G.R. No. 194121, July 11, 2016 the lost goods.
12chanrobleslaw
TORRES-MADRID BROKERAGE, INC., Petitioner, v. FEB MITSUI MARINE INSURANCE CO., INC.
AND BENJAMIN P. MANALASTAS, DOING BUSINESS UNDER THE NAME OF BMT TRUCKING
SERVICES, Respondents.
DECISION
BRION, J.:
We resolve the petition for review on certiorari challenging the Court of Appeals' (CA) October 14,
2010 decision in CA-G.R. CV No. 91829. 1chanrobleslaw
The CA affirmed the Regional Trial Court's (RTC) decision in Civil Case No. 01-1596, and found
petitioner Torres-Madrid Brokerage, Inc. (TMBI) and respondent Benjamin P. Manalastas jointly and
solidarily liable to respondent FEB Mitsui Marine Insurance Co., Inc. (Mitsui) for damages from the
loss of transported cargo.
Antecedents
On October 7, 2000, a shipment of various electronic goods from Thailand and Malaysia arrived at
the Port of Manila for Sony Philippines, Inc. (Sony). Previous to the arrival, Sony had engaged the
services of TMBI to facilitate, process, withdraw, and deliver the shipment from the port to its
warehouse in Binan, Laguna.2chanrobleslaw
TMBI - who did not own any delivery trucks - subcontracted the services of Benjamin Manalastas'
company, BMT Trucking Services (BMT), to transport the shipment from the port to the Binan
warehouse.3 Incidentally, TMBI notified Sony who had no objections to the
arrangement.4chanrobleslaw
Four BMT trucks picked up the shipment from the port at about 11:00 a.m. of October 7, 2000.
However, BMT could not immediately undertake the delivery because of the truck ban and because
the following day was a Sunday. Thus, BMT scheduled the delivery on October 9, 2000.
In the early morning of October 9, 2000, the four trucks left BMT's garage for Laguna. 5 However,
only three trucks arrived at Sony's Binan warehouse.
At around 12:00 noon, the truck driven by Rufo Reynaldo Lapesura (NSF-391) was found
abandoned along the Diversion Road in Filinvest, Alabang, Muntinlupa City. 6 Both the driver and the
shipment were missing.
Later that evening, BMT's Operations Manager Melchor Manalastas informed Victor Torres, TMBI's
General Manager, of the development.7 They went to Muntinlupa together to inspect the truck and
to report the matter to the police.8chanrobleslaw
Victor Torres also filed a complaint with the National Bureau of Investigation (NBI) against
Lapesura for "hijacking." 9 The complaint resulted in a recommendation by the NBI to the Manila
City Prosecutor's Office to prosecute Lapesura for qualified theft. 10chanrobleslaw
TMBI notified Sony of the loss through a letter dated October 10, 2000,11 It also sent BMT a letter
dated March 29, 2001, demanding payment for the lost shipment. BMT refused to pay, insisting that
the goods were "hijacked."
In the meantime, Sony filed an insurance claim with the Mitsui, the insurer of the goods. After
evaluating the merits of the claim, Mitsui paid Sony PHP7,293,386.23 corresponding to the value of
After being subrogated to Sony's rights, Mitsui sent TMBI a demand letter dated August 30, 2001 for
payment of the lost goods. TMBI refused to pay Mitsui's claim. As a result, Mitsui filed a complaint
against TMBI on November 6, 2001,
TMBI, in turn, impleaded Benjamin Manalastas, the proprietor of BMT, as a third-party defendant.
TMBI alleged that BMT's driver, Lapesura, was responsible for the theft/hijacking of the lost cargo
and claimed BMT's negligence as the proximate cause of the loss. TMBI prayed that in the event it is
held liable to Mitsui for the loss, it should be reimbursed by BMT,
At the trial, it was revealed that BMT and TMBI have been doing business with each other since the
early 80's. It also came out that there had been a previous hijacking incident involving Sony's cargo
in 1997, but neither Sony nor its insurer filed a complaint against BMT or TMBI.13chanrobleslaw
On August 5, 2008, the RTC found TMBI and Benjamin Manalastas jointly and solidarity liable to pay
Mitsui PHP 7,293,386.23 as actual damages, attorney's fees equivalent to 25% of the amount
claimed, and the costs of the suit.14 The RTC held that TMBI and Manalastas were common carriers
and had acted negligently.
Both TMBI and BMT appealed the RTC's verdict.
TMBI denied that it was a common carrier required to exercise extraordinary diligence. It maintains
that it exercised the diligence of a good father of a family and should be absolved of liability because
the truck was "hijacked" and this was a fortuitous event.
BMT claimed that it had exercised extraordinary diligence over the lost shipment, and argued as
well that the loss resulted from a fortuitous event.
On October 14, 2010, the CA affirmed the RTC's decision but reduced the award of attorney's fees to
PHP 200,000.
The CA held: (1) that "hijacking" is not necessarily a fortuitous event because the term refers to the
general stealing of cargo during transit;15 (2) that TMBI is a common carrier engaged in the business
of transporting goods for the general public for a fee; 16 (3) even if the "hijacking" were a fortuitous
event, TMBI's failure to observe extraordinary diligence in overseeing the cargo and adopting
security measures rendered it liable for the loss; 17 and (4) even if TMBI had not been negligent in
the handling, transport and the delivery of the shipment, TMBI still breached its contractual
obligation to Sony when it failed to deliver the shipment.18chanrobleslaw
TMBI disagreed with the CA's ruling and filed the present petition on December 3, 2010.
The Arguments
TMBI's Petition
TMBI insists that the hijacking of the truck was a fortuitous event. It contests the CA's finding that
neither force nor intimidation was used in the taking of the cargo. Considering Lapesura was never
found, the Court should not discount the possibility that he was a victim rather than a
perpetrator.19chanrobleslaw
TMBI denies being a common carrier because it does not own a single truck to transport its
shipment and it does not offer transport services to the public for compensation. 20 It emphasizes
that Sony knew TMBI did not have its own vehicles and would subcontract the delivery to a third-
party.
Further, TMBI now insists that the service it offered was limited to the processing of paperwork
attendant to the entry of Sony's goods. It denies that delivery of the shipment was a part of its
obligation.21chanrobleslaw
TMBI solely blames BMT as it had full control and custody of the cargo when it was lost.22 BMT, as a
common carrier, is presumed negligent and should be responsible for the loss.
BhtT's Comment
BMT insists that it observed the required standard of care.23 Like the petitioner, BMT maintains that
the hijacking was a fortuitous event - a force majeure - that exonerates it from liability.24 It points
out that Lapesura has never been seen again and his fate remains a mystery. BMT likewise argues
that the loss of the cargo necessarily showed that the taking was with the use of force or
intimidation.25cralawredchanrobleslaw
If there was any attendant negligence, BMT points the finger on TMBI who failed to send a
representative to accompany the shipment.26 BMT further blamed TMBI for the latter's failure to
adopt security measures to protect Sony's cargo.27chanrobleslaw
Mitsui's Comment
Mitsui counters that neither TMBI nor BMT alleged or proved during the trial that the taking of the
cargo was accompanied with grave or irresistible threat, violence, or force.28 Hence, the incident
cannot be considered "force majeure" and TMBI remains liable for breach of contract.
Mitsui emphasizes that TMBI's theory - that force or intimidation must have been used because
Lapesura was never found - was only raised for the first time before this Court.29 It also discredits
the theory as a mere conjecture for lack of supporting evidence.
Mitsui adopts the CA's reasons to conclude that TMBI is a common carrier. It also points out Victor
Torres' admission during the trial that TMBI's brokerage service includes the eventual delivery of
the cargo to the consignee.30chanrobleslaw
Mitsui invokes as well the legal presumption of negligence against TMBI, pointing out that TMBI
simply entrusted the cargo to BMT without adopting any security measures despite: (1) a previous
hijacking incident, when TMBI lost Sony's cargo; and (2) TMBI's knowledge that the cargo was
worth more than 10 million pesos.31chanrobleslaw
Mitsui affirms that TMBI breached the contract of carriage through its negligent handling of the
cargo, resulting in its loss.
The Court's Ruling
A brokerage may be considered a common
carrier if it also undertakes to deliver the
goods for its customers
Common carriers are persons, corporations, firms or associations engaged in the business of
transporting passengers or goods or both, by land, water, or air, for compensation, offering their
services to the public.32 By the nature of their business and for reasons of public policy, they are
bound to observe extraordinary diligence in the vigilance over the goods and in the safety of their
passengers.33chanrobleslaw
In A.F. Sanchez Brokerage Inc. v. Court of Appeals,34we held that a customs broker - whose principal
business is the preparation of the correct customs declaration and the proper shipping documents -
is still considered a common carrier if it also undertakes to deliver the goods for its customers. The
law does not distinguish between one whose principal business activity is the carrying of goods and
one who undertakes this task only as an ancillary activity.35 This ruling has been reiterated
in Schmitz Transport &Brokerage Corp. v. Transport Venture, Inc.,36 Loadmasters Customs Services,
Inc. v. Glodel Brokerage Corporation,37 and Wesrwind Shipping Corporation v. UCPB General Insurance
Co., Inc.38chanrobleslaw
Despite TMBI's present denials, we find that the delivery of the goods is an integral, albeit ancillary,
part of its brokerage services. TMBI admitted that it was contracted to facilitate, process, and clear
the shipments from the customs authorities, withdraw them from the pier, then transport and
deliver them to Sony's warehouse in Laguna.39chanrobleslaw
Further, TMBI's General Manager Victor Torres described the nature of its services as follows:
chanRoblesvirtualLawlibrary
ATTY. VIRTUDAZO: Could you please tell the court what is the nature of the business of [TMBI]?
Witness MR. Victor Torres of Torres Madrid: We are engaged in customs brokerage business. We
acquire the release documents from the Bureau of Customs and eventually deliver the cargoes to
the consignee's warehouse and we are engaged in that kind of business, sir. 40
That TMBI does not own trucks and has to subcontract the delivery of its clients' goods, is
immaterial. As long as an entity holds itself to the public for the transport of goods as a business, it is
considered a common carrier regardless of whether it owns the vehicle used or has to actually hire
one.41chanrobleslaw
Lastly, TMBI's customs brokerage services - including the transport/delivery of the cargo - are
available to anyone willing to pay its fees. Given these circumstances, we find it undeniable that
TMBI is a common carrier.
Consequently, TMBI should be held responsible for the loss, destruction, or deterioration of the
goods it transports unless it results from:
chanRoblesvirtualLawlibrary
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act of omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.42chanroblesvirtuallawlibrary
For all other cases - such as theft or robbery - a common carrier is presumed to have been at fault
or to have acted negligently, unless it can prove that it observed extraordinary
diligence.43chanrobleslaw
Simply put, the theft or the robbery of the goods is not considered a fortuitous event or a force
majeure. Nevertheless, a common carrier may absolve itself of liability for a resulting loss: (1) if it
proves that it exercised extraordinary diligence in transporting and safekeeping the goods;44 or (2) if
it stipulated with the shipper/owner of the goods to limit its liability for the loss, destruction, or
deterioration of the goods to a degree less than extraordinary diligence. 45chanrobleslaw
However, a stipulation diminishing or dispensing with the common carrier's liability for acts
committed by thieves or robbers who do not act with grave or irresistible threat, violence, or force
is void under Article 1745 of the Civil Code for being contrary to public policy. 46Jurisprudence,
too, has expanded Article 1734's five exemptions. De Guzman v. Court of Appeals47 interpreted
Article 1745 to mean that a robbery attended by "grave or irresistible threat, violence or force" is a
fortuitous event that absolves the common carrier from liability.

In the present case, the shipper, Sony, engaged the services of TMBI, a common carrier, to facilitate
the release of its shipment and deliver the goods to its warehouse. In turn, TMBI subcontracted a
portion of its obligation - the delivery of the cargo - to another common carrier, BMT.
Despite the subcontract, TMBI remained responsible for the cargo. Under Article 1736, a common
carrier's extraordinary responsibility over the shipper's goods lasts from the time these goods are
unconditionally placed in the possession of, and received by, the carrier for transportation, until
they are delivered, actually or constructively, by the carrier to the consignee. 48chanrobleslaw
That the cargo disappeared during transit while under the custody of BMT - TMBI's subcontractor -
did not diminish nor terminate TMBFs responsibility over the cargo. Article 1735 of the Civil Code
presumes that it was at fault.
Instead of showing that it had acted with extraordinary diligence, TMBI simply argued that it was
not a common carrier bound to observe extraordinary diligence. Its failure to successfully establish
this premise carries with it the presumption of fault or negligence, thus rendering it liable to
Sony/Mitsui for breach of contract.
Specifically, TMBI's current theory - that the hijacking was attended by force or intimidation - is
untenable.
First, TMBI alleged in its Third Party Complaint against BMT that Lapesura was responsible for
hijacking the shipment.49 Further, Victor Torres filed a criminal complaint against Lapesura with the
NBI.50 These actions constitute direct and binding admissions that Lapesura stole the cargo. Justice
and fair play dictate that TMBI should not be allowed to change its legal theory on appeal.
Second, neither TMBI nor BMT succeeded in substantiating this theory through evidence. Thus, the
theory remained an unsupported allegation no better than speculations and conjectures. The CA
therefore correctly disregarded the defense of force majeure.
TMBI and BMT are not solidarity liable
to Mitsui
We disagree with the lower courts" ruling that TMBI and BMT are solidarity liable to Mitsui for the
loss as joint tortfeasors. The ruling was based on Article 2194 of the Civil Code:
chanRoblesvirtualLawlibrary
Art. 2194. The responsibility of two or more persons who are liable for quasi-delict is solidary.
Notably, TMBI's liability to Mitsui does not stem from a quasi-delict (culpa aquiliana) but from its
breach of contract (culpa contractual). The tie that binds TMBI with Mitsui is contractual, albeit one
that passed on to Mitsui as a result of TMBI's contract of carriage with Sony to which Mitsui had
been subrogated as an insurer who had paid Sony's insurance claim. The legal reality that results
from this contractual tie precludes the application of quasi-delict based Article 2194.
A third party may recover from a
common carrier for quasi-delict
but must prove actual n egligence
We likewise disagree with the finding that BMT is directly liable to Sony/Mitsui for the loss of the
cargo. While it is undisputed that the cargo was lost under the actual custody of BMT (whose
employee is the primary suspect in the hijacking or robbery of the shipment), no direct contractual
relationship existed between Sony/Mitsui and BMT. If at all, Sony/Mitsui's cause of action against
BMT could only arise from quasi-delict, as a third party suffering damage from the action of another
due to the latter's fault or negligence, pursuant to Article 2176 of the Civil Code. 51chanrobleslaw
We have repeatedly distinguished between an action for breach of contract {culpa contractual) and
an action for quasi-delict (culpa aquiliana).
In culpa contractual, the plaintiff only needs to establish the existence of the contract and the
obligor's failure to perform his obligation. It is not necessary for the plaintiff to prove or even allege
that the obligor's non- compliance was due to fault or negligence because Article 1735 already
presumes that the common carrier is negligent. The common carrier can only free itself from
liability by proving that it observed extraordinary diligence. It cannot discharge this liability by
shifting the blame on its agents or servants.52chanrobleslaw
On the other hand, the plaintiff in culpa aquiliana must clearly establish the defendant's fault or
negligence because this is the very basis of the action.53 Moreover, if the injury to the plaintiff
resulted from the act or omission of the defendant's employee or servant, the defendant may
absolve himself by proving that he observed the diligence of a good father of a family to prevent the
damage,54chanrobleslaw
In the present case, Mitsui's action is solely premised on TMBl's breach of contract. Mitsui did not
even sue BMT, much less prove any negligence on its part. If BMT has entered the picture at all, it 'is
because TMBI sued it for reimbursement for the liability that TMBI might incur from its contract of
carriage with Sony/Mitsui. Accordingly, there is no basis to directly hold BMT liable to Mitsui for
quasi-delict.
BMT is liable to TMBI for breach
of their contract of carriage
We do not hereby say that TMBI must absorb the loss. By subcontracting the cargo delivery to BMT,
TMBI entered into its own contract of carriage with a fellow common carrier.
The cargo was lost after its transfer to BMT's custody based on its contract of carriage with TMBI.
Following Article 1735, BMT is presumed to be at fault. Since BMT failed to prove that it
observed extraordinary diligence in the performance of its obligation to TMBI, it is liable to TMBI for
breach of their contract of carriage.
In these lights, TMBI is liable to Sony (subrogated by Mitsui) for breaching the contract of carriage.
In turn, TMBI is entitled to reimbursement from BMT due to the latter's own breach of its contract
of carriage with TMBI. The proverbial buck stops with BMT who may either: (a) absorb the loss, or
(b) proceed after its missing driver, the suspected culprit, pursuant to Article 2181, 55chanrobleslaw
WHEREFORE, the Court hereby ORDERS petitioner Torres- Madrid Brokerage, Inc. to pay the
respondent FEB Mitsui Marine Insurance Co., Inc. the following:
chanRoblesvirtualLawlibrary
a. Actual damages in the amount of PHP 7,293,386.23 plus legal interest from the time the
complaint was filed until it is fully paid;
b. Attorney's fees in the amount of PHP 200,000.00; and cralawlawlibrary
c. Costs of suit.
Respondent Benjamin P. Manalastas is in turn ORDERED to REIMBURSE Torres-Madrid Brokerage,
Inc. of the above-mentioned amounts.
SO ORDERED
 THIRD DIVISION
[G.R. NO. 150157 : January 25, 2007]
MAURICIO MANLICLIC and PHILIPPINE RABBIT BUS LINES, INC., Petitioners, v. MODESTO
CALAUNAN, Respondent.
DECISION
CHICO-NAZARIO, J.:
Assailed before Us is the decision1 of the Court of Appeals in CA-G.R. CV No. 55909 which affirmed in
toto the decision2 of the Regional Trial Court (RTC) of Dagupan City, Branch 42, in Civil Case No. D-
10086, finding petitioners Mauricio Manliclic and Philippine Rabbit Bus Lines, Inc. (PRBLI)
solidarily liable to pay damages and attorney's fees to respondent Modesto Calaunan.
The factual antecedents are as follows:
The vehicles involved in this case are: (1) Philippine Rabbit Bus No. 353 with plate number CVD-
478, owned by petitioner PRBLI and driven by petitioner Mauricio Manliclic; and (2) owner-type
jeep with plate number PER-290, owned by respondent Modesto Calaunan and driven by Marcelo
Mendoza.
At around 6:00 to 7:00 o'clock in the morning of 12 July 1988, respondent Calaunan, together with
Marcelo Mendoza, was on his way to Manila from Pangasinan on board his owner-type jeep. The
Philippine Rabbit Bus was likewise bound for Manila from Concepcion, Tarlac. At approximately
Kilometer 40 of the North Luzon Expressway in Barangay Lalangan, Plaridel, Bulacan, the two
vehicles collided. The front right side of the Philippine Rabbit Bus hit the rear left side of the jeep
causing the latter to move to the shoulder on the right and then fall on a ditch with water resulting
to further extensive damage. The bus veered to the left and stopped 7 to 8 meters from point of
collision.
Respondent suffered minor injuries while his driver was unhurt. He was first brought for treatment
to the Manila Central University Hospital in Kalookan City by Oscar Buan, the conductor of the
Philippine Rabbit Bus, and was later transferred to the Veterans Memorial Medical Center.
By reason of such collision, a criminal case was filed before the RTC of Malolos, Bulacan, charging
petitioner Manliclic with Reckless Imprudence Resulting in Damage to Property with Physical
Injuries, docketed as Crim. Case No. 684-M-89. Subsequently on 2 December 1991, respondent filed
a complaint for damages against petitioners Manliclic and PRBLI before the RTC of Dagupan City,
docketed as Civil Case No. D-10086. The criminal case was tried ahead of the civil case. Among those
who testified in the criminal case were respondent Calaunan, Marcelo Mendoza and Fernando
Ramos.
In the civil case (now before this Court), the parties admitted the following:
1. The parties agreed on the capacity of the parties to sue and be sued as well as the venue and the
identities of the vehicles involved;
2. The identity of the drivers and the fact that they are duly licensed;
3. The date and place of the vehicular collision;
4. The extent of the injuries suffered by plaintiff Modesto Calaunan and the existence of the medical
certificate;
5. That both vehicles were going towards the south; the private jeep being ahead of the bus;
6. That the weather was fair and the road was well paved and straight, although there was a ditch on
the right side where the jeep fell into.3
When the civil case was heard, counsel for respondent prayed that the transcripts of stenographic
notes (TSNs)4 of the testimonies of respondent Calaunan, Marcelo Mendoza and Fernando Ramos in
the criminal case be received in evidence in the civil case in as much as these witnesses are not
available to testify in the civil case.
Francisco Tuliao testified that his brother-in-law, respondent Calaunan, left for abroad sometime in
November, 1989 and has not returned since then. Rogelio Ramos took the stand and said that his
brother, Fernando Ramos, left for Amman, Jordan, to work. Rosalia Mendoza testified that her
husband, Marcelo Mendoza, left their residence to look for a job. She narrated that she thought her
husband went to his hometown in Panique, Tarlac, when he did not return after one month. She
went to her husband's hometown to look for him but she was informed that he did not go
there.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
The trial court subpoenaed the Clerk of Court of Branch 8, RTC, Malolos, Bulacan, the court where
Criminal Case No. 684-M-89 was tried, to bring the TSNs of the testimonies of respondent
Calaunan,5 Marcelo Mendoza6and Fernando Ramos7 in said case, together with other documentary
evidence marked therein. Instead of the Branch Clerk of Court, it was Enrique Santos Guevara, Court
Interpreter, who appeared before the court and identified the TSNs of the three afore-named
witnesses and other pertinent documents he had brought. 8 Counsel for respondent wanted to mark
other TSNs and documents from the said criminal case to be adopted in the instant case, but since
the same were not brought to the trial court, counsel for petitioners compromised that said TSNs
and documents could be offered by counsel for respondent as rebuttal evidence.
For the defendants, petitioner Manliclic and bus conductor Oscar Buan testified. The TSN 9 of the
testimony of Donato Ganiban, investigator of the PRBLI, in Criminal Case No. 684-M-89 was marked
and allowed to be adopted in the civil case on the ground that he was already dead.
Respondent further marked, among other documents, as rebuttal evidence, the TSNs10 of the
testimonies of Donato Ganiban, Oscar Buan and petitioner Manliclic in Criminal Case No. 684-M-89.
The disagreement arises from the question: Who is to be held liable for the collision?cralaw library
Respondent insists it was petitioner Manliclic who should be liable while the latter is resolute in
saying it was the former who caused the smash up.
The versions of the parties are summarized by the trial court as follows:
The parties differed only on the manner the collision between the two (2) vehicles took place.
According to the plaintiff and his driver, the jeep was cruising at the speed of 60 to 70 kilometers
per hour on the slow lane of the expressway when the Philippine Rabbit Bus overtook the jeep and
in the process of overtaking the jeep, the Philippine Rabbit Bus hit the rear of the jeep on the left
side. At the time the Philippine Rabbit Bus hit the jeep, it was about to overtake the jeep. In other III
words, the Philippine Rabbit Bus was still at the back of the jeep when the jeep was hit. Fernando
Ramos corroborated the testimony of the plaintiff and Marcelo Mendoza. He said that he was on
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN AFFIRMING THE TRIAL COURT'S
another jeep following the Philippine Rabbit Bus and the jeep of plaintiff when the incident took
UNFAIR DISREGARD OF HEREIN PETITIONER PRBL's DEFENSE OF EXERCISE OF DUE DILIGENCE
place. He said, the jeep of the plaintiff overtook them and the said jeep of the plaintiff was followed
IN THE SELECTION AND SUPERVISION OF ITS EMPLOYEES.
by the Philippine Rabbit Bus which was running very fast. The bus also overtook the jeep in which
he was riding. After that, he heard a loud sound. He saw the jeep of the plaintiff swerved to the right
on a grassy portion of the road. The Philippine Rabbit Bus stopped and they overtook the Philippine IV
Rabbit Bus so that it could not moved (sic), meaning they stopped in front of the Philippine Rabbit
Bus. He testified that the jeep of plaintiff swerved to the right because it was bumped by the
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN AFFIRMING THE TRIAL COURT'S
Philippine Rabbit bus from behind.
QUESTIONABLE AWARD OF DAMAGES AND ATTORNEY'S FEE.

Both Mauricio Manliclic and his driver, Oscar Buan admitted that the Philippine Rabbit Bus bumped
With the passing away of respondent Calaunan during the pendency of this appeal with this Court,
the jeep in question. However, they explained that when the Philippine Rabbit bus was about to go
we granted the Motion for the Substitution of Respondent filed by his wife, Mrs. Precila Zarate Vda.
to the left lane to overtake the jeep, the latter jeep swerved to the left because it was to overtake
De Calaunan, and children, Virgilio Calaunan, Carmelita Honeycomb, Evelyn Calaunan, Marko
another jeep in front of it. Such was their testimony before the RTC in Malolos in the criminal case
Calaunan and Liwayway Calaunan.15
and before this Court in the instant case. [Thus, which of the two versions of the manner how the
collision took place was correct, would be determinative of who between the two drivers was
negligent in the operation of their respective vehicles.]11 In their Reply to respondent's Comment, petitioners informed this Court of a Decision 16 of the Court
of Appeals acquitting petitioner Manliclic of the charge 17 of Reckless Imprudence Resulting in
Damage to Property with Physical Injuries attaching thereto a photocopy thereof.
Petitioner PRBLI maintained that it observed and exercised the diligence of a good father of a family
in the selection and supervision of its employee, specifically petitioner Manliclic.
On the first assigned error, petitioners argue that the TSNs containing the testimonies of respondent
Calaunan,18 Marcelo Mendoza19 and Fernando Ramos20 should not be admitted in evidence for
On 22 July 1996, the trial court rendered its decision in favor of respondent Calaunan and against
failure of respondent to comply with the requisites of Section 47, Rule 130 of the Rules of Court.
petitioners Manliclic and PRBLI. The dispositive portion of its decision reads:

For Section 47, Rule 13021 to apply, the following requisites must be satisfied: (a) the witness is
WHEREFORE, judgment is rendered in favor of the plaintiff and against the defendants ordering the
dead or unable to testify; (b) his testimony or deposition was given in a former case or proceeding,
said defendants to pay plaintiff jointly and solidarily the amount of P40,838.00 as actual damages
judicial or administrative, between the same parties or those representing the same interests; (c)
for the towing as well as the repair and the materials used for the repair of the jeep in
the former case involved the same subject as that in the present case, although on different causes of
question; P100,000.00 as moral damages and another P100,000.00 as exemplary damages
action; (d) the issue testified to by the witness in the former trial is the same issue involved in the
and P15,000.00 as attorney's fees, including appearance fees of the lawyer. In addition, the
present case; and (e) the adverse party had an opportunity to cross-examine the witness in the
defendants are also to pay costs.12
former case.22

Petitioners appealed the decision via Notice of Appeal to the Court of Appeals. 13
In a decision dated 28 September 2001, the Court of Appeals, finding no reversible error in the
decision of the trial court, affirmed it in all respects.14
Petitioners are now before us by way of Petition for Review assailing the decision of the Court of
Appeals. They assign as errors the following:
Admittedly, respondent failed to show the concurrence of all the requisites set forth by the Rules for
a testimony given in a former case or proceeding to be admissible as an exception to the hearsay
rule. Petitioner PRBLI, not being a party in Criminal Case No. 684-M-89, had no opportunity to
cross-examine the three witnesses in said case. The criminal case was filed exclusively against
petitioner Manliclic, petitioner PRBLI's employee. The cases dealing with the subsidiary liability of
employers uniformly declare that, strictly speaking, they are not parties to the criminal cases
instituted against their employees.23

Notwithstanding the fact that petitioner PRBLI was not a party in said criminal case, the testimonies
I
of the three witnesses are still admissible on the ground that petitioner PRBLI failed to object on
their admissibility.
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN AFFIRMING THE TRIAL COURT'S
QUESTIONABLE ADMISSION IN EVIDENCE OF THE TSN's AND OTHER DOCUMENTS PRESENTED IN
It is elementary that an objection shall be made at the time when an alleged inadmissible document
THE CRIMINAL CASE.
is offered in evidence; otherwise, the objection shall be treated as waived, since the right to object is
merely a privilege which the party may waive. Thus, a failure to except to the evidence because it
II does not conform to the statute is a waiver of the provisions of the law. Even assuming ex gratia
argumenti that these documents are inadmissible for being hearsay, but on account of failure to
object thereto, the same may be admitted and considered as sufficient to prove the facts therein
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN AFFIRMING THE TRIAL COURT'S
asserted.24 Hearsay evidence alone may be insufficient to establish a fact in a suit but, when no
RELIANCE ON THE VERSION OF THE RESPONDENT ON HOW THE ACCIDENT SUPPOSEDLY
OCCURRED.
objection is made thereto, it is, like any other evidence, to be considered and given the importance it "4. That sometime on July 12, 1988 at around 6:20 A.M. plaintiff was on board the above-described
deserves.25 motor vehicle travelling at a moderate speed along the North Luzon Expressway heading South
towards Manila together with MARCELO MENDOZA, who was then driving the same;
In the case at bar, petitioner PRBLI did not object to the TSNs containing the testimonies of
respondent Calaunan, Marcelo Mendoza and Fernando Ramos in the criminal case when the same "5. That approximately at kilometer 40 of the North Luzon Express Way, the above-described motor
were offered in evidence in the trial court. In fact, the TSNs of the testimonies of Calaunan and vehicle was suddenly bumped from behind by a Philippine Rabbit Bus with Body No. 353 and with
Mendoza were admitted by both petitioners.26 Moreover, petitioner PRBLI even offered in evidence plate No. CVD 478 then being driven by one Mauricio Manliclic of San Jose, Concepcion, Tarlac, who
the TSN containing the testimony of Donato Ganiban in the criminal case. If petitioner PRBLI argues was then travelling recklessly at a very fast speed and had apparently lost control of his vehicle;
that the TSNs of the testimonies of plaintiff's witnesses in the criminal case should not be admitted
in the instant case, why then did it offer the TSN of the testimony of Ganiban which was given in the
"6. That as a result of the impact of the collision the above-described motor vehicle was forced off
criminal case? It appears that petitioner PRBLI wants to have its cake and eat it too. It cannot argue
the North Luzon Express Way towards the rightside where it fell on its driver's side on a ditch, and
that the TSNs of the testimonies of the witnesses of the adverse party in the criminal case should not
that as a consequence, the above-described motor vehicle which maybe valued at EIGHTY
be admitted and at the same time insist that the TSN of the testimony of the witness for the accused
THOUSAND PESOS (P80,000) was rendered a total wreck as shown by pictures to be presented
be admitted in its favor. To disallow admission in evidence of the TSNs of the testimonies of
during the pre-trial and trial of this case;
Calaunan, Marcelo Mendoza and Fernando Ramos in the criminal case and to admit the TSN of the
testimony of Ganiban would be unfair.
"7. That also as a result of said incident, plaintiff sustained bodily injuries which compounded
plaintiff's frail physical condition and required his hospitalization from July 12, 1988 up to and until
We do not subscribe to petitioner PRBLI's argument that it will be denied due process when the
July 22, 1988, copy of the medical certificate is hereto attached as Annex "A" and made an integral
TSNs of the testimonies of Calaunan, Marcelo Mendoza and Fernando Ramos in the criminal case are
part hereof;
to be admitted in the civil case. It is too late for petitioner PRBLI to raise denial of due process in
relation to Section 47, Rule 130 of the Rules of Court, as a ground for objecting to the admissibility
of the TSNs. For failure to object at the proper time, it waived its right to object that the TSNs did not "8. That the vehicular collision resulting in the total wreckage of the above-described motor vehicle
comply with Section 47. as well as bodily (sic) sustained by plaintiff, was solely due to the reckless imprudence of the
defendant driver Mauricio Manliclic who drove his Philippine Rabbit Bus No. 353 at a fast speed
without due regard or observance of existing traffic rules and regulations;
In Mangio v. Court of Appeals,27 this Court, through Associate Justice Reynato S. Puno,28 admitted in
evidence a TSN of the testimony of a witness in another case despite therein petitioner's assertion
that he would be denied due process. In admitting the TSN, the Court ruled that the raising of denial "9. That defendant Philippine Rabbit Bus Line Corporation failed to exercise the diligence of a good
of due process in relation to Section 47, Rule 130 of the Rules of Court, as a ground for objecting to father of (sic) family in the selection and supervision of its drivers; x x x"31
the admissibility of the TSN was belatedly done. In so doing, therein petitioner waived his right to
object based on said ground.
Can Manliclic still be held liable for the collision and be found negligent notwithstanding the
declaration of the Court of Appeals that there was an absence of negligence on his part?cralaw
Petitioners contend that the documents in the criminal case should not have been admitted in the library
instant civil case because Section 47 of Rule 130 refers only to "testimony or deposition." We find
such contention to be untenable. Though said section speaks only of testimony and deposition, it
In exonerating petitioner Manliclic in the criminal case, the Court of Appeals said:
does not mean that documents from a former case or proceeding cannot be admitted. Said
documents can be admitted they being part of the testimonies of witnesses that have been admitted.
Accordingly, they shall be given the same weight as that to which the testimony may be entitled. 29 To the following findings of the court a quo, to wit: that accused-appellant was negligent "when the
bus he was driving bumped the jeep from behind"; that "the proximate cause of the accident was his
having driven the bus at a great speed while closely following the jeep"; x x x
On the second assigned error, petitioners contend that the version of petitioner Manliclic as to how
the accident occurred is more credible than respondent's version. They anchor their contention on
the fact that petitioner Manliclic was acquitted by the Court of Appeals of the charge of Reckless We do not agree.
Imprudence Resulting in Damage to Property with Physical Injuries.
The swerving of Calaunan's jeep when it tried to overtake the vehicle in front of it was beyond the
To be resolved by the Court is the effect of petitioner Manliclic's acquittal in the civil case. control of accused-appellant.

From the complaint, it can be gathered that the civil case for damages was one arising from, or x x x
based on, quasi-delict.30 Petitioner Manliclic was sued for his negligence or reckless imprudence in
causing the collision, while petitioner PRBLI was sued for its failure to exercise the diligence of a
Absent evidence of negligence, therefore, accused-appellant cannot be held liable for Reckless
good father in the selection and supervision of its employees, particularly petitioner Manliclic. The
Imprudence Resulting in Damage to Property with Physical Injuries as defined in Article 365 of the
allegations read:
Revised Penal Code.32
From the foregoing declaration of the Court of Appeals, it appears that petitioner Manliclic was
acquitted not on reasonable doubt, but on the ground that he is not the author of the act complained
of which is based on Section 2(b) of Rule 111 of the Rules of Criminal Procedure which reads:
(b) Extinction of the penal action does not carry with it extinction of the civil, unless the extinction
proceeds from a declaration in a final judgment that the fact from which the civil might arise did not
exist.
In spite of said ruling, petitioner Manliclic can still be held liable for the mishap. The afore-quoted
section applies only to a civil action arising from crime or ex delicto and not to a civil action arising
from quasi-delict or culpa aquiliana. The extinction of civil liability referred to in Par. (e) of Section
3, Rule 111 [now Section 2 (b) of 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. 33
A quasi-delict or culpa aquiliana is a separate legal institution under the Civil Code with a
substantivity all its own, and individuality that is entirely apart and independent from a delict or
crime - a distinction exists between the civil liability arising from a crime and the responsibility for
quasi-delicts or culpa extra-contractual. The same negligence causing damages may produce civil
liability arising from a crime under the Penal Code, or create an action for quasi-delicts or culpa
extra-contractual under the Civil Code.34 It is now settled that acquittal of the accused, even if based
on a finding that he is not guilty, does not carry with it the extinction of the civil liability based on
quasi delict.35
In other words, if an accused is acquitted based on reasonable doubt on his guilt, his civil liability
arising from the crime may be proved by preponderance of evidence only. However, if an accused is
acquitted on the basis that he was not the author of the act or omission complained of (or that there
is declaration in a final judgment that the fact from which the civil might arise did not exist), said
acquittal closes the door to civil liability based on the crime or ex delicto. In this second instance,
there being no crime or delict to speak of, civil liability based thereon or ex delicto is not possible. In
this case, a civil action, if any, may be instituted on grounds other than the delict complained of.
As regards civil liability arising from quasi-delict or culpa aquiliana, same will not be extinguished
by an acquittal, whether it be on ground of reasonable doubt or that accused was not the author of
the act or omission complained of (or that there is declaration in a final judgment that the fact from
which the civil liability might arise did not exist). The responsibility arising from fault or negligence
in a quasi-delict is entirely separate and distinct from the civil liability arising from negligence under
the Penal Code.36 An acquittal or conviction in the criminal case is entirely irrelevant in the civil
case37 based on quasi-delict or culpa aquiliana.
Petitioners ask us to give credence to their version of how the collision occurred and to disregard
that of respondent's. Petitioners insist that while the PRBLI bus was in the process of overtaking
respondent's jeep, the latter, without warning, suddenly swerved to the left (fast) lane in order to
overtake another jeep ahead of it, thus causing the collision.
As a general rule, questions of fact may not be raised in a Petition for Review . The factual findings of
the trial court, especially when affirmed by the appellate court, are binding and conclusive on the
Supreme Court.38 Not being a trier of facts, this Court will not allow a review thereof unless:
(1) the conclusion is a finding grounded entirely on speculation, surmise and conjecture; (2) the
inference made is manifestly mistaken; (3) there is grave abuse of discretion; (4) the judgment is
based on a misapprehension of facts; (5) the findings of fact are conflicting; (6) the Court of Appeals
went beyond the issues of the case and its findings are contrary to the admissions of both appellant
and appellees; (7) the findings of fact of the Court of Appeals are contrary to those of the trial court;
(8) said findings of fact are conclusions without citation of specific evidence on which they are
based; (9) the facts set forth in the petition as well as in the petitioner's main and reply briefs are
not disputed by the respondents; and (10) the findings of fact of the Court of Appeals are premised
on the supposed absence of evidence and contradicted by the evidence on record. 39
After going over the evidence on record, we do not find any of the exceptions that would warrant
our departure from the general rule. We fully agree in the finding of the trial court, as affirmed by
the Court of Appeals, that it was petitioner Manliclic who was negligent in driving the PRBLI bus
which was the cause of the collision. In giving credence to the version of the respondent, the trial
court has this say:
x x x Thus, which of the two versions of the manner how the collision took place was correct, would
be determinative of who between the two drivers was negligent in the operation of their respective
vehicle.
In this regard, it should be noted that in the statement of Mauricio Manliclic (Exh. 15) given to the
Philippine Rabbit Investigator CV Cabading no mention was made by him about the fact that the
driver of the jeep was overtaking another jeep when the collision took place. The allegation that
another jeep was being overtaken by the jeep of Calaunan was testified to by him only in Crim. Case
No. 684-M-89 before the Regional Trial Court in Malolos, Bulacan and before this Court. Evidently, it
was a product of an afterthought on the part of Mauricio Manliclic so that he could explain why he
should not be held responsible for the incident. His attempt to veer away from the truth was also
apparent when it would be considered that in his statement given to the Philippine Rabbit
Investigator CV Cabading (Exh. 15), he alleged that the Philippine Rabbit Bus bumped the jeep of
Calaunan while the Philippine Rabbit Bus was behind the said jeep. In his testimony before the
Regional Trial Court in Malolos, Bulacan as well as in this Court, he alleged that the Philippine
Rabbit Bus was already on the left side of the jeep when the collision took place. For this
inconsistency between his statement and testimony, his explanation regarding the manner of how
the collision between the jeep and the bus took place should be taken with caution. It might be true
that in the statement of Oscar Buan given to the Philippine Rabbit Investigator CV Cabading, it was
mentioned by the former that the jeep of plaintiff was in the act of overtaking another jeep when the
collision between the latter jeep and the Philippine Rabbit Bus took place. But the fact, however,
that his statement was given on July 15, 1988, one day after Mauricio Manliclic gave his statement
should not escape attention. The one-day difference between the giving of the two statements would
be significant enough to entertain the possibility of Oscar Buan having received legal advise before
giving his statement. Apart from that, as between his statement and the statement of Manliclic
himself, the statement of the latter should prevail. Besides, in his Affidavit of March 10, 1989, (Exh.
14), the unreliability of the statement of Oscar Buan (Exh. 13) given to CV Cabading rear its "ugly
head" when he did not mention in said affidavit that the jeep of Calaunan was trying to overtake
another jeep when the collision between the jeep in question and the Philippine Rabbit bus took
place.
x x x
If one would believe the testimony of the defendant, Mauricio Manliclic, and his conductor, Oscar
Buan, that the Philippine Rabbit Bus was already somewhat parallel to the jeep when the collision
took place, the point of collision on the jeep should have been somewhat on the left side thereof
rather than on its rear. Furthermore, the jeep should have fallen on the road itself rather than
having been forced off the road. Useless, likewise to emphasize that the Philippine Rabbit was
running very fast as testified to by Ramos which was not controverted by the defendants. 40
Having ruled that it was petitioner Manliclic's negligence that caused the smash up, there arises the
juris tantum presumption that the employer is negligent, rebuttable only by proof of observance of
the diligence of a good father of a family.41 Under Article 218042 of the New Civil Code, 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. 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. 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.43
In the case at bar, petitioner PRBLI maintains that it had shown that it exercised the required
diligence in the selection and supervision of its employees, particularly petitioner Manliclic. In the
matter of selection, it showed the screening process that petitioner Manliclic underwent before he
became a regular driver. As to the exercise of due diligence in the supervision of its employees, it
argues that presence of ready investigators (Ganiban and Cabading) is sufficient proof that it
exercised the required due diligence in the supervision of its employees.
In the selection of prospective employees, employers are required to examine them as to their
qualifications, experience and service records. In the supervision of employees, the employer must
formulate standard operating procedures, monitor their implementation and impose disciplinary
measures for the breach thereof. To fend off vicarious liability, employers must submit concrete
proof, including documentary evidence, that they complied with everything that was incumbent on
them.44
In Metro Manila Transit Corporation v. Court of Appeals, 45 it was explained that:
Due diligence in the supervision of employees on the other hand, includes the formulation of
suitable rules and regulations for the guidance of employees and the issuance of proper instructions
intended for the protection of the public and persons with whom the employer has relations
through his or its employees and the imposition of necessary disciplinary measures upon employees
in case of breach or as may be warranted to ensure the performance of acts indispensable to the
business of and beneficial to their employer. To this, we add that actual implementation and
monitoring of consistent compliance with said rules should be the constant concern of the
employer, acting through dependable supervisors who should regularly report on their supervisory
functions.
In order that the defense of due diligence in the selection and supervision of employees may be
deemed sufficient and plausible, it is not enough to emptily invoke the existence of said company
guidelines and policies on hiring and supervision. As the negligence of the employee gives rise to the
presumption of negligence on the part of the employer, the latter has the burden of proving that it
has been diligent not only in the selection of employees but also in the actual supervision of their
work. The mere allegation of the existence of hiring procedures and supervisory policies, without
anything more, is decidedly not sufficient to overcome such presumption.
We emphatically reiterate our holding, as a warning to all employers, that "the formulation of
various company policies on safety without showing that they were being complied with is not
sufficient to exempt petitioner 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." x x x.
The trial court found that petitioner PRBLI exercised the diligence of a good father of a family in the
selection but not in the supervision of its employees. It expounded as follows:
From the evidence of the defendants, it seems that the Philippine Rabbit Bus Lines has a very good
procedure of recruiting its driver as well as in the maintenance of its vehicles. There is no evidence
though that it is as good in the supervision of its personnel. There has been no iota of evidence
introduced by it that there are rules promulgated by the bus company regarding the safe operation
of its vehicle and in the way its driver should manage and operate the vehicles assigned to them.
There is no showing that somebody in the bus company has been employed to oversee how its
driver should behave while operating their vehicles without courting incidents similar to the herein
case. In regard to supervision, it is not difficult to observe that the Philippine Rabbit Bus Lines, Inc.
has been negligent as an employer and it should be made responsible for the acts of its employees,
particularly the driver involved in this case.
We agree. The presence of ready investigators after the occurrence of the accident is not enough to
exempt petitioner PRBLI from liability arising from the negligence of petitioner Manliclic. Same does
not comply with the guidelines set forth in the cases above-mentioned. The presence of the
investigators after the accident is not enough supervision. Regular supervision of employees, that is,
prior to any accident, should have been shown and established. This, petitioner failed to do. The lack
of supervision can further be seen by the fact that there is only one set of manual containing the
rules and regulations for all the drivers of PRBLI.46How then can all the drivers of petitioner PRBLI
know and be continually informed of the rules and regulations when only one manual is being lent
to all the drivers?cralaw library
For failure to adduce proof that it exercised the diligence of a good father of a family in the selection
and supervision of its employees, petitioner PRBLI is held solidarily responsible for the damages
caused by petitioner Manliclic's negligence.
We now go to the award of damages. The trial court correctly awarded the amount of P40,838.00 as
actual damages representing the amount paid by respondent for the towing and repair of his
jeep.47 As regards the awards for moral and exemplary damages, same, under the circumstances,
must be modified. The P100,000.00 awarded by the trial court as moral damages must be reduced
to P50,000.00.48 Exemplary damages are imposed by way of example or correction for the public
good.49 The amount awarded by the trial court must, likewise, be lowered to P50,000.00.50 The
award of P15,000.00 for attorney's fees and expenses of litigation is in order and authorized by
law.51
WHEREFORE, premises considered, the instant Petition for Review is DENIED. The decision of the
Court of Appeals in CA-G.R. CV No. 55909 is AFFIRMED with the MODIFICATION that (1) the award
of moral damages shall be reduced to P50,000.00; and (2) the award of exemplary damages shall be
lowered to P50,000.00. Costs against petitioners.
SO ORDERED.
 [G.R. NO. 166640 : July 31, 2009] In the case at bar, the trial court, in its Decision dated September 13, 1999, found respondents
Ildefonso Callejas and Edgar de Borja, together with Liong Chio Chang, jointly and severally liable to
pay petitioner damages and costs of suit. The dispositive portion of the Decision reads:
HERMINIO MARIANO, JR., Petitioner, v. ILDEFONSO C. CALLEJAS and EDGAR DE
BORJA,Respondents.
ACCORDINGLY, the defendants are ordered to pay as follows:
DECISION
1. The sum of P50,000.00 as civil indemnity for the loss of life;
PUNO, C.J.:
2. The sum of P40,000.00 as actual and compensatory damages;
On appeal are the Decision1 and Resolution2 of the Court of Appeals in CA-G.R. CV No. 66891, dated
May 21, 2004 and January 7, 2005 respectively, which reversed the Decision3 of the Regional Trial 3. The sum of P1,829,200.00 as foregone income;
Court (RTC) of Quezon City, dated September 13, 1999, which found respondents jointly and
severally liable to pay petitioner damages for the death of his wife.
4. The sum of P30,000.00 as moral damages;

First, the facts:

5. The sum of P20,000.00 as exemplary damages;

Petitioner Herminio Mariano, Jr. is the surviving spouse of Dr. Frelinda Mariano who was a
6. The costs of suit.
passenger of a Celyrosa Express bus bound for Tagaytay when she met her death. Respondent
Ildefonso C. Callejas is the registered owner of Celyrosa Express, while respondent Edgar de Borja
was the driver of the bus on which the deceased was a passenger. SO ORDERED.7

At around 6:30 p.m. on November 12, 1991, along Aguinaldo Highway, San Agustin, Dasmariñas, Respondents Callejas and De Borja appealed to the Court of Appeals, contending that the trial court
Cavite, the Celyrosa Express bus, carrying Dr. Mariano as its passenger, collided with an Isuzu truck erred in holding them guilty of breach of contract of carriage.
with trailer bearing plate numbers PJH 906 and TRH 531. The passenger bus was bound for
Tagaytay while the trailer truck came from the opposite direction, bound for Manila. The trailer
On May 21, 2004, the Court of Appeals reversed the decision of the trial court. It reasoned:
truck bumped the passenger bus on its left middle portion. Due to the impact, the passenger bus fell
on its right side on the right shoulder of the highway and caused the death of Dr. Mariano and
physical injuries to four other passengers. Dr. Mariano was 36 years old at the time of her death. She . . . the presumption of fault or negligence against the carrier is only a disputable presumption. It
left behind three minor children, aged four, three and two years. gives in where contrary facts are established proving either that the carrier had exercised the
degree of diligence required by law or the injury suffered by the passenger was due to a fortuitous
event. Where, as in the instant case, the injury sustained by the petitioner was in no way due to any
Petitioner filed a complaint for breach of contract of carriage and damages against respondents for
defect in the means of transport or in the method of transporting or to the negligent or wilful acts of
their failure to transport his wife and mother of his three minor children safely to her destination.
private respondent's employees, and therefore involving no issue of negligence in its duty to
Respondents denied liability for the death of Dr. Mariano. They claimed that the proximate cause of
provide safe and suitable cars as well as competent employees, with the injury arising wholly from
the accident was the recklessness of the driver of the trailer truck which bumped their bus while
causes created by strangers over which the carrier had no control or even knowledge or could not
allegedly at a halt on the shoulder of the road in its rightful lane. Thus, respondent Callejas filed a
have prevented, the presumption is rebutted and the carrier is not and ought not to be held liable.
third-party complaint against Liong Chio Chang, doing business under the name and style of La
To rule otherwise would make the common carrier the insurer of the absolute safety of its
Perla Sugar Supply, the owner of the trailer truck, for indemnity in the event that he would be held
passengers which is not the intention of the lawmakers. 8
liable for damages to petitioner.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

The dispositive portion of the Decision reads:

Other cases were filed. Callejas filed a complaint,4 docketed as Civil Case No. NC-397 before the RTC
of Naic, Cavite, against La Perla Sugar Supply and Arcadio Arcilla, the truck driver, for damages he
incurred due to the vehicular accident. On September 24, 1992, the said court dismissed the
complaint against La Perla Sugar Supply for lack of evidence. It, however, found Arcilla liable to pay
Callejas the cost of the repairs of his passenger bus, his lost earnings, exemplary damages and
attorney's fees.5
WHEREFORE, the decision appealed from, insofar as it found defendants-appellants Ildefonso
Callejas and Edgar de Borja liable for damages to plaintiff-appellee Herminio E. Mariano, Jr., is
REVERSED and SET ASIDE and another one entered absolving them from any liability for the death
of Dr. Frelinda Cargo Mariano.9

A criminal case, Criminal Case No. 2223-92, was also filed against truck driver Arcilla in the RTC of The appellate court also denied the motion for reconsideration filed by petitioner.
Imus, Cavite. On May 3, 1994, the said court convicted truck driver Arcadio Arcilla of the crime of
reckless imprudence resulting to homicide, multiple slight physical injuries and damage to
Hence, this appeal, relying on the following ground:
property.6
THE DECISION OF THE HONORABLE COURT OF APPEALS, SPECIAL FOURTEENTH DIVISION IS NOT
IN ACCORD WITH THE FACTUAL BASIS OF THE CASE.10
The following are the provisions of the Civil Code pertinent to the case at bar:
In the case at bar, petitioner cannot succeed in his contention that respondents failed to overcome
the presumption of negligence against them. The totality of evidence shows that the death of
petitioner's spouse was caused by the reckless negligence of the driver of the Isuzu trailer truck
which lost its brakes and bumped the Celyrosa Express bus, owned and operated by respondents.

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 and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all
the circumstances.
First, we advert to the sketch prepared by PO3 Magno S. de Villa, who investigated the accident. The
sketch13 shows the passenger bus facing the direction of Tagaytay City and lying on its right side on
the shoulder of the road, about five meters away from the point of impact. On the other hand, the
trailer truck was on the opposite direction, about 500 meters away from the point of impact. PO3 De
Villa stated that he interviewed De Borja, respondent driver of the passenger bus, who said that he
was about to unload some passengers when his bus was bumped by the driver of the trailer truck
that lost its brakes. PO3 De Villa checked out the trailer truck and found that its brakes really failed.
He testified before the trial court, as follows:

ART. 1756. In case of death of or injuries to passengers, common carriers are presumed to have ATTY. ESTELYDIZ:
been at fault or to have acted negligently, unless they prove that they observed extraordinary
diligence as prescribed in articles 1733 and 1755.
q You pointed to the Isuzu truck beyond the point of impact. Did you investigate why did (sic) the
Isuzu truck is beyond the point of impact?cralawred
In accord with the above provisions, Celyrosa Express, a common carrier, through its driver,
respondent De Borja, and its registered owner, respondent Callejas, has the express obligation "to
a Because the truck has no brakes.
carry the passengers safely as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with a due regard for all the circumstances," 11 and to observe
extraordinary diligence in the discharge of its duty. The death of the wife of the petitioner in the COURT:
course of transporting her to her destination gave rise to the presumption of negligence of the
carrier. To overcome the presumption, respondents have to show that they observed extraordinary
q What is the distance between that circle which is marked as Exh. 1-c to the place where you found
diligence in the discharge of their duty, or that the accident was caused by a fortuitous event.
the same?cralawred

This Court interpreted the above quoted provisions in Pilapil v. Court of Appeals. 12 We elucidated:
a More or less 500 meters.

While the law requires the highest degree of diligence from common carriers in the safe transport of
q Why did you say that the truck has no brakes?cralawred
their passengers and creates a presumption of negligence against them, it does not, however, make
the carrier an insurer of the absolute safety of its passengers.
a I tested it.
Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance and precaution in
the carriage of passengers by common carriers to only such as human care and foresight can q And you found no brakes?cralawred
provide. What constitutes compliance with said duty is adjudged with due regard to all the
circumstances.
a Yes, sir.

Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the part of the
xxx
common carrier when its passenger is injured, merely relieves the latter, for the time being, from
introducing evidence to fasten the negligence on the former, because the presumption stands in the
place of evidence. Being a mere presumption, however, the same is rebuttable by proof that the q When you went to the scene of accident, what was the position of Celyrosa bus?cralawred
common carrier had exercised extraordinary diligence as required by law in the performance of its
contractual obligation, or that the injury suffered by the passenger was solely due to a fortuitous
a It was lying on its side.
event.

COURT:
In fine, we can only infer from the law the intention of the Code Commission and Congress to curb
the recklessness of drivers and operators of common carriers in the conduct of their business.
q Right side or left side?cralawred
Thus, it is clear that neither the law nor the nature of the business of a transportation company
makes it an insurer of the passenger's safety, but that its liability for personal injuries sustained by a Right side.
its passenger rests upon its negligence, its failure to exercise the degree of diligence that the law
requires.
ATTY. ESTELYDIZ:

q On what part of the road was it lying?cralawred

a On the shoulder of the road.

COURT:

q How many meters from the point of impact?cralawred

a Near, about 5 meters.14

His police report bolsters his testimony and states:

Said vehicle 1 [passenger bus] was running from Manila toward south direction when, in the course
of its travel, it was hit and bumped by vehicle 2 [truck with trailer] then running fast from opposite
direction, causing said vehicle 1 to fall on its side on the road shoulder, causing the death of one and
injuries of some passengers thereof, and its damage, after collission (sic), vehicle 2
continiously (sic) ran and stopped at approximately 500 meters away from the piont (sic) of
impact.15

In fine, the evidence shows that before the collision, the passenger bus was cruising on its rightful
lane along the Aguinaldo Highway when the trailer truck coming from the opposite direction, on full
speed, suddenly swerved and encroached on its lane, and bumped the passenger bus on its left
middle portion. Respondent driver De Borja had every right to expect that the trailer truck coming
from the opposite direction would stay on its proper lane. He was not expected to know that the
trailer truck had lost its brakes. The swerving of the trailer truck was abrupt and it was running on a
fast speed as it was found 500 meters away from the point of collision. Secondly, any doubt as to the
culpability of the driver of the trailer truck ought to vanish when he pleaded guilty to the charge of
reckless imprudence resulting to multiple slight physical injuries and damage to property in
Criminal Case No. 2223-92, involving the same incident.ςηαñrοblεš νιr†υαl lαω
lιbrαrÿ

IN VIEW WHEREOF, the petition is DENIED. The Decision dated May 21, 2004 and the Resolution
dated January 7, 2005 of the Court of Appeals in CA-G.R. CV No. 66891 are AFFIRMED.

SO ORDERED.
G.R. No. 71137 October 5, 1989 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:
SPOUSES FEDERICO FRANCO and FELICISIMA R. FRANCO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, ANTONIO REYES, MRS. SUSAN CHUAY and LOLITA (1) To pay Antonio Reyes, actual and compensatory damages in the amount of
LUGUE respondents. 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;
FERNAN, C.J.:
(3) To pay Susan Chuay, the widow of Fernando Chuay, actual and
compensatory damages in the total sum of P24,000.00; and
The instant petition for review of a decision of the Court of Appeals deals mainly with the nature of
an employer's liability for his employee's negligent act.
(4) To pay attorney's fee in the amount of P5.000.00;
At about 7:30 in the evening of October 18, 1974, Macario Yuro swerved the northbound Franco Bus
with Plate No. XY320-PUB he was driving to the left to avoid hitting a truck with a trailer parked All with legal interests from the filing of this suit on November 11, 1974 until
facing north along the cemented pavement of the MacArthur Highway at Barrio Talaga, Capas paid; and the costs of this suit.
Tarlac, thereby taking the lane of an incoming Isuzu Mini Bus bearing Plate No. YL-735 being driven
by one Magdaleno Lugue and making a collision between the two (2) vehicles an unavoidable and
SO ORDERED. 3
disastrous eventuality.

On appeal by herein petitioners as defendants-appellants, respondent appellate court, agreeing with

Dragged fifteen (15) meters from the point of impact (midway the length of the parked truck with
the lower court, held that defendants-appellants' driver who died instantly in the vehicular collision,
trailer), the mini bus landed right side down facing south in the canal of the highway, a total wreck.
was guilty of reckless or criminal imprudence punishable by law in driving appellants' bus; that the
The Franco Bus was also damaged but not as severely. The collision resulted in the deaths of the two
civil obligation of the appellants arises from Article 103 of the Revised Penal Code resulting in the
(2) drivers, Macario Yuro and Magdaleno Lugue, and two (2) passengers of the mini bus, Romeo Bue
subsidiary liability of the appellants under the said provisions, 4 that the case subject of appeal is
and Fernando Chuay.
one involving culpable negligence out of which civil liability arises and is not one of civil
negligence; 5 and that there is nothing in Articles 102 and 103 of the Revised Penal Code which
Consequently, Antonio Reyes, the registered owner of the Isuzu Mini Bus, Mrs. Susan Chuay, the wife requires a prior judgment of conviction of the erring vehicle driver and his obligation to pay his civil
of victim Fernando Chuay, and Mrs. Lolita Lugue, the wife of driver-victim Magdaleno Lugue, filed an liability before the said provisions can be applied. 6 Respondent appellate court increased the award
action for damages through reckless imprudence before the Court of First Instance of Pampanga in of damages granted by the lower court as follows:
Angeles City, Branch IV, docketed as Civil Case No. 2154 against Mr. & Mrs. Federico Franco, the
owners and operators of the Franco Transportation Company. The complaint alleged that: (a) the
WHEREFORE, the decision appealed from is hereby modified as follows:
recklessness and imprudence of the Franco Bus driver caused the collision which resulted in his
own death and that of the mini bus driver and two (2) other passengers thereof; (b) that as a
consequence of the vehicular mishap, the Isuzu Mini Bus became a total wreck resulting in actual 1. To pay Susan Chuay, widow of Fernando Chuay, the sum of P30,000.00 for
damages amounting to P50,000.00 and the loss of an average net income of P120.00 daily or the latter's death and P112,000.00 for loss of earning capacity;
P3,600.00 monthly multiplied by a minimum of one more year of serviceability of said mini bus or
P40,200.00; and, (c) that in view of the death of the three (3) passengers aforementioned, the heirs
2. To pay Lolita Lugue, widow of Magdaleno Lugue, the sum of P30,000.00 for
of each should be awarded a minimum of P12,000.00 and the expected average income of P6,000.00
the latter's death and P62,000.00 for loss of earning capacity. The rest of the
each of the driver and one of the passengers and P12,000.00 of the Chinese businessman passenger.
judgment appealed from is affirmed. Costs against defendants-appellants.

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.
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." 2 On this premise, the trial court
ruled as follows:
SO ORDERED. 7
On April 1, 1985, petitioners filed a motion for reconsideration of the aforesaid respondent
appellate court's decision dated January 2, 1985 but the same was denied on May 13, 1985.
Hence, the instant petition raising two (2) legal questions: first, whether the action for recovery of
damages instituted by herein private respondents was predicated upon crime or quasi-delict; and
second, 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.
Petitioners contend that the allegations in paragraph 9 of the Amended Complaint 8 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.
We find merit in this contention. 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,
tavern-keepers, 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.
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,
xxx xxx xxx
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. 9
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. 11

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. 12 Consequently, therefore, we find petitioners liable for the damages claimed pursuant to
their primary liability under the Civil Code.

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. 13 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 15 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 . 16

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. 17

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.
 [G.R. No. 84516. December 5, 1989.]
DIONISIO CARPIO, Petitioner, v. HON. SERGIO DOROJA, (Presiding Judge, MTC Branch IV,
Zamboanga City) and EDWIN RAMIREZ Y WEE, Respondents.
SYLLABUS
1. CRIMINAL LAW; SUBSIDIARY CIVIL LIABILITY OF AN EMPLOYER; REQUISITES. — 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.
2. ID.; ID.; MAY BE DETERMINED AND ENFORCED IN THE CRIMINAL CASE AS PART OF THE
EXECUTION PROCEEDINGS. — 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.
3. ID.; ID.; ID.; GRANT OF A MOTION FOR A SUBSIDIARY WRIT OF EXECUTION INCUMBENT UPON
THE COURT UPON CONVICTION OF THE EMPLOYEE. — 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.
4. REMEDIAL LAW; EXECUTION AND SATISFACTION OF JUDGMENTS; GENERAL SUPERVISION OF
COURTS OVER ITS PROCESS OF EXECUTION; CARRIES WITH IT THE RIGHT DETERMINE TO EVERY
QUESTION OF FACT AND LAW. — This Court held in the earlier case of Pajarito v. Señeris, 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."cralaw virtua1aw library
5. CRIMINAL LAW; SUBSIDIARY LIABILITY OF THE EMPLOYEE; SEPARATE COMPLAINT AGAINST
THE EMPLOYER NOT NECESSARY. — 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. Señeris, 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."
DECISION
PARAS, J.:
Before Us is a petition to review by certiorari the decision of the Municipal Trial Court of Zamboanga
City, Branch IV, which denied petitioner’s motion for subsidiary writ of execution against the owner-
operator of the vehicle which figured in the accident.
The facts of the case are undisputed.
Sometime on October 23, 1985, 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.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
An information for Reckless Imprudence Resulting to Serious Physical Injuries was filed against
Edwin Ramirez with the Municipal Trial Court of Zamboanga City, Branch IV. On January 14, 1987,
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. The dispositive portion of the decision handed down
on May 27, 1987 reads as follows:jgc:chanrobles.com.ph
"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 P1,500.00 as attorney’s fees and to
pay the cost of this suit.
"SO ORDERED." (p. 7, Rollo)
Thereafter, the accused filed an application for probation.
At the early stage of the trial, the private prosecutor manifested his desire to present evidence to
establish the civil liability of either the accused driver or the owner-operator of the vehicle.
Accused’s counsel moved that the court summon the owner of the vehicle to afford the latter a day
in court, on the ground that the accused is not only indigent but also jobless and thus cannot answer
any civil liability that may be imposed upon him by the court. The private prosecutor, however, did
not move for the appearance of Eduardo Toribio.
The civil aspect of the above-quoted decision was appealed by the private prosecutor to the
Regional Trial Court Branch XVI, appellant praying for moral damages in the amount of P10,000.00,
compensatory damages at P6,186.40, and attorney’s fees of P5,000.00. The appellate court, on
January 20, 1988, modified the trial court’s decision, granting the appellant moral damages in the
amount of Five Thousand Pesos (P5,000.00), while affirming all other civil liabilities.
Thereafter, a writ of execution dated March 10, 1988 was duly served upon the accused but was,
however, returned unsatisfied due to the insolvency of the accused as shown by the sheriff’s return.
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.
Hence, the instant petition.
Petitioner relies heavily on the case of Pajarito v. Señeris, 87 SCRA 275, which enunciates that "the
subsidiary liability of the owner-operator is fixed by the judgment, because if a case were to be filed
against said operator, the court called upon to act thereto has no other function than to render a
decision based on the indemnity award in the criminal case without power to amend or modify it
even if in his opinion an error has been committed in the decision." Petitioner maintains that the
tenor of the aforesaid decision implies that the subsidiary liability of the owner-operator may be
enforced in the same proceeding and a separate action is no longer necessary in order to avoid
undue delay, notwithstanding the fact that said employer was not made a party in the criminal
action.chanrobles.com:cralaw:red
It is the theory of respondent that the owner-operator cannot be validly held subsidiarily liable for
the following reasons, namely: (a) the matter of subsidiary liability was not raised on appeal; (b)
contrary to the case of Pajarito v. Señeris, the injuries sustained by the complainant did not arise
from the so-called "culpa-contractual" but from "culpa-aquiliana" ; (c) the judgments of appellate
courts may not be altered, modified, or changed by the court of origin; and (d) said owner was never
made a party to the criminal proceedings.
Thus, the underlying issue raised in this case is; 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.
The law involved in the instant case is Article 103 in relation to Article 100, both of the Revised
Penal Code, which reads thus:jgc:chanrobles.com.ph
"Art. 103. Subsidiary civil liability of other persons. The subsidiary liability established in the net
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."cralaw virtua1aw library
Respondent contends that the case of Pajarito v. Señeris 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 quasi-delictual 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. Señeris, 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."cralaw virtua1aw
library
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. Señeris,
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."cralaw virtua1aw library
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 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.chanrobles virtual lawlibrary
SO ORDERED.
 [G.R. NO. 169498 : December 11, 2008] After trial on the merits, the RTC rendered a Decision4 on 27 September 2002 in Criminal Case No.
1116-V-99 finding Sagosoy guilty of the crime charged, thereby sentencing him to a straight penalty
of four (4) months imprisonment and to indemnify the spouses Delos Santos for actual and moral
OSCAR DELOS SANTOS and ELIZA DELOS SANTOS, Petitioners, v.COURT OF
damages resulting from Ferdinand's injury. The fallo of the said RTC Decision reads:
APPEALS, Respondent.

WHEREFORE, judgment is hereby rendered finding accused ANTONIO SAGOSOY y NAMALATA

DECISION
guilty beyond reasonable doubt and as principal of the crime of reckless imprudence resulting to
serious physical injuries and damage to property, without any attending mitigating or aggravating
CHICO-NAZARIO, J.: circumstance and hereby sentences him to a straight penalty of FOUR (4) MONTHS of arresto mayor.
The accused is further sentenced to pay [the Spouses Delos Santos] the amount of P85,000.00
representing the medical expenses after deducting the amount of P150,000.00 contributed by the
Before this Court is a Special Civil Action for Certiorari, Prohibition and Mandamusunder Rule 65 of
employer of the accused, the amount of P9,200.00 representing the cost of repair of the damaged
the Revised Rules of Court filed by petitioners spouses Oscar and Eliza delos Santos (spouses Delos
tiburine, the amount of P75,000.00 representing the value of the horse, and the amount
Santos), seeking to reverse and set aside the Decision1 dated 28 June 2005 of the Court of Appeals in
of P300,000.00 representing the cost of the operation to be performed on Ferdinand upon reaching
CA-G.R. SP No. 83234 for having been rendered with grave abuse of discretion amounting to lack or
the age of 18. Finally, the accused is sentenced to pay [the Spouses Delos Santos] the amount
excess of jurisdiction. In its assailed Decision, the Court of Appeals reversed the Orders dated 10
of P500,000.00 as moral damages, to pay Ferdinand delos Santos, through his parents [the Spouses
February 2004 and 1 March 2004 of the Regional Trial Court (RTC) of Valenzuela, Branch 172, in
Delos Santos], the amount of P200,000.00 as indemnity, to pay the amount equivalent to 10% of the
Criminal Case No. 1116-V-99, declaring Saturnino Dy, also known as Juanito Dy (Dy), and Dyson
amount to be collected as reasonable attorney's fees, and to pay the costs of suit, all without
Surface and Coating Corporation (Dyson Corporation) as joint employers of the accused Antonio
subsidiary imprisonment in case of insolvency.
Sagosoy (Sagosoy), who should both be held liable solidarily with Sagosoy for the injury caused to
Ferdinand delos Santos (Ferdinand).
The spouses Delos Santos filed a Motion for the Issuance of Writ of Execution,5 which was favorably
acted upon by the RTC. The First Writ of Execution6 was issued on 3 January 2003 commanding the
The factual and procedural antecedents of this case are as follows:
Sheriff to execute and make effective its 27 September 2002 Decision in Criminal Case No. 1116-V-
99.
On 18 March 1998, at around 7:00 o'clock in the morning, the Isuzu forward van driven by Sagosoy
collided with a horse-drawn carriage steered by Oscar delos Santos. Oscar delos Santos was with his
An attempt to satisfy the judgment was made by the Sheriff, but he found no real or personal
four-year-old son Ferdinand who was seated in the carriage. The collision left the horse dead and
properties of Sagosoy to answer for the latter's civil liability to the spouses Delos Santos. The
Ferdinand seriously injured with a broken spinal cord. A surgical operation to repair the broken
unsatisfied Sheriff's Return7prompted the spouses Delos Santos to file a Motion for the Issuance of
spinal cord could not be performed on Ferdinand because of his tender age. Thus, Ferdinand's
Alias Writ of Execution8 against the properties and income of Dy in light of his subsidiary liability as
broken spinal cord further caused irreversible damage to his vision, speech, and motor skills.
the employer of Sagosoy. The motion was opposed by Dy who denied that he was the employer of
Sagosoy. According to Dy, at the time the accident occured, Sagoysoy was merely doing an isolated
The van driven by Sagosoy bears plate number ULP 725 registered under the name of Dy of Dyson and non-business related driving task for him.
Corporation.
After weighing the arguments of the parties, the RTC issued on 30 May 2003 an Order directing the
An Information2 charging Sagosoy with the crime of Reckless Imprudence Resulting in Serious issuance of an Alias Writ of Execution, not just against the income and properties of Sagosoy, but
Physical Injuries and Damage to Property was eventually filed before the RTC, which reads: also those of Dy.9The Alias Writ of Execution10 was issued on 3 June 2003.

That on or about the 18th day of March, 1998, in Valenzuela, Metro Manila and within the Subsequently, the RTC, in an Order dated 23 June 2003, denied Dy's Motion for Reconsideration of
jurisdiction of this Honorable Court, the above-named accused, being then the driver of an Isuzu its Order dated 30 May 2003.
Forward Van bearing Plate No. 725, did then and there unlawfully and feloniously drive, manage
and operate the same along Tatalon, Ugong, this municipality, in a reckless, negligent and imprudent
Dy filed a Petition for Certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 78005,
manner, without taking the necessary precautions to avoid accident to person and damage to
averring that the RTC committed grave abuse of discretion in issuing its Orders dated 30 May 2003
property, and so, as a result of such carelessness, negligence and imprudence, said vehicle driven by
and 23 June 2003. The appellate court, however, in a Decision11 dated 28 September 2004,
the accused, hit and collide with Horse-Drawn Vehicle (Tiburine) causing said Tiburine to be
dismissed Dy's Petition and affirmed the questioned RTC Orders. Said Decision of the Court of
damaged in the amount of P9,200.00 and causing further the death of the horse valued
Appeals in CA-G.R. SP No. 78005 became final and executory on 20 October 2004 as evidenced by
at P75,000.00 to the damage and prejudice of the owner thereof, and as further consequence,
the Entry of Judgment already made therein.12
Ferdinand delos Santos sustained physical injuries which requires medical attendance for a period
of more than 30 days and incapacitated said Ferdinand delos Santos from performing his habitual
work for the same period of time. In the interregnum, per the Sheriff's Return dated 6 October 2003, the Alias Writ of Execution was
again returned unsatisfied due to the failure of the Sheriff to locate any real or personal property
registered in the name of Dy.13
The case was docketed as Criminal Case No. 1116-V-99.

Unrelenting, the spouses Delos Santos filed a Motion for the Issuance of a Second Writ of Execution
When arraigned, Sagosoy pleaded not guilty.3
before the RTC, identifying Dyson Corporation as the co-employer of Sagosoy, together with Dy. The
spouses Delos Santos called the attention of the trial court to particular pieces of evidence to Reconsideration was filed only on 10 August 2005. Resultantly, the Court of Appeals Decision in CA-
establish that Sagosoy, at the time of the accident, worked for both Dy and Dyson Corporation, G.R. SP No. 83234 became final and executory on 19 September 2005.
namely: (1) Sagosoy's testimony that Dy was doing business in the name of Dyson Corporation; (2)
Sagosoy's Social Security System (SSS) record showing that Dyson Corporation was his registered
The spouses Delos Santos are now before this Court seeking the reversal of the Court of Appeals
employer; and (3) the Articles of Incorporation of Dyson Corporation establishing that Dy was one
disquisition on the ground of grave abuse of discretion. For the resolution of this Court are the
of the majority stockholders of Dyson Corporation. 14 The spouses Delos Santos also propounded
following issues:
that the accident which caused serious physical injuries to Ferdinand took place while Sagosoy was
undertaking an activity in furtherance of the business operations of Dyson Corporation. 15
I.
Dyson Corporation timely opposed the spouses Delos Santos's latest Motion, underscoring the
inconsistencies in the spouses Delos Santos's stand on the crucial issue of who was the real WHETHER OR NOT THE FILING OF THE INSTANT SPECIAL CIVIL ACTION FOR CERTIORARI, IS
employer of Sagosoy. Dyson Corporation averred that the spouses Delos Santos should not be PROPER IN THE INSTANT CASE.
allowed to conveniently shift their position on the said issue, and now joined Dyson Corporation
with Dy as Sagosoy's employers after it turned out that Dy alone was financially incapable of
II.
satisfying the civil liability under the RTC judgment in Criminal Case No. 1116-V-99.16

In an Order17 dated 10 February 2004, the RTC granted the spouses Delos Santos's Motion and
declared Dy and Dyson Corporation as co-employers of Sagosoy. In its Order, the RTC explained that
while the van driven by Sagosoy was owned by Dy, it was being used by Dyson Corporation in its
business operations. The RTC further justified that the initial confusion as to the identity of
Sagosoy's employer was understandable and did not render impossible the conclusion that both Dy
and Dyson Corporation were Sagosoy's employers who should both accordingly be held liable for
the civil liability arising from the crime of which Sagosoy was adjudged guilty.
In an Order18 dated 1 March 2004, the RTC denied the Motion for Reconsideration of Dyson
Corporation for no sufficient merit.
For allegedly having been issued with grave abuse of discretion, the RTC Orders dated 10 February
2004 and 1 March 2004 were challenged by Dyson Corporation before the Court of Appeals through
a Special Civil Action for Certiorari, docketed as CA-G.R. SP No. 83234.
On 28 June 2005, the Court of Appeals promulgated a Decision in CA-G.R. SP No. 83234, finding
therein that the issuance by the RTC of its 10 February 2004 and 1 March 2004 Orders was tainted
with grave abuse of discretion. The appellate court reasoned that Dy and Dyson Corporation could
only be treated as joint employers of Sagosoy upon the piercing of the veil of corporate fiction,
which was not warranted in the instant case since it had not been shown that Dy was hiding behind
the cloak of Dyson Corporation in order to evade liability. Thus, the fallo of the Decision of the Court
of Appeals reads:
WHEREFORE, premises considered, the petition is hereby GRANTED. We hereby ANNUL and SET
ASIDE the assailed orders. Costa against [the spouses Delos Santos]. 19
The spouses Delos Santos filed a Motion for Reconsideration on 10 August 2005 explaining that the
delay was caused by their counsel who did not notify them of the receipt of the Court of Appeals
Decision dated 28 June 2005. It was only upon inquiry with the RTC on 26 July 2005 that they
learned of the appellate court's decision.
The Court of Appeals, in a Resolution20 dated 30 August 2005, refused to give due course to the
spouses Delos Santos's Motion for Reconsideration since it was not filed within the reglementary
period. According to the appellate court, the spouses Delos Santos thru counsel received a copy of
their 28 June 2005 Decision on 26 July 2005. Hence, the spouses Delos Santos had only until 29 July
2005 to move for the reconsideration of the judgment or to appeal it. The Motion for
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN DENYING THE
SPOUSES DELOS SANTOS' MOTION FOR RECONSIDERATION.
III.
WHETHER OR NOT DY AND DYSON CORPORATION ARE JOINT EMPLOYERS OF SAGOSOY AND
SHOULD THEREFORE BE HELD SUBSIDIARILY LIABLE FOR THE CIVIL LIABILITY ARISING FROM
THE CRIME COMMITTED BY SAGOSOY.
The Court first dispenses with the procedural issues raised by the parties, particularly the propriety
of the remedy they chose to avail herein.
The spouses Delos Santos justify their present Petition for Certiorari, Prohibition and Mandamus by
averring the lack of any other plain, speedy or adequate remedy available in the ordinary course of
law that could compensate them for the injury caused to their son. On the other hand, Dyson
Corporation counters by highlighting the failure of the spouses Delos Santos to timely file their
Motion for Reconsideration before the Court of Appeals in CA-G.R. SP No. 83234. Dyson Corporation
argues that the special civil action of certiorari cannot be invoked as a substitute for the remedy of
appeal that was already lost, less so, when the requisites for certiorari were not faithfully complied
with.
According to Section 1, Rule 65 of the Revised Rules of Court, a Petition for Certiorari may be filed
under the following circumstances:
SEC. 1. Petition for certiorari - - When any tribunal, board or officer exercising judicial or quasi-judicial
functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate
remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the
proper court, alleging the facts with certainty and praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law
and justice may require.
A writ of certiorari may be issued only for the correction of errors of jurisdiction or grave abuse of
discretion amounting to lack or excess of jurisdiction. The writ cannot be used for any other purpose, as
its function is limited to keeping the inferior court within the bounds of its jurisdiction.21
For certiorari to prosper, the following requisites must concur: (1) the writ is directed against a
tribunal, a board or any officer exercising judicial or quasi-judicial functions; (2) such tribunal, board
or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to
lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in
the ordinary course of law.22
"Without jurisdiction" means that the court acted with absolute lack of authority. There is "excess of
jurisdiction" when the court transcends its power or acts without any statutory authority. "Grave
abuse of discretion" implies such capricious and whimsical exercise of judgment as to be equivalent to
lack or excess of jurisdiction; in other words, power is exercised in an arbitrary or despotic manner by
reason of passion, prejudice, or personal hostility; and such exercise is so patent or so gross as to
amount to an evasion of a positive duty or to a virtual refusal either to perform the duty enjoined or to
act at all in contemplation of law.23
Although the court has absolute discretion to reject and dismiss a Petition for Certiorari, in general, it
does so only (1) when the petition fails to demonstrate grave abuse of discretion by any court, agency,
or branch of the government; or (2) when there are procedural errors, like violations of the Rules of
Court or Supreme Court Circulars. One of the procedural errors for which the court could dismiss a
Petition for Certiorari is the failure of the petitioner to file a motion for reconsideration of the assailed
order or decision.24 A motion for reconsideration must first be filed with the lower court prior to
resorting to the extraordinary writ of certiorarisince a motion for reconsideration is still considered an
adequate remedy in the ordinary course of law. The rationale for the filing of a motion for
reconsideration is to give an opportunity to the lower court to correct its imputed errors.25
In the present case, the spouses Delos Santos did file a Motion for Reconsideration but they were only
able to do so beyond the reglementary period.
Moreover, since the case at bar resonates with a piercing and urgent call for justice for a four-year-old
boy seriously crippled by the accident caused by the negligence of Sagosoy, the Court is persuaded to
excuse the procedural flaw so it could fully heed the call. Laws and rules should be interpreted and
applied not in a vacuum or in isolated abstraction, but in light of surrounding circumstances and
attendant facts in order to afford justice to all. This Court is not impervious to instances when rules of
procedure must yield to the loftier demands of substantial justice and equity. Procedural rules are mere
tools designed to facilitate the attainment of justice; their application must be liberalized to promote
public interest.26
In this instance, the Court has no doubt that substantial justice will be served and patent injustice will
be obviated by giving due course to this Petition in the presence of compelling reasons to disregard the
spouses Delos Santos's procedural mistake. Just as we had ruled in Aguam v. Court of Appeals27 :
ends of justice rather than dispose of the case on technicality and cause a grave injustice to the parties,
giving a false impression of speedy disposal of cases while actually resulting in more delay, if not a
miscarriage of justice.
What should guide judicial action is the principle that a party-litigant is to be given the fullest
opportunity to establish the merits of his complaint or defense rather than for him to lose life, liberty,
honor or property on technicalities. The rules of procedure should be viewed as mere tools designed to
facilitate the attainment of justice. Their strict and rigid application, which would result in
technicalities that tend to frustrate rather than promote substantial justice, must always be
eschewed.28
The relaxation of procedural rules is even more imperative in the instant Petition where there is an
undeniable need for this Court to settle threshold factual issues to finally give justice to the parties. It is
true that this Court is not a trier of facts, but there are recognized exceptions to this general rule such
as when the appellate court had ignored, misunderstood, or misinterpreted cogent facts and
circumstances which, if considered, would change the outcome of the case; or when its findings were
totally devoid of support; or when its judgment was based on a misapprehension of facts.29
The Court now proceeds to the crucial substantive issue raised in this Petition: whether Dy and the
Dyson Corporation are co-employers of Sagosoy who are subsidiarily liable for the civil liabilities
arising from the crime committed by Sagosoy.
The Court of Appeals did not find Dyson Corporation as the co-employer of Sagosoy, relying on the
Decision dated 28 September 2004 of the same court in CA-G.R. SP No. 78005 which sustained the
subsidiary liability of Dy as the employer of Sagosoy and which had already attained finality. The
appellate court also refused to adjudge Dyson Corporation to be solidarily liable with Dy unless the veil
of corporate fiction was pierced.
The Court does not agree.
The spouses Delos Santos do not controvert the pronouncement of the Court of Appeals in its 28
September 2004 Decision in CA-G.R. SP No. 78005 that Dy, as the employer of Sagosoy, was subsidiarily
liable for the civil obligations of his insolvent employee who caused injury to third persons in the course
of the latter's employment. Indeed, the spouses Delos Santos agree with the appellate court that Dy
should not be allowed to run scot-free from his liability in light of the fact that he was the owner of the
van Sagosoy was driving at the time of the accident. What the spouses Delos Santos are seeking from
this Court is the affirmation that in addition to Dy, Dyson Corporation is also the employer of Sagosoy,
as several pieces of evidence would show, which should likewise be made answerable for the civil
liabilities incurred by Sagosoy.

The court has discretion to dismiss or not to dismiss an appellant's appeal. It is a power conferred on
The Court notes that there was no way for the Court of Appeals in CA-G.R. SP No. 78005 to already
the court, not a duty. The "discretion must be a sound one, to be exercised in accordance with the tenets
deduce from the pleadings and evidence presented therein that Sagosoy was employed not just by Dy,
of justice and fair play, having in mind the circumstances obtaining in each case." Technicalities,
but also by Dyson Corporation. The Petition in CA-G.R. SP No. 78005 was filed by Dy and all arguments
however, must be avoided. The law abhors technicalities that impede the cause of justice. The court's
and evidence necessarily revolved only around his liability as an employer. Moreover, the finding of the
primary duty is to render or dispense justice. "A litigation is not a game of technicalities." "Law suits,
Court of Appeals in CA-G.R. SP No. 78005, that Sagosoy was working for Dy, is not necessarily in conflict
unlike duels are not to be won by a rapier's thrust. Technicality, when it deserts its proper office as an
with a subsequent ruling in another case that Sagosoy was employed not just by Dy, but also by Dyson
aid to justice and becomes its great hindrance and chief enemy, deserves scant consideration from
Corporation. It bears to emphasize that Dy remains to be considered an employer of Sagosoy and still
courts." Litigations must be decided on their merits and not on technicality. Every party litigant must
subsidiarily liable for the latter's civil obligations arising from the crime. However, if Dyson
be afforded the amplest opportunity for the proper and just determination of his cause, free from the
Corporation is declared a co-employer of Sagosoy together with Dy, then Dyson Corporation and Dy
unacceptable plea of technicalities. Thus, dismissal of appeals purely on technical grounds is frowned
must now solidarily bear the subsidiary liability.
upon where the policy of the court is to encourage hearings of appeals on their merits and the rules of
procedure ought not to be applied in a very rigid, technical sense; rules of procedure are used only to
help secure, not override substantial justice. It is a far better and more prudent course of action for the Justice and fairness dictate that the spouses Delos Santos should be compensated for the tragic fate of
court to excuse a technical lapse and afford the parties a review of the case on appeal to attain the their son, and the rule of law should be enforced against those persons who may be adjudged liable,
brushing aside hornbook procedural principles which unduly delay the dispensation of justice to an
innocent and hapless boy who practically lost his life to an accident due to the negligence of another.
Since it was duly proven that Sagosoy had no real or personal properties to satisfy the judgment, then
Sagosoy's employer must answer for damages Sagosoy caused. The statutory basis for an employer's
subsidiary liability is found in Articles 102 and 103 of the Revised Penal Code, which read:
Art. 102. Subsidiary civil liability of innkeepers, tavernkeepers, 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 regulation shall have been
committed by them or their employees.
evidence and the circumstances establish that Dy is the registered owner of the van driven by Sagosoy
in furtherance of the business of Dyson Corporation; and that Dyson Corporation uses the van driven by
Sagosoy in its business operation and recognizes Sagosoy as one of its employees per the latter's SSS
records. Hence, both Dy and Dyson Corporation can be deemed the employers of Sagosoy.
With the pronouncement that both Dy and Dyson Corporation are subsidiarily liable for the damages
caused to the spouses Delos Santos, let this much prolonged litigation be put to an end. The counsels of
the parties are herby warned not to employ any procedural tactics that would further delay the
execution of the RTC Decision dated 27 September 2002 in Criminal Case No. 1116-V-99. Litigation is
not a game of technicalities in which one, more deeply schooled and skilled in the subtle art of
movement and position, entraps and destroys the other.32 In the words of Mr. Justice Malcolm, "More
important than anything else, is that the court should be right and to render justice where justice is
due."33

Innkeepers are also subsidiarily liable for restitution of goods taken by robbery or theft within their
WHEREFORE, in view of the foregoing, the instant Petition is GRANTED. The Decision dated 28 June
houses from guests lodging therein, or for the payment of the value thereof, provided that such guests
2005 and Resolution dated 30 August 2005 of the Court of Appeals in CA-G.R. SP No. 83234
shall have notified in advance the innkeeper himself, or the person representing him, of the deposit of
are REVERSED and SET ASIDE. The Orders dated 10 February 2004 and 1 March 2004 of the Regional
such goods within the inn; and shall furthermore have followed the directions which such innkeeper or
Trial Court of Valenzuela, Branch 172, in Criminal Case No. 1116-V-99 are hereby REINSTATED. No
his representative may have given them with respect to the care of and vigilance over such goods. No
costs.
liability shall attach in case of robbery with violence against or intimidation of persons unless
committed by the innkeeper's employees.
SO ORDERED.
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 their servants, pupils, workmen, apprentices, or employees in
the discharge of their duties.

This liability is enforceable in the same criminal proceeding in which the award is made. 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.30

The Court has scrupulously examined the records of this case and concluded that Sagosoy was working
for both Dy and Dyson Corporation when the van he was driving collided with the horse-drawn
carriage carrying Ferdinand. In his testimony before the RTC, Sagosoy narrated that he was employed
by Dy who was doing business under the name of Dyson Corporation. Sagosoy's testimony is validated
by the Certificate of Incorporation of Dyson Corporation showing that Dy is one of the major
stockholders of Dyson Corporation. Also, the SSS records of Sagosoy state that his employer is Dyson
Corporation. These pieces of evidence strongly prove that Sagosoy is also deemed an employee of Dyson
Corporation. In contrast, Dyson Corporation does not at all offer any controverting evidence, and
vainly centers its defense on procedural rhetoric.31

In addition, the records are bereft of information on any other business or industry that Dy is engaged
in and for which he personally employs Sagosoy. Sagosoy could not be the mere private driver of Dy
because when the accident occurred, Sagosoy was driving an Isuzu Forward van, which is primarily
used for the delivery of goods and effects. Taking note of the fact that Dy is the Chief Executive Officer
of Dyson Corporation, it would appear that the van being driven by Sagosoy was only registered in Dy's
name, but was actually being used by Dyson Corporation in the conduct of its business. Given these
circumstances, both Dy and Dyson Corporation should be declared the employers of Sagosoy who are
both subsidiarily liable for Sagosoy's liabilities ex delicto.

Finally, contrary to the ruling of the Court of Appeals, there is no need to pierce the veil of corporate
fiction in this case, considering that Dy and Dyson Corporation are precisely being treated as separate
entities, which is the reason why they are being declared "co-employers" of Sagosoy. That Dy is hiding
behind the personality of Dyson Corporation in order to escape liability is not even relevant herein. The