Guilatco vs.

City of Dagupan, 1989; defendants Ocampo, Kalaw, Santos, Reyes,

Guilatco vs. City of Dagupan, 1989; Aguilar, Liquete, Palma, Arellano, Jose,
Guilatco vs. City of Dagupan, 1989; Lichauco, Barretto and Cansipit (owners,
Guilatco vs. City of Dagupan, 1989; directors, writers, editors and
Guilatco vs. City of Dagupan, 1989; administrators of a certain newspaper
Guilatco vs. City of Dagupan, 1989; known as “El Renacimiento” or “Muling
Guilatco vs. City of Dagupan, 1989; Pagsilang”) for the purpose of recovering
Guilatco vs. City of Dagupan, 1989; damages resulting from an alleged libelous
publication.
The editorial “Birds of Prey” was alleged to
iii. Joint Tortfeasors; have incited the Filipino people into
believing that plaintiff was a vile despot and
wo or more persons whose negligence in a a corrupt person, unworthy of the position
single accident or event causes damages to which he held. The said editorial alluded to
another person. In many cases the joint him as an eagle that surprises and devours,
tortfeasors are jointly and severally liable a vulture that gorges himself on dead and
for the damages, meaning that any of them rotten meat, an owl that affects a petulant
can be responsible to pay the entire omniscience, and a vampire that sucks the
amount, no matter how unequal the blood of the victim until he leaves it
negligence of each party was. bloodless.
After hearing the evidence adduced during
Example: Harry Hotrod is doing 90 miles an trial, the judge of the CFI rendered
hour along a two-lane road in the early judgment in favor of petitioner, holding all
evening, Adele Aimster has stopped her car the defendants (except for Reyes, Aguilar
to study a map with her car sticking out and Liquete who were found to be editors
into the lane by six inches. Hotrod swings but in a subordinate position and found to
out a couple of feet to miss Aimster's have merely acted under the direction of
vehicle, never touches the brake, and hits their superiors) liable jointly and severally
Victor Victim, driving from the other for sustained damages on account of
direction, killing him. While Hotrod is petitioner’s wounded feelings, mental
grossly negligent for the high speed and suffering and injuries to his standing and
failure to slow down, Aimster is also reputation in the sum of P35,000 as well as
negligent for her car's slight intrusion into P25,000 as punitive damages.
the lane. As a joint tortfeasor she may have This judgment prompted defendants to
to pay all the damages, particularly if appeal to the SC, claiming that the CFI
Hotrod has no money or insurance. committed several errors in rendering said
However, comparative negligence rules by judgment among which was that the lower
statute or case law in most jurisdictions will court committed an error in rendering a
apportion the liability by percentages of judgment jointly and severally against the
negligence among the tortfeasors defendants.
(wrongdoers) and the injured parties.
ISSUE
Article 2194, CC: 1. WON the defendants, regardless of
The responsibility of two or more persons their participation in the commission of the
who are liable for quasi-delict is solidary. actual tort, may be held jointly and
severally liable as joint tort feasor.
WORCESTER vs. OCAMPO, 1912; 2. WON the above damages for the
wounded feelings, mental suffering and
FACTS injuries was correct.
Plaintiff Dean Worcester, member of the 3. WON the lower court was correct in
Civil Commission of the Philippines and awarding punitive damages and damages
Secretary of the Interior of the Insular for the wounded feelings, mental suffering
Government commenced an action against and injuries.

HELD
1. YES. Joint tort feasors are all the
persons who command, instigate, promote,
encourage, advise, countenance,
cooperate in, aid or abet the commission of
a tort, or who approve of it after it is done,
if done for their benefit.
Joint tort feasors are jointly and severally
liable for the tort which they commit. They
are each liable as principals, to the same
extent and in the same manner as if they
had performed the wrongful act
themselves.
***If several persons jointly commit a tort,
the plaintiff or person injured, has his
election to sue all or some of the parties
jointly, or one of them separately, because
tort is in its nature a separate act of each
individual.
Defendants fail to recognize that the basis
of the present action is a tort. They fail to
recognize the universal doctrine that each
joint tort feasor is not only individually
liable for the tort in which he participates,
but is also jointly liable with his tort
feasors. The defendants might have been
sued separately for the commission of the
tort. They might have sued jointly and
severally, as they were. It is not necessary
that the cooperation should be a direct,
corporeal act. **note: Ponente used
examples of torts as held under common
law** (In a case of assault and battery
committed by various persons, under the
common law, all are principals). So also is
the person who counsels, aids, or assists in
any way the commission of a wrong. Under
the common law, he who aided, assisted or
counseled, in any way the commission of a
crime, was as much a principal as he who
inflicted or committed the actual tort.
It may be stated as a general rule, that the
joint tort feasors are all the persons who
command, instigate, promote, encourage,
advise, countenance, cooperate in, aid or
abet the commission of a tort, or who
approve of it after it is done, if done for
their benefit. They are each liable as
principals, to the same extent and in the
same manner as if they had performed the
wrongful act themselves.
Joint tort feasors are jointly and severally
liable for the tort which they commit. The
person injured may sue all of them, or any
number less than all. Each is liable for the
whole damage caused by all, and
altogether jointly liable for the whole
damage. It is no defense for one sued
alone, that the others who participated in
the wrongful act are not joined with him as
defendants; nor is it any excuse for him
that his participation in the tort was
insignificant as compared with that of the
others.
Joint tort feasors are not liable pro rata.
The damages can not be apportioned
among them, except among themselves.
They can no insist upon an apportionment,
for the purpose of each paying an aliquot
part. They are jointly and severally liable
for the full amount.
A payment in full of the damage done, by
one of the joint tort feasors, of course
satisfies any claim which might exist
against the others. There can be but one
satisfaction. The release of one of the joint
tort feasors by agreement, generally
operates to discharge all.
Of course the courts during the trial may
find that some of the alleged joint tort
feasors are liable and that others are not
liable. The courts may release some for
lack of evidence while condemning others
of the alleged tort feasors. And this is true
even though they are charged jointly and
severally.
This same principle is recognized by Act
277 of the Philippine Commission. Section
6 provides that:
Every author, editor or proprietor . . . is
chargeable with the publication of any
words in any part . . . or number of each
newspaper, as fully as if he were the author
of the same.
In our opinion the lower court committed
no error in rendering a joint and several
judgment against the defendants and
allowing an execution against their
individual property. The provisions of the
Civil and Commercial Codes cited by the
defendants and appellants have no
application whatever to the question
presented in the present case.
The courts during the trial may find that
some of the alleged joint tort feasors are
liable and that others are not liable. The
courts may release some for lack of
evidence while condemning others of the
alleged tort. And this is true even though
they are charged jointly and severally.
However, in this case, the lower court,
committed no error in rendering a joint and
several judgment against the defendants.
As recognized by Section 6 of Act 277 of
the Philippine Commission: “Every author,
editor, or proprietor * * * is chargeable
with the publication of any words in any
part * * * or number of each newspaper,
as fully as if he were the author of the
same.
Disposition Judgment of the lower court
modified. Ocampo, Kalaw, Palma, Arellano,
Jose, Lichauco, Barretto, and Cansipit held
jointly and severally liable for the sum of
P25, 000 with interest at 6%. Santos
absolved from any liability.
2. The amount of damages resulting
from a libelous publication to a man's good
name and reputation is difficult of
ascertainment. It is nor difficult to realize
that the damage thus done is great and
almost immeasurable. The specific amount
the damages to be awarded must depend
upon the facts in each case and the sound
discretion of the court. No fixed or precise
rules can be laid down governing the
amount of damages in cases of libel. It is
difficult to include all of the facts and
conditions which enter into the measure of
such damages. A man's good name and
reputation are worth more to him than all
the wealth which he can accumulate during
a lifetime of industrious labor. To have
them destroyed may be eminently of more
damage to him personally than the
destruction of his physical wealth. The loss
is immeasurable. No amount of money can
compensate him for his loss.
Notwithstanding the great loss which he,
from his standpoint, sustains, the courts
must have some tangible basis upon which
to estimate such damages.
"The enjoyment of a private
reputation is as much a constitutional right
as the possession of life, liberty or
property. It is one of those rights necessary
to human society, that underlie the whole
scheme of human civilization. The respect
and esteem of his fellows are among the
highest rewards of a wellspent life
vouchsafed to man in this existence.
The law recognizes the value of such
a reputation and constantly strives to give
redress for its injury. It imposes upon him
who attacks it by slanderous words or
libelous publications, the liability to make
full compensation for the damage to the
reputation, for the shame, obloquy and for
the injury to the feelings of its owner, which
are caused by the publication of the slander
or libel. The law goes further. If the words
are spoken or the publication is made with
the intent to injure the victim or with
criminal indifference to civil obligation, it
imposes such damages as the jury, in view
of all the circumstances of the particular
case, adjudge that the wrongdoer ought to
pay as an example to the public and to
deter others from doing likewise, and for
punishment for the infliction of the injury.
3. Yes. After a careful examination of
the evidence, and in view of all of the facts
and circumstances and the malice
connected with the publication of said
editorial and the subsequent publications
with relation to said editorial, that the lower
court, by virtue of the provisions of Act No.
277 of the Philippine Commission, was
justified in imposing punitive damages
upon the defendants.
Section 11 of Act No. 277 allows the court,
in an action for libel, to render a judgment
for punitive damages, in an amount which
the court may think will be a just
punishment to the libeler and an example
to others.

Exemplary damages in civil actions for libel
may always be recovered if the defendant
or defendants are actuated by malice. In
the present case there was not the slightest
effort on the part of the defendants to show
the existence of probable cause or
foundation whatever for the facts contained
in said editorial. Malice, hatred, and ill will
against the plaintiff are seen throughout
the record. The said editorial not only
attempted to paint the plaintiff as a villain,
but upon every occasion, the defendants
resorted to ridicule of the severest kind.
Taking into consideration the fact that
some of the defendants have been
prosecuted criminally and have been
sentenced, and considering that fact as a
part of the punitive damages, we have
arrived at the conclusion that the judgment
of the lower court should be modified, and
that a judgment should be rendered
against the defendants, jointly and
severally, and in favor of the plaintiff, the
Honorable Dean C. Worcester, in the sum
of P10,000, as punitive damages, with
interest at 6 per cent from the 23d day of
January, 1909.
MMTC vs. CA, 1993
Facts:
The case arose from Nenita who incurred
injuries from being thrown out of the
windshield of the jeepney that she was
riding that collided with a bus operated by
MMTC (petitioner). Nenita filed for
damages for neither the operator of the
jeepney nor the MMTC would pay for the
damages sustained by Nenita. The RTC
ruled that MMTC is abstained from liability
for it has proven that it has shown diligence
of a good father of a family in employing
and supervising its employees. MMTC
stated that it goes through a process of
screening, interviewing, and seminar
attending before they hire their employees.
The CA reversed the decision of the RTC
holding that the MMTC was not able to
further prove that its employees complied
with its requirements.
Issue:
Whether or not diligence of a good father
has been observed by MMTC?
Held:
The SC ruled that MMTC, being sued
as employer of the bus driver Leonardo
under Art. 2180 or vicarious liability, was
not able to prove that it had exercised due
diligence of a good father of a family in the
selection and supervision of its employees
as it has not proven that it exercised due
diligence in supervising its employees for
mere imposition of hiring procedures and
supervisory policies without anything more
is not sufficient to overcome the
presumption of negligence imposed upon
them by the law.
The basis of the employer’s vicarious
liability is that the responsibility imposed
by the article arises by reason of a
presumption of negligence on the part of
the persons made responsible under the
article from their failure to exercise due
care and vigilance over the acts of
subordinates to prevent them from causing
damage. Negligence is imputed to them by
law, unless they prove the contrary by
showing that they exercised diligence of a
good father of a family to prevent damage.
It is clear that it is the non-performance of
certain duties of precaution and prudence
imposed upon them that is why they are
made answerable for damages caused by
their employee.
For the doctrine to apply, it must first be
shown that there is employer-employee
relationship and that the plaintiff must
show that the tort complained of was
committed in the scope of his assigned task
and that is when the employer may find it
necessary to interpose a defense of due
diligence of a good father of a family. The
diligence of a good father of a family
required to be observed by the employer to
prevent damages under Art. 2180 refers to
due diligence in the selection and
supervision the employees to protect the
public.
iv. Particular Persons held liable by
law;
Possessor or user manual
Article 2183, CC;
The possessor of an animal or whoever
may make use of the same is responsible
for the damage which it may cause,
although it may escape or be lost. This
responsibility shall cease only in case the
damage should come from force majeure
or from the fault of the person who has
suffered damage.
VESTIL vs. IAC;
Summary
(dog bite) Theness died due to being bitten
by the Vestil’s dog. The Vestil are liable for
damages as possessors of the dog under
Article 2183.
Facts of the case
Theness (3 years old) was bitten by the
Vestil’s dog at the house of Vicente
Miranda, Purita Vestil’s late father while
playing with Purita’s daughter. She was
treated for multiple lacerated wounds on
the forehead and was administered with an
anti-rabies vaccine. She was later re-
admitted due to vomiting of saliva. She
died due to broncho-pneumonia. Her
parents, the Uys, sued the Vestils for
damages, holding them liable as
possessors of the dog, Andoy.
Trial Court: Dismissed the complaint.
Court of Appeal: Theness had died due to
the dog bites. Under Article 2183 of the
Civil Code., the Vestils are liable for
damages as possessor of the property and
the dog.
Defense: The dog was tame and had
merely been provoked, although no one
had seen it bite Theness. Additionally, she
had died of broncho-pneumonia, which had
no correlation to dog bites.
Anyway, she (Purita) could not be held
liable because the dog does not belong to
her but to Vicente Miranda, her father. She
is not the sole owner of the unpartitioned
property, there are other heirs. There are
also other occupants of the house that
maintain themselves out of a common
fund, they do not pay rent because of their
relation to her father but do occupy the
property.
Issue/s:
Whether or not the Vestils liable for
damages. Yes.
Held:
The cause of Theness’ death was the dog
bites. She developed hydrophobia, a
symptom of rabies, and had died due to
broncho-pneumonia, a complication of
rabies.
The Vestils are the possessors of the
property and Purita is the only heir residing
in Cebu City. They use it as a second home
and visited weekly - renting it out to the
boarders, paying for utilities and hiring the
maid who cleaned and cooked for the house
occupants. An occupant of the household
(Marcial Lao) testified that they maintain
the house for business purposes and that
he is one of the boarder of said property.
Liability is due to the possession of the dog,
regardless of the ownership of the dog or
property. Under Article 2183, regardless if
the animal was tame or vicious or if it had
been lost and removed from the control of
the Vestils, liability still attach because one
who possesses an animal for utility,
pleasure or service must answer for the
damage which the animal may had caused.
Article 2183: The possessor of an animal…
is responsible for the damage it may
cause… The responsibility shall cease only
in case the damage should come from force
majeure or from the fault of the person who
suffered damage.
The Vestils are liable for damages for
Theness’ death as possessor of Andoy, the
dog. Theness is just 3 years old and could
not be faulted for any of actions of alleged
provocations. Notably, the Vestils had
offered to assist in the hospitalization
expense, even if they declared the Uys to
merely be their casual acquaintances only.
Owner of Motor Vehicle
Articles 2184 to 2186, Civil Code;
Article 2184. In motor vehicle mishaps,
the owner is solidarily liable with his driver,
if the former, who was in the vehicle, could
have, by the use of the due diligence,
prevented the misfortune. It is disputably
presumed that a driver was negligent, if he
had been found guilty of reckless driving or
violating traffic regulations at least twice
within the next preceding two months.
If the owner was not in the motor vehicle,
the provisions of article 2180 are
applicable.
Article 2185. Unless there is proof to the
contrary, it is presumed that a person
driving a motor vehicle has been negligent
if at the time of the mishap, he was
violating any traffic regulation.
Article 2186. Every owner of a motor
vehicle shall file with the proper
government office a bond executed by a
government-controlled corporation or
office, to answer for damages to third
persons. The amount of the bond and other
terms shall be fixed by the competent
public official.
CHAPMAN vs. UNDERWOOD, 27 PHIL
375;
Facts: J.H. Chapman visited a man by the
name of Creveling, in front of whose house
the accident occurred. Chapman wanted to
board a certain "San Marcelino" single-
track street-car coming from Santa Ana
and bound for Manila. Being told by
Creveling that the car was approaching, he
hurriedly, passed from the gate of
Creveling s home into the street for the
purpose of signaling and boarding the car.
The car was a closed one, the entrance
being from the front or the rear platform.
Chapman attempted to board the front
platform but, seeing that he could not
reach it without extra exertion, stopped
beside the car, facing toward the rear
platform, and waited for it to come within
reach for him to board. While in this
position, he was struck from behind and
run over by Underwood s automobile.
Immediately prior to the incident,
Underwood s automobile, which was being
driven by his chauffeur, followed behind a
street car from Manila bound to Santa Ana
(Opposite direction of the San Marcelino
street-car that Chapman wanted to board).
Just before reaching the scene of the
accident, the street car being followed by
Underwood took the switched off the main
line to the left. Thereupon, Underwood s
automobile no longer followed that street-
car nor went to the left, but either kept
straight ahead on the main street-car track
or a bit to the right. The street-car which
the Chapman intended to board was on the
main line and bound in an opposite
direction. When the front of the "San
Marcelino" car (the one which plaintiff
attempted to board) was almost in front of
Underwood s automobile, the latter s driver
suddenly went to the right striking and
running over Chapman.
The trial court rendered decision in favor of
the defendant.
Issue: Is defendant liable in the case at
bar?
Held: A careful examination of the record
leads to the conclusion that the Under wood
s driver was guilty of negligence in running
upon and over the plaintiff. He was passing
an incoming car upon the wrong side. The
plaintiff, out to board the car, was not
obliged to observe whether a car was
coming upon him from his left hand. He had
only to guard against those coming from
the right. He knew that, according to the
law of the road, no automobile or other
vehicle coming from his left should pass
upon his side of the car. He needed only to
watch for cars coming from his right, as
they were the only ones under the law
permitted to pass up on that side of the
street car.
Underwood, however, is not responsible for
the negligence of his driver, under the facts
and circumstances of this case. As stated in
the case of Johnson vs. David (5 Phil. Rep.,
663), the driver does not fall within the list
of persons in
article 1903 of the Civil Code for whose acts
the defendant would be responsible.
The owner of an automobile who permits
his chauffeur to drive up to Escolta, for
example, at a speed of 60 miles an hour,
without any effort to stop him, although he
has had a reasonable opportunity to do so,
becomes himself responsible, both
criminally and civilly, for the results
produced by the acts of his chauffe ur. On
the other hand, if the driver, by a sudden
act of negligence, and without the owner
having a reasonable opportunity to prevent
the acts or its continuance, injures a person
or violates the criminal law, the owner of
the automobile, although present therein at
the time the act was committed, is not
responsible, e ither civilly or criminally,
therefor. The act complained of must be
continued in the presence of the owner for
such a length a time that the owner, by his
acquiescence, makes his driver's act his
own.
In this case, it DOES NOT appear that,
from the time the automobile took the
wrong side of the road to the commission
of the injury, sufficient time intervenedto
give the defendant an opportunity to
correct the act of his driver. Instead, it
appears that the interval between the
turning out to meet and pass the street car
and the happening of the accident was so
small as not to be sufficient to charge
defendant with the negligence of the driver.
CAEDO vs. YU KHE TAI, 26 SCRA 410;
FACTS:
Plaintiff Caedo was driving his Mercury car
at about 5:30 in the morning of March 24,
1958 along E. de los Santos Ave., in the
vicinity of San LorenzoVillage bound for the
airport. Several members of his family
were in the car. Coming from the opposite
direction was the Cadillac car of defendant
Yu Khe Thai driven by his driver Rafael
Bernardo. The two cars were traveling at a
moderate speed with their headlights on.
Ahead of the Cadillac was a caretela.
Defendant’s driver did not notice it until he
was about eight (8) meters away. Instead
of slowing down behind the caretela
defendant’s driver veered to the left with
the intention of passing by the caretela but
in doing so its rear bumper caught the
ream of thecaretela’s left wheel wrenching
it off. Defendant’s car skidded obliquely to
the other end and collided with the on-
coming vehicle of the plaintiff. The plaintiff
on his part, slackened his speed and tried
to avoid the collision by veering to the right
but the collision occurred just the same
injuring the plaintiff and members of his
family. Plaintiff brought an action for
damages against both the driver and owner
of the Cadillac car. There was no question
that defendant’s driver was negligent and
liable.
ISSUE:
Whether or not defendant Yu Khe Thai,
owner of the car, who was in the car, was
solidarily liable with the driver under Art.
2184, of the Civil Code.
RULING:
The applicable law is Article 2184 of the
Civil Code. Under the said provision, if the
causative factor was the driver’s
negligence, the owner of the vehicle who
was present is likewise held liable if he
could have prevented the mishap by the
exercise of due diligence. The basis of the
master’s liability in civil law is not
respondent superior but rather the
relationship of paterfamilias. The theory is
that ultimately the negligence of the
servant, if known to the master and
susceptible of timely correction by him,
reflects his own negligence if he fails to
correct it in order to prevent injury or
damage.
Negligence on the part of the owner, if any,
must be sought in the immediate setting
and circumstances of the accident, that is,
in his failure to detain the driver from
pursuing a course which not only gave him
clear notice of the danger but also sufficient
time to act upon it. We do not see that such
negligence may be imputed. The car, as
has been stated, was not running at an
unreasonable speed. The road was wide
and open, and devoid of traffic that early
morning. There was no reason for the car
owner to be in any special state of alert. He
had reason to rely on the skill and
experience of his driver. He became aware
of the presence of the carretela when his
car was only twelve meters behind it, but
then his failure to see it earlier did not
constitute negligence, for he was not
himself at the wheel. And even when he did
see it at that distance, he could not have
anticipated his driver’s sudden decision to
pass the carretela on its left side in spite of
the fact that another car was approaching
from the opposite direction. The time
element was such that there was no
reasonable opportunity for Yu Khe Thai to
assess the risks involved and warn the
driver accordingly. The thought that
entered his mind, he said, was that if he
sounded a sudden warning it might only
make the other man nervous and make the
situation worse. It was a thought that, wise
or not, connotes no absence of that due
diligence required by law to prevent the
misfortune. Under the facts the owner of
the car was not liable.
PCI LEASING AND FINANCE, INC. vs.
UCPB GENERAL INSURANCE, CO. INC.
2008;
FACTS:
1. On October 19, 1990 at about 10:30
p.m., a Mitsubishi Lancer owned by UCPB
and insured with UCPB General Insurance
Inc. was hit and bumped by an 18-wheeler
Fuso Tanker Truck owned by PCI Leasing &
Finance. The truck was allegedly leased to
and operated by Superior Gas & Equitable
Co., Inc. (SUGECO) and driven by its
employee Renato Gonzaga. The impact
caused heavy damage to the Lancer
resulting in an explosion of the rear part of
the car. Gonzaga continued on his way and
did not bother to bring the victims to the
hospital.
2. UCPB was paid P244, 500.00 by its
insurance company representing the
coverage of the damaged car. As the 18-
wheeler truck is registered under the name
of PCI Leasing, repeated demands were
made by UCPB General Insurance Co. for
the payment of the aforesaid amounts.
However, no payment was made. Thus,
UCPB filed a case on March 13, 1991.
3. Petitioner interposed the defense
that it could not be held liable for the
collision, since the driver of the truck,
Gonzaga, was not its employee, but that of
its co-defendant SUGECO. In fact, it was
SUGECO, and not petitioner, that was the
actual operator of the truck, pursuant to a
Contract of Lease signed by petitioner and
SUGECO. Petitioner, however, admitted
that it was the owner of the truck in
question.
4. The trial court rendered a decision
in favor of UCPB General Insurance and
ordered PCI Leasing and Gonzaga to pay
the principal amount with 12% interest as
of the filing of the complaint plus attorney’s
fees.
5. On appeal to the CA, the same was
affirmed with modification in that the
award of attorney’s fees was deleted and
the rate of interest was lowered to 6% per
annum. The CA found petitioner liable for
the damage caused by the collision since
under the Public Service Act, if the property
covered by a franchise is transferred or
leased to another without obtaining the
requisite approval, the transfer is not
binding on the Public Service Commission
and, in contemplation of law, the grantee
continues to be responsible under the
franchise in relation to the operation of the
vehicle, such as damage or injury to third
parties due to collisions.
6. Petitioner claims that the CA's
reliance on the Public Service Act is
misplaced, since the said law applies only
to cases involving common carriers, or
those which have franchises to operate as
public utilities. In contrast, the case before
this Court involves a private commercial
vehicle for business use, which is not
offered for service to the general public.
ISSUES:
1. WoN PCI Leasing, as registered
owner of a motor vehicle may be held liable
with the driver therof for damages caused
to third parties - YES
2. WoN PCI Leasing is absolved from
liability by the enactment of RA 8556 or
the Financing Company Act of 1998 – NO
RULING: Petition DENIED. CA decision
AFFIRMED.
RATIO:
1. Petitioner's contention has partial
merit, as indeed, the vehicles involved in
the case at bar are not common carriers,
which makes the Public Service Act
inapplicable. However, the registered
owner of the vehicle driven by a negligent
driver may still be held liable under
applicable jurisprudence involving laws on
compulsory motor vehicle registration and
the liabilities of employers for quasi- delicts
under the Civil Code. The principle of
holding the registered owner of a vehicle
liable for quasi-delicts resulting from its use
is well established in jurisprudence.
2. For damage or injuries arising out of
negligence in the operation of a motor
vehicle, the registered owner may be held
civilly liable with the negligent driver either
1) subsidiarily, if the aggrieved party seeks
relief based on a delict or crime under
Articles 100 and 103 of the RPC; or 2)
solidarily, if the complainant seeks relief
based on a quasi-delict under Articles 2176
and 2180 of the Civil Code. It is the option
of the plaintiff whether to waive completely
the filing of the civil action, or institute it
with the criminal action, or file it separately
or independently of a criminal action; his
only limitation is that he cannot recover
damages twice for the same act or
omission of the defendant. In case a
separate civil action is filed, the long-
standing principle is that the registered
owner of a motor vehicle is primarily and
directly responsible for the consequences
of its operation, including the negligence of
the driver, with respect to the public and all
third persons. In contemplation of law, the
registered owner of a motor vehicle is the
employer of its driver, with the actual
operator and employer, such as a lessee,
being considered as merely the owner's
agent. This being the case, even if a sale
has been executed before a tortious
incident, the sale, if unregistered, has no
effect as to the right of the public and third
persons to recover from the registered
owner. The public has the right to
conclusively presume that the registered
owner is the real owner, and may sue
accordingly.
3. In the case now before the Court,
there is not even a sale of the vehicle
involved, but a mere lease, which remained
unregistered up to the time of the
occurrence of the quasi-delict that gave
rise to the case. Since a lease, unlike a
sale, does not even involve a transfer of
title or ownership, but the mere use or
enjoyment of property, there is more
reason, therefore, in this instance to uphold
the policy behind the law, which is to
protect the unwitting public and provide it
with a definite person to make accountable
for losses or injuries suffered in vehicular
accidents. This is and has always been the
rationale behind compulsory motor vehicle
registration under the Land Transportation
and Traffic Code and similar laws, which, as
early as Erezo v. Jepte, has been guiding
the courts in their disposition of cases
involving motor vehicular incidents. It is
also important to emphasize that such
principles apply to all vehicles in general,
not just those offered for public service or
utility.
4. The new law, R.A. No. 8556,
notwithstanding developments in foreign
jurisdictions, do not supersede or repeal
the law on compulsory motor vehicle
registration. No part of the law expressly
repeals Section 5(a) and (e) of R.A. No.
4136 , as amended, otherwise known as
the Land Transportation and Traffic Code.
Neither is there an implied repeal of R.A.
No. 4136. As a rule, repeal by implication
is frowned upon, unless there is clear
showing that the later statute is so
irreconcilably inconsistent and repugnant
to the existing law that they cannot be
reconciled and made to stand together.
There is nothing in R.A. No. 4136 that is
inconsistent and incapable of reconciliation.
5. A lease such as the one involved in
the instant case is an encumbrance in
contemplation of law, which needs to be
registered in order for it to bind third
parties. Under this policy, the evil sought to
be avoided is the exacerbation of the
suffering of victims of tragic vehicular
accidents in not being able to identify a
guilty party. A contrary ruling will not serve
the ends of justice. The failure to register a
lease, sale, transfer or encumbrance,
should not benefit the parties responsible,
to the prejudice of innocent victims. The
non-registration of the lease contract
between petitioner and its lessee precludes
the former from enjoying the benefits
under Section 12 of R.A. No. 8556.
6. This ruling may appear too severe
and unpalatable to leasing and financing
companies, but the Court believes that
petitioner and other companies so situated
are not entirely left without a remedy. They
may resort to third-party complaints
against their lessees or whoever are the
actual operators of their vehicles. In the
case at bar, there is, in fact, a provision in
the lease contract between petitioner and
SUGECO to the effect that the latter shall
indemnify and hold the former free and
harmless from any "liabilities, damages,
suits, claims or judgments" arising from the
latter's use of the motor vehicle. Whether
petitioner would act against SUGECO based
on this provision is its own option.
7. The burden of registration of the
lease contract is minuscule compared to
the chaos that may result if registered
owners or operators of vehicles are freed
from such responsibility. Petitioner pays
the price for its failure to obey the law on
compulsory registration of motor vehicles
for registration is a pre-requisite for any
person to even enjoy the privilege of
putting a vehicle on public roads.
Manufacturers/processors of
foodstuffs;
Article 2187, Civil Code;
Manufacturers and processors of
foodstuffs, drinks, toilet articles and similar
goods shall be liable for death or injuries
caused by any noxious or harmful
substances used, although no contractual
relation exists between them and the
consumers.
Sections 92-107 (Chapter 1), RA No.
7394 (1992);
ARTICLE 92. Exemptions. — If the
concerned department finds that for good
or sufficient reasons, full compliance with
the labeling requirements otherwise
applicable under this Act is impracticable or
is not necessary for the adequate
protection of public health and safety, it
shall promulgate regulations exempting
such substances from these requirements
to the extent it deems consistent with the
objective of adequately safeguarding public
health and safety, and any hazardous
substance which does not bear a label in
accordance with such regulations shall be
deemed mislabeled hazardous substance.
ARTICLE 93. Grounds for Seizure and
Condemnation of Mislabeled Hazardous
Substances. — a) Any mislabeled
hazardous substance when introduced into
commerce or while held for sale shall be
liable to be proceeded against and
condemned upon order of the concerned
department in accordance with existing
procedure for seizure and condemnation of
articles in commerce: Provided, That this
Article shall not apply to a hazardous
substance intended for export to any
foreign country if:
1) it is in a package labeled in
accordance with the specifications of the
foreign purchaser;
2) it is labeled in accordance with
the laws of the foreign country;
3) it is labeled on the outside of
the shipping package to show that it is
intended for export; and
4) it is so exported,
b) any hazardous substance
condemned under this Article shall after
entry of order of condemnation be disposed
of by destruction or sale as the concerned
department may direct, and the proceeds
thereof, if sold, less the legal cost and
charges, shall be paid into the treasury of
the Philippines; but such hazardous
substance shall not be sold under any order
which is contrary to the provisions of this
Act: Provided, That, after entry of the order
and upon the payment of the costs of such
proceedings and the execution of a good
and sufficient bond conditioned that such
hazardous substance shall not be sold or
disposed of contrary to the provisions of
this Act, the concerned department may
direct that such hazardous substance be
delivered to or retained by the owner
thereof for destruction or for alteration to
comply with the provisions of this Act under
the supervision of an officer or employee
duly designated by the concerned
department. The expenses for such
supervision shall be paid by the person
obtaining release of the hazardous
substance under bond.
c) all expenses in connection with
the destruction provided for in paragraphs
(a) and (b) of this Article and all expenses
in connection with the storage and labor
with respect to such hazardous substance
shall be paid by the owner or consignee,
and default in such payment shall
constitute a lien against any importation by
such owner or consignee.
ARTICLE 94. Labeling Requirements
of Cigarettes. — All cigarettes for sale or
distribution within the country shall be
contained in a package which shall bear the
following statement or its equivalent in
Filipino: “Warning” Cigarette Smoking is
Dangerous to Your Health”. Such
statement shall be located in conspicuous
place on every cigarette package and shall
appear in conspicuous and legible type in
contrast by typography, layout or color
with other printed matter on the package.
Any advertisement of cigarette shall
contain the name warning as indicated in
the label.
ARTICLE 95. Penalties. — a) Any
person who shall violate the provisions of
Title III, Chapter IV of this Act, or its
implementing rules and regulations, except
Articles 81 to 83 of the same Chapter, shall
be subject to a fine of not less than Five
hundred pesos (P500.00) but not more
than Twenty thousand pesos (P20,000.00)
or imprisonment of not less than three (3)
months but not more than two (2) years or
both, at the discretion of the court:
Provided, That, if the consumer product is
one which is not a food, cosmetic, drug,
device or hazardous substance, the penalty
shall be a fine of not less than Two hundred
pesos (P200.00) but not more than Five
thousand pesos (P5,000.00) or
imprisonment of not less than one (1)
month but not more than one (1) year or
both, at the discretion of the court.
b) Any person who violates the
provisions of Article 81 to 83 for the first
time shall be subject to a fine of not less
than Two hundred pesos (P200.00) but not
more than Five thousand pesos
(P5,000.00) or by imprisonment of not less
than one (1) month but not more than six
(6) months or both, at the discretion of the
court. A second conviction under this
paragraph shall also carry with it the
penalty of revocation of business permit
and license.
CHAPTER V
Liability for Product and Service
ARTICLE 96. Implementing Agency.
— The Department of Trade and Industry
shall enforce the provisions of this Chapter
and its implementing rules and regulations.
ARTICLE 97. Liability for the Defective
Products. — Any Filipino or foreign
manufacturer, producer, and any importer,
shall be liable for redress, independently of
fault, for damages caused to consumers by
defects resulting from design,
manufacture, construction, assembly and
erection, formulas and handling and
making up, presentation or packing of their
products, as well as for the insufficient or
inadequate information on the use and
hazards thereof.
A product is defective when it does not offer
the safety rightfully expected of it, taking
relevant circumstances into consideration,
including but not limited to:
a) presentation of product;
b) use and hazards reasonably
expected of it;
c) the time it was put into
circulation.
A product is not considered defective
because another better quality product has
been placed in the market.
The manufacturer, builder, producer or
importer shall not be held liable when it
evidences:
a) that it did not place the product
on the market;
b) that although it did place the
product on the market such product has no
defect;
c) that the consumer or a third
party is solely at fault.
ARTICLE 98. Liability of Tradesman
or Seller. — The tradesman/seller is
likewise liable, pursuant to the preceding
article when:
a) it is not possible to identify the
manufacturer, builder, producer or
importer;
b) the product is supplied, without
clear identification of the manufacturer,
producer, builder or importer;
c) he does not adequately preserve
perishable goods. The party making
payment to the damaged party may
exercise the right to recover a part of the
whole of the payment made against the
other responsible parties, in accordance
with their part or responsibility in the cause
of the damage effected.
ARTICLE 99. Liability for Defective
Services. — The service supplier is liable for
redress, independently of fault, for
damages caused to consumers by defects
relating to the rendering of the services, as
well as for insufficient or inadequate
information on the fruition and hazards
thereof.
The service is defective when it does not
provide the safety the consumer may
rightfully expect of it, taking the relevant
circumstances into consideration, including
but not limited to:
a) the manner in which it is
provided;
b) the result of hazards which may
reasonably be expected of it;
c) the time when it was provided.
A service is not considered defective
because of the use or introduction of new
techniques.
The supplier of the services shall not be
held liable when it is proven:
a) that there is no defect in the
service rendered;
b) that the consumer or third party
is solely at fault.
ARTICLE 100. Liability for Product and
Service Imperfection. — The suppliers of
durable or non-durable consumer products
are jointly liable for imperfections in quality
that render the products unfit or
inadequate for consumption for which they
are designed or decrease their value, and
for those resulting from inconsistency with
the information provided on the container,
packaging, labels or publicity
messages/advertisement, with due regard
to the variations resulting from their
nature, the consumer being able to
demand replacement to the imperfect
parts.
If the imperfection is not corrected within
thirty (30) days, the consumer may
alternatively demand at his option:
a) the replacement of the product
by another of the same kind, in a perfect
state of use;
b) the immediate reimbursement
of the amount paid, with monetary
updating, without prejudice to any losses
and damages;
c) a proportionate price reduction.
The parties may agree to reduce or
increase the term specified in the
immediately preceding paragraph; but
such shall not be less than seven (7) nor
more than one hundred and eighty (180)
days.
The consumer may make immediate use of
the alternatives under the second
paragraph of this Article when by virtue of
the extent of the imperfection, the
replacement of the imperfect parts may
jeopardize the product quality or
characteristics, thus decreasing its value.
If the consumer opts for the alternative
under sub-paragraph (a) of the second
paragraph of this Article, and replacement
of the product is not possible, it may be
replaced by another of a different kind,
mark or model: Provided, That any
difference in price may result thereof shall
be supplemented or reimbursed by the
party which caused the damage, without
prejudice to the provisions of the second,
third and fourth paragraphs of this Article.
ARTICLE 101. Liability for Product
Quantity Imperfection. — Suppliers are
jointly liable for imperfections in the
quantity of the product when, in due regard
for variations inherent thereto, their net
content is less than that indicated on the
container, packaging, labeling or
advertisement, the consumer having
powers to demand, alternatively, at his
own option:
a) the proportionate price
b) the supplementing of weight or
measure differential;
c) the replacement of the product
by another of the same kind, mark or
model, without said imperfections;
d) the immediate reimbursement
of the amount paid, with monetary
updating without prejudice to losses and
damages if any.
The provisions of the fifth paragraph of
Article 99 shall apply to this Article.
The immediate supplier shall be liable if the
instrument used for weighing or measuring
is not gauged in accordance with official
standards.
ARTICLE 102. Liability for Service
Quality Imperfection. — The service
supplier is liable for any quality
imperfections that render the services
improper for consumption or decrease their
value, and for those resulting from
inconsistency with the information
contained in the offer or advertisement, the
consumer being entitled to demand
alternatively at his option:
a) the performance of the services,
without any additional cost and when
applicable;
b) the immediate reimbursement
of the amount paid, with monetary
updating without prejudice to losses and
damages, if any;
c) a proportionate price reduction.
Reperformance of services may be
entrusted to duly qualified third parties, at
the supplier’s risk and cost.
Improper services are those which prove to
be inadequate for purposes reasonably
expected of them and those that fail to
meet the provisions of this Act regulating
service rendering.
ARTICLE 103. Repair Service Obligation.
— When services are provided for the
repair of any product, the supplier shall be
considered implicitly bound to use
adequate, new, original replacement parts,
or those that maintain the manufacturer’s
technical specifications unless, otherwise
authorized, as regards to the latter by the
consumer.
ARTICLE 104. Ignorance of Quality
Imperfection. — The supplier’s ignorance of
the quality imperfections due to
inadequacy of the products and services
does not exempt him from any liability.
ARTICLE 105. Legal Guarantee of
Adequacy. — The legal guarantee of
product or service adequacy does not
require an express instrument or
contractual exoneration of the supplier
being forbidden.
ARTICLE 106. Prohibition in Contractual
Stipulation. — The stipulation in a contract
of a clause preventing, exonerating or
reducing the obligation to indemnify for
damages effected, as provided for in this
and in the preceding Articles, is hereby
prohibited, if there is more than one person
responsible for the cause of the damage,
they shall be jointly liable for the redress
established in the pertinent provisions of
this Act. However, if the damage is caused
by a component or part incorporated in the
product or service, its manufacturer,
builder or importer and the person who
incorporated the component or part are
jointly liable.
ARTICLE 107. Penalties. — Any person
who shall violate any provision of this
Chapter or its implementing rules and
regulations with respect to any consumer
product which is not food, cosmetic, or
hazardous substance shall upon conviction,
be subject to a fine of not less than Five
thousand pesos (P5,000.00) and by
imprisonment of not more than one (1)
year or both upon the discretion of the
court.
In case of juridical persons, the penalty
shall be imposed upon its president,
manager or head. If the offender is an
alien, he shall, after payment of fine and
service of sentence, be deported without
further deportation proceedings.
COCA-COLA BOTTLER’S PHILIPPINES
vs. CA, (1993);
FACTS:
The private respondent in this case
was the owner of a school canteen that sold
soft drinks (including Coke and Sprite) and
other goods to both students and the
public. One day she received some
complaints from parents that the Coke and
Sprite soft drinks she sold contained fiber-
like matter and other foreign substances or
particles. Testing done by the Department
of Health confirmed the presence of these
substances. As a consequence of that
discovery, her sales severely plummeted,
eventually costing her her job and shop.
She demanded payment of
damages from the petitioner which the
latter refused.
 The petitioner anchored its
arguments on failure of the private
respondent to exhaust administrative
remedies and prescription. The private
respondent contended that her complaint
was one for damages which did not involve
administrative action and that her cause of
action was based on an injury to plaintiff’s
right which can be brought within four
years pursuant to Article 1146 of the Civil
Code.
The trial court granted the
petitioner’s motion to dismiss, reasoning
that the complaint was based on a contract
and not a quasi-delict.
The Court of Appeals annulled the
trial court’s orders, ruling that petitioner’s
complaint was based on a quasi-delict and
not for a breach of warranty. The action
had not prescribed yet.
ISSUE:
Whether or not the action for
damages should be treated as one for
breach of implied warranty against hidden
defects or merchantability or one for quasi-
delict
RULING:
The action is one for quasi-delict.
The allegations in the complaint,
that there was reckless and negligent
manufacture of “adulterated food items
intended to be sold for public consumption”
on the part of petitioner, supported the
public respondent’s conclusion that the
cause of action was based on a quasi-delict.
The vendee’s remedies against a
vendor with respect to the warranties
against hidden defects of or encumbrances
upon the thing sold are not limited to those
prescribed in Article 1567 of the Civil Code.
The vendor could likewise be liable for
quasi-delict under Article 2176 of the Civil
Code, and an action based thereon may be
brought by the vendee.
As a general rule, a pre-existing
contract between the parties bars the
applicability of the law on quasi-delict. An
exception to the rule is that the liability
itself may be deemed to arise from quasi-
delict, such as the acts which break the
contract.
The Court has repeatedly held in
past cases that the existence of a contract
between the parties does not bar the
commission of a tort by the one against the
other and the consequent recovery of
damages therefor.
Provinces, cities, municipalities
Article 2189, Civil Code;
Provinces, cities and municipalities shall be
liable for damages for the death of, or
injuries suffered by, any person by reason
of the defective condition of roads, streets,
bridges, public buildings, and other public
works under their control or supervision.
Section 24; LGC 1991;
Local government units and their officials
are not exempt from liability for death or
injury to persons or damage to property.
City of Manila vs. Teotico, 1968;
FACTS: Teotico fell inside an uncovered
and unlighted catch basin or manhole on P.
Burgos Avenue, Manila as he was trying to
board a jeepney, causing injuries which
required him to incur medical expenses.
Teotico filed, with the CFI of Manila, a
complaint for damages against the City of
Manila, its mayor, city engineer, city health
officer, city treasurer and chief of police.
The CFI of Manila rendered a decision in
favor of Teotico and dismissing the
amended complaint, without costs.
On appeal taken by plaintiff, this decision
was affirmed by the CA, except insofar as
the City of Manila is concerned, which was
sentenced to pay damages in the
aggregate sum of P6,750.00. Hence, this
appeal for certiorari by the City of Manila.
ISSUE: WON the City of Manila should be
held liable as the incident happened on a
NATIONAL highway
HELD: the decision appealed from is hereby
affirmed
YES
The question to be determined is if present
case is governed by Section 4 of Republic
Act No. 409 (Charter of the City of Manila)
reading:
The city shall not be liable or held for
damages or injuries to persons or property
arising from the failure of the Mayor, the
Municipal Board, or any other city officer,
to enforce the provisions of this chapter, or
any other law or ordinance, or from
negligence of said Mayor, Municipal Board,
or other officers while enforcing or
attempting to enforce said provisions.
or by Article 2189 of the Civil Code of the
Philippines which provides:
Provinces, cities and municipalities shall be
liable for damages for the death of, or
injuries suffered by, any person by reason
of defective conditions of road, streets,
bridges, public buildings, and other public
works under their control or supervision.
Manila maintains that the former provision
should prevail over the latter, because
Republic Act 409, is a special law, intended
exclusively for the City of Manila, whereas
the Civil Code is a general law, applicable
to the entire Philippines.
The CA , however, applied the Civil Code,
and, we think, correctly. It is true that,
insofar as its territorial application is
concerned, Republic Act No. 409 is a
special law and the Civil Code a general
legislation; but, as regards the subject-
matter of the provisions above quoted,
Section 4 of Republic Act 409 establishes a
general rule regulating the liability of the
City of Manila for: “damages or injury to
persons or property … Upon the other
hand, Article 2189 of the Civil Code
constitutes a particular prescription making
“provinces, cities and municipalities . . .
liable for damages for the death of, or
injury suffered by any person by reason” —
specifically — “of the defective condition of
roads, streets, bridges, public buildings,
and other-public works under their control
or supervision.”
In other words, said section 4 refers to
liability arising from negligence, in general,
regardless of the object thereof, whereas
Article 2189 governs liability due to
“defective streets,” in particular. Since the
present action is based upon the alleged
defective condition of a road, said Article
2189 is decisive thereon.
xxxxx
Teotico alleged in his complaint his injuries
were due to the defective condition of a
street which is “under the supervision and
control” of the City. In its answer to the
amended complaint, the City, in turn,
alleged that “the streets aforementioned
were and have been constantly kept in
good condition and regularly inspected and
the storm drains and manholes thereof
covered by the defendant City and the
officers concerned” who “have been ever
vigilant and zealous in the performance of
their respective functions and duties as
imposed upon them by law.“ Thus, the City
had, in effect, admitted that P. Burgos
Avenue was and is under its control and
supervision.
Moreover, the assertion to the effect that
said Avenue is a national highway was
made, for the first time, in its MR of the
decision of the CA . Such assertion raised,
therefore, a question of fact, which had not
been put in issue in the trial court, and
cannot be set up, for the first time, on
appeal, much less after the rendition of the
decision of the appellate court, in a motion
for the reconsideration thereof.
At any rate, under Article 2189 of the Civil
Code, it is not necessary for the liability
therein established to attach that the
defective roads or streets belong to the
province, city or municipality from which
responsibility is exacted. What said article
requires is that the province, city or
municipality have either “control or
supervision” over said street or road. Even
if P. Burgos Avenue were, therefore, a
national highway, this circumstance would
not necessarily detract from its “control or
supervision” by the City of Manila, under
Republic Act 409. In fact Section 18(x)
thereof provides:

Sec. 18. Legislative powers. — The

Municipal Board shall have the following
legislative powers:

xxx xxx xxx

(x) Subject to the provisions of existing law

to provide for the laying out, construction
and improvement, and to regulate the use
of streets, avenues, alleys, sidewalks,
wharves, piers, parks, cemeteries, and
other public places; to provide for lighting,
cleaning, and sprinkling of streets and
public places; . . . … the building and repair
of tunnels, sewers, and drains, and all
structures in and under the same …to
provide for and regulate cross-works,
curbs, and gutters therein, . . … and
regulate the use, of bridges, viaducts and
culverts; … to regulate the lights used on
all vehicles, cars, and locomotives; . .

Then, again, the determination of whether

or not P. Burgos Avenue is under the
control or supervision of the City of Manila
and whether the latter is guilty of
negligence, in connection with the
maintenance of said road, which were
decided by the Court of Appeals in the
affirmative, is one of fact, and the findings
of said Court thereon are not subject to our
review.

Guilatco vs. City of Dagupan, 1989;