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GREENSTAR EXPRESS, INC. AND FRUTO L. SAYSON, JR. vs.

NISSIN-UNIVERSAL
ROBINA CORPORATION
G.R. No. 205090, October 17, 2016, J. Del Castillo

Employers shall be liable for the damages caused by their employees acting within
the scope of their assigned tasks.

The antecedent negligence of a person does not preclude recovery of damages caused
by the supervening negligence of the latter, who had the last fair chance to prevent the
impending harm by the exercise of due diligence.

Facts:

Greenstar Express, Inc. is the owner of a passenger bus, driven by Fruto Sayson,
which collided head on with an L-300 van, owned by Unoversal Robina and Nissin
Universal Robina Corporation and driven by Renante Bicomong, NURCs Operations
Manager, in Maharlika Highway, Laguna. As a result of the collision, Bicomong died
instantly, while the passenger bus owned by Greenstar sustained damages.

Greenstar and Fruto filed a case for damages against the respondents, based on the
negligence of Bicomong, an employee of the respondents. During trial, it was established
that Bicomong used the L300, a vehicle owned by the respondents, in transporting bulky
material to his home, despite the fact that he himself was issued an executive car. The
incident also happened on a holiday, and the employee did not use the vehicle for official
company use.

The RTC ruled in favor of the respondents. It held that for the employer to be liable
for the damages caused by his employee, the latter must have caused the damage in the
course of doing his assigned tasks or in the-performance of his duties. In this case,
Bicomong was not in the performance of his duty on the day of the accident because it was
a holiday; there were no plants of the company in Quezon and Laguna; the deceased was
issued an executive car for his own use, and merely preferred using the L300 for
transporting bulky materials to his home. Because the accident occurred outside
Bicomongs assigned tasks, defendant employers cannot be held liable to the plaintiffs, even
assuming that it is the fault of defendants employee that was the direct and proximate
cause of their damages.

CA affirmed the RTC judgment, thus the petitioners appealed to the Supreme
Court.

Issue:

Whether or not the respondents are liable for the negligence of their employee even
though the accident occurred not in the performance of the employees duty to the
company.

Ruling:
Respondents are not liable for the negligence of their employee.

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

When by evidence the ownership of the van and Bicomong's employment were
proved, the presumption of negligence on respondents' part attached, as the registered
owner of the van and as Bicomong's employer. The burden of proof then shifted to
respondents to show that no liability under Article 2180 arose. This may be done by proof of
any of the following:

1. That they had no employment relationship with Bicomong; or


2. That Bicomong acted outside the scope of his assigned tasks; or
3. That they exercised the diligence of a good father of a family in the
selection and supervision of Bicomong.

Respondents succeeded in overcoming the presumption of negligence, having


shown that when the collision took place, Bicomong was not in the performance of his
work; that he was in possession of a service vehicle that did not belong to his employer
NURC, and which vehicle was not officially assigned to him; that his use of the URC van was
unauthorized; that the accident occurred on a holiday and while Bicomong was on his way
home to his family; and that Bicomong had no official business whatsoever in his
hometown in Quezon, or in Laguna where the collision occurred, his area of operations
being limited to the Cavite area.

On the other hand, the evidence suggests that the collision could have been avoided
if Sayson exercised care and prudence. Despite having seen Bicomong drive the URC van in
a precarious manner while the same was still a good 250 meters away from his bus, Sayson
did not take the necessary precautions, as by reducing speed and adopting a defensive
stance to avert any untoward incident. Instead, he maintained his current speed. An
experienced driver who is presented with the same facts would have adopted an attitude
consistent with a desire to preserve life and property; for common carriers, the diligence
demanded is of the highest degree.

The law exacts from common carriers (i.e., those persons, corporations, firms, or
associations engaged in the business of carrying or transporting passengers or goods or
both, by land, water, or air, for compensation, offering their services to the public) the
highest degree of diligence (i.e., extraordinary diligence) in ensuring the safety of its
passengers. Articles 1733 and 1755 of the Civil Code state:

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 all the circumstances of each case.

Art. 1755. A common carrier is bound to carry the passengers safely as far as
human care arid foresight can provide, using the utmost diligence of very
cautious persons, with a due regard for all the circumstances.

In this relation, Article 1756 provides that '[i]n case of death of or injuries to
passengers, common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary diligence as prescribed in
Articles 1733 and 1755.

The doctrine of last clear chance provides that where both parties are negligent but
the negligent act of one is appreciably later in point of time than that of the other, or where
it is impossible to determine whose fault or negligence brought about the occurrence of the
incident, the one who had the last clear opportunity to avoid the impending harm but
failed to do so, is chargeable with the consequences arising therefrom. Stated differently,
the rule is that the antecedent negligence of a person does not preclude recovery of
damages caused by the supervening negligence of the latter, who had the last fair chance to
prevent the impending harm by the exercise of due diligence.

COCA-COLA BOTTLERS PHILIPPINES, INC. vs. SPOUSES JOSE R. BERNARDO AND


LILIBETH R. BERNARDO, DOING BUSINESS UNDER THE NAME AND STYLE
JOLLY BEVERAGE ENTERPRISES
G.R. No. 190667, November 7, 2016, C.J. Sereno

The use of unjust, oppressive, or high-handed business methods resulting in unfair


competition also gives a right of action to the injured party.

Facts:

Respondents, doing business under the name "Jolly Beverage Enterprises," are
distributors of petitioner under an exclusive dealership contract.

Sometime in late 1998 or early 1999, before the contract expired, petitioner required
respondents to submit a list of their customers on the pretext that it would formulate a
policy defining its territorial dealership in Quezon City. It assured respondents that their
contract would be renewed for a longer period, provided that they would submit the list.
However, despite their compliance, the promise did not materialize.

Respondents later discovered that petitioner has been reaching out to respondents
clients. Petitioner also employed pricing schemes that caused respondents to lose their
major customers. As a result, respondents filed a Complaint for damages, alleging that the
acts of petitioner constituted dishonesty, bad faith, gross negligence, fraud, and unfair
competition in commercial enterprise. Petitioner denied the allegations and claimed that
the Complaint was a mere ploy resorted to by respondents to evade the payment of the
deliveries.

The RTC held petitioner liable for damages for abuse of rights in violation of
Articles 19, 20, and 21 of the Civil Code and for unfair competition under Article 28. The CA
affirmed the RTC ruling.
Issue:

Whether the award of damages and attorney's fees was proper.

Ruling:

Articles 19, 20, and 21 of the Civil Code provide the legal bedrock for the award of
damages to a party who suffers damage whenever another person commits an act in
violation of some legal provision; or an act which, though not consitituting a transgression
of positive law, nevertheless violates certain rudimentary rights of the party aggrieved.
Under any of these provisions, an act that causes injury to another may be made the basis
for an award of damages. Meanwhile, the use of unjust, oppressive, or high-handed
business methods resulting in unfair competition also gives a right of action to the injured
party, pursuant to Article 28 of the Civil Code.

Here, petitioner had employed oppressive and high-handed schemes to unjustly


limit the market coverage and diminish the investment returns of respondents. Petitioner
took advantage of the information provided by respondents to facilitate its takeover of the
latter's usual business area. Distributors like respondents, who had assisted petitioner in its
marketing efforts, suddenly found themselves with fewer customers.

The CA correctly ruled that the award of temperate damages was justified, even if it
was not specifically prayed for, because 1) respondents prayed for the grant of "other
reliefs," and 2) the award was clearly warranted under the circumstances. Indeed, the law
permits judges to award a different kind of damages as an alternative to actual damages.
Article 2224 of the Civil Code provides that 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 can not, from the nature of
the case, be provided with certainty. Compensatory damages may be awarded in the
concept of temperate damages for injury to business reputation or business standing, loss of
goodwill, and loss of customers who shifted their patronage to competitors. In this case,
both the RTC and the CA found that respondents had suffered pecuniary loss by reason of
petitioner's high-handed machinations to eliminate competition in the market. However,
the unpaid obligation of respondents shall be offset against the temperate damages due
them from petitioner.

The award of moral damages, on the other hand, finds legal basis under Article
2219(10) of the Civil Code, which states that moral damages may be recovered in acts and
actions referred to in Articles 21 and 28. Similarly, the award of exemplary damages is
justified by Article 2229 of the Civil Code to caution powerful business owners against the
use of oppressive and high-handed commercial strategies to target and trample on the
rights of small business owners, who are striving to make a decent living. The grant of
attorney's fees was also warranted because of the award of exemplary damages.

WILLIAM ENRIQUEZ AND NELIA-VELA ENRIQUEZ vs. ISAROG LINE TRANSPORT,


INC. AND VICTOR SEDENIO
G.R. No. 212008, November 16, 2016, J. Peralta

The indemnification for loss of earning capacity partakes of the nature of actual
damages, which must be duly proven by competent proof and the best obtainable evidence
thereof.

Facts:

Sonny Enriquez was a passenger of a bus owned and operated by respondent Isarog
Line Express Transport, Inc. driven by Victor Sedenio. While on the road the bus collided
with another bus owned by Philtranco Service Enterprises, Inc. which was being driven by
Primitivo Aya-ay. As a result, several passengers died, including Sonny. Sonny's parents,
petitioners Spouses Enriquez, filed a complaint for damages against Isarog Line and
Philtranco and their drivers before the RTC.

The RTC found all the defendants solidarily liable. The CA affirmed the RTC but
modified the monetary award by removing the award for unrealized income. The Spouses
Enriquez then filed a Motion for Partial Reconsideration, which the CA denied.

Issue:

Whether the Spouses Enriquez are entitled damages for their son's loss of earning
capacity.

Ruling:

Petitioners are entitled to damages for their sons loss of earning capacity.

Under Article 2206 of the Civil Code, the heirs of the victim are entitled to
indemnity for loss of earning capacity. Compensation of this nature is awarded not for loss
of earnings, but for loss of capacity to earn. The indemnification for loss of earning capacity
partakes of the nature of actual damages, which must be duly proven by competent proof
and the best obtainable evidence thereof. Thus, as a rule, documentary evidence should be
presented to substantiate the claim for damages for loss of earning capacity. By way of
exception, damages for loss of earning capacity may be awarded despite the absence of
documentary evidence when (1) the deceased was self-employed and earning less than the
minimum wage under current labor laws, in which case, judicial notice may be taken of the
fact that in the deceased's line of work no documentary evidence is available; or (2) the
deceased was employed as a daily wage worker earning less than the 'minimum wage under
current labor laws.

The Spouses Enriquez were able to present competent proof and the best obtainable
evidence of their departed son's income since the defendants did not object when they
presented the certification from ASLAN Security Systems, Inc. (ASLAN) during the trial.
Contrary to the CAs claim that the said document had no probative value because
the signatory was never presented to testify, the rule is that evidence not objected to is
deemed admitted and may be validly considered.

Hence, the heirs were entitled to a monetary award for the loss of earning capacity.
Using the settled formula, the amount of damages for loss of earning capacity is
P1,038,960.00, thus:

Net Earning Capacity = Life expectancy x Gross Annual Income - Living


Expenses
= [2/3 (80 - age at death)] x GAI - [50% of GAI]
= [2/3 (80 - 26)] x P57,720.00 - P28,860.00
= [2/3 (54)] x P28,860.00
= 36 x P28,860.00
Net Earning Capacity = P1,038,960.00 of the award of exemplary damages.

NANITO EVANGELISTA (SUBSTITUTED BY HIS HEIRS, REPRESENTED BY THE


SURVIVING SPOUSE, LEOVIGILDA C. EVANGELISTA) vs. SPOUSES NEREO V.
ANDOLONG III, ET AL.
G.R. No. 221770, November 16, 2016, J. Perlas-Bernabe

Temperate or moderate 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
provided with certainty.

Facts:

The Spouses Andolong are the majority shareholders of RAII, a domestic


corporation engaged in the business of operating amusement centers. On various dates,
Nanito and respondents entered into various memoranda of agreement (MOA), as well as
deeds of assignment/sale with right to repurchase over machines, equipment, and
amenities, which were used in the operations of amusement centers in different malls. In
the subject MOA, the parties agreed that they would equally share, the net profits of said
amusement centers. Claiming that respondents failed to comply with their obligation to
remit his share of the net profits, Nanito filed the instant complaint. During the pendency
of the case, Nanito died and, consequently, was substituted by his heirs (petitioners).

The RTC dismissed petitioners' complaint for insufficiency of evidence. Essentially,


the RTC found that Nanito failed to establish his claim against respondents. The CA later
affirmed the RTCs decision.

Issue:

Whether petitioners are entitled to temperate damages.

Ruling:
Petitioners are entitled to temperate damages.

Under Article 2224 of the Civil Code, temperate or moderate 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 provided with certainty. Consequently, in
computing the amount of temperate or moderate damages, it is usually left to the discretion
of the courts, but the amount must be reasonable, bearing in mind that temperate damages
should be more than nominal but less than compensatory.

Respondents' failure to remit the net profits to Nanito pursuant to the subject MOA
caused some pecuniary loss on the part of the latter, albeit he failed to prove the exact
amount of such loss. In view of such circumstance, the Court deems it reasonable to award
temperate damages to petitioners in the amount of P1,100,000.00, which is roughly half of
P2,241,632.00, or the amount of gross revenue claimed to have been earned by the
amusement centers. Notably, the award of P1,100,000.00 shall earn legal interest at the rate
of six percent (6%) per annum from the finality of this Decision until fully paid.

ROSITA B. LIM vs. LUIS TAN, ET AL. / LUIS TAN, ET AL. vs. ROSITA B. LIM / ANG
TIAT CHUAN VS. ROSITA B. LIM
G.R. No. 177422 / G.R. No. 177676, November 28, 2016, J. Reyes

When death occurs due to a crime, the following may be recovered: (1) civil
indemnity ex delicto for the death of the victim; (2) actual or compensatory damages; (3)
moral damages; (4) exemplary damages; (5) attorney's fees and expenses of litigation; and
(6) interest, in proper case. Temperate damages may also 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.

Facts:

This case spawned from the death of Florentino Lim, a scion of the wealthy Lim Ket
Kai family of Cagayan de Oro City. Upon investigation, the Tan brothers and Chuan
together with eight others, were charged with murder before Military Commission No. 1.
The Military Commission found Luis, Chuan, and four of their co-accused, namely,
Mariano Velez, Jr., Antonio Ocasiones, Leopoldo Nicolas, and Marciano Benemerito, guilty
of murder. On the other hand, the other brothers of Luis were acquitted.

The said judgment, however, simply concluded the criminal prosecution of those
already haled to court but it did not entomb the indignant feelings instigated by the death
of Florentino. Thus, Rosita, wife of the deceased Florentino, together with her then minor
children (collectively, the petitioners), commenced a civil action for damages against all
those charged with the slaying of Florentino.

The RTC rendered judgment ordering the surviving Defendants and the heirs and
successors-in-interest of the deceased Defendants, who have been substituted in their place
as Defendants, to pay to the [petitioners], jointly and severally, the following amounts: a)
P15 Million as actual and compensatory damages; b) P25Million as moral damages; c) P10
Million as exemplary damages; d) P1 Million as attorney's fees; e) P500,000.00 for litigation
expenses; and f) costs of suit.

The CA modified the RTC decision by directing the payment of the following
amounts: a) P50,000.00 as civil indemnity; b) P350,000.00 as temperate damages; c)
P150,000.00 as moral damages; d) P150,000.00 as exemplary damages; e) P100,000.00 as
attorney's fees; and P100,000.00) as litigation expenses.

Issue:

Whether the CA erred in modifying the damages, attorney's fees and litigation
expenses awarded to the heirs of Florentino.

Ruling:

No. However, the amount of civil indemnity awarded to the heirs of Florentino must
be modified. It is jurisprudentially settled that when death occurs due to a crime, the
following may be recovered: (1) civil indemnity ex delicto for the death of the victim; (2)
actual or compensatory damages; (3) moral damages; (4) exemplary damages; (5) attorney's
fees and expenses of litigation; and (6) interest, in proper case.

In imposing the proper amount of damages, the principal consideration is the


penalty provided by law or imposable for the offense because of its heinousness and not the
public penalty actually imposed on the offender.

Here, the Court sustains the award of civil indemnity but increases its amount to
P100,000.00 in accordance with recent jurisprudence. Civil indemnity is awarded to the
offended party as a kind of monetary restitution or compensation to the victim for the
damage or infraction that was done to the latter by the accused, which in a sense only covers
the civil aspect. Thus, in a crime where a person dies, in addition to the penalty of
imprisonment imposed to the offender, the accused is also ordered to pay the victim a sum
of money as restitution.

The CA's deletion of the award of actual and compensatory damages which
included the loss of earning capacity of the victim is also proper. The indemnification for
loss of earning capacity partakes of the nature of actual damages. For one to be entitled to
actual damages, it is necessary to prove the actual amount of loss with a reasonable degree
of certainty, premised upon competent proof and the best evidence obtainable by the
injured party. Here, although Rosita testified as to the annual income of Florentino, she
failed to substantiate the same by documentary evidence.

Nevertheless, the CA properly awarded temperate damages. According to Article


2224 of the Civil Code, temperate 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. Here, pecuniary expenses were incurred in the funeral and burial of Florentino.
Moral damages are awarded to allow them to obtain means for diversion that could
serve to alleviate their moral and psychological sufferings. In cases of murder, the award of
moral damages is mandatory without need of allegation and proof other than the death of
the victim. The award of moral damages of P150,000.00 in the present case is proper.

Corollarily, exemplary damages are awarded in addition to moral damages by way of


example or correction for the public good. The purpose of exemplary damages is to serve as
a deterrent to serious wrong doings and as a vindication of undue sufferings and wanton
invasion of the rights of an injured or a punishment for those guilty of outrageous conduct.
Here, the Court upholds the amount of P150,000.00 as exemplary damages.

Finally, as a general rule, the parties may stipulate the recovery of attorney's fees. In
the absence of such stipulation, Article 2208 of the Civil Code enumerates the legal grounds
which justify or warrant the grant of attorney's fees and expenses of litigation, and this case
qualifies for the 1sr and 11th reasons why attorney's fees are awarded, namely: (a) when
exemplary damages are awarded; and (b) in any other case where the court deems it just
and equitable that attorney's fees and expenses of litigation should be recovered.
Considering that the Court has awarded exemplary damages in this case, attorney's fees can
likewise be awarded.

Lastly, the heirs of Florentino should likewise be granted an interest at the legal rate
of six percent (6%) per annum on all the damages awarded from the date of finality of this
Decision until fully paid.

ROSALIE SY AYSON vs. FIL-ESTATE PROPERTIES, INC. AND FAIRWAYS AND


BLUEWATER RESORT AND COUNTRY CLUB, INC.
G.R. No. 223269, December 1, 2016, J. Perlas-Bernabe

When the act of one party is tainted with bad faith, and such act causes injury to
another; the party guilty of bad faith shall be liable for moral damages, exemplary damages,
and attorney's fees.

Facts:

This case arose from a Complaint for recovery of possession and damages filed by
Ayson against Fil-Estate and Fairways before the RTC, alleging that she is the registered
owner of a 1,000-square meter parcel of land, more or less, located in Yapak, Malay, Aklan
(subject land). Sometime in June 1997, she discovered that Fil-Estate and Fairways illegally
entered into the subject land and included it in the construction of its golf course without
her prior consent and authorization. Despite receipt of a Notice to Cease and Desist from
Ayson, Fil-Estate and Fairways continued their encroachment and development of the
subject land making it now a part of the entire golf course. Thus, she was constrained to file
the instant complaint.

Fil-Estate and Fairways maintain that the subject land was formerly owned by one
Divina Marte Villanueva (Villanueva), with whom they entered into a Joint Venture
Agreement (JVA) for the development of the Fairways and Bluewater Resort Golf and
Country Club. Fil-Estate and Fairways explained that prior to the JVA, Villanueva sold
portions of her property to various buyers, including Ayson, with the caveat that such
portions may be used in a development project. In this light, Villanueva allegedly convinced
her buyers to agree to a land swap should such development push through. When the
project commenced, the other buyers readily agreed to said land swaps. Unfortunately, talks
with Ayson stalled, prompting Fil-Estate and Fairways to "exclude" development work on
the subject land. Nevertheless, Fil-Estate and Fairways commenced construction on the
subject land, allegedly relying in good faith upon Villanueva's assurance that her other
former buyers, e.g., Ayson, would eventually agree with the land swap agreements.
According to Fil-Estate and Fairways, Ayson only signified her objection to the inclusion of
the subject land in the development project when construction was almost finished.

The RTC ruled in Ayson's favor and, accordingly, ordered Fil-Estate and Fairways to
pay her the following amounts: (a) US$100,000.00 or its Philippine Peso equivalent,
representing the value of the subject land, plus P50,000.00 monthly rentals for the use and
occupancy of said land starting December 1997 until the aforesaid value has been fully paid;
(b) P900,000.00 as actual damages; (c)Pl,000,000.00 as moral damages; (d) Pl,000,000.00
as exemplary damages; (e) P300,000.00 as attorney's fees and other litigation expenses; and
(f) the costs of suit.

The CA affirmed the RTC ruling with modification reducing the award of damages
as follows: (a) US$40,000.00 or its Philippine Peso equivalent, representing the value of the
subject land, plus Pl,000.00 monthly rentals for the use and occupancy of said land starting
December 1997 until the aforesaid value has been fully paid; ( b) P52,666.00 plus
US$4,316.06 or its Philippine Peso equivalent as actual damages; (c) PS00,000.00 as moral
damages; (d) P300,000.00 as exemplary damages; and (e) P200,000.00 as attorney's fees
and other litigation expenses.

Issue:

Whether the awards of moral damages, exemplary damages, and attorney's fees in
Ayson's favor and the corresponding amounts thereof, as well as the correctness of the
valuation of the subject land at US$40,000.00 and the monthly rental therefor proper.

Ruling:

Fil-Estate and Fairways knew that Ayson is the undisputed owner of the subject
land but nevertheless chose to rely on Villanueva's empty assurances that she will be able to
convince Ayson to agree on a land swap arrangement; and thereafter, proceeded to enter the
subject land and introduce improvements thereon. Such acts were without Ayson's
knowledge and consent, she, thus: (a) suffered sleepless nights and mental anguish
knowing that the property she and her husband had invested for their future retirement
had been utilized by Fil-Estate and Fairways for their own sake; and (b) had to seek legal
remedies to vindicate her rights. Thus, Fil-Estate and Fairways' acts were done in bad faith
and resulted in injury to Ayson; hence, they are liable for, inter alia, moral damages,
exemplary damages, and attorney's fees.
Relatedly, the CA correctly reduced the awards for moral damages, exemplary
damages, and attorney's fees in light of the evidence adduced as well as the prevailing
circumstances of the instant case. It must be stressed that "[m]oral damages are not meant
to be punitive but are designed to compensate and alleviate the physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock,
social humiliation, and similar harm unjustly caused to a person." Similarly, exemplary
damages are imposed "by way of example or correction for the public good, in addition to
the moral, temperate, liquidated or compensatory damages" and are awarded "only if the
guilty party acted in a wanton, fraudulent, reckless, oppressive or malevolent manner."
Lastly, attorney's fees should be reasonable in all cases where an award thereof is warranted
under the circumstances.

In addition, a legal interest at the rate of six percent (6%) per annum should be
imposed on all monetary awards to Ayson from the time of the finality of this Decision until
fully paid.

EDDIE CORTEL Y CARNA & YELLOW BUS LINE, INC. vs. CECILE GEPAYA-LIM
G.R. No. 218014, Deceber 7, 2016, J. Carpio

The elements of res ipsa loquitur are: (1) the accident is of such character as to
warrant an inference that it would not have happened except for the defendant's negligence;
(2) the accident must have been caused by an agency or instrumentality within the exclusive
management or control of the person charged with the negligence complained of; and (3) the
accident must not have been due to any voluntary action or contribution on the part of the
person injured.

The rule is when an employee causes damage due to his own negligence while
performing his own duties, there arises a presumption that his employer is negligent. This
presumption can be rebutted only by proof of observance by the employer of the diligence of
a good father of a family in the selection and supervision of its employees.

Facts:

A bus operated by Yellow Bus Line and driven by Eddie Cortel y Carna (Cortel) hit
from behind a motorcycle driven by SPO3 Robert Lim, who was driving towards the same
direction of the bus. Upon impact, Lim was thrown upward and then slammed into the
bus, hitting the base of its right windshield wiper. The motorcycle got entangled with the
broken bumper of the bus.

Respondent Cecile Gepaya-Lim, Lim's widow, filed a complaint for damages against
petitioners.

The trial court found that the bus was running fast when it bumped the motorcycle
ridden by Lim. The trial court ruled that the accident is the proximate cause of Lim's death.
The trial court also ruled that Yellow Bus Line failed to present sufficient evidence to prove
that it exercised due diligence in the selection and supervision of Cortel.
In affirming the ruling of the trial court, the Court of Appeals applied the doctrine
of res ipsa loquitur. However, the Court of Appeals recomputed Lim's lost earning capacity
using the formula:

Life expectancy 2/3 x [80- age of deceased at the time of death]

2/3 x (80-41]

2/3 x [39]

FORMULA NET EARNING CAPACITY (NEC)

Issues:

1) Whether res ipsa loquitur applies.


2) Whether Yellow Bus Line exercised diligence of a good father of a family in the
selection and supervision of its employees.
3) Whether the award of loss of earning capacity and damages to respondent is proper.

Ruling:

1) Res ipsa loquitur applies to this case.

The elements of res ipsa loquitur are: (1) the accident is of such character as to
warrant an inference that it would not have happened except for the defendant's
negligence; (2) the accident must have been caused by an agency or instrumentality within
the exclusive management or control of the person charged with the negligence complained
of; and (3) the accident must not have been due to any voluntary action or contribution on
the part of the person injured.

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

2) Yellow Bus Line did not exercise diligence of a good father of a family in the
selection and supervision of its employees.

The rule is when an employee causes damage due to his own negligence while
performing his own duties, there arises a presumption that his employer is negligent. This
presumption can be rebutted only by proof of observance by the employer of the diligence
of a good father of a family in the selection and supervision of its employees. In this case,
Yellow Bus Line failed to prove that it exercised due diligence of a good father of a family in
the selection and supervision of its employees. Cortel's certificates of attendance to
seminars, which Yellow Bus Line did not even present as evidence in the trial court, are not
enough to prove otherwise.
3) The award of loss of earning capacity and damages to respondent is proper due to
the computation of the award in accordance with the following formula:

Net earning capacity Life Expectancy x [Gross Annual Income-


Living Expenses (50% of gross annual income)], where life
expectancy 2/3 (80 - the age of the deceased).

PHILIPPINE NATIONAL BANK vs. PABLO V. RAYMUNDO


G.R. No. 208672, December 7, 2016, J. Peralta

A bank's disregard of its own banking policy amounts to gross negligence.

Facts:

Pablo V. Raymundo, then Department Manager of PNB San Pedro Branch, approved
for deposit a foreign draft check in the amount of $172,549.00 issued by Solomon
Guggenheim Foundation, drawn against Morgan Guaranty Company of New York, payable
to Merry May Juan in the opening of the latter's checking account with PNB San Pedro
Branch. Consequent to the approval for deposit of the foreign draft check, a checking
account and a check booklet were issued to Juan. On even date, Juan drew 6 PNB Checks,
all in the aggregate amount of Php4 Million. The 6 checks were negotiated by Ms. Juan and
were approved for payment on the same day by Raymundo, without waiting for the foreign
draft check, intended to fund the issued check, to be cleared by the PNB Foreign Currency
Clearing Unit.

The foreign draft check was later dishonored for being fraudulent. As a result, the
Ombudsman charged Raymundo with violation of Section 3(e) of RA No. 3019.

The RTC acquitted Raymundo of the charge of violation of Section 3(e) of R.A. No.
3019. CA affirmed the RTCs Decision.

Issues:

1) Whether Raymundo is civilly liable for the amount of the checks.


2) Whether PNB is entitled to actual damages.

Ruling:

1) Raymundo is civilly liable for the amount of the checks due to his gross negligence
in a) in allowing the peso conversion of the foreign check to be credited to Juans newly-
opened peso checking account, even before the lapse of the 21-day clearing period, and (b)
in issuing Juan a check booklet, all on the very same day the said account was opened.
Raymundo disregarded the bank's foreign check clearing policy, and risked his trust and
confidence on Juan's and her cohorts' assurance that the foreign check was good and that
they would not negotiate any check until the former check is cleared.
Since their business and industry are imbued with public interest, banks are
required to exercise extraordinary diligence, which is more than that of a Roman pater
familias or a good father of a family, in handling their transactions. Banks are also expected
to exercise the highest degree of diligence in the selection and supervision of their
employees.

A bank's disregard of its own banking policy amounts to gross negligence, which is
described as "negligence characterized by the want of even slight care, acting or omitting to
act in a situation where there is duty to act, not inadvertently but willfully and
unintentionally with a conscious indifference to consequences insofar as other persons may
be affected." Payment of the amounts of checks without previously clearing them with the
drawee bank, especially so where the drawee bank is a foreign bank and the amounts
involved were large, is contrary to normal or ordinary banking practice. Before the check
shall have been cleared for deposit, the collecting bank can only assume at its own risk that
the check would be cleared and paid out. As a bank Branch Manager, Raymundo is expected
to be an expert in banking procedures, and he has the necessary means to ascertain
whether a check, local or foreign, is sufficiently funded.

Raymundo's act of approving the deposit to Juan's newly-opened peso checking


account of the peso conversion of the foreign check prior to the lapse of the 21-day clearing
period is the proximate cause why the 6 checks worth Php4 Million were later encashed,
thereby causing the PNB undue injury. Defined as that cause which, in natural and
continuous sequence, unbroken by any efficient intervening cause, produces injury and
without which the result would not have occurred, the proximate cause can be determined
by asking a simple question: "If the event did not happen, would the injury have resulted? If
the answer is no, then the event is the proximate cause. If Raymundo did not disregard the
bank's foreign check clearing policy, PNB would not have suffered losses.

2) PNB is entitled to actual damages.

It is well settled that actual damages, to be recoverable, must not only be capable of
proof, but must actually be proved with a reasonable degree of certainty. 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, and courts cannot simply
rely on speculation, conjecture or guesswork in determining the fact and amount of
damages. While the PNB claims having suffered damages to the extent of Php4 Million due
to the encashment of checks drawn against uncollected deposit, the testimonial and
documentary evidence on record show that it only incurred losses of around Php2 Million.