TORTS: Missing Cases Part 2

Layugan v. IAC
Facts:

Pedro T. Layugan filed an action for damages against Godofredo Isidro, alleging that
while at Baretbet, Bagabag, Nueva Vizcaya, the Plaintiff and a companion were
repairing the tire of their cargo truck which was parked along the right side of the
National Highway; that defendant's truck, driven recklessly by Daniel Serrano
bumped the plaintiff, that as a result, plaintiff was injured and hospitalized where
he incurred and will incur more expenses as he recuperates from said injuries;
Plaintiff's right leg was amputated and that because of said injuries he would be
deprived of a lifetime income.

To free themselves from liability, defendants Isidro [owner] and Serrano [driver]
averred that he knows his responsibilities as a driver and further contends that it
was the negligence of plaintiff that was the proximate cause of the accident. They
alleged that plaintiff parked his truck in a manner which occupied a part of the
highway and he did not even put a warning sign.

Subsequently, a third-party complaint was filed by the defendant against his

insurer, the Travellers Multi Indemnity Corporation; that the third-party plaintiff
[Isidro], without admitting his liability to the plaintiff, claimed that the third-party
defendant [Travellers] is liable to the former for contribution, indemnity and
subrogation by virtue of their insurance contract which covers the insurer's liability
for damages arising from death, bodily injuries and damage to property. The
Insurance company argued that it is only liable for the amount agreed in the policy
and the complaint was premature since no claim was made to it.

The RTC ruled in favor of the Petitioners. The CA reversed the decision, stating that
it is the petitioners who were negligent since they did not exercise caution by
putting warning signs that their truck is park on the shoulder of the highway.

Issue: Whether Isidro, the owner, is liable—Yes

Held:
The SC held that the CA erroneously appreciated the evidence. It was proven that
the petitioner placed a warning sign within 3 to 4 meters from their truck in the
form of a lighted kerosene lamp. The existence of this warning sign was
corroborated by Serrano, respondent's driver, and further stated that when he saw
a parked truck, he kept on stepping on the brake pedal but it did not function.
Thus despite this warning sign, the truck recklessly driven by Serrano and owned
by Respondent Isidro bumped the truck of petitioner.

The private respondent is sued under Art. 2176 in relation to Art. 2180, paragraph
5, of the Civil Code. In the latter, when an injury is caused by the negligence
of a servant or employee there instantly arises a presumption of law that
there was negligence on the part of the master or employer either in the
selection of the servant or employee, or in supervision over him after
selection, or both. Such presumption is juris tantum and not juris et de jure and
consequently, may be rebutted. If follows necessarily that if the employer
shows to the satisfaction of the court that in the selection and in the
supervision he has exercised the care and diligence of a good father of a
family, the presumption is overcome and he is relieved from liability. In
disclaiming liability for the incident, the private respondent stresses that the
negligence of his employee has already been adequately overcome by his driver's
statement that he knew his responsibilities as a driver and that the truck owner
used to instruct him to be careful in driving.

We do not agree with the private respondent in his submission. In the first place, 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. Moveover, to our mind,
the fact that the private respondent 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 respondent court, are not sufficient to destroy the finding
of negligence of the Regional Trial Court given the facts established at the trial. The
private respondent 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 to the
petitioner. 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.

FGU Insurance v. G.P. Sarmiento Trucking

Facts:

G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on 18 June 1994

thirty (30) units of Condura S.D. white refrigerators aboard one of its Isuzu truck,
driven by Lambert Eroles. While the truck was traversing the north diversion road
along McArthur highway in Barangay Anupol, Bamban, Tarlac, it collided with an
unidentified truck, causing it to fall into a deep canal, resulting in damage to the
cargoes.

FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion

Industries, Inc., the value of the covered cargoes: P204, 450.00. FGU, in turn,
being the subrogee of the rights and interests of the insured sought reimbursement
of the amount, from GPS. Since GPS failed to heed the claim, FGU filed a complaint
for damages and breach of contract of carriage against GPS and its driver with the
Regional Trial Court, Branch 66, of Makati City. In its answer, respondents asserted
that GPS was the exclusive hauler only of Concepcion Industries, Inc., since 1988,
and it was not so engaged in business as a common carrier. Respondents further
claimed that the cause of damage was purely accidental. GPS, instead of submitting
its evidence, filed with leave of court a motion to dismiss the complaint by way of
demurrer to evidence on the ground that petitioner had failed to prove that it was a
common carrier. The RTC and CA both ruled in favor of the Respondent.

Issue: Whether GPS, either as a common carrier or a private carrier, may be

presumed to have been negligent when the goods it undertook to transport safely
were subsequently damaged while in its custody— Yes

Held:
In culpa contractual, upon which the action of petitioner rests as being the
subrogee of Concepcion Industries, Inc., the mere proof of the existence of the
contract and the failure of its compliance justify, prima facie, a corresponding right
of relief. Thus, FGU has a claim for the amount paid out.

The law, recognizing the obligatory force of contracts, will not permit a party to be
set free from liability for any kind of misperformance of the contractual undertaking
or a contravention of the tenor thereof

GPS recognizes the existence of a contract of carriage between it and petitioner’s

assured, and admits that the cargoes it has assumed to deliver have been lost or
damaged while in its custody. In such a situation, a default on, or failure of
compliance with, the obligation in this case, the delivery of the goods in its custody
to the place of destination - gives rise to a presumption of lack of care and
corresponding liability on the part of the contractual obligor the burden being on
him to establish otherwise. GPS has failed to do so.

Perla Compania De Seguros v. Saranagaya

Facts:
• 1986: Spouses Gaudencio Sarangaya III and Primitiva Sarangaya
erected Super A Building, a semi-concrete, semi-narra, one-storey
commercial building fronting the provincial road of Santiago, Isabela
• It has three doors which were leased out
• The two-storey residence of the Sarangayas was behind the second
and third doors of the building
• On the left side of the commercial building stood the office of the Matsushita
Electric Philippine Corporation (Matsushita)
• 1988: Perla Compania de Seguros, Inc. through its branch manager
Bienvenido Pascual, entered into a contract of lease of the first door beside
the Matsushita office
• It was converted into a two door so he had a garage where he parked
a company car 1981 model 4-door Ford Cortina which he used to
supervise different towns
• July 7, 1988: Pascual went to San Fernando, Pampanga leaving the car
 • 3 days later: When he returned and warmed up the car, it made an odd
sound. On the second try, there was again an odd sound and small flames
came out of its engine so he was startled, stopped the car, went out and
pushed it out of the garage
• Soon, fire spewed out of its rear compartment and burned the whole
garage where he was trapped so he suffered burns in the face, legs
and arms
• The spouses were busy watching TV when they heard 2 loud explosions,
smelt of gasoline and fire burned all their belongings
• City fire marshall investigated and concluded that the fire was accidental
• Spouses filed a complaint against Pascual for gross negligence and Perla for
lacking the required diligence in the selection and supervision of its
employee.
• RTC: Pascual and Perla liable jointly and solidarily
• Pascual was held liable under the doctrine of res ipsa loquitur
• CA: affirmed but modified the amount of damages

Issue: Whether the doctrine of res ipsa loquitur is applicable— Yes; Whether Perla
lacked the required diligence in the selection and supervision of its employee—Yes

Held:
(1)Res Ipsa Loquitur applicable
• Res ipsa loquitur
• Latin phrase which literally means “the thing or the transaction speaks
for itself.
• It relates to the fact of an injury that sets out an inference to the
cause thereof or establishes the plaintiff’s prima facie case
• The doctrine rests on inference and not on presumption
• Facts of the occurrence warrant the supposition of negligence and they
furnish circumstantial evidence of negligence when direct evidence is
lacking
• Based on the theory that the defendant either knows the cause of the
accident or has the best opportunity of ascertaining it and the plaintiff,
having no knowledge thereof, is compelled to allege negligence in
general terms
• Plaintiff relies on proof of the happening of the accident alone to
establish negligence
• Provides a means by which a plaintiff can pin liability on a defendant
who, if innocent, should be able to explain the care he exercised to
prevent the incident complained of
• defendant’s responsibility to show that there was no negligence
on his part
• Requisites of Res Ipsa Loquitur
• 1) the accident is of a kind which does not ordinarily occur unless
someone is negligent
• “Ordinary” refers to the usual course of events
• Flames spewing out of a car engine, when it is switched
on, is obviously not a normal event. Neither does an
explosion usually occur when a car engine is revved.
 • Pascual, as the caretaker of the car, failed to submit any
proof that he had it periodically checked - negligence
• 2) the cause of the injury was under the exclusive control of the
person in charge and
• 3) the injury suffered must not have been due to any voluntary action
or contribution on the part of the person injured.
• When there is caso fortuito:
• (a) the cause of the unforeseen and unexpected occurrence was
independent of the human will
• human agency must be entirely excluded as the proximate
cause or contributory cause of the injury or loss -Not because
car not maintained
• (b) it was impossible to foresee the event which constituted the caso
fortuito or, if it could be foreseen, it was impossible to avoid -
NOT under the control of Pascual
• (c) the occurrence must be such as to render it impossible to perform
an obligation in a normal manner - Spouses had no access nor
obligation for the maintenance
• (d) the person tasked to perform the obligation must not have
participated in any course of conduct that aggravated the accident
(2)Perla lacked diligence
• Perla did not include any rule or regulation that Pascual should have
observed in performing his functions
• There was no guidelines for the maintenance and upkeep of company
property like the vehicle that caught fire
• Did not require periodic reports on or inventories of its properties
• Article 2180 of the Civil Code states that employers shall be
liable for the damage caused by their employees. The liability is
imposed on all those who by their industry, profession or other
enterprise have other persons in their service or supervision
• Nowhere does it state that the liability is limited to employers in the
transportation business.

PLDT v. CA
Facts:
Sps. Esteban were riding their jeep along the inside lane of Lacson Street
where they resided [at 25km/hr as Antonio Esteban claimed; CA said jeep ran fast;
if the jeep braked at that speed, the spouses would not have been thrown against
the windshield]. The jeep abruptly swerved from the inside lane, then it 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. Antonio failed to notice
the open trench which was left uncovered because of the darkness and the lack of
any warning light or signs. The spouses were thrown against the windshield. Gloria
Esteban allegedly sustained injuries on her arms, legs and face, leaving a
permanent scar on her cheek, while Antonio suffered cut lips. The jeep’s windshield
was also shattered.

PLDT denies liability, contending that the injuries sustained by the spouses
were due to their own negligence, and that it should be the independent contractor
L.R. Barte and Co. [Barte] who should be held liable. PLDT filed a third-party
complaint against Barte, alleging that under the terms of their agreement, PLDT
should not be answerable for any accident or injuries arising from the negligence of
Barte or its employees. Barte claimed that it was not aware, nor was it notified of
the accident, and that it complied with its contract with PLDT by installing the
necessary and appropriate signs.

RTC ruled in favor of the spouses. CA reversed RTC and dismissed the
spouses’ complaint, saying that the spouses were negligent. Later, it set aside its
earlier decision and affirmed in toto RTC’s decision. (SC declared this later decision
null and void. The first decision already became final and executory because no
appeal was taken seasonably.)

Issue: Whether PLDT is liable for the injuries sustained by the spouses — No

Held:
The accident which befell the spouses was due to the lack of diligence of
Antonio, and was not imputable to the negligent omission on the part of PLDT. 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 Antonio 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. The mound was relatively big and visible,
being 2-3 ft high and 1-1/2 ft wide. Also, he knew of the existence and location of
the mound, having seen it many previous times.

The negligence of Antonio was not only contributory to his and his wife’s
injuries 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 the spouses. By exercising
reasonable care and prudence, Antonio could have avoided the injurious
consequences of his act, even assuming arguendo that there was some alleged
negligence on the part of PLDT.

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. 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; hence, the presence of warning
signs could not have completely prevented the accident. Furthermore, Antonio had
the last clear chance to avoid the accident, notwithstanding the negligence he
imputes to PLDT.

A person claiming damages for the negligence of another has the

burden of proving the existence of such fault or negligence causative
thereof, otherwise, his action must fail. The facts constitutive of negligence must
be affirmatively established by competent evidence. In this case, there was
insufficient evidence to prove any negligence on the part of PLDT. What was
presented was just the self-serving testimony of Antonio and the unverified
photograph of a portion of the scene of the accident. The absence of a police report
and the non-submission of a medical report from the hospital where the spouses
were allegedly treated have not even been explained.

Kapalaran Bus Line v Conrado

Facts:
On August, 1982, the jeepney driven by Lope Grajera was coming from Laguna on
its way to Sta. Cruz. As it reached the intersection where there is a traffic sign
“yield,” it stopped and cautiously treated the intersection as a “Thru Stop” street,
which it is not.

The Kapalaran Bus Line was on its way from Sta. Cruz, Laguna driven by its driver,
Virgilio Llamoso, on its way towards Manila. As the KBL neared the intersection,
Llamoso inquired from his conductor if they could still accommodate passengers
and learning that they were already full, he decided to bypass Pila and instead, to
proceed along the national highway. Virgilio admitted that there was another vehicle
ahead of him.

The general rule is that the vehicle on the national highway has the right of way as
against a feeder road. Another general rule is that a vehicle coming from the right
has the right of way over the vehicle coming from the left.The general rules on right
of way may be invoked only if both the vehicles approach the intersection at almost
the same time. In the case at bar, both roads are national roads. Also, the KBL Bus
was still far from the intersection when the jeepney reached the same. As testified
by Atty. Conrado Manicad, he stopped at the intersection to give way to the jeepney
driven by Grajera. However, there was a collision between the jeepney and the bus.
The KBL bus ignored the stopped vehicles and the other vehicles behind Atty.
Manicad and overtook both vehicles at the intersection therefore causing the
accident.

Kapalaran filed a suit against the owner of the jeepney and its driver. However, it
lost the case. Furthermore, the Court did not hold as liable the driver of the bus.

Issue: Whether or not KBL is accountable, considering the driver of the bus was
not held liable by the Courts.— Yes

Held:
Kapalaran is liable. The driver violated certain general rules, and provisions in
the Land Transportation and Traffic Code. Hence, he can be presumed negligent.
The patent and gross negligence on the part of Kapalaran’s driver raised the legal
presumption that Kapalaran as employer was guilty of negligence either in the
selection or supervision of its bus drivers. Where the employer is held liable for
damages, it has of course a right of recourse against its own negligent employee. If
petitioner Kapalaran was interested in maintaining its right of recourse against or
reimbursement from its own driver, it should have appealed from that portion of the
trial court’s decision which had failed to hold the bus driver accountable for
damages. The liability of employer under Article 2180 of the Civil Code is direct and
immediate; it is not conditioned upon prior recourse against the negligent on its
own part.

The law requires Kapalaran as common carrier to exercise extraordinary diligence in

carrying and transporting their passengers safely “as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with due
regard for all the circumstances.” In requiring the highest possible degree of
diligence from common carriers and creating a presumption of negligence against
them, the law compels them to curb the recklessness of their drivers. The law seeks
to stop and prevent the slaughter and maiming of people (whether passengers or
not) and the destruction of property (whether freight or not) on our highways by
buses, the very size and power of which seem often to inflame the minds of their
drivers.

Marchan v. Mendoza
Facts:

On Feb 1954, around 9PM, a passenger bus operated by the Philippine Rabbit
Bus Lines (PRBL) and driven by Silverio Marchan fell into a ditch somewhere in
Barrio Malanday, Polo, Bulacan, while travelling on its way to Manila. The said bus
was traveling at a high rate of speed without due regard to the safety of the
passengers. So much so that one of the passengers had to call the attention of
Marchan who was then at the steering wheel of said bus to lessen the speed or to
slow down, but then Marchan did not heed the request of said passenger; neither
did he slacken his speed. On the contrary, Marchan even increased his speed while
approaching a six-by-six truck which was then parked ahead, apparently for the
purpose of passing the said parked truck and to avoid collision with the incoming
vehicle from the opposite direction. However, when he veered his truck to resume
position over the right lane, the rear tires of said truck skidded because of his high
rate of speed, thereby causing said truck to fall into a ditch.

As a result of which Arsenio Mendoza, his wife and child, who were then inside the
bus as passengers were thrown out to the ground resulting in their multiple
injuries.

Arsenio Mendoza suffered the most serious injuries which damaged his
vertebrae causing the paralysis of his lower extremities which up to the
time when the case was tried he continued to suffer. The physician who
attended and treated plaintiff Arsenio Mendoza opined that he may never walk
again.

Consequently the driver of said bus Silverio Marchan was prosecuted for serious,
less serious and slight physical injuries through reckless imprudence before
the Justice of the Peace Court of Polo Bulacan, and thereafter convicted as charged
which judgment of conviction was subsequently affirmed by the CFI of same
province.

Plaintiffs Arsenio, his wife and child sought to recover damages against Marchan
(driver) and from Bienvenido Buan and Natividad Paras (administrator of the estate
of Florencio Buan – owner of PRBL) on the basis of a breach of CoC for failure of
defendants operator and driver to safely convey them to their destination and also
on account of Marchan’s criminal negligence resulting to plaintiff’s multiple
damages.

RTC found for the plaintiffs and awarded the amount of P40K as compensatory
damages and attorney’s fees

CA found that there was negligence on the part of the defendants.CA affirmed the
award of compensatory damages modifying the appealed lower court decision by
holding petitioners to pay the amount of P30K as exemplary damages and
sustaining the award of attorney's fees in the amount of P5K

Petitioners sought the reversal of the CA Decision imputing error on the appellate
court for finding an implied contract of carriage by the petitioner bus firm and
respondent. Petitioners also argue that CA is without jurisdiction to adjudicate
exemplary damages since there was no allegation nor prayer, nor proof, nor
counterclaim of error for the same by the respondents.

ISSUE/S:
1. W/N there was a CoC between petitioners and respondent and if there was
breach? YES
2. W/N the awarding of damages by the CA was proper? YES

Held:
1. It is undisputed by the evidence on record that Silverio Marchan was then at the
steering wheel of the vehicle of the defendant transportation company. At that
moment, the riding public is not expected to inquire from time to time before they
board the passenger bus whether or not the driver who is at the steering wheel of
said bus was authorized to drive said vehicle or that said driver is acting within the
scope of his authority and observing the existing rules and regulations required of
him by the management. To hold otherwise would in effect render the aforequoted
provision of law (Article 1759) ineffective." It is clear from the above Civil Code
provision that common carriers cannot escape liability "for the death of or
injuries to passengers through the negligence and willful acts of the
former's employees, although such employees may have acted beyond the
scope of their authority or in violation of the orders.

2. The amount of P40,000 awarded as compensatory damages is quite reasonable

and fair, considering that plaintiff Arsenio Mendoza had suffered paralysis on the
lower extremities, which will incapacitate him to engage in his customary
occupation throughout the remaining years of his life, especially so that
Mendoza was only 26 years old when he met an accident and taking the
average span of life of a Filipino, he may be expected to live for 30 years
more; and bearing in mind the earning capacity of Arsenio Mendoza who before the
happening of this accident derived an income of almost P100/month from the
business of his father-in-law as Assistant Supervisor of the small fairs and
his income of P100/month which he derived as a professional boxer.
Considering that respondent Arsenio Mendoza was only in his middle twenties
when, thru the negligence of petitioners, he lost the use of his limbs, being
condemned for the remainder of his life to be a paralytic, in effect leading a
maimed, well-nigh useless existence.

As to the finding of liability for exemplary damages, it is to be observed however,

that in the complaint, plaintiffs "prayed for such other and further relief as
this Court may deem just and equitable”. Suffice it to state that when plaintiffs
prayed in their complaint for such other relief and remedies that may be availed of
under the premises, in effect, therefore, the court is called upon the exercise and
use its discretion whether the imposition of punitive or exemplary damages even
though not expressly prayed or pleaded in the plaintiffs' complaint.

It appears that exemplary damages may be imposed by way of example or

correction only in addition, among others, to compensatory damages, but
that they cannot be recovered as a matter of right, their determination
depending upon the discretion of the court. It further appears that the amount
of exemplary damages need not be proved, because its determination depends
upon the amount of compensatory damages that may be awarded to the claimant.
If the amount of exemplary damages need not be proved, it need not also
be alleged, and the reason is obvious because it is merely incidental or
dependent upon what the court may award as compensatory damages.
Unless and until this premise is determined and established, what may be claimed
as exemplary damages would amount to a mere surmise or speculation. It follows
as a necessary consequence that the amount of exemplary damages need
not be pleaded in the complaint because the same cannot be
predetermined. One can merely ask that it be determined by the court if in
the use of its discretion the same is warranted by the evidence, and this is
just what the respondents have done.

THUS, the Decision of the CA is affirmed. Petitioners are liable for the sum
of P40K (compensatory), P30K (exemplary) and P5K as attorney’s fees all
with interest at the legal rate.

Syki v. Bagasa
Facts:
On June 22, 1992, respondent 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 jeepey (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 an fractured his
left thigh bone. He also suffered lacerations and abrasions in his left leg.

On October 29, 1992, respondent filed a complaint for damages for breach of
common carrier's contractual obligations and quasi-delict against Aurora Pisuena,
the owner of the passenger jeepney, 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 but
ordered petitioner Ernesto Syki and his truck driver to pay respondent Begasa,
jointly and severely, actual and moral damages plus attorney's fees. Petitioner
appealed to the court of appeals, but the court denied their motion
for reconsideration.

Syki filed the instant petition for review, arguing that the CA erred in not finding
respondent Begasa guilty of contributory negligence. Hence, the damages awarded
to him should have been decreased or mitigated for he believes that he observed
the diligence of a good father of a family in selecting and supervising the said
employee, thus he should not be held liable for the injuries sustained by the
respondent.

Issue: Whether Syki is liable— Yes

Held:
The sole and proximate cause of the accident was the negligence of petitioner's
driver who, as found by the lower courts did not slow down even he was already
approaching a busy intersection. The passenger jeepney had a long stopped to pick
up respondent and his three companions and, in fact, respondent was already
partly inside the jeepney when the petitioner's driver rear-ended. No doubt
petitioner's driver was reckless.

And after failing to prove that Syki, the owner, observed the diligence of a good
father of a family in selecting and supervising his driver and since the negligence of
the driver was the sole and proximate cause of the accident, petitioner is liable.

Based therefore on jurisprudential law, the employer must not merely present
testimonial evidence to prove that he had observed the diligence of a good father of
a family in the selection and supervision of his employee, but he must also support
such testimonial evidence with concrete or documentary evidence. The reason for
this is to obviate the biased nature of the employers testimony or that of his
witnesses

Ma-ao Sugar Central v CA

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.

Petitioner denied death and other benefits, and Famoso’s widow filed a suit in
the RTC Baguio. RTC ruled in her favor but deducted 25% from the total
damages awarded due to decedent’s contributory negligence.
Widow and petitioner appealed; widow claimed that deductions were illegal,
petitioner that it was not negligent and therefore not liable at all.

CA sustained RTC except as to deceased’s contributory negligence and

disallowed the deductions protested by the private respondent.

Petitioner contends that there is contributory negligence on the part of Famoso

as he was not at his assigned station when the train was derailed; that he would
not have been injured if he had stayed in the front car rather than at the back;
and that he had been killed because he chose to ride in the caboose

Issue: Whether the decedent can be held guilty of contributory negligence—No

Held:
Contributory negligence has been defined as "the act or omission
amounting to want of ordinary care on the part of the person injured
which, concurring with the defendant's negligence, is the proximate
cause of the injury. “It has been held that "to hold a person as having
contributed to his injuries, it must be shown that he performed an act
that brought about his injuries in disregard of warnings or signs of an
impending danger to health and body."

There is no showing that the caboose where Famoso was riding was a dangerous
place and that he recklessly dared to stay there despite warnings or signs of
impending danger.

Investigation of the accident revealed that the derailment was caused by protruding
rails which had come loose as they were not connected and fixed in place by
fishplates (which could only be removed thru the use of special tools). The same
fishplates could not be found at the scene of the accident.

SC applied the doctrine of Res ipsa loquitur: the absence of the fish plates –
whatever the case or reason-is by itself alone proof of the negligence of the
petitioner.

Petitioner is liable because it was lax in requiring its employees to exercise the
necessary vigilance in maintaining the rails in good condition to prevent the
derailments that sometimes happened “every hour”.

PCIB v. CA
Facts:
Ford Philippines drew and issued Citibank Check. No. SN 04867 on October 19,
1977, Citibank Check No. SN 10597 on July 19, 1978 and Citibank Check No.
SN-16508 on April 20, 1979, all in favor of the Commissioner of Internal Revenue
(CIR) for payment of its percentage taxes. The checks were crossed and deposited
with the IBAA, now PCIB, BIR's authorized collecting bank. The first check was
cleared containing an indorsement that "all prior indorsements and/or lack of
indorsements guaranteed." The same, however, was replaced with two (2) IBAA's
managers' checks based on a call and letter request made by Godofredo Rivera,
Ford's General Ledger Accountant, on an alleged error in the computation of the tax
due without IBAA verifying the authority of Rivera. These manager's checks were
later deposited in another bank and misappropriated by the syndicate. The last two
checks were cleared by the Citibank but failed to discover that the clearing stamps
do not bear any initials. The proceeds of the checks were also illegally diverted or
switched by officers of PCIB — members of the syndicate, who eventually encashed
them. Ford, which was compelled to pay anew the percentage taxes, sued in two
actions for collection against the two banks on January 20, 1983, barely six years
from the date the first check was returned to the drawer. The direct perpetrators of
the crime are now fugitives from justice.

DECISION OF LOWER COURTS:

st
1 case:
(1) Trial Court: Citibank and IBAA were jointly and severally liable for the checks
(2) CA: only IBAA (PCIB) solely liable for the amount of the first check
nd
2 case:
(1) Trial Court: absolved PCIB from liability and held that only the Citibank is liable
for the checks issued by Ford
(2) Court of Appeals: held both banks liable for negligence in the selection and
supervision of their employees resulting in the erroneous encashment of the
checks.

Issue: Has petitioner Ford the right to recover from the collecting bank (PCIBank)
and the drawee bank (Citibank) the value of the checks intended as payment to the
Commissioner of Internal Revenue? Or has Ford's cause of action already
prescribed?

Held:
A. Citibank Check No. SN-04867

FORD
Ford, is guilty of the "imputed contributory negligence" that would defeat its claim
for reimbursement, bearing in mind that its employees, Godofredo Rivera and
Alexis Marindo, were among the members of the syndicate.
although the employees of Ford initiated the transactions attributable to an
organized syndicate, in our view, their actions were not the proximate cause of
encashing the checks payable to the CIR. The degree of Ford's negligence, if any,
could not be characterized as the proximate cause of the injury to the parties.

IBAA/PCIB
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 one (Godofredo
Rivera and in his signature to the authenticity of such signature considering that the
plaintiff is not a client of the defendant IBAA."
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.
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
scrutinize the check and to know its depositors before it could make the clearing
indorsement "all prior indorsements and/or lack of indorsement guaranteed".
PCIBank is liable in the amount corresponding to the proceeds of Citibank Check
No. SN-04867.

Citibank
None

B. Citibank Check Numbers SN-10597 and 16508

PCIBank
Section 5 31 of Central Bank Circular No. 580, Series of 1977 provides that any
theft affecting items in transit for clearing, shall be for the account of sending bank,
which in this case is PCIBank.

Citibank
negligent in the performance of its duties. Citibank failed to establish that its
payment of Ford's checks were made in due course and legally in order. In its
defense, Citibank claims the genuineness and due execution of said checks,
considering that Citibank (1) has no knowledge of any infirmity in the issuance of
the checks in question (2) coupled by the fact that said checks were sufficiently
funded and (3) the endorsement of the Payee or lack thereof was guaranteed by
PCIBank (formerly IBAA), thus, it has the obligation to honor and pay the same.
As the drawee bank breached its contractual obligation with Ford and such degree
of culpability contributed to the damage caused to the latter. It failed to perform
what was incumbent upon it, which is to ensure that the amount of the checks
should be paid only to its designated payee.
Invoking the doctrine of comparative negligence, we are of the view that both
PCIBank and Citibank failed in their respective obligations and both were negligent
in the selection and supervision of their employees resulting in the encashment of
Citibank Check Nos. SN 10597 and 16508. Thus, we are constrained to hold them
equally liable for the loss of the proceeds of said checks issued by Ford in favor of
the CIR. Time and again, we have stressed that banking business is so impressed
with public interest where the trust and confidence of the public in general is of
paramount importance such that the appropriate standard of diligence must be very
high, if not the highest, degree of diligence. A bank's liability as obligor is not
merely vicarious but primary, wherein the defense of exercise of due diligence in
the selection and supervision of its employees is of no moment. Banks handle daily
transactions involving millions of pesos. By the very nature of their work the degree
of responsibility, care and trustworthiness expected of their employees and officials
is far greater than those of ordinary clerks and employees. Banks are expected to
exercise the highest degree of diligence in the selection and supervision of their
employees.
The relationship between a holder of a commercial paper and the bank to which it is
sent for collection is that of a principal and an agent and the diversion of the
amount of the check is justified only by proof of authority from the drawer; that in
crossed checks, the collecting bank is bound to scrutinize the check and know its
depositors before clearing indorsement; that as a general rule, banks are liable for
wrongful or tortuous acts of its agents within the scope and in the course of their
employment; that failure of the drawee bank to seasonably discover irregularity in
the checks constitutes negligence and renders the bank liable for loss of proceeds
of the checks; that an action upon a check prescribes in ten (10) years; and that
the contributory negligence of the drawer shall reduce the damages he may recover
against the collecting bank.
Since a master may be held for his servant's wrongful act, the law imputes to the
master the act of the servant, and if that act is negligent or wrongful and
proximately results in injury to a third person, the negligence or wrongful conduct is
the negligence or wrongful conduct of the master, for which he is liable. The general
rule is that if the master is injured by the negligence of a third person and by the
concurring contributory negligence of his own servant or agent, the latter's
negligence is imputed to his superior and will defeat the superior's action against
the third person, assuming, of course that the contributory negligence was the
proximate cause of the injury of which complaint is made.
Given these circumstances, the mere fact that the forgery was committed by a
drawer- payor's confidential employee or agent, who by virtue of his position had
unusual facilities for perpetrating the fraud and imposing the forged paper upon the
bank, does not entitle the bank to shift the loss to the drawer-payor, in the absence
of some circumstance raising estoppel against the drawer. This rule likewise applies
to the checks fraudulently negotiated or diverted by the confidential employees who
hold them in their possession.
As a general rule, however, a banking corporation is liable for the wrongful or
tortuous acts and declarations of its officers or agents within the course and scope
of their employment. A bank will be held liable for the negligence of its officers or
agents when acting within the course and scope of their employment. It may be
liable for the tortuous acts of its officers even as regards that species of tort of
which malice is an essential element. A bank holding out its officers and agents as
worthy of confidence will not be permitted to profit by the frauds these officers or
agents were enabled to perpetrate in the apparent course of their employment; nor
will it be permitted to shirk its responsibility for such frauds, even though no benefit
may accrue to the bank therefrom. For the general rule is that a bank is liable for
the fraudulent acts or representations of an officer or agent acting within the course
and apparent scope of his employment or authority. And if an officer or employee of
a bank, in his official capacity, receives money to satisfy an evidence of
indebtedness lodged with his bank for collection, the bank is liable for his
misappropriation of such sum.

CONTRIBUTORY NEGLIGENCE OF PLAINTIFF SHALL REDUCE DAMAGES HE MAY

RECOVER. — Finally, we also find that Ford is not completely blameless in its failure
to detect the fraud. Failure on the part of the depositor to examine its passbook,
statements of account, and cancelled checks and to give notice within a reasonable
time (or as required by statute) of any discrepancy which it may in the exercise of
due care and diligence find therein, serves to mitigate the banks' liability by
reducing the award of interest from twelve percent (12%) to six percent (6%) per
annum. As provided in Article 1172 of the Civil Code of the Philippines,
responsibility arising from negligence in the performance of every kind of obligation
is also demandable, but such liability may be regulated by the courts, according to
the circumstances. In quasi-delicts, the contributory negligence of the plaintiff shall
reduce the damages that he may recover.

Genobiagon v CA
Facts:
(see separate file)

Eriquiaga v. CA: (separate file)

Nikko Hotel v. Reyes

Facts:
In the evening of October 13, 1994, while drinking coffee at the lobby of Hotel
Nikko, respondent was invited by a friend, Dr. Filart to join her in a party in
celebration of the birthday of the hotel’s manager. During the party and when
respondent was lined-up at the buffet table, he was stopped by Ruby Lim, the
Executive Secretary of the hotel, and asked to leave the party. Shocked and
embarrassed, he tried to explain that he was invited by Dr. Filart, who was herself a
guest. Not long after, a Makati policeman approached him and escorted him out of
her party.

Ms. Lim admitted having asked respondent to leave the party but not under the
ignominious circumstances painted by Mr. Reyes, that she did the act politely and
discreetly. Mindful of the wish of the celebrant to keep the party intimate and
exclusive, she spoke to the respondent herself when she saw him by the buffet
table with no other guests in the immediate vicinity. She asked him to leave the
party after he finished eating. After she had turned to leave, the latter screamed
and made a big scene.

Dr. Filart testified that she did not want the celebrant to think that she invited Mr.
Reyes to the party.

Respondent filed an action for actual, moral and/or exemplary damages and
attorney’s fees. The lower court dismissed the complaint. On appeal, the Court of
Appeals reversed the ruling of the trial court, consequently imposing upon Hotel
Nikko moral and exemplary damages and attorney’s fees. On motion for
reconsideration, the Court of Appeals affirmed its decision. Thus, this instant
petition for review.
Ilocos Norte Electric Company v CA
Facts:
A strong typhoon engulfed the province of Ilocos Norte, bringing heavy rains and
flooding in its wake. The deceased Isabel Lao Juan, fondly called Nana Belen,
ventured out of the house towards the direction of the Five Sisters Emporium, a
commercial establishment. While wading in waist-deep flood, Nana Belen, in an
unfortunate accident, had suffered and died in a circulatory shock electrocution. An
action for damages was instituted by the heirs of the deceased. Petitioner, on the
other hand, contended that the deceased could have died either by drowning or by
electrocution due to negligence attributable only to herself and not to the electric
company. That the deceased installed an electrical wire enclosing the iron gate and
fence to deter the area from burglars.

Issue: Whether petitioner may be held liable for the deceased’s death.

Held:
While it is true that typhoons and floods are considered Acts of God for which no
person may be held responsible, however, it was through the intervention of
petitioner’s negligence that death took place.

Under the circumstances, petitioner was negligent in seeing to it that no harm is

done to the general public “… considering that electricity is an agency, subtle and
deadly, the measure of care required of electric companies must be commensurate
with or proportionate to the danger. The duty of exercising this high degree of
diligence and care extends to every place where persons have a right to be“.

“The negligence of petitioner having been shown, it may not now absolve itself from
liability by arguing that the victim’s death was solely due to a fortuitous event.”
When an act of God combines or concurs with the negligence of the defendant to
produce an injury, the defendant is liable if the injury would not have resulted but
for his own negligent conduct or omission

Hence, the heirs of Nana Belen, may not be barred from recovering damages
caused by petitioner’s negligence.