civil Code, one of which is when the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered. The award should, therefore, be increased to P82,000. The trial court should have specified how much of the P100,000 was for moral damages and how much was for exemplary damages. These damages are distinct from each other. Moral damages are governed by Articles 2217 to 2220, inclusive, of the Civil Code; while exemplary damages are governed by Articles 2229 to 2235 thereof. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Under Article 2206(3) the spouse, and the legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased resulting from a crime.

In the instant case, Leonora Genanda, then 70 years old when she testified, 25 declared that because of her husband's death, she "suffered very much," had sleepless nights, and could not eat. The victim's son, Donato Genanda, Jr., did not testify on the moral damages he might have suffered. Hence, only the victim's widow may be entitled to moral damages, and an award of P25,000 would be adequate. As to exemplary damages, the same may be granted in criminal cases as part of the civil liability if the crime was committed with one or more aggravating circumstances. As stated earlier, more than one generic aggravating circumstance attended the killing of Donato Genanda, Sr. An award of P25,000 as exemplary damages in favor of the heirs of the victim is in order. IN VIEW WHEREOF, the assailed decision of Branch 49 of the Regional Trial Court of Palawan in Criminal Case No. 86-6371 convicting REX BERGANTE, RODITO BERGANTE, and LEO BERGANTE of the crime of murder and sentencing each of them to suffer the penalty of reclusion perpetua is hereby AFFIRMED, subject to the modification that the said accused are hereby ORDERED to pay, jointly and severally, (1) the heirs of Donato Genanda, Sr., in the sum of P50,000 as indemnity and P25,000 as exemplary damages; and (2) Leonora Genanda, in the sum of P25,000 as moral damages. The decision in Criminal Case No. 86-6548 for violation of P.D. No. 1866 is SET ASIDE, and appellant REX BERGANTE is ACQUITTED thereof. 54. CRISMINA GARMENTS, INC., VS. CA FACTS: Petitioner was engaged in the export of girls' denim pants, contracted the services of the respondent the sole proprietress of the D'Wilmar Garments, for the sewing of 20,762 pieces of assorted girls['] denims supplied by the [petitioner] under Purchase Orders Nos. 1404. At first, the respondent was told that the sewing of some of the pants was defective. She offered to take delivery of the defective pants. However, she was later told by petitioner's representative that the goods were already good. She was told to just return for her check of P76,410.00. However, the petitioner]failed to pay her the aforesaid amount. This prompted her to hire the services of counsel and demand payment of the aforesaid amount within ten 10 days from receipt thereof. the [petitioner]'s [v]ice-[p]resident wrote a letter to [respondent]'s counsel, averring, inter alia, that the pairs of jeans sewn by her, numbering 6,164 pairs, were defective and that she was liable to the [petitioner] for the amount of P49,925.51 which was the value of the damaged pairs of denim pants and demanded refund of the aforesaid amount. Later, the respondent filed her complaint against the petitioner with the [trial court] for the collection of the principal amount of P76,410.00. . Resolution of the lower court: After due proceedings, the trial court rendered judgment in favor of the respondent against the petitioner and odred plaintiff to pay including the sum of P5,000 as attorney's fees; and The CA affirmed the lower courts decision but deleted attorneys fees. ISSUE: whether or not the award or attorneys fees was proper. RESOLUTION OF THE SC: (The sc discussed more on the issue of the proper interest rate.)

The appealed Decision of the CA is MODIFIED. (So it means that it maintained the deletion of the attorneys fees awarded by the lower court). The rate of interest shall be six percent (6%) per annum, computed from the time of the filing of the Complaint in the trial court until the finality of the judgment. If the adjudged principal and the interest (or any part thereof) remain unpaid thereafter, the interest rate shall be twelve percent (12%) per annum computed from the time the judgment becomes final and executory until it is fully satisfied. No pronouncement as to costs. 55. BAUTISTA VS. MANGALDAN RURAL BANK, INC FACTS: Plaintiff Cristeta Bautista mortgaged her conjugal share of 1/2 of the land covered by TCT No. 1507 for P2,000.00 to defendant Mangaldan Rural Bank The inscription at the back of the title specifically states that only 1/2 portion of the subject land is mortgaged The said mortgage was foreclosed extra-judicially, for failure of plaintiff to pay the principal obligation and the other charges with the defendant as the highest bidder. After the plaintiff failed to redeem the mortgaged property within the reglementary period, ownership over the whole parcel of land instead of the 1/2 portion which was mortgaged, was consolidated in the name of defendant bank. Defendant bank sold for and in consideration of the sum of P3,385.00 and executed a deed of absolute sale over the whole property covered by TCT No. 130847 in favor of its co-defendant Fred Rodriguez.Plaintiffs filed a complaint against herein defendants for the annulment and/or cancellation of the following: 1) deed of absolute sale 2) entry no. 492278 on OCT No. 1507; 3) consolidation of ownership dated 18 July 1979; 4) entry no. 592279 on OCT No. No. 1507; 5) TCT No. 130847; and 6) deed of sale dated 18 December 1979. Resolution of the lower court: It ruled in favor of plaintiffs against defendants likewise, ordered to pay plaintiffs damages in the sum of P5,000.00; attorney's fees in the sum of P11,750.00 and the litigation expenses in the sum of P5,000.00 and to pay double costs. The Ca set aside the awards of damages in favor of plaintiffs-appellees in the amount of P5,000.00; attorney's fees of P11,750.00 and litigation expenses in the sum of P5,000.00. ISSUE: whether or not the petitioners are entitled to recover damages as well as attorney's fees as a result of the admitted mistake of respondent bank in selling the entire lot, instead of only-half thereof, to respondent Efren Rodriguez. RESOLUTION OF THE SC: In the present case, we find that the respondent court not only gravely abused its discretion but also misapprehension the facts when it set aside the lower court's awards for damages and attorney's fees in favor of petitioners. Prudence dictates that a person signing a document in his official capacity (as bank manager in this case) must closely read and meticulously study the contents of the said document affixing his signature thereon. A bank is not without a legal staff or lawyer who prepares documents concerning its business. The mistake committed by the bank's staff, which was admitted by respondent Jimenez, was not a slight or minor infraction. It deprived petitioners of their property which could ultimately result in their ejectment

there from. Moreover, the bank's manager, Dr. Jimenez, could not even explain why the mistake occurred. Moral damages are not awarded to penalize the defendant but to compensate the plaintiff for the injuries he may have suffered. 5 In the present case, we believe that moral damages are proper for there can be no doubt that petitioners must have suffered sleepless nights, serious anxiety and wounded feelings upon learning that they had lost the remaining one-half of their property on which their house is built due to the negligence of respondent bank. Article 20 of the Civil Code is a cannon of conduct which every person must observe in his relation with another. The initial carelessness of the rural bank in consolidating the ownership of the entire property instead of only one-half thereof in its name, its sale of the entire property to respondent Efren Rodriguez, and the lack of promptness to rectify the mistake after its discovery, constitute after its discovery, constitute gross negligence and bad faith. These were sufficiently established by the evidence. Indeed, the bank and its manager were grossly negligent in handling the business transaction involved herein and later showing bad faith by refusing to rectify the wrong done to petitioners . As for respondent Efren Rodriguez, his adamant refusal to return one-half of the land to the lawful owner after having been informed of the error committed by the bank showed bad faith and served to aggravate the sorry plight of the petitioners. It is, however, the Court's view that he was himself a victim of the bank's gross negligence before he was apprised of the mistake. From this viewpoint, the Court believes that he should not be imposed exemplary damages. For the mental anguish, sleepless nights and serious anxiety suffered by the petitioners, respondent are liable jointly and severally for moral damages which the Court believes should be raised to P10,000.00. To serve as deterrent for respondent bank from repeating similar acts, this Court likewise awards exemplary damages against it in the sum of P10,000.00. WHEREFORE, the appealed decision is hereby REVERSED and SET ASIDE. The trial court's decision is reinstated with the above-mentioned modifications. Costs against private respondents. 56. ZENITH INSURANCE CORPORATION. VS. CA FACTS: Private respondent Lawrence Fernandez insured his car for "own damage" under private car Policy No. 50459 with petitioner Zenith Insurance Corporation. Later, the car figured in an accident and suffered actual damages in the amount of P3, 640.00. After allegedly being given a run around by Zenith for two months, Fernandez filed a complaint with the Regional Trial Court of Cebu for sum of money and damages resulting from the refusal of Zenith to pay the amount claimed. Aside from actual damages and interests, Fernandez also prayed for moral damages in the amount of P10,000.00, exemplary damages of P5,000.00, attorney's fees of P3,000.00 and litigation expenses of P3,000.00.

Resolution of the lower court: It favored respondent Fernandez and awarded the following damages; The amount of P3,640.00 representing the damage incurred plus interest at the rate of twice the prevailing interest rates; The amount of P20,000.00 by way of moral damages; The amount of P20,000.00 by way of exemplary damages; The amount of P5,000.00 as attorney's fees; The amount of P3,000.00 as litigation expenses; and Costs. The CA affirmed in toto the lower courts decision. ISSUE: whether or not the award of attorneys fees, moral and exemplary damages was proper. RESOLUTION OF THE SC: It is clear that under the Insurance Code, in case of unreasonable delay in the payment of the proceeds of an insurance policy, the damages that may be awarded are: 1) attorney's fees; 2) other expenses incurred by the insured person by reason of such unreasonable denial or withholding of payment; 3) interest at twice the ceiling prescribed by the Monetary Board of the amount of the claim due the injured; and 4) the amount of the claim. As regards the award of moral and exemplary damages, the rules under the Civil Code of the Philippines shall govern. "The purpose of moral damages is essentially indemnity or reparation, not punishment or correction. Moral damages are emphatically not intended to enrich a complainant at the expense of a defendant, they are awarded only to enable the injured party to obtain means, diversions or amusements that will serve to alleviate the moral suffering he has undergone by reason of the defendant's culpable action. While it is true that no proof of pecuniary loss is necessary in order that moral damages may be adjudicated, the assessment of which is left to the discretion of the court according to the circumstances of each case (Art. 2216, New Civil Code), it is equally true that in awarding moral damages in case of breach of contract, there must be a showing that the breach was wanton and deliberately injurious or the one responsible acted fraudently or in bad faith. in the instant case, there was a finding that private respondent was given a "runaround" for two months, which is the basis for the award of the damages granted under the Insurance Code for unreasonable delay in the payment of the claim. However, the act of petitioner of delaying payment for two months cannot be considered as so wanton or malevolent to justify an award of P20,000.00 as moral damages, taking into consideration also the fact that the actual damage on the car was only P3,460. In the pre-trial of the case, it was shown that there was no total disclaimer by respondent. The reason for petitioner's failure to indemnify private respondent within the two-month period was that the parties could not come to an agreement as regards the amount of the actual damage on the car. The amount of P10,000.00 prayed for by private respondent as moral damages is equitable. On the other hand, exemplary or corrective damages are imposed by way of example or correction for the public good (Art. 2229, New Civil Code of the Philippines). In the case of Noda v. Cruz-Arnaldo, G.R. No. 57322, June 22,1987; 151 SCRA 227, exemplary damages were not awarded as the insurance company had not acted in wanton, oppressive or malevolent manner. The same is true in the case at bar.

The amount of P5,000.00 awarded as attorney's fees is justified under the circumstances of this case considering that there were other petitions filed and defended by private respondent in connection with this case. As regards the actual damages incurred by private respondent, the amount of P3,640.00 had been established before the trial court and affirmed by the appellate court. Respondent appellate court correctly ruled that the deductions of P250.00 and P274.00 as deductible franchise and 20% depreciation on parts, respectively claimed by petitioners as agreed upon in the contract, had no basis. Therefore, the award of moral damages is reduced to P10,000.00 and the award of exemplary damages is hereby deleted. The awards due to private respondent Fernandez are as follows: 1) P3,640.00 as actual claim plus interest of twice the ceiling prescribed by the Monetary Board computed from the time of submission of proof of loss;2) P10,000.00 as moral damages;3) P5,000.00 as attorney's fees;4) P3,000.00 as litigation expenses; and5) Costs. 57. COMPAIA MARITIMA VS. ALLIED FREE WORKERS UNION FACTS: Compania maritima entered into a written contract with the free allied workers union for arrastre and stevedoring services of the latter. It was stipulated that the company will revoke the contract before the expiration of the contract if the workers do not provide for proper services. At the time the contract was made the union just been organized and requested the company to recognize it as he exclusive bargaining unit. However, the company ignored the request tending the union to file with the CIR praying that it be recognized as such. Later, the company entered into another arrastre and stevedoring contract with another party (Iligan arrastre and stevedoring association). The free allied union workers picketed for 9 days preventing the Iligan arrastre and stevedoring association to perform their function. For this reason the company sued the union for the rescission of the contract and for damages in the CFI of Lanao. Resolution of the trial court: It rendered a decision (1) declaring the arrastre and stevedoring contract terminated; (2) dismissing the union's counterclaim; (3) ordering the union and its officers to pay solidarily to the company P520,000 as damages, with six percent interest per annum from September 9, 1954, when the complaint. was filed; (4) permanently enjoining the union from performing any arrastre and stevedoring work for the company at Iligan City, and (5) requiring the union to post a supersedeas bond in the sum of P520,000 to stay execution. ISSUE: whether or not the damages (actual, moral and attorneys fees) awarded by the trial court in favor of the company were proper based from the testimony of the two accountants. RESOLUTION OF THE SC: The trial court erred in ordering the union and its officials to pay the amount of the said expenses as damages, to the company.

The trial court did not bother to make a breakdown of the alleged damages, totaling P450,000. The reports of the two hired accountants, Demetrio S. Jayme and M. J. Siojo, show the following alleged damages, in the aggregate amount of P349,245.37 (not P412,663.17, as erroneously added by the consignees. counsel, 161,163-4 tsn March 11, 1960): We have already stress that, on the basis of the reports of the two accountants, the damages, claimed by the complaint as a matter of simple addition, does not reach the sum of P 450,000 fixed by the trial court. The damages shown in the accountants reports and in the statement made by the consignees chief clerk (who did not testify) amount to P349,245.37, or much less than P450,000. It would not be proper to allow Jayme's estimates as recoverable damages. They are not supported by reliable evidence. They can hardly be sanctioned by the "generally accepted auditing standards" alluded to in Jayme's report. The pertinent records of the company should have been produced in court. The purser and steward did not testify. Our conclusion is that an injustice would be perpetrated if the damages, aggregating P178,579 computed and estimated in the report of Jayme, a biased witness, should be accepted at their face value. Moral damages and attorney's fees. - Considering that the consignees claim for moral damages, was based on the same facts on which it predicated its claim for actual deduction which we have found to be groundless, it follows that the company, a juridical person, is not entitled to moral damages. Anyway, the company did not plead and prove moral damages. It merely claimed moral damages, in the prayer of its complaint. That is not sufficient (Darang vs. Ty Belizar, L19487, January 31, 1967, 19 SCRA 214, 222). Under the facts of this case, we do not find any justification for awarding attorney's considering to the company. Hence, the trial court's award of P20,000 as attorney's Considering is set aside. Appellants' first assignment of error, although not properly argued by their counsel, should be sustained.WHEREFORE, that portion of the trial court's judgment declaring the arrastre and stevedoring contract terminated, permanently enjoining the union and its officials from performing arrastre and stevedoring work for the vessels of the Compaia Maritima, and dismissing defendants' counterclaim is affirmed. The lower court's award of damages is reversed and set aside. Cases 49-57 APIDCOR, EMERSON P. 58. DEL ROSARIO VS COURT OF APPEALS FACTS: Sps. Del Roario commenced a civil action against Metal Forming Corporation (MFC) in the RTC of Manila. They sought to recover damages resulting when their residence roof, made of shingles bought/ purchased from and installed by the MFC, was blown away by typhoon Ruping barely after 2months. The Sps. Also contended that

aside from the destruction of the roof of their house, injury was also caused to its electrical wiring, ceiling, fixtures, walls, wall paper, wood parquet flooring and furniture. Thus the plaintiff Sps. Prayed for an actual damages of 1,008,003.00 pesos-representing the estimated cost of the repair, restoration and/ or replacement of the damaged areas and items in plaintiffs house and the cost of the inspection. They also prayed for an award of moral damages in the sum of 3M, exemplary damages- 1M, and attorneys fees- 1M. The RTC rendered judgment in favor of the Del Rosarios. MFC appealed to the CA. The CA reversed the Trial Courts decision. It ruled that there was no privity of contract between the Del Rosarios and MFC hence, the Del Rosarios had no course of action against MFC for breach of warranties. ISSUE: WON MFC is answerable to the Del Rosarios for the damages caused to the latters residence when its roof, made of shingles purchased from and installed by the former, was blown away by a typhoon. HELD: Actual or compensatory damages cannot be presumed, but must be duly proved and proved with reasonable degree of certainty. A court cannot rely on speculations, conjectures or guesswork as to the fact and amount of damages, but must depend upon competent proof that they have (been) suffered and on evidence of the actual amount thereof. This Court also agrees with the Trial Court that exemplary damages are properly exigible of MFC, "Article 2229 of the Civil Code provides that such damages may be imposed by way of example or correction for the public good. While exemplary damages cannot be recovered as a matter of right, they need not be proved, although plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded. The award of P1,000,000.00 exemplary damages is also far too excessive and should likewise be reduced to an equitable level. Exemplary damages are imposed not to enrich one party or impoverish another but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions Finally, It is settled that the award of attorney's fees is the exception rather than the rule and counsel's fees are not to be awarded every time a party wins. The power of the court to award attorney's fees under Article 2208 of the Civil Code demands factual, legal, and equitable justification; its basis cannot be left to speculation or conjecture. Where granted, the court must explicitly state in the body of the decision, and not only in the dispositive portion thereof, the legal reason for the award of attorney's fees. WHEREFORE, the challenged Decision of the Court of Appeals of June 29, 1994 is REVERSED and SET ASIDE; and the Decision of the Regional Trial Court of November 18, 1991 is REINSTATED AND AFFIRMED, with the modification that the award of actual damages and attorney's fees is deleted, and the moral and exemplary damages awarded are reduced from P500,000.00 to P100,000.00, and from P300,000.00 to P50,000.00, respectively. IT IS SO ORDERED 59. PEOPLE VS BUGAYONG

FACTS: On October 15, 1994 at MRR Queen of Peace Baguio City, accused RODELIO BUGAYONG had ARLENE hold his penis inside the room he share[d] with Leticia, At that time CATHERINE BUGAYONG who was six (6) years old was also inside the same room and her father, the accused was letting her sleep. Bugayong threatened to maim Arlene if she [did] not hold his penis. When the penis was already hard and stiff, he placed it inside the mouth of Arlene and a white substance came out from the penis. The young girl CATHERINE BUGAYONG saw this incident. Arlene testified that her stepfather had been doing the same act when she was still in Grade 3 and was nine years old. She also said that there were occasions when BUGAYONG played first with his penis then touched her vagina with his penis until a white substance [came] out [of] it and that was the time BUGAYONG would pull back his penis, or in the words of Arlene "idinidikit at pag may lumabas saka inilalayo. When asked to explain what she meant by "idinidikit", Arlene said that the penis of BUGAYONG partly entered [her] vagina and she got hurt. In any event, when LETICIA arrived home that day, CATHERINE reported to her that her father, RODELIO BUGAYONG, had Arlene hold his penis and put it inside the mouth of the former. Leticia called for RODELIO BUGAYONG and they talked. While the two (2) were talking, Alberto, the elder brother of Arlene, called for the latter and they went to the house of their grandmother ANITA YU at Slaughter Compound for fear that something [would] happen. Arlene reported the incident to her grandmother. Anita Yu told Arlene that she [would] not allow her to go to her mother and that she (YU) [would] file a case against Bugayong. The Trial Court convicted Bugayong for the crime of statutory rape and acts of lasciviousness. Likewise awarded damages to the victim Arlene Cauan. In the instant appeal, he asserts that this allegation regarding the date of the commission of the offense violated his constitutional right "to be informed of the nature and cause of the accusation against him." The trial court held that the accused raped the victim in 1993, not in 1994. Notwithstanding the rather encompassing allegation in the Information that the crime was committed "before and until October 15, 1994," the trial court ruled that it could legally convict the accused for the crime committed in 1993. The primordial consideration in determining the sufficiency of the averment in the Information as to time is whether the accused was accorded the opportunity to prepare a defense. In this case, the trial court observed that he was not so deprived. Furthermore, it noted that the Information charged more than one offense, but that the accused failed to interpose an opposition. ISSUE: WON The Trial Court erred in convicting the appellant the crime of rape and acts of lasciviousness as well as the award of damages HELD: The foregoing shows that appellant sexually assaulted complainant in 1993 when she was 10 years old. Thus, the trial court correctly convicted him of statutory rape under Article 335 (3) of the Revised Penal Code. Moreover, appellant is also guilty of acts of lasciviousness committed on October 15, 1995. The trial court correctly awarded P50,000 as indemnity ex delicto, an amount which is automatically granted to the offended party without need of further evidence other than the fact of the commission of rape.

Consistent with recent jurisprudence, appellant should also be ordered to pay the victim the additional amount of P50,000 as moral damages. In People v. Prades, 23 the Court resolved that "moral damages may additionally be awarded to the victim in the criminal proceeding, in such amount as the Court deems just, without the need for pleading or proof of the basis thereof as has heretofore been the practice." WHEREFORE, the appeal is hereby DENIED and the assailed Decision is AFFIRMED, with the MODIFICATION that Appellant Rodelio Bugayong is ordered to pay Complainant Arlene Cauan P50,000 as indemnity and the additional amount of P50,000 as moral damages, or a total of P100,000. Costs against the appellant. SO ORDERED. 60. ST. PETER MEMORIAL PARK, INC. VS CLEOFAS FACTS: Plaintiff Regino Cleofas and his mother Lucia Dela Cruz filed a complaint against the St. Peter Memorial Park, Inc. et al. an prayed to be declared the rightful owners and entitled to the possession of lot 719 of the Piedad Estate. Lot no. 719 of the Piedad estate forms part of the land covered by Original Certificate of title No. 614 of the Registry of deeds, in the name of the Government of the Philippine Island. Regino Cleofas has been consistent in their contention that lot no. 719 belongs to them in ownership, as heirs of Antonio Cleofas, original awardee of said lot the title to which in the name of said predecessor in interest is said to have been burnt in fire in 1933. Defendant Memorial Park, however, claims to have derived its title to lot 719 through a series of transfers ultimately traced back to an alleged assignment made by Antonio Cleofas on July 15, 1921 over sales certificate number 923 in favor o Aniceto Mrtin and Trino Narciso. But there is no record in the Registry of Deed about the assignment and the alleged sale of the said lot by Trino Narciso in favor of the defendant Memorial Park. The Trial Court awarded the lot to the heirs of Antonio Cleofas at the same tme ordered the defendant Memorial Park to pay 40k as damages and the amount of 10k as attorneys fees plus cost. ISSUE: WON the Trial Court erred in awarding damages and attorneys fees to respondents-apellees Cleofas. HELD: The Trial Court awarded damages in the amount of 40k without stating the concept thereof. It appearing that the petitioner St. Peter Memorial Park, Inc. and the defendants Francisco M. Bautista and Basilia Roque had acted in evident bad faith, the said amount maybe considered as moral and exemplary damages. By the same token, the award of 10k as attorneys fees is justified. The St. Peter Memorial Park, Inc. had disregard in a wanton manner he rights of the respondents. WHEREFORE, the decision dated March 19,1977 appealed from is hereby affirmed, with the qualification that the amount of 40k is awarded as moral and exemplary damages, without pronouncement as to costs.

61. EXPERT TRAVEL AND TOURS, INC. VS COURT OF APPEALS FACTS: Expertravel & Tours, Inc., ("Expertravel"), a domestic corporation engaged in the travel agency business, issued to private respondent Ricardo Lo four round-trip plane tickets for Hongkong, together with hotel accommodations and transfers, for a total cost of P39,677.20. Alleging that Lo had failed to pay the amount due, Expertravel caused several demands to be made. Since the demands were ignored by Lo, Expertravel filed a court complaint for recovery of the amount claimed plus damages. Respondent Lo explained, in his answer, that his account with Expertravel had already been fully paid. The outstanding account was remitted to Expertravel through its then Chairperson, Ms. Ma. Rocio de Vega, who was theretofore authorized to deal with the clients of Expertravel. The payment was evidenced by a Monte de Piedad Check No. 291559, dated 06 October 1987, for P42,175.20 for which Ms. de Vega, in turn, issued City Trust Check No. 417920 in favor of Expertravel for the amount of P50,000.00, with the notation "placement advance for Ricardo Lo, etc." Per its own invoice, Expertravel received the sum on 10 October 1987. The Trial Court, affirmed in toto by the appellate court (CA) held that the payment made by Lo was valid and binding on the petitioner Expert Travel. It ordered the plaintiff to pay defendant Lo moral damages in the amount of 30K; attys fees- 10k and to pay the cost of the suit. ISSUES: Can moral damages be recovered in a clearly unfounded suit? Can moral damages be awarded for negligence or quasi-delict that did not result to physical injury to the offended party? HELD: Moral damages are not punitive in nature but are designed to compensate and alleviate in some way the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury unjustly caused to a person. Although incapable of pecuniary computation, moral damages, nevertheless, must somehow be proportional to and in approximation of the suffering inflicted. Such damages, to be recoverable, must be the proximate result of a wrongful act or omission the factual basis for which is satisfactorily established by the aggrieved party. Although the institution of a clearly unfounded civil suit can at times be a legal justification for an award of attorney's fees, such filing, however, has almost invariably been held not to be a ground for an award of moral damages. The rationale for the rule is that the law could not have meant to impose a penalty on the right to litigate. The anguish suffered by a person for having been made a defendant in a civil suit would be no different from the usual worry and anxiety suffered by anyone who is haled to court, a situation that cannot by itself be a cogent reason for the award of moral damages. If the rule were otherwise, then moral damages must every time be awarded in favor of the prevailing defendant against an unsuccessful plaintiff. The Court confirms, once again, the foregoing rules.

WHEREFORE, the petition is GRANTED and the award of moral damages to respondent Ricardo Lo under the assailed decision is DELETED. In its other aspects, the appealed decision shall remain undisturbed. No costs.1wphi1.nt SO ORDERED. 62. J MARKETING CORPORATION VS SIA JR. FACTS: J. Marketing Corporation, a company engaged in the business of appliances and motorcycles, received from Kawasaki Motors (Phils.) a brand new Kawasaki motorcycle, color Blue, Mode HD-11 (1985) with Engine No. G7E-04848 and Chassis No. KG-805535. Upon receipt, petitioners representative placed motorcycle in the bodega of YKS Bldg., Rizal Avenue, Tacloban City. However, Petitioner found out that the motorcycle unit was missing in the bodega and the loss immediately reported to the police authorities. Subsequently, (petitioner) tried to trace the lost motor cycle to one Felicidad Sia, Jr., herein (private respondent), who bought a motorcycle from one Renato Pelande, Jr. on May 25, 1987. Allegedly, petitioners representative went to the house of the private respondent and examined the chassis and motor numbers of the motorcycle in his (private respondent) possession, and found out that the chassis and motor numbers of the motorcycle in private respondents possession have been tampered to jibe with the chassis and motor numbers of the motorcycle unit previously purchased by Renato Pelande, Jr. from petitioner. When petitioners representative confronted private respondent at the Constabulary Highway Patrol Group office anent the questionable motorcycle, private respondent refused to return the said motorcycle to petitioner and instead told petitioners representative to file a case in court. Hence, on September 24, 1987, petitioner filed a complaint for replevin with damages against private respondent Felicidad C. Sia, Jr. before the Regional Trial Court of Tacloban City, Branch 8. On April 14, 1988, private respondent Felicidad C. Sia Jr. filed a third party complaint against Renato Pelante Jr. from whom he purchased his motorcycle. Said third party defendant was subsequently declared as in default. After trial, the lower court rendered a decision dismissing petitioners complaint but awarded damages and attorneys fees to private respondent. On appeal, the CA affirmed the decision of the court a quo. ISSUE: WON the award of attorneys fees and damages (moral and exemplary) is proper. HELD: A persons right to litigate should not be penalized by holding him liable for damages. This is especially true when the filing of the case is to enforce what he believes to be his rightful claim against another although found to be erroneous. In this case, petitioner precisely instituted the replevin case against private respondent based on the latters own challenge to the former that if they really had a right on the motorcycle, then they should institute the necessary case in court. When petitioner did sue private respondent and filed a third party complaint against the person from whom private respondent claims to have brought the motorcycle, it cannot be said that the institution of the replevin suit was tainted with gross and evident bad faith or was done maliciously to harass, embarrass, annoy or ridicule private respondent. Moreover, the adverse result of an action dismissal of petitioners complaint does not per se make an act unlawful and subject the actor to the payment of moral damages. It is not a sound public policy to place a premium on the right to litigate. No

damages can be charged on those who may exercise such precious right in good faith, even if done erroneously. The award of exemplary damages has likewise no factual basis. It is a requisite that the act must be accompanied by bad faith or done in wanton, fraudulent or malevolent manner - circumstances which are absent in this case. In addition, exemplary damages cannot be awarded as the requisite element of compensatory damages was not present. With respect to the attorneys fees, an adverse decision does not ipso facto justify the award thereof to the winning party. All indications point to the fact that petitioner honestly thought that they had a good cause of action, so notwithstanding the dismissal of their case, no attorneys fees can be granted to private respondent. Considering that the latter claims to be the owner of the motorcycle, petitioner was compelled to sue him. When the former necessarily became a party defendant no attorneys fees and litigation expenses can automatically be recovered even if he should win, a it is not the fact of winning alone that entitles recovery of such items but rather the attendance of special circumstances - the enumerated exceptions in Article 2208 of the New Civil Code. There being no bad faith reflected in petitioners persistence in pursuing its case, other than an erroneous conviction of the righteousness of its cause, attorneys fees cannot be recovered as cost. WHEREFORE, premises considered, the decision of the Court of Appeals is AFFIRMED WITH THE MODIFICATION that the award of damages, attorneys fees and cost to private respondent is deleted. SO ORDERED. 63. INDUSTRIAL INSURANCE CO. VS PABLO BONDAD FACTS: The present Petition finds its roots in an incident which involved three vehicles: a Galant Sigma car driven by Grace Ladaw Morales (Vehicle 1), a packed passenger jeepney originally driven by Ligorio Bondad (Vehicle 2), and a DM Transit Bus driven by Eduardo Mendoza (Vehicle 3). V-3 (D.M. Transit Bus) was traveling along South Expressway coming from Alabang towards the general direction of Makati. When upon reaching a place at KM Post 14 [in front] of Merville Subd., said V-3 hit and bumped the rear left side portion of V-1 [Bondads' jeepney] which was then at [stop] position due to flat tire[;] due to the severe impact cause by V-3 it swerved to the left and collided with the right side portion of V-2 [Morales' car] which was travelling [in] the same direction taking the innermost lane[;] V-2 was dragged to its left side and hit the concrete wall. All vehicles incurred damages and sustaining injuries to the occupant of V-1 and the passengers of V-3. Victims were brought to the hospital for treatment. Before the Regional Trial Court of Makati, Petitioner Industrial Insurance Company, Inc. and Grace Ladaw Morales filed a Complaint for damage against DM Transit Corporation, Eduardo Diaz, Pablo Bondad and Ligorio Bondad. Petitioner contended that it had paid Morales P29,800 for the damages to her insured car. It also asserted that the December 17, 1984 accident had been caused "solely and proximately" by the "joint gross and wanton negligence, carelessness and imprudence

of both defendant drivers Eduardo Diaz y Mendoza and Ligorio Bondad y Hernandez, who failed to exercise and observe the diligence required by law in the management and operation of their respective vehicles and by their defendant employers; D.M. Transit Corporation and Pablo Bondad, respectively, for their failure to exercise the diligence required of them by law in the selection and supervision of their employees including their aforementioned involved drivers. Respondents Pablo and Ligorio Bondad filed their Answer denying any responsibility or liability to petitioner and Morales. They asserted that their vehicle was on full stop because of a flat tire. Thus, it was the bus which hit Morales' car. In their Counterclaim, they contended that petitioner had acted in bad faith in impleading them and that, contrary to its allegation, no prior demand had been made upon them. In its October 14, 1991 Decision, the trial court exculpated the Bondads and ordered petitioner to pay them actual, moral and exemplary damages, as well as attorney's fees. Petitioner appealed to the Court of Appeals, which affirmed the ruling of the trial court with modification. Hence, this Petition for Review. ISSUE: WON the award of moral and exemplary damages, as well as attorneys fees are proper. HELD: We agree. Attorney's fees may be awarded by a court if one who claims it is compelled to litigate with third persons or to incur expenses to protect one's interests by reason of an unjustified act or omission on the part of the party from whom it is sought. In this case, the records show that petitioner's suit against respondents was manifestly unjustified. In the first place, the contact between the vehicles of respondents and of Morales was completely due to the impact of the onrushing bus. This fact is manifest in the police investigation report and, significantly, in the findings of facts of both lower courts. In the case at bar, it has been shown that the petitioner acted in bad faith in compelling respondents to litigate an unfounded claim. As a result, Respondent Ligorio Bondad "could no longer concentrate on his job." Moreover, Pablo Bondad became sick and even suffered a mild stroke. Indeed, respondents' anxiety is not difficult to understand. They were innocently attending to a flat tire on the shoulder of the road; the next thing they knew, they were already being blamed for an accident. Worse, they were forced to commute all the way from Laguna to Makati in order to attend the hearings. Under the circumstances of this case, the award of moral damages is justified. Likewise, we affirm the award of exemplary damages because petitioner's conduct needlessly dragged innocent bystanders into an unfounded litigation. Indeed, exemplary damages are imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated or compensatory damages. In sum, the Court affirms the award of moral damages, exemplary damages, attorney's fees and litigation expenses. The facts of this case clearly show that petitioner was motivated by bad faith in impleading respondents. Indeed, a person's right to litigate, as a rule, should not be penalized. This right, however, must be exercised in good faith.

64. TRIPLE EIGHT INTEGRATED SERVICES INC. VS. NLRC FACTS: Private respondent Osdana was recruited by petitioner for employment with the latters principal, Gulf Catering Company, a firm based in the Kingdom of Saudi Arabia. Under the original employment contract, Osdana was engage to work as food server for a period of 36 months with salary of 550 Saudi Rials. Subsequently, petitioner asked Osdana to sign another Contractor-Employment Agreement which provided that she would be employed as waiter for 12 months with a salary of 280 US$. Osdana left for Riyadh, Saudi Arabia, and commenced working for GCC. Contrary to the terms and conditions of the employment contract, was made to wash dishes, cooking pots, and utensils, perform janitorial works and other task which were unrelated to her job designation as waitress. Making matters worse was the fact that she was made to work a grueling 12 hour shift without overtime pay. Because of long hours and strenuous nature of her work, she was diagnosed as having Bilateral Carpal Tunnel Syndrome, a conditon precipitated by activities requiring repeated flexion, pronation and supinaion of the wrist and characterize by excruciating pain and numbness in the arms.Because of this she was dismissed from work allegedly on the ground of illness. She was not given any separation pay and she was not compensated for her salaries while on the hospital and for some works rendered. Upon her return to the Philippines, Osdana sought the help of the petitioner, but no avail. She was thus constrained to file a complaint against petitioner. The Labor Arbiter ruled in favor of Osdana and ordered to pay the complainant for the unexpired portion of the contract and likewise ordered to pay the complainant 50k oral damages, and 20k exemplar damages and 10% of the monetary award as attorneys fees. Petitioner appealed to the NLRC but the NLRC affirmed the decision of the Labor Arbiter. Motion for reconsideration was likewise denied. Hence this petition for certiorari. ISSUE: WON the NLRC committed abuse of discretion in awarding of salaries for the unexpired portion of the employment contract, unpaid salaries and summary differential granted by public respondents to Osdana as well as the award of damages for being contrary to law. HELD: With respect to the award of moral and exemplary damages, the same is likewise proper but should be reduced. Worth reiterating is the rule that moral damages are recoverable where the dismissal of the employee was attended by bad faith or fraud or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs, or public policy. Likewise exemplary damages maybe awarded if the dismissal was effected in a wanton, oppressive or malevolent manner. Since the employer is deemed to have acted in bad faith, the award of attorneys fees is likewise upheld.

Petitioner is ordered to paybthe private respondent 30k in oral damages, 10k in exemplary damages and 10% attorneys fees. This decision is without prejudice to any remedy or claim for reimbursement or contribution petitioner may institute against its foreign principal, Gulf Catering Company. O pronouncement as to costs. SO ORDERED. 65. NESCITO C. HILARIO VS NLRC FACTS: Petitioner Nescito C. Hilario seeks to modify the Decision1 of public respondent National Labor Relations Commission, which reversed and set aside the decision of Labor Arbiter Salimathar V. Nambi, National Capital Region. Petitioner was hired by private respondent Reynolds Philippines, Inc. (Reynolds) through the Bob Garon Consultancy, Inc. as personnel manager of its Cavite plant on December 1, 1984. Sometime in June 1985 he was transferred to the Head Office to handle various legal matters. On November 29, 1985, petitioner was handed a letter by Reynolds personnel informing him that the company had been incurring financial losses and that, as a result, his employment would be terminated on the ground of retrenchment, effective January 1, 1986. While there are records submitted relative to the financial status of the respondent company is concerned in support of its claim of severe business reverses, the complainant has, however, established the contrary. It has not be (sic) substantially refuted the fact that after the complainants pull out from the Dasmarinas plant, his salary was increased by One Thousand Pesos (P1,000.00) per month; that after his termination, Atty. George Molina who took over his position as Plant Manager also enjoyed an increase and even Atty. George Molinas successor was given a much higher salary than his predecessors. On December 5, 1985 petitioner filed a complaint for illegal dismissal with prayer for reinstatement, backwages and damages with Labor Arbiter Nambi. On December 15, 1992, the Labor Arbiter rendered a decision dismissing the complaint but ordering Reynolds to pay petitioner his unpaid salary for December 1985, Christmas bonus and separation pay equivalent to one (1) month salary. Petitioner appealed to the National Labor Relations Commission. Finding the appeal meritorious, on March 7, 1995, the NLRC reversed and set aside the decision of the Labor Arbiter and declared petitioners dismissal as illegal. ISSUE: WON the employer is liable for moral and exemplary damages. HELD: The employer may be liable for damages if, in terminating the employment, it also committed an anti-social and oppressive abuse of its right to investigate and dismiss its employee in violation of Article 1701 of the Civil Code which prohibits oppression by either capital or labor against the other. After a meticulous examination of the records in this case, it is not shown that Reynolds acted in a wanton or oppressive manner against petitioner or in gross bad faith in

terminating his employment. However, as the NLRC pointed out, there is evident bad faith in the respondent companys termination of petitioner on the ground of retrenchment, since his salary was increased after his pullout from the Dasmarias plant and those appointed after his termination were given salaries much higher than what petitioner used to enjoy while connected with the company. In no case may this be considered as gross bad faith or wanton or oppressive act on the part of the company; hence an award of P20,000.00 as moral damages is sufficient. WHEREFORE, the decision of the NLRC is hereby MODIFIED. Private respondent Reynolds Philippines, Inc. is hereby ordered to pay petitioner his backwages for three (3) years fromJanuary 1, 1986 to January 1, 1989 without deduction or qualification; his unpaid salary for December 1985, as well as his Christmas bonus and separation pay equivalent to one months salary for roughly one years service. However, the award of moral damages is reduced to P20,000.00 SO ORDERED. 66. ARCONA VS. COURT OF APPEALS FACTS: At around 7:30 in the evening of June 27, 1986, Napoleon Ong and Edgardo Talanquines were walking along the national highway at Barangay Labog, Brookes Point, Palawan, on their way home after coming from a birthday party. When they were near the house of Jerry Boston, Edgardo heard a loud thud. He turned around saw Napoleon slump to the ground. Suddenly, someone hit Edgardo from behind with a piece of bamboo, causing him to fall. He saw no one in the immediate premises except petitioner. Edgardo then stood up and ran towards the house of Cesar Umapas to ask for help. Prosecution witness Leo Zaragoza testified that he was standing in front of Jerry Boston house, about seven (7) meters away, when he saw petitioner (Carlos Arcona) stab Napoleon. Carlos Arcona contended that he acted in self defense but failed to persuade the court. Napoleon expired on the way to the hospital. Dr. Joaquin Fabellon, who conducted the autopsy on Napoleons body, certified that the cause of death was the stab wound sustained at the stomach area just above the waistline. The RTC Convicted Carlos Arcona(Petitioner) for the crime of homicide and slight physical injury and awarded damages as follows: For the case of Homicide, to indemnify the heirs of Napoleon Ong the amount of 30k for his death, 10k as actual damages, 10k as moral damages. For the crime of slight physical injury, to indemnify Edgardo Talanquines the sum of 10k as actual damages. Petitioner appealed to the CA but the Ca affirmed the decision of the RTC but increased the Civil indemnity to 50k. Feeling aggrieved, the petitioner filed instant petition for review. He maintains that he acted in self defense when he stabbed Napoleon and hit Edgardo with a bamboo stick. ISSUE:WON the increased of Civil indemnity from 10k to 50k is proper. HELD: The Court of Appeals was correct in increasing the amount of civil indemnity to P50,000.00, in line with existing jurisprudence. In cases of murder, homicide, parricide

and rape, civil indemnity in the amount of P50,000.00 is automatically granted to the offended party or his heirs in case of his death, without need of further evidence other than the fact of the commission of the crime. On the other hand, the award of moral damages in the sum of P 10,000.00 must be increased to P50,000.00. As borne out by human nature and experience, a violent death invariably and necessarily brings about emotional pain and anguish on the part of the victims family. It is inherently human to suffer sorrow, torment, pain and anger when a loved one becomes the victim of a violent or brutal killing. Such violent death or brutal killing not only steals from the family of the deceased his precious life, deprives them forever of his love, affection and support, but often leaves them with the gnawing feeling that an injustice has been done to them. For this reason, moral damages must be awarded even in the absence of any allegation and proof of the heirs emotional suffering. Finally, the award of actual damages in the amount of P10,000.00 does not appear to have been substantiated. Only those expenses which are duly proven, or those that appear to have been genuinely incurred in connection with the death, wake or burial of the victim, will be recognized in court. Hence, the same must be deleted. WHEREFORE, in view of the foregoing, the petition for review is DENIED. The decision of the Court of Appeals, finding petitioner Carlos Arvuna y Morban guilty beyond reasonable doubt of Homicide, attended by the mitigating circumstance of voluntary surrender, and sentencing him to suffer the indeterminate penalty of six (6) years and one (1) day of prision mayor, as minimum, to fourteen (14) years and one (1) day of reclusion temporal, as maximum, and to pay the heirs of the deceased Napoleon Ong the sum of P50,000.00 as civil indemnity, is AFFIRMED with MODIFICATION. As modified, petitioner is further ordered to pay the heirs of the deceased moral damages in the increased amount of P50,000.00. The award of actual damages is deleted for lack of factual and legal basis. SO ORDERED. 67. GREGORIO FULE VS. COURT OF APPEALS FACTS: Petitioner Gregorio Fule, a banker by profession and a jeweler at the same time, acquired a 10-hectare property in Tanay, Rizal (hereinafter Tanay property), which used to be under the name of Fr. Antonio Jacobe. The latter had mortgaged it earlier to the Rural Bank of Alaminos (the Bank), Laguna, Inc. to secure a loan in the amount of P10,000.00, but the mortgage was later foreclosed and the property offered for public auction upon his default. Petitioner, as corporate secretary of the bank, asked Remelia Dichoso and Oliva Mendoza to look for a buyer who might be interested in the Tanay property. The two found one in the person of herein private respondent Dr. Ninevetch Cruz. It so happened that at the time, petitioner had shown interest in buying a pair of emerald-cut diamond earrings owned by Dr. Cruz but the latter declined petitioners offer. Second offer was made at the lobby of the Prudential Bank and then made a sketch thereof for twenty to forty minutes, petitioner gave them back to Dr. Cruz who again refused to sell them.

Subsequently, however, negotiations for the barter of the jewelry and the Tanay property ensued. Dr. Cruz requested herein private respondent Atty. Juan Belarmino to check the property. Atty. Belarmino accordingly caused the preparation of a deed of absolute sale while petitioner and Dr. Cruz attended to the safekeeping of the jewelry The following day, petitioner, together with Dichoso and Mendoza, arrived at the residence of Atty. Belarmino to finally execute a deed of absolute sale. The actual consideration of the sale was 200k but since the jewelry was appraised only at 160k, the parties agreed that the balance of 40k would just be paid in cash. Petitioner together with Dichoso and Mendoza headed to the bank to get the jewelry. At 5:55pm Dr. Cruz and the cashier then opened the safety deposit box, the former retrieving a transparent plastic or cellophane bag with the jewelry inside and handing over the same to petitioner. The latter took the jewelry from the bag, went near the electric light at the banks lobby, held the jewelry against the light and examined it for ten to fifteen minutes. After a while, Dr. Cruz asked, Okay na ba iyan? Petitioner expressed his satisfaction by nodding his head. at about 8:00 oclock in the evening of the same day, petitioner arrived at the residence of Atty. Belarmino complaining that the jewelry given to him was fake. He then used a tester to prove the alleged fakery. The lower court and the CA upheld the validity of the sale and genuineness of the jewelry since the element of a contract were all consummated and petitioner is stopped to come back after the lapse of considerable length of time to claim what he got is fake. The court also awarded damages to the respondent. Petitoner elevated the case to the SC fro the principal reason of mitigating the mount of damages warded to both the private respondents which he considers as exhorbitant. ISSUE: WON the Trial Court erred in awarding moral and exemplary damages and attorneys fees in favor of defendants and against the plaintiff. HELD: While, as a rule, moral damages cannot be recovered from a person who has filed a complaint against another in good faith because it is not sound policy to place a penalty on the right to litigate, the same, however, cannot apply in the case at bar. The factual findings of the courts a quo to the effect that petitioner filed this case because he was the victim of fraud; that he could not have been such a victim because he should have examined the jewelry in question before accepting delivery thereof, considering his exposure to the banking and jewelry businesses; and that he filed the action for the nullification of the contract of sale with unclean hands, all deserve full faith and credit to support the conclusion that petitioner was motivated more by ill will than a sincere attempt to protect his rights in commencing suit against respondents. We do not have here, therefore, a situation where petitioners complaint was simply found later to be based on an erroneous ground which, under settled jurisprudence, would not have been a reason for awarding moral and exemplary damages. Instead, the cause of action of the instant case appears to have been contrived by petitioner himself. In other words, he was placed in a situation where he could not honestly evaluate whether his cause of action has a semblance of merit, such that it would require the expertise of the courts to put it to a test. His insistent pursuit of such case then coupled with circumstances showing that he himself was guilty in bringing about the supposed wrongdoing on which he anchored his cause of action would render him

answerable for all damages the defendant may suffer because of it. This is precisely what took place in the petition at bar and we find no cogent reason to disturb the findings of the courts below that respondents in this case suffered considerable damages due to petitioners unwarranted action. WHEREFORE, the decision of the Court of Appeals dated October 20, 1992 is hereby AFFIRMED in toto. Dr. Cruz, however, is ordered to pay petitioner the balance of the purchase price of P40,000.00 within ten (10) days from the finality of this decision. Costs against petitioner. SO ORDERED. Cases 58-67 PACIO, MANUEL 68. SUMALPONG, vs.COURT OF APPEALS FACTS: At around 10:00 o'clock. In the evening of August 6, 1992, while complainant and his wife were on their way home from their ricefield in the interior, they saw the petitioner standing by the road beside a house under construction. When they came near him, the petitioner inquired from Leonarda if she knew the identity of the persons who had stoned his house, and when the latter denied any knowledge thereof, the petitioner told her that the people from the interior were abusive. To that comment Leonarda retorted that the petitioner should first identify the persons responsible for stoning his house, otherwise, she will bring the matter to the attention of the Barangay Captain. Angered by Leonarda's reply, the petitioner asked, "why are you angry, are you the wife of that person"? , and simultaneously slapped Leonarda's face causing the latter to fall to the ground. While Leonarda was on her hands and knees, the petitioner drew his gun and shot her at the back of her head. The complainant then rushed towards the petitioner who shot him twice but missed. The petitioner and the complainant grappled for the possession of the gun and fell into a nearby canal. In the course of the struggle, the petitioner bit the complainant's right forearm and left ear thereby causing a mutilation of the latter. According full faith and credence to the testimonies of the prosecution witnesses, the trial court rendered a decision convicting the petitioner of the crime of attempted homicide and sentencing him to suffer the penalty of imprisonment from six (6) months and one (1) day of arresto mayor as minimum to two (2) years, four (4) months and one (1) day of prison correccional as maximum. The petitioner was likewise ordered to indemnify the complainant in the amount of: (a) P16,800.00 for the loss of his crops due to his failure to attend to his farmwork because of the injuries inflicted upon him by the petitioner; (b) P2,000.00 for hospitalization expenses; and c) P5,000.00 by way of moral damages. The petitioner's conviction was affirmed on appeal to the Court of Appeals which, however, modified the award of damages to the complainant, deleting the awards for loss of crops and hospitalization expenses, increasing the moral damages to P10,000.00, and awarding nominal damages in the same amount. This Court upholds the Court of Appeals' ruling on the matter. Eliminating the award of actual or compensatory damages in the form of hospitalization expenses and loss of income, the Court of Appeals cited the failure of the complainant to offer any proof of

the same. To justify a grant of actual or compensatory damages, it is necessary to prove with a reasonable degree of certainty, premised upon competent proof and on the best evidence obtainable by the injured party, the actual amount of loss. ISSUE : Whether or not the Court of Appeals is correct in deleting the actual or compensatory damages HELD : Although the authority to assess damages or indemnity in criminal cases is vested in trial courts, it is so only in the first instance. On appeal, such authority passes to the appellate court. Thus, this Court has, in many cases, increased the damages awarded by the trial court, although the offended party had not appealed from said award, and the only party who sought a review of the decision of said court was the accused. The Court finds the award of nominal and moral damages both in the amount of P10,000.00 justified under the circumstances. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. 21 In other words, whenever there has been a violation of an ascertained legal right, although no actual damages resulted or none are shown, the award of nominal damages is proper. There is no room to doubt that some species of injury was caused to the complainant because of the medical expenses he incurred in having his wounds treated, and the loss of income due to his failure to work during his hospitalization. However, in the absence of competent proof of the amount of actual damages, the complainant is entitled only to nominal damages. Anent the increase in the amount of moral damages awarded, suffice it to state that the nature of the injuries and the degree of physical suffering endured by the complainant warrants the same. The tragic incident caused a mutilation of complainant's left ear and a permanent scar on his right forearm. These injuries have left indelible marks on the complainant's body and will serve as a constant reminder of this traumatic experience. WHEREFORE, the assailed decision of the Court of Appeals is hereby AFFIRMED in toto. SO ORDERED. 69. PRODUCERS BANK OF THE PHILS V CA (SPS CHUA) FACTS: Sometime in April, 1982, respondent Salvador Chua was offered by Mr. Jimmy Rojas, manager of Producers Bank of the Philippines, to transfer his account from Pacific Banking Corporation to herein petitioner bank. Respondent spouses opened and maintained substantial savings and current deposits with, and likewise obtained various loans from petitioner bank, one of which was a loan for P2,000,000.00 which was secured by a real estate mortgage and payable within a period of three (3) years or from 1982 to 1985.

On January 20, 1984, private respondents deposited with petitioner bank the total sum of P960,000.00, which was duly entered in private respondents' savings account passbook. Petitioner bank failed to credit this deposit due to the fact that its Branch Manager absconded with the money of the bank's depositors. Consequently, petitioner bank dishonored the checks drawn out by private respondents in favor of their various creditors on the ground of insufficient funds, despite the fact that at that time, the balance of private respondents' deposit was in the amount of P1,051,051.19. Private respondents requested for copies of their ledgers covering their savings and current accounts, but petitioner bank refused. Private respondents instituted on January 30, 1984 an action for damages against petitioner bank On the other hand, petitioner bank filed with the City Sheriff of Bacolod a petition for extrajudicial foreclosure of the real estate Private respondents filed a complaint for injunction and damages, alleging that the petition for extrajudicial foreclosure was without basis and was instituted maliciously in order to harass private respondents. On April 26, 1988, the trial court rendered its decision on the latter case, in favor of the spouses Chua, awarding the sum of P2,000,000.00 as moral damages, and the sum of P250,000.00 as exemplary damages, among others. On October 31, 1991, upon appeal by petitioner bank, the Court of Appeals modified the decisionone of the changes was the award of the sum of P500,000.00 as moral and exemplary damages. Petitioner moved for a consideration but the same was denied, hence, this petition ISSUE: WON the petitioner bank is liable for moral damages HELD: The decision of the Court of Appeals is affirmed with modification only as to the award of damages YES, Moral and exemplary damages may be awarded without proof of pecuniary loss. In awarding such damages, the court shall take into account the circumstances obtaining in the case and assess damages according to its discretion. As borne out by the record of this case, private respondents are engaged in several businesses, such as rice and corn trading, cement dealership, and gasoline proprietorship. The dishonor of private respondents' checks and the foreclosure initiated by petitioner adversely affected the credit standing as well as the business dealings of private respondents as their suppliers discontinued credit lines resulting in the collapse of their businesses.

In the case of Leopoldo Araneta vs. Bank of America, it was held that: "The financial credit of a businessman is a prized and valuable asset, it being a significant part of the foundation of his business. Any adverse reflection thereon constitutes some financial loss to him." The damage to private respondents' reputation and social standing entitles them to moral damages. Article 2217, in relation to Article 2220, of the Civil Code explicitly provides that "moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury." Obviously, petitioner bank's wrongful act caused serious anxiety, embarrassment, and humiliation to private respondents for which they are entitled to recover moral damages in the amount of P300,000.00 which we deem to be reasonable. 69. PRODUCERS BANK OF THE PHILS V CA (SPS CHUA) FACTS: Strebels side: As a lessee of a lot situated in Santa Mesa, Manila, plaintiff Strebel subleased part thereof to the Standard Vacuum Oil Company; that the latter constructed thereon a Mobilgas Station which was operated by Eustaquio & Co., a partnership organized by said plaintiff and one Primo Eustaquio, that, "out of spite and with a view to the eventual acquisition of the said property for himself and his men," defendant Jose Figueras "tried all he could to built a drainage through" the aforementioned property; that, in order to accomplish this purpose, and, using his official and political influence, defendant Figueras, then Under-Secretary of Labor, caused. his co-defendant Cornelio S. Ruperto, an Assistant City Fiscal of Manila, to prepare an opinion which was signed by the City Fiscal, holding that the City of Manila has a right to construct said drainage, and, to this effect, make the necessary excavations at the boundary line of said lot leased to Strebel and the lot belonging to Figueras Plaintiff Strebel also claims that defendant Figueras "by making use of his official and political connections," was able to induce the Secretary of Justice to transfer temporarily, from the Bureau of Immigration to the Bureau of Prisons, one Dr. Manuel Hernandez, the husband of plaintiff's step daughter; Plaintiff asked Secretary Nepomuceno to mediate between them and Under-Secretary of Labor to forget about past family problems. Plaintiff later on claims that Figueras still didnt forget about the past and "making use of his official and political influence," and with the cooperation of his former secretary, defendant Cornelio S. Ruperto, an Assistant City Fiscal of Manila, as well as "in connivance with the Director of Labor" which office was then held by defendant Felipe E. Jose, "and other employees in the Department and Bureau of Labor," defendant Figueras succeeded in securing the institution, against plaintiff Strebel, and his partner, Primo Eustaquio, of Criminal Case No. 11005 of the Court of First Instance of Manila, for allegedly compelling several employees to work more than eight (8) hours a day, in violation of Commonwealth Act No. 444, in relation to Commonwealth Act No. 303, although before the filing of the information "the defendants collectively and singly knew that the allegations therein are false;" that said criminal case was subsequently

dismissed by the Court of First Instance of Manila for failure of the prosecution "to establish even a prima facie case against the accused"; Through the foregoing series of acts, the defendants have "caused moral and mental suffering to the . . . plaintiff, his wife, and his entire family, and damage to his business in the amount of P15,000.00 besides actual damages in the amount of P1,500.00 paid to his attorney in defending himself from the malicious charge," ISSUE: WON Plaintiff may recover damages for moral and mental suffering HELD: NO, The plan to built said drainage was seemingly abandoned before plaintiff's property rights could be violated. There was nothing wrong, either legally or morally, in the desire of Figueras to seek an outlet for the water coming from his property. On the contrary, it is required by the elementary principles of health and sanitation. Besides, there is no allegation that any lot other than that of plaintiff Strebel was better suited for the purpose. Neither could he have any arising from the assignment of his wife's son-in-law from the Bureau of Prisons - to which he had been previously assigned temporarily to the Bureau of Immigration, for 1.The authority of the Secretary of Justice to make the assignment in question and the validity thereof, under said legal provision, are submitted. Hence, it is not claimed that said officer may be held civilly liable for the aforementioned assignment. This being the case, how can such responsibility be exacted from Figueras who, it is urged, merely instigated said assignment? 2.Even if we assumed the act complained of to be wrong or to have caused injury, the right of action hypotethically resulting therefrom, if any on which we need not, and do not, express any opinion would have accrued in favor of Dr. Hernandez who is not a party in the present action not plaintiff herein. "As a general rule, the right of recovery for mental suffering resulting from bodily injuries is restricted to the person who has suffered the bodily hurt, and there can be no recovery for distress caused by sympathy for another's suffering, or for fright due to a wrong against a third person. So the anguish of mind arising as to the safety of others who may be in personal peril from the same cause cannot be taken into consideration. '. . . damages are not recoverable for fright or shock even when sustained as result of wilful act, unless such act was directed toward person or property or person seeking recovery; hence plaintiff is not entitled to recover against administratrix of sister's murderer for fright or shock caused by viewing mutilated body of murdered sister. The rule on this point, as stated in the American Jurisprudence, is: "Injury or Wrong to Another. In law mental anguish is restricted as a rule, to such mental pain or suffering as arises from an injury or wrong to the person himself, as distinguished from that form of mental suffering which is the accompaniment of sympathy or sorrow for another's suffering or which arises from a contemplation of wrongs committed on the person of another. Pursuant to the rule stated, a husband or wife cannot recover for mental suffering caused by his or her sympathy for the other's suffering." It should be noted that plaintiff is not even related to Dr. Hernandez. The latter's wife is a daughter of Mrs. Strebel by a previous marriage. Hence Dr. Hernandez is merely related by affinity, not to Strebel, but to a relative by affinity of said plaintiff.

- Another allegation made by plaintiffs in arguing their cause of action to recover damages, they said that "with a view to further injuring" him "and besmirching his good name in the community and waging a cleavage in the harmonious relation between Eustaquio & Co. and its laborers," defendants Felipe E. Jose and Cornelio S. Ruperto issued a press statement to the effect that plaintiff Strebel and his partner, Eustaquio had flagrantly violated the provisions of the Eight-Hour Law and that said Criminal Case had been dismissed by the court on a flimsy ground; and that this statement had "caused moral and mental suffering to the herein plaintiff and damage to his business in the amount of P5,000.00," The Supreme Court said that this news item mentions, neither the number of the case referred to, nor the names of the persons accused therein. Moreover, it merely contains a criticism of the action taken by the court. The reference, therein imputed to the Director of Labor, to the flagrant violation of the eight-hour labor law by the accused, was a mere reiteration of the theory of the Bureau of Labor, which the prosecution had adopted by filing the information in said case. Being a matter of court record, which had been taken up at the hearing held publicly, and settled in a decision already promulgated, said theory was open for public consumption, and, hence, an allusion thereto or statement thereof, in order to justify said criticism, is not actionable. As regards the malicious prosecution point raised by Strebel, by specific mandate of Article 2219 of the Civil Code of the Philippines, however, moral damages may not be recovered in cases of crime or tort, unless either results or causes "physical injuries," which are lacking in the case at bar. Although the same article permits recovery of said damages in cases of malicious prosecution, this feature of said provision may not be availed of by the plaintiff herein, inasmuch as the acts set forth in the complaint took place in 1949, or before said Code became effective (laws shouldnt have retroactive effect). 71. ABS-CBN V CA FACTS: ABS-CBN, by virtue of contract with VIVA, had an exclusive right to exhibit some Viva films. ABS-CBN had a right of first refusal. VIVA gave ABS-CBN 3 packages (36 titles) to choose from. VP for ABS Charo Santos-Concio wrote VIVA that they are not accepting the list because there were only 10 titles there that they could potentially purchase. ABS asked for another list, saying they had quite an attractive offer to make. VIVA gave ABS a new list: 52 original movie titles (never before aired on TV) and 104 reruns. VIVAs proposal was P60M (P30M cash, P30M TV spots) for 52 originals and 52 reruns. Del Rosario (VIVAs rep) and Eugenio Lopez III had a meeting regarding this in Tamarind Grill Restaurant. According to ABSCBN, the meeting culminated in Del Rosario accepting ABSCBNs offer of P35M for 52 of the films VIVA was selling for P60M plus Maging Sino Ka Man. VIVA said this wasnt their agreement and that they refuse to sell anything less the 104movie package for P60M. In the meantime, RBS bought the 104-film package (which included Maging Sino Ka Man) for P60M. There were ads in the newspapers for the airing of the movie on Channel 7.

ABSCBN filed a case in RTC to enjoin RBS from airing 14 VIVA films, including Maging Sino Ka Man. RTC granted a preliminary injunction; but lifted the same after RBS put up a counterbond. ABSCBN filed a petition in the CA to challenge the RTC decision. CA granted TRO, but eventually dismissed ABSCBNs petition and made them pay for actual, moral and exemplary damages and attys fees to RBS, and attys fees to VIVA. ISSUE: WON (RBS) republic Broadcasting Corporation may recover damages from ABSCBN HELD: NO ACTUAL DAMAGES Except as provided by law or by stipulation, one is entitled to compensation for actual damages only for such pecuniary loss suffered by him as he has duly proved. The indemnification shall comprehend not only the value of the loss suffered, but also that of the profits that the obligee failed to obtain. In contracts and quasi-contracts the damages which may be awarded are dependent on whether the obligor acted with good faith or otherwise. In case of good faith, the damages recoverable are those which are the natural and probable consequences of the breach of the obligation and which the parties have foreseen or could have reasonably foreseen at the time of the constitution of the obligation. If the obligor acted with fraud, bad faith, malice, or wanton attitude, he shall be responsible for all damages which may be reasonably attributed to the nonperformance of the obligation. In crimes and quasi-delicts, the defendant shall be liable for all damages which are the natural and probable consequences of the act or omission complained of, whether or not such damages have been foreseen or could have reasonably been foreseen by the defendant. Actual damages may likewise be recovered for loss or impairment of earning capacity in cases of temporary or permanent personal injury, or for injury to the plaintiff's business standing or commercial credit. RBS claims actual damages based on Arts 19-21 for the injunction for having to put up a counterbond. The SC said that since ABS had not posted a bond and was in fact still challenging it, RBS didnt have to put up the counterbond. RBS also claims actual damages for the advertisements for the airing of Maging Sino Ka Man. The SC said that ABS is not liable for lack of sufficient basis. The prelim injunction was lifted by RTC upon RBS paying the counterbond, and not on any legal and factual basis. ATTYS FEES As regards attorney's fees, the law is clear that in the absence of stipulation, attorney's fees may be recovered as actual or compensatory damages under any of the circumstances provided for in Article 2208 of the Civil Code. The general rule is that attorney's fees cannot be recovered as part of damages because of the policy that no premium should be placed on the right to litigate. They are not to

be awarded every time a party wins a suit. The power of the court to award attorney's fees under Article 2208 demands factual, legal, and equitable justification. Even when a claimant is compelled to litigate with third persons or to incur expenses to protect his rights, still attorney's fees may not be awarded where no sufficient showing of bad faith could be reflected in a party's persistence in a case other than an erroneous conviction of the righteousness of his cause. MORAL DAMAGES Moral damages are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer. The award is not meant to enrich the complainant at the expense of the defendant, but to enable the injured party to obtain means, diversion, or amusements that will serve to obviate the moral suffering he has undergone. It is aimed at the restoration, within the limits of the possible, of the spiritual status quo ante, and should be proportionate to the suffering inflicted. The award of moral damages cannot be granted in favor of a corporation because, being an artificial person and having existence only in legal contemplation, it has no feelings, no emotions, no senses. It cannot, therefore, experience physical suffering and mental anguish which can be experienced only by one having a nervous system. The award for damages must be set aside, since RBS is a corporation. EXEMPLARY DAMAGES These are imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated, or compensatory damages. They are recoverable in criminal cases as part of the civil liability when the crime was committed with one or more aggravating circumstances; in quasi-delicts, if the defendant acted with gross negligence; and in contracts and quasi-contracts, if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. The claim of RBS against ABS-CBN is not based on contract, quasi-contract, delict, or quasi-delict. The claims for moral and exemplary damages can only be based on Articles 19, 20, and 21 of the Civil Code. Arts 19-21 have at their very core the common element of malice or bad faith. Such intentional design to do a wrongful act must be proved by evidence. Here, ABSCBN was honestly convinced of the merits of its cause after it had undergone serious negotiations culminating in its formal submission of a draft contract. Settled is the rule that the adverse result of an action does not per se make the action wrongful and subject the actor to damages, for the law could not have meant to impose a penalty on the right to litigate. If damages result from a person's exercise of a right, it is damnum absque injuria. Disposition Petition Granted. CA decision reversed, except to unappealed award of Attys damages of Viva Films. 72. NPC v PHILIPP BROTHERS OCEANIC

FACTS: The National Power Corporation (NAPOCOR) issued invitations to bid for the supply and delivery of 120,000 metric tons of imported coal for its Batangas Coal-Fired Thermal Power Plant in Calaca, Batangas. The Philipp Brothers Oceanic, Inc. (PHIBRO) prequalified and was allowed to participate as one of the bidders. After the public bidding was conducted, PHIBRO's bid was accepted. NAPOCOR's acceptance was conveyed in a letter. PHIBRO sent word to NAPOCOR that industrial disputes might soon plague Australia, the shipment's point of origin, which could seriously hamper PHIBRO's ability to supply the needed coal. PHIBRO again apprised NAPOCOR of the situation in Australia, particularly informing the latter that the ship owners therein are not willing to load cargo unless a "strike-free" clause is incorporated in the charter party or the contract of carriage. In order to hasten the transfer of coal, PHIBRO proposed to NAPOCOR that they equally share the burden of a "strike-free" clause. NAPOCOR refused. Subsequently, PHIBRO received from NAPOCOR a confirmed and workable letter of credit. Instead of delivering the coal on or before the thirtieth day after receipt of the Letter of Credit, as agreed upon by the parties in the July contract, PHIBRO effected its first shipment only on November17,1987. Consequently, in October 1987, NAPOCOR once more advertised for the delivery of coal to its Calaca thermal plant. PHIBRO participated anew in this subsequent bidding. On November 24, 1987, NAPOCOR disapproved PHIBRO's application for pre-qualification to bid for not meeting the minimum requirements. Upon further inquiry, PHIBRO found that the real reason for the disapproval was its purported failure to satisfy NAPOCOR's demand for damages due to the delay in the delivery of the first coal shipment. This prompted PHIBRO to file an action for damages with application for injunction against NAPOCOR with the Regional Trial Court, Branch 57, Makati City. In its complaint, PHIBRO alleged that NAPOCOR's act of disqualifying it in the October 1987 bidding and in all subsequent biddings was tainted with malice and bad faith. PHIBRO prayed for actual, moral and exemplary damages and attorney's fees. In its answer, NAPOCOR averred that the strikes in Australia could not be invoked as reason for the delay in the delivery of coal because PHIBRO itself admitted that as of July 28, 1987 those strikes had already ceased. And, even assuming that the strikes were still ongoing, PHIBRO should have shouldered the burden of a "strike-free" clause because their contract was "C and F Calaca, Batangas, Philippines," meaning, the cost and freight from the point of origin until the point of destination would be for the account of PHIBRO. Furthermore, NAPOCOR claimed that due to PHIBRO's failure to deliver the coal on time, it was compelled to purchase coal from ASEA at a higher price. NAPOCOR claimed for actual damages in the amount of P12,436,185.73, representing the increase in the price of coal, and a claim of P500,000.00 as litigation expenses. Thereafter, trial on the merits ensued. The trial court decided in favor of PHIBRO. Unsatisfied, NAPOCOR elevated the case to the Court of Appeals. The Court of Appeals rendered a Decision affirming in toto the Decision of the Regional Trial Court. ISSUE: Whether or not NAPOCOR acted wrongfully or with bad faith in disqualifying PHIBRO from participating in the subsequent public bidding and is PHIBRO entitled to damages

HELD: Since there is no evidence to prove bad faith and arbitrariness on the part of the petitioners in evaluating the bids, we rule that the private respondents are not entitled to damages representing lost profits." (Emphasis supplied) Verily, a reservation of the government of its right to reject any bid, generally vests in the authorities a wide discretion as to who is the best and most advantageous bidder. The exercise of such discretion involves inquiry, investigation, comparison, deliberation and decision, which are quasi-judicial functions, and when honestly exercised, may not be reviewed by the court A court cannot merely rely on speculations, conjectures, or guesswork as to the fact and amount of damages. Thus, while indemnification for damages shall comprehend not only the value of the loss suffered, but also that of the profits which the obligee failed to obtain,43 it is imperative that the basis of the alleged unearned profits is not too speculative and conjectural as to show the actual damages which may be suffered on a future period. This Court has laid down the rule that in the absence of stipulation, a winning party may be awarded attorney's fees only in case plaintiff's action or defendant's stand is so untenable as to amount to gross and evident bad faith.50 This cannot be said of the case at bar. NAPOCOR is justified in resisting PHIBRO's claim for damages. As a matter of fact, we partially grant the prayer of NAPOCOR as we find that it did not act in bad faith in disapproving PHIBRO's pre-qualification to bid. WHEREFORE, the decision of the Court of Appeals in CA-G.R. CV No. 126204 dated August 27, 1996 is hereby MODIFIED. The award, in favor of PHIBRO, of actual, moral and exemplary damages, reimbursement for expenses, cost of litigation and attorney's fees, and costs of suit, is DELETED. SO ORDERED. 73. GERALDEZ V. COURT OF APPEALS FACTS: With reference to Civil Case No. Q-90-4649 of the RTC of Quezon City, Petitioner Geraldez filed an action for damages against Respondent Kenstar Travel Corporation for breach of contract with antecedent facts as follows: Petitioner opt a 22-day Europe tour travel package offered by Respondent Corporation paying 2,990dollars as consideration. The tour did not end up as expected by herein petitioner, it did not as represented in the brochure: no European tour manager, hotels were not 1st class and the Filipino tour guide who is supposed to accompany them is a 1st timer. Petitioner then filed a breach of contract against Respondent Corporation for committing acts of representations constituting fraud in contracting the obligation. RTC rendered judgment ordering Respondent Corporation to pay petitioner 500,000 as moral damages, P 200,000 as nominal damages, 300,000 as exemplary damages and 50,000 as litigation and attorney's fees (all in pesos). On appeal, award for moral and exemplary damages were deleted and a reduction of nominal damages to 40,000 pesos, this on account that the Respondent has substantially complied with the prestation and no malice or bad faith is imputable as a consequence. Hence, the petition

ISSUE: Whether or not private respondent acted in bad faith or with gross negligence in discharging its obligation under contract. HELD: On the foregoing considerations, respondent court erred in deleting the award for moral and exemplary damages which may be awarded in breaches of contract where fraud is evident. Private respondent faulted with fraud in the inducement, which is employed by a party to a contract in securing the consent of the other. In the case at bar, the Private respondent has committed either dolo causante or dolo incidente by making false misrepresentation. Either which oblige a person to indemnify damages. Wherefore, premises considered, the decision of Respondent Court of Appeals is hereby set aside, and another one rendered, ordering private respondent Kenstar Travel Corporation to pay petitioner Lydia Geraldez the sums of P 100,000 by way of moral damages, P 50,000 as exemplary damages, and P 20,000 as attorneys fees with litigation cost against private respondent. The nominal award of damages is hereby deleted. 74. PEOPLE vs. CRISTOBAL FACTS : Such was the case of Cherry Tamayo, a married woman. She was twenty-eight years old, with one child and another on the way, when tragedy struck. She was sexually assaulted on 31 March 1986. Fortunately, the life in her womb survived. She accused Rogelio Cristobal of rape in a sworn complaint2 filed with the Municipal Trial Court (MTC) of Maddela, Quirino, on 8 April 1986. In the morning of 31 March 1986, Cherry Tamayo, a resident of Barangay San Dionisio I, Maddela, Quirino, went to the nearby Bilala Creek to wash her family's clothes. She was alone. At around midday, between the hours of 12:00 and 1:00 and after accomplishing her task, she decided to take a bath in the creek. She was about to start when somebody held her neck from behind and thereafter forcibly laid her down the ground. Only then did she recognize her attacker, the accused Rogelio Cristobal. Cherry managed to stand up and run away, but Rogelio caught up with her and delivered two fistblows to her stomach. Not content with this, Rogelio, while viciously holding her hair, pressed down Cherry's face into the water. Rogelio then took her three meters away from the creek and forcibly laid her down on the ground. Because of her weakened and pregnant state, Cherry could not struggle any further. Rogelio removed her clothes and panties. He then went on top of her, inserted his private organ into hers, and succeeded in satisfying his lust on her.Afterwhich, he slapped and threatened Cherry with death if she would talk. The threat went unheeded as Cherry, upon reaching her home, immediately told her husband of what had happened to her. Her husband accompanied her to the police station of Maddela, Quirino, to report the incident and then to Dr. Mercedita Erni-Reta for medical examination. It has long been settled that when the issue is one of credibility of witnesses, appellate courts will generally not disturb the findings of the trial court, considering that the latter is in a better position to decide the question, having heard the witnesses themselves and observed their deportment and manner of testifying during the trial. It has been aptly said:

In the resolution of the factual issues, the Court relies heavily on the trial court for its evaluation Of the witnesses and their credibility. Having the opportunity to observe them on the stand, the trial judge is able to detect that sometimes thin line between fact and prevarication that will determine the guilt or innocence of the accused. That line may not be discernible from a mere reading of the impersonal record by the reviewing court. Only the judge trying the case can see all these and on the basis of his observations arrive at an informed and reasoned verdict. ISSUE: Whether or not the testimony of the complainant is worthy of full faith and credit. HELD :This rule admits of exceptions, such as when the evaluation was reached arbitrarily, when the trial court overlooked, misunderstood, or misapplied some facts or circumstances of weight and substance which could affect the result of the case. None of these exceptions exists in this case. It is also settled that when a woman Says that she has been raped, she says in effect all that is necessary to show that she has been raped, and if her testimony meets the test of credibility the accused may be convicted on the basis thereof. The accused failed to establish physical impossibility because the alibi places him within only three kilometers from where the crime was committed, a manageable distance to travel in a few minutes. Additionally, no married woman in her right mind, like Cherry Tamayo, would subject herself to public scrutiny and humiliation in order to perpetuate a falsehood. Neither would she take the risk of being alienated from her husband and her family. If Cherry Tamayo then resolved to face the ordeal and relate in public what many similarly situated would have kept secret, she did so simply to obtain justice. For sexually assaulting a pregnant married woman, the accused has shown moral corruption, perversity, and wickedness. He has grievously wronged the institution of marriage. The imposition then of exemplary damages by way of example to deter others from committing similar acts or for correction for the public good is warranted. We hereby fix it at P25,000.00. Pursuant to the current policy of this Court, the moral damages awarded by the trial court should be increased from P30,000.00 to P40,000.00. WHEREFORE, the instant appeal is DISMISSED, and the decision of Branch 32 of the Regional Trial Court of Cabarroguis, Quirino, in Criminal Case No. 604 convicting the accused ROGELIO CRISTOBAL of the crime of rape is AFFIRMED, subject to the foregoing modifications. As modified, the award of moral damages is increased from P30,000.00 to P40,000.00, and the accused is further ordered to pay exemplary damages in the amount of P25,000.00. Costs against the accused. SO ORDERED. 75. PEOPLE VS. MATRIMONIO

FACTS : Rowena Matrimonio, a girl of fourteen (14) years in December of 1985, was unlike many of the youths of her age in our country. She was the first to be born into a common-law relationship between a man and a woman who did not think of legalizing their union despite the succeeding births of four (4) more children. She was no stranger to poverty; both her father and mother were itinerant vendors he of sweepstakes tickets and she of children's toys. As if these adverse circumstances were not enough, she underwent, at such a tender and innocent age, a most painful, terrifying and horrifying experience the memory of which will forever haunt her. She was sexually molested not once but twice by her own natural father, the herein appellant, in their own home in Sampaloc, Manila. The first assault occurred on 27 December 1985. As a consequence of this most unnatural and revolting act, she became pregnant. The second took place on 5 April 1986. On both occasions, she had no choice but yield her body and honor because he had threatened to kill her, her mother and her siblings. It was only after the second incident that she decided to reveal his bestial deeds. Appellant moved for a consolidation of Criminal Case No. 86-46286 in Branch 47 with Criminal Case No. 86-46285 in Branch 45, which was granted, subject to the conformity of the Presiding Judge of Branch 45, in the Order of 9 September 1986. 9 The latter did not object to the consolidation. As a result, the two (2) cases were jointly tried in Branch ISSUE: Whether or not the victim is entitled to moral damages that the lower court failed to impose. HELD: RTC DECISION: In a Decision dated 5 October 1987 10 but promulgated on 28 October 1987, the trial court found the accused guilty beyond reasonable doubt of the crime of Rape under Article 335 of the Revised Penal Code in both criminal cases, and sentenced him: . . . to suffer the penalty of RECLUSION PERPETUA for the first rape on December 27, 1985 and the same penalty of RECLUSION PERPETUA for the second rape on April 5, 1986. 11 A day after the promulgation, accused-appellant filed a Notice of Appeal wherein he manifested his intention to appeal the decision to the Court of Appeals. COURT OF APPEALS DECISION: The Court of appeals sustain the trial court for the prosecution's evidence proved beyond reasonable doubt that the appellant intimidated Rowena into consummating the sexual acts with him on 27 December 1985 and 5 April 1986. He conveniently availed of two (2) forms of intimidation: threats and his overpowering moral influence. SUPREME COURT DECISION: The affirmance of the appellant's convictions in the two (2) cases subject of this appeal is inevitable. He should, however, be condemned to pay moral and exemplary damages which the trial court failed to impose. It must be imposed for the circumstances in these cases warrant the award of moral damages under Article 2219(3) in relation to Article 2217 of the Civil Code. We hereby fix the award at P50,000.00 in each of the two (2) appealed cases. As for exemplary damages, provided for under Article 2229 of the same Code. P25,000.00 in each of the said cases. Exemplary damages are herein imposed to deter other fathers with perverse tendencies or aberrant sexual behavior from sexually abusing their own daughters.

WHEREFORE, the appealed Decision of Branch 45 of the Regional Trial Court of Manila in Criminal Case No. 86-46285 and Criminal Case No. 86-46286 is hereby AFFIRMED subject to the modification above indicated. As modified, moral and exemplary damages, in the amounts of P50,000.00 and P25,000.00, respectively, are awarded to the offended party, ROWENA I. MATRIMONIO, in each of the said cases. Costs against the appellant. SO ORDERED. 76. SARMIENTO VS. EMPLOYEES COMPENSATION COMMISSION FACTS : The late Flordeliza Sarmiento was employed by the National Power Corporation in Quezon City as accounting clerk in May 1974. At the time of her death on August 12, 1981 she was manager of the budget division. The deceaseds illness was a cancer known as differential squarrous cell carcinoma, and sought treatment in various hospitals. And on August 12, 1981, she succumbed to cardio respiratory arrest due to parotid carcinoma, and she was 20 years old. Believing that the deceaseds fatal illness having been contracted during her employment was service-connected, Jose B. Sarmiento filed a claim for death benefits under PD 626. On September 9, 1982, the GSIS, through its Medical Services Center, denied the claim. It was pointed out that the illness of Flordeliza was not caused by employment and employment conditions. Dissatisfied with the respondents decision of denial, Jose Sarmiento wrote a letter to the GSIS requesting that the records of the claim be elevated to the Employees Compensation Commission for review pursuant to the law and the Amended Rules on Employees Compensation. The respondent Commission affirmed the GSIS decision, it found that the deceaseds death is not compensable because she did not contract nor suffer from the same reason of her work but by reason of embryonic rests and epithelial growth. ISSUE : Whether or not the deceaseds illness under PD 626, compensable? HELD : Under PD 626, a compensable illness means illness accepted as an occupational disease and listed by the Employees Compensation Commission, or any illness caused by employment subject to proof by the employee that the risk of contracting the same is increased by working conditions The respondent prays for the application of the Old Workmen's Compensation Act which provided for a presumption of compensability whenever an ailment supervened during the course of the employment. We dismiss the petition. Given the preceding medical evaluations, we affirm the findings of the public respondents which found no proof that the deceased's working conditions have indeed caused or increased the risk of her contracting her illness. WHEREFORE, the petition is DISMISSED. The decisions of the Government Service Insurance System and the Employees' Compensation Commission denying the claim are AFFIRMED. SO ORDERED.

Cases 68-76 BAYTAN, ROGELIO