CEREZO VS.

TUAZON
GR No. 141538 March 23, 2004

FACTS:

Country Bus Lines passenger bus collided with a tricycle. Tricycle driver Tuazon filed a complaint
for damages against Mrs. Cerezo, as owner of the bus line, her husband Attorney Juan Cerezo, and bus driver
Danilo A. Foronda.

After considering Tuazon’s testimonial and documentary evidence, the trial court ruled in Tuazon’s
favor. The trial court made no pronouncement on Foronda’s liability because there was no service of
summons on him. The trial court did not hold Atty. Cerezo liable as Tuazon failed to show that Mrs.
Cerezo’s business benefited the family, pursuant to Article 121(3) of the Family Code. The trial court held
Mrs. Cerezo solely liable for the damages sustained by Tuazon arising from the negligence of Mrs. Cerezo’s
employee, pursuant to Article 2180 of the Civil Code.

ISSUE:
Whether petitioner is solidarily liable.

RULING:

Contrary to Mrs. Cerezo’s assertion, Foronda is not an indispensable party to the case. An
indispensable party is one whose interest is affected by the court’s action in the litigation, and without whom
no final resolution of the case is possible. However, Mrs. Cerezo’s liability as an employer in an action for a
quasi-delict is not only solidary, it is also primary and direct. Foronda is not an indispensable party to the
final resolution of Tuazon’s action for damages against Mrs. Cerezo.

The responsibility of two or more persons who are liable for a quasi-delict is solidary. Where there is
a solidary obligation on the part of debtors, as in this case, each debtor is liable for the entire obligation.
Hence, each debtor is liable to pay for the entire obligation in full. There is no merger or renunciation of
rights, but only mutual representation. Where the obligation of the parties is solidary, either of the parties is
indispensable, and the other is not even a necessary party because complete relief is available from either.
Therefore, jurisdiction over Foronda is not even necessary as Tuazon may collect damages from Mrs. Cerezo
alone.

Moreover, an employer’s liability based on a quasi-delict is primary and direct, while the employer’s
liability based on a delict is merely subsidiary. The words “primary and direct,” as contrasted with
“subsidiary,” refer to the remedy provided by law for enforcing the obligation rather than to the character and
limits of the obligation. Although liability under Article 2180 originates from the negligent act of the
employee, the aggrieved party may sue the employer directly.

When an employee causes damage, the law presumes that the employer has himself committed an act
of negligence in not preventing or avoiding the damage. This is the fault that the law condemns. While the
employer is civilly liable in a subsidiary capacity for the employee’s criminal negligence, the employer is
also civilly liable directly and separately for his own civil negligence in failing to exercise due diligence in
selecting and supervising his employee. The idea that the employer’s liability is solely subsidiary is wrong.

To hold the employer liable in a subsidiary capacity under a delict, the aggrieved party must initiate a
criminal action where the employee’s delict and corresponding primary liability are established. If the present
action proceeds from a delict, then the trial court’s jurisdiction over Foronda is necessary.

However, the present action is clearly for the quasi-delict of Mrs. Cerezo and not for the delict of
Foronda.

Thus, the petition was denied ordering the defendant Hermana Cerezo to pay the plaintiff.
VIRON TRANSPORTATION CO., INC. VS. DELOS SANTOS
GR No. 54080

FACTS:

Defendant Alberto delos Santos was the driver of defendant Rudy Samidan of the latter’s vehicle, a
Forward Cargo Truck. At about 12:30 in the afternoon, he was driving said truck along the National Highway
within the vicinity of Gerona, Tarlac. The Viron Bus, driven by Wilfredo Villanueva, tried to overtake his
truck, and he swerved to the right shoulder of the highway, but as soon as he occupied the right lane of the
road, the cargo truck which he was driving was hit by the Viron bus on its left front side, as the bus swerved
to his lane to avoid an incoming bus on its opposite direction. With the driver of another truck dealing
likewise in vegetables, Dulnuan, the two of them and the driver of the Viron bus proceeded to report the
incident to the Police Station.

Both the RTC and the CA rendered its decision in favor of the private respondents.

ISSUE:

Whether the employer is liable to the negligence of his employee.

RULING:

As employers of the bus driver, the petitioner is, under Article 2180 of the Civil Code, directly and
primarily liable for the resulting damages. The presumption that they are negligent flows from the
negligence of their employee. That presumption, however, is only jusris tantum, not juris et de jure. Their
only possible defense is that they exercised all the diligence of a good father of a family to prevent the
damage.

In fine, when the employee causes damage due to his own negligence while performing his own
duties, 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.

Petitioner, through its witnesses, failed to rebut such legal presumption of negligence in the selection
and supervision of employees, thus, petitioner as the employer is responsible for damages, the basis of the
liability being the relationship of pater familias or on the employer’s own negligence. Hence, with the
allegations and subsequent proof of negligence against the bus driver of petitioner, petitioner (employer) is
liable for damages.
MERCURY DRUG CORPORATION VS. BAKING
GR No. 57435

FACTS:

Sebastian Baking, respondent, went to the clinic of Dr. Cesar Sy for a medical check-up. Dr. Sy gave
respondent two medical prescriptions – Diamicron for his blood sugar and Benalize tablets for his
triglyceride.

Respondent then proceeded to petitioner Mercury Drug Corporation (Alabang Branch) to buy the
prescribed medicines. However, the saleslady misread the prescription Diamicron as a prescription for
Dormicum. Unaware that what was given to him was the wrong medicine, respondent took one pill of
dormicum on three consecutive days. On the third day he took the medicine, and he figured in a vehicular
accident. The car he was driving collided with the car of one Jose Peralta. Respondent fell asleep while
driving he could not remember anything about the collision nor felt its impact.

Suspecting that the tablet he took may have bearing on his physical and mental state at the time of the
collision, respondent returned to Dr. Sy. Upon being shown the medicine, Dr. Sy was shocked to find that
what was sold to him was Dormicum, instead of the prescribed Diamicron

The RTC and CA rendered their decision in favor of respondent.

ISSUE:

Whether petitioner was negligent, and if so, whether such negligence was the proximate cause of
respondent’s accident.

RULING:

Article 2176 states that “whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damages done. Such fault or negligence, if there is no pre-existing
contractual relationship between the parties, is called a quasi-delict…”

Obviously, petitioner’s employee was grossly negligent in selling respondent domicrum, instead of
the prescribed diamicron. Considering that a fatal mistake could be a matter of life and death for a buying
patient, the employee should have been very cautious in dispensing medicines. Petitioner contends that the
proximate cause of the accident was respondent’s negligence in driving. The court disagrees. The accident
could have not occurred had petitioner’s employee been careful in reading the prescription.

Article 2180 in complementing the preceding article states that “the obligation imposed by articles
2176 is demandable not only for one’s own acts or omissions, but also for those of persons for whom one is
responsible.” It is thus clear that the employer of a negligent employee is liable for the damages caused by
the latter. When an injury is caused by the negligence of an employee, there instantly arises a presumption of
the law that there has been negligence on the part of the employer either in the selection of the employee or
the supervision over him, after such selection. The presumption, however, may be rebutted by a clear
showing on the part of the employer that he has exercised the care and diligence of a good father of a family
in the selection and supervision of his employee.

In this case, petitioner failed to prove such exercised of due diligence of a good father of a family in
the selection and supervision of employee, thus making the petitioner solidarily liable for the damages.
SAFEGUARD SECURITY V. TANGCO
GR No. 165732

FACTS:

Evangeline Tangco (Evangeline) went to Ecology Bank, Katipunan Branch, Quezon City, to renew
her time deposit per advice of the bank's cashier as she would sign a specimen card. Evangeline, a duly
licensed firearm holder with corresponding permit to carry the same outside her residence, approached
security guard Pajarillo, who was stationed outside the bank, and pulled out her firearm from her bag to
deposit the same for safekeeping. Suddenly, Pajarillo shot Evangeline with his service shotgun hitting her in
the abdomen instantly causing her death. Respondent filed a complaint for damages against Pajarillo for
negligently shooting Evangeline and against Safeguard for failing to observe the diligence of a good father of
a family to prevent the damage committed by its security guard.

Petitioners denied the material allegations in the complaint and alleged that Safeguard exercised the
diligence of a good father of a family in the selection and supervision of Pajarillo; that Evangeline's death
was not due to Pajarillo's negligence as the latter acted only in self-defense.

ISSUES:
1. Whether Pajarillo is guilty of negligence in shooting Evangeline; and
2. Whether Safeguard should be held solidarily liable for the damages awarded to respondents.

RULING:

Safeguard contends that it cannot be jointly held liable since it had adequately shown that it had
exercised the diligence required in the selection and supervision of its employees. It claims that it had
required the guards to undergo the necessary training and to submit the requisite qualifications and
credentials which even the RTC found to have been complied with; that the RTC erroneously found that it
did not exercise the diligence required in the supervision of its employee. Safeguard further claims that it
conducts monitoring of the activities of its personnel, wherein supervisors are assigned to routinely check the
activities of the security guards which include among others, whether or not they are in their proper post and
with proper equipment, as well as regular evaluations of the employees' performances; that the fact that
Pajarillo loaded his firearm contrary to Safeguard's operating procedure is not sufficient basis to say that
Safeguard had failed its duty of proper supervision; that it was likewise error to say that Safeguard was
negligent in seeing to it that the procedures and policies were not properly implemented by reason of one
unfortunate event. The Supreme Court was not convinced. Article 2180 of the Civil Code provides: The
obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but also for
those of persons for whom one is responsible.

As the employer of Pajarillo, Safeguard is primarily and solidarily liable for the quasi-delict
committed by the former. Safeguard is presumed to be negligent in the selection and supervision of his
employee by operation of law. This presumption may be overcome only by satisfactorily showing that the
employer exercised the care and the diligence of a good father of a family in the selection and the supervision
of its employee. In the selection of prospective employees, employers are required to examine them as to
their qualifications, experience, and service records. On the other hand, due diligence in the supervision of
employees 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.
 KHRISTINE REA M. REGINO, petitioner
vs.
PANGASINAN COLLEGES OF SCIENCE AND TECHNOLOGY, et.al., respondents.
G.R No. 156109 November 18, 2004

Panganiban, J.:
FACTS:

Petitioner Kristine Regino was a poor student enrolled at the Pangasinan College of Science
and Technology. Thus, a fund raising project pertaining to a dance party was organized by PCST,
requiring all its students to purchase two tickets in consideration as a prerequisite for the final
exam.

Regino, an underprivileged, failed to purchase the tickets because of her status as well as
that project was against her religious belief, thus, she was not allowed to take the final examination
by her two professors.

ISSUE:

Whether or not the refusal of the university to allow Regino to take the final examination
valid?

HELD:

No. The Supreme Court declared that the act of PCST was not valid. Though, it can impose
its administrative policies, necessarily, the amount of tickets or payment shall be included or
expressed in the student handbooks given to every student before the start of the regular classes
of the semester. In this case, the fund raising project was not included in the activities to be
undertaken by the university during the semester. The petitioner is entitled for damages due to her
traumatic experience on the acts of the university causing her to stop studying sand later transfer
to another school.

SECOND DIVISION
ERNESTO PLEYTO AND PHILIPPINE RABBIT BUS LINES, INC., petitioners
vs.
MARIA D. LOMBOY AND CARMELA LOMBOY, respondents.
GR No. 148737, June 16, 2004
Quisumbing, J.:

FACTS:
Petitioner Philippine Rabbit Bus Lines, Inc (PRBL), driven by Ernesto Pleyto. Ricardo
Lomboy was a passenger to a car by Arnulfo Asuncion, Ricardo’s brother-in-law. Carmela, the
daughter of Ricardo, also a passenger to said car, suffered injuries requiring hospitalization. But
her father Ricardo Lomboy died. Ricardo’s heirs filed an action for damages against Pleyto and
PRBL. One of the bus passengers testified that Pleyto tried to overtake a tricycle but hit it instead.
Pleyto then swerved in to the left opposite lane and smashed the car. According to Pleyto, the
tricycle suddenly stopped without warning to which Pleyto stepped on the brakes and bus lost
speed but swerved to the other lane to avoid hitting the tricycle. Unfortunately, it collided with the
Manila-bound Mitsubishi car.
The trial court rendered decision in favor of the plaintiffs. Then CA affirmed the trial court’s
decision. Petitioners moved for reconsideration but the appellate court denied it. Hence, this
petition.
ISSUE:
 Whether the CA erred in pegging the monthly living expenses at 50% of gross earnings
considering that no substantial proof was presented to prove Lomboy’s gross income.
HELD:
No reversible error may be attributed to the court in fixing the loss of earning capacity at the
amount P1,152,000.00.
In considering the earning capacity of the victim as an element of damages, the net
earnings, which is computed by deducting necessary expenses from the gross earnings, and not
the gross earnings, is to be utilized in the computation. The amount of net earnings was arrived at
after deducting the necessary expenses (pegged at 50% of gross income) from the gross annual
income. This computation is in accord with settled jurisprudence. (Villa Rey case)
The testimony of the wife, Maria Lomboy, that her husband was earning a monthly income
of P8,000.00 is sufficient to establish a basis for an estimate of damages for loss of earning
capacity.
Jurisprudence provides that the factors that should be taken into account in determining the
compensable amount of lost earnings are:
 the number of years for which the victim would otherwise have lived; and
 the rate of loss sustained by the heirs of the deceased.
Moral damages are awarded to enable the injured party to obtain means, diversions or
amusements that will serve to alleviate the moral suffering he/she has undergone, by reason of the
defendant’s culpable action. Its award is aimed at restoration of the spiritual proportionate to the
suffering inflicted.
Thus, moral damages of P500,000 is reduced to P100,000 in keeping with the purpose of
the law and jurisprudence in allowing moral damages.
WHEREFORE, the assailed Decision of the Court of Appeals in CA-GR CV No. 61300 is
AFFIRMED, with the sole MODIFICATION that the award of moral damages to the heirs of Ricardo
Lomboy is reduced from P500,000.00 to P100,000.00. No pronouncement as to costs.  
Petitioners, in the Supreme Court view, misread the Villa Rey Transit case. In considering the earning capacity of the
victim as an element of damages, the net earnings, which is computed by deducting necessary expenses from the gross earnings,
and not the gross earnings, is to be utilized in the computation. Note that in the present case, both the Court of Appeals and the
trial court used net earnings, not gross earnings in computing loss of earning capacity. The amount of net earnings was arrived at
after deducting the necessary expenses (pegged at 50% of gross income) from the gross annual income. This computation is in
accord with settled jurisprudence, including the Villa Rey case.

Chapter 3 Different Kinds of Obligations

POTESTATIVE SUSPENSIVE CONDITION

G.R. No. L-5267 October 27, 1953

LUZ HERMOSA, as administratrix of the Intestate Estate of Fernando Hermosa, Sr., and Fernando
Hermosa, Jr., petitioners, vs. EPIFANIO M. LONGARA, respondent.

Labrador, J.

Facts:

On October 2, 1948, Respondent Epifanio M. Longarafileda claim against the estate of Fernando
Hermosa, Sr. The claims are of three kinds, namely, P2,341.41 representing credit advances made
to Fernando Hermosa, Sr. from 1932 to 1944, P12,924.12 made to his son Francisco Hermosa,
and P3,772 made to his grandson, Fernando Hermosa, Jr. from 1945 to 1947, after his death in
December, 1944.
Longara presented evidences and the Court of Appeals found that Fernando Hermosa, Sr. were
able to obtain the credit advances “on condition that payment should be made as soon as he
receive funds derived from the sale of his property in Spain."
The CA held that payment of the advances did not become due until Luz Hermosa, the
administratix received the sum of P20,000.00 from the buyer of the property.
Issue:

Whether or not the obligation contracted by the intestate was subject to a condition on his sole will
as debtor, and is therefore, null and void.

Ruling:

No. The condition "as soon as he (intestate) receive funds derived from the sale of his property in
Spain,"was not a purely potestative one, depending exclusively upon the will of the intestate, but a
mixed one, depending partly upon the will of intestate and partly upon chance, i.e., the presence of
a buyer of the property for the price and under the conditions desired by the intestate. The
obligation is clearly governed by the second sentence of article 1115 of the old Civil Code (8
Manresa, 126). The condition is, besides, a suspensive condition, upon the happening of which the
obligation to pay is made dependent. And upon the happening of the condition, the debt became
immediately due and demandable. (Article 1114, old Civil Code; 8 Manresa, 119).

If the condition were "if he decides to sell his house." or "if he likes to pay the sums advanced," or
any other condition of similar import implying that upon him (the debtor) alone payment would
depend, the condition would be protestativa, dependent exclusively upon his will or discretion.

The judgment appealed from is hereby affirmed in so far as it approves the claims of appellee in
the amounts of P2,341 and P12,942.12, and reversed as to that of P3,772. Without costs.

POTESTATIVE SUSPENSIVE CONDITION

GR No. L-5003 June 27, 1953

NAZARIO TRILLANA, administrator-appellee vsQUEZON COLLEGE, INC.,claimant-appellant

Paras,J.:

Facts:
On June 1, 1948, Damasa Crisostomo sent an application for subscription of 200 shares to
Quezon College, Inc. without an initial payment but stated that
“babayarankonglahatpagkataposnaako ay makapaghulingisda.”
The term of payment was not accepted by Quezon College, Inc. thus, absence of acceptance of
the counter offer of Damasa had not ripened into an enforceable contract.
Damasa died on October 26, 1948. As no payment appears to have been made on the
subscription, Quezon College Inc.presented a claim before the Court of First Instance of Bulacan in
her testate proceeding for collection of the sum of P20,000, representing the value of the
subscription to the capital stock of Quezon College, Inc.

Issue:
Whether or not the condition made by Damasa dependent on her sole will is valid.

Ruling:
No. A condition obviously dependent upon the sole will of the debtor, therefore facultative in nature,
rendered the obligation void.
Under Article 1115 of the old Civil Code, “If the fulfillment of the condition should depend upon the
exclusive will of the debtor, the condition obligation shall be void.” If it should depend upon chance,
or upon the will of a third person, the obligation shall produce all its effects in accordance with the
provisions of this code.

It cannot be argued that the condition solely is void, because it would have served to create the
obligation to pay, unlike a case, exemplified by Osmeñavs Rama (14 Phil 99), wherein only the
potestative condition was held void because it referred merely to the fulfillment of an already
existing indebtedness.

The appealed order is affirmed, and costs against appellant.

POSITIVE SUSPENSIVE CONDITION

GR No. 83851 March 3, 1993

VISAYAN SAWMILL COMPANY, INC., and ANG TAY, petitioners, vs. CA and RJH TRADING,
represented by RAMON J. HIBIONADA, proprietor, respondents.

Davide, JR.,J

Facts:
On May 1, 1983, RJH Trading entered into a sale involving scrap iron with Visayan Sawmill Co.
subject to the condition that the former will open the letter of credit in the amount of P250,000.00 in
favor of the latter on or before May 15, 1983 evidenced by a contract.
On May 17, 1983, the RJH started to dig and gather the scrap iron at the premises of Visayan
Sawmill only until May 30 due to a case filed against the RJH. Then, on May 23, 1983, the
corporation sent a telegram to RJH cancelling the contract of sale for failure of the latter to comply
with the conditions agreed.
On May 24, 1983, RJH informed the defendant that the letter of credit was opened on May 12,
1983 at BPI Main Office-Ayalabut the transmittal was delayed. It was only May 26, 1983 that the
corporation received the letter advice from BPI Dumaguete Branch.
On July 19, 1983, RJH demanded the corporation to comply with the deed of sale, however, in
reply the latter is unwilling to continue with the sale due to the plaintiff’s failure to comply with
essential pre-condition of the contract. Thus, RJH filed a complaint.
The trial court rendered judgment in favor of RJH. The court said that rescission is improper
because the breach was very slight and the delay in opening the letter of credit was only 11 days.
Aggrieved, Visayan Sawmill appealed to CA which affirmed the decision of the trial court with
modification.

Issue:
Whether or not the rescission of the contract made by Visayan Sawmill Co. is valid.

Ruling:
Yes. The rescission of the contract made by Visayan Sawmill Co. is valid.

The SC ruled that the contract is not one of sale where the buyer acquired ownership over the
property subject to the resolutory condition that the purchase price would be paid after delivery.
Thus, there was to be no actual sale until the opening, making or indorsing of the irrevocable and
unconditional letter of credit. Since what obtains in the case at bar is a mere promise to sell, the
failure of RJH Trading to comply with the positive suspensive condition cannot even be considered
a breach (casual or serious) but simply an event that prevented the obligation of Visayan Sawmill
to convey title from acquiring binding force.

The SC granted the petition and reversed the decision of CA.

POSITIVE SUSPENSIVE CONDITION

GR No. 129018 November 15, 2001

CARMELITA LEAÑO, assisted by her husband Gregorio Cuachon, petitioner, vs. CA AND
HERMOGENES FERNANDO, respondents.

Pardo,J.:
Facts:
On November 13, 1985, Hermogenes Fernando, as vendor andCarmelita Leaño, as vendee
executed a contract to sell involving a piece of land worth P107,750.00. The contract include the
manner of paying the total purchase price, grace periods, interest on unpaid installments, and etc.
The last payment of Carmelita was on April 1, 1989.
On September 16, 1991, the trial court orderedLeañoon the ejectment case filed by Fernando to
vacate the premises and to pay the latter P250.00 per month for the use and occupation of the
property from May 27, 1991 until she vacated the premises, attorney’s fees and costs of the suit.
On September 27, 1993, petitioner Leaño filed with RTC Malolos, Bulacan a complaint for specific
performance with preliminary injunction.
On February 6, 1995, the trial court rendered a decision ordering Leaño to pay the sum of
P103,090.70as her outstanding obligations under the contract to sell.
On February 21, 1995, Leañofiled a motion for reconsideration however, the trial court increased
the amount of her obligation to P183,687.00 and to pay the attorney’s fees. Then, appealed to the
CA
On January 22, 1997, the CA affirmed the decision of the RTC in toto.

Issue:
Whether or not the transaction between the parties is an absolute sale or a conditional sale.

Ruling:
Contrary to the findings of the trial court, the transaction between the parties was a conditional sale
not an absolute sale.

The Court ruled that first, the contract to sell makes the sale, cession and conveyance “subject to
conditions” set forth in the contract to sell and second, what was transferred was the possession of
the property, not ownership. In a contract to sell of real property on installments, the full payment of
the purchase price is a positive suspensive condition,the failure of which is not considered a
breach, casual or serious, but simply an event that prevented the obligation of the vendor to
convey title from acquiring any obligatory force. The transfer of ownership and title would occur
after full payment of the price.

The SC denied the petition and affirmed the decision of CA in toto.