G.R. No.

L-40570 January 30, 1976

TEODORO C. UMALI, petitioner,

vs.
HON. ANGEL BACANI, in his capacity as Presiding Judge of Branch IX of the Court of First
Instance of Pangasinan and FIDEL H. SAYNES, respondents.

Julia M. Armas for petitioner.

Antonio de los Reyes for private respondent.

ESGUERRA, J.:

Petition for certiorari to review the decision of the Court of First Instance of Pangasinan Branch IX, in
Civil Case No. U2412, entitled, "Fidel H. Saynes, plaintiff-appellee versus Teodoro C. Umali,
defendant-appellant", which found the death by electrocution of Manuel Saynes, a boy of 3 years and 8
months, as "due to the fault or negligence of the defendant (Umali) as owner and manager of the
Alcala Electric Plant", although the liability of defendant is mitigated by the contributory negligence of
the parents of the boy "in not providing for the proper and delegate supervision and control over their
son The dispositive part of the decision reads as follows:

Wherefore, the Court hereby renders judgment in favor of the plaintiff by ordering the
defendant to pay to the plaintiff the sum of Five Thousand Pesos (P5,000.00) for the
death of his son, Manuel Saynes; the sum of One Thousand Two Hundred Pesos
(P1,200.00) for actual expenses for and in connection with the burial of said deceased
child, and the further sum of Three Thousand Pesos (P3,000.00) for moral damages and
Five Hundred (P500.00) Pesos as reasonable attorney's fee, or a total of Nine Thousand
Seven Hundred (P9,700.00) Pesos, and to pay the costs of this suit. It Is So Ordered.

Undisputed facts appearing of record are:

On May 14, 1972, a storm with strong rain hit the Municipality of Alcala Pangasinan,
which started from 2:00 o'clock in the afternoon and lasted up to about midnight of the
same day. During the storm, the banana plants standing on an elevated ground along
the barrio road in San Pedro Ili of said municipality and near the transmission line of the
Alcala Electric Plant were blown down and fell on the electric wire. As a result, the live
electric wire was cut, one end of which was left hanging on the electric post and the
other fell to the ground under the fallen banana plants.

On the following morning, at about 9:00 o'clock barrio captain Luciano Bueno of San
Pedro Iii who was passing by saw the broken electric wire and so he warned the people
in the place not to go near the wire for they might get hurt. He also saw Cipriano
Baldomero, a laborer of the Alcala Electric Plant near the place and notified him right
then and there of the broken line and asked him to fix it, but the latter told the barrio
captain that he could not do it but that he was going to look for the lineman to fix it.
 Sometime after the barrio captain and Cipriano Baldomero had left the place, a small
boy of 3 years and 8 months old by the name of Manuel P. Saynes, whose house is just
on the opposite side of the road, went to the place where the broken line wire was and
got in contact with it. The boy was electrocuted and he subsequently died. It was only
after the electrocution of Manuel Saynes that the broken wire was fixed at about 10:00
o'clock on the same morning by the lineman of the electric plant.

Petitioner claims that he could not be liable under the concept of quasi-delict or tort as owner and
manager of the Alcala Electric Plant because the proximate cause of the boy's death electrocution
could not be due to any negligence on his part, but rather to a fortuitous event-the storm that caused
the banana plants to fall and cut the electric line-pointing out the absence of negligence on the part of
his employee Cipriano Baldomero who tried to have the line repaired and the presence of negligence
of the parents of the child in allowing him to leave his house during that time.

A careful examination of the record convinces Us that a series of negligence on the part of defendants'
employees in the Alcala Electric Plant resulted in the death of the victim by electrocution. First, by the
very evidence of the defendant, there were big and tall banana plants at the place of the incident
standing on an elevated ground which were about 30 feet high and which were higher than the electric
post supporting the electric line, and yet the employees of the defendant who, with ordinary foresight,
could have easily seen that even in case of moderate winds the electric line would be endangered by
banana plants being blown down, did not even take the necessary precaution to eliminate that source
of danger to the electric line. Second, even after the employees of the Alcala Electric Plant were
already aware of the possible damage the storm of May 14, 1972, could have caused their electric
lines, thus becoming a possible threat to life and property, they did not cut off from the plant the flow of
electricity along the lines, an act they could have easily done pending inspection of the wires to see if
they had been cut. Third, employee Cipriano Baldomero was negligent on the morning of the incident
because even if he was already made aware of the live cut wire, he did not have the foresight to realize
that the same posed a danger to life and property, and that he should have taken the necessary
precaution to prevent anybody from approaching the live wire; instead Baldomero left the premises
because what was foremost in his mind was the repair of the line, obviously forgetting that if left
unattended to it could endanger life and property.

On defendants' argument that the proximate cause of the victim's death could be attributed to the
parents' negligence in allowing a child of tender age to go out of the house alone, We could readily see
that because of the aforementioned series of negligence on the part of defendants' employees
resulting in a live wire lying on the premises without any visible warning of its lethal character, anybody,
even a responsible grown up or not necessarily an innocent child, could have met the same fate that
befell the victim. It may be true, as the lower Court found out, that the contributory negligence of the
victim's parents in not properly taking care of the child, which enabled him to leave the house alone on
the morning of the incident and go to a nearby place cut wire was very near the house (where victim
was living) where the fatal fallen wire electrocuted him, might mitigate respondent's liability, but we
cannot agree with petitioner's theory that the parents' negligence constituted the proximate cause of
the victim's death because the real proximate cause was the fallen live wire which posed a threat to life
and property on that morning due to the series of negligence adverted to above committed by
defendants' employees and which could have killed any other person who might by accident get into
contact with it. Stated otherwise, even if the child was allowed to leave the house unattended due to
the parents' negligence, he would not have died that morning where it not for the cut live wire he
accidentally touched.
Art. 2179 of the Civil Code provides that if the negligence of the plaintiff (parents of the victim in this
case) was only contributory, the immediate and proximate cause of the injury being the defendants'
lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be
awarded. This law may be availed of by the petitioner but does not exempt him from liability.
Petitioner's liability for injury caused by his employees negligence is well defined in par. 4, of Article
2180 of the Civil Code, which states:

The owner and manager of an establishment or enterprise are likewise responsible for
damages caused by their employees in the service of the branches in which the latter
are employed or on tile occasion of their functions.

The negligence of the employee is presumed to be the negligence of the employer because the
employer is supposed to exercise supervision over the work of the employees. This liability of the
employer is primary and direct (Standard Vacuum Oil Co. vs. Tan and Court of Appeals, 107 Phil. 109).
In fact the proper defense for the employer to raise so that he may escape liability is to prove that he
exercised, the diligence of the good father of the family to prevent damage not only in the selection of
his employees but also in adequately supervising them over their work. This defense was not
adequately proven as found by the trial Court, and We do not find any sufficient reason to deviate from
its finding.

Notwithstanding diligent efforts, we fail to fired any reversible error committed by the trial Court in this
case, either in its appreciation of the evidence on questions of facts or on the interpretation and
application of laws government quasi-delicts and liabilities emanating therefrom. The inevitable
conclusion is that no error amounting to grave abuse of discretion was committed and the decision
must be left untouched.

WHEREFORE, the decision of respondent Court dated June 27, 1974 is affirmed.

Costs against petitioner.

SO ORDERED.

Teehankee (Chairman), Makasiar, Muñoz Palma and Martin, JJ., concur.

G.R. No. L-12219 March 15, 1918

AMADO PICART, plaintiff-appellant,

vs.
FRANK SMITH, JR., defendant-appellee.

Alejo Mabanag for appellant.

G. E. Campbell for appellee.

STREET, J. :

In this action the plaintiff, Amado Picart, seeks to recover of the defendant, Frank Smith, jr., the sum of
P31,000, as damages alleged to have been caused by an automobile driven by the defendant. From a
judgment of the Court of First Instance of the Province of La Union absolving the defendant from
liability the plaintiff has appealed.
The occurrence which gave rise to the institution of this action took place on December 12, 1912, on
the Carlatan Bridge, at San Fernando, La Union. It appears that upon the occasion in question the
plaintiff was riding on his pony over said bridge. Before he had gotten half way across, the defendant
approached from the opposite direction in an automobile, going at the rate of about ten or twelve miles
per hour. As the defendant neared the bridge he saw a horseman on it and blew his horn to give
warning of his approach. He continued his course and after he had taken the bridge he gave two more
successive blasts, as it appeared to him that the man on horseback before him was not observing the
rule of the road.

The plaintiff, it appears, saw the automobile coming and heard the warning signals. However, being
perturbed by the novelty of the apparition or the rapidity of the approach, he pulled the pony closely up
against the railing on the right side of the bridge instead of going to the left. He says that the reason he
did this was that he thought he did not have sufficient time to get over to the other side. The bridge is
shown to have a length of about 75 meters and a width of 4.80 meters. As the automobile approached,
the defendant guided it toward his left, that being the proper side of the road for the machine. In so
doing the defendant assumed that the horseman would move to the other side. The pony had not as
yet exhibited fright, and the rider had made no sign for the automobile to stop. Seeing that the pony
was apparently quiet, the defendant, instead of veering to the right while yet some distance away or
slowing down, continued to approach directly toward the horse without diminution of speed. When he
had gotten quite near, there being then no possibility of the horse getting across to the other side, the
defendant quickly turned his car sufficiently to the right to escape hitting the horse alongside of the
railing where it as then standing; but in so doing the automobile passed in such close proximity to the
animal that it became frightened and turned its body across the bridge with its head toward the railing.
In so doing, it as struck on the hock of the left hind leg by the flange of the car and the limb was
broken. The horse fell and its rider was thrown off with some violence. From the evidence adduced in
the case we believe that when the accident occurred the free space where the pony stood between the
automobile and the railing of the bridge was probably less than one and one half meters. As a result of
its injuries the horse died. The plaintiff received contusions which caused temporary unconsciousness
and required medical attention for several days.

The question presented for decision is whether or not the defendant in maneuvering his car in the
manner above described was guilty of negligence such as gives rise to a civil obligation to repair the
damage done; and we are of the opinion that he is so liable. As the defendant started across the
bridge, he had the right to assume that the horse and the rider would pass over to the proper side; but
as he moved toward the center of the bridge it was demonstrated to his eyes that this would not be
done; and he must in a moment have perceived that it was too late for the horse to cross with safety in
front of the moving vehicle. In the nature of things this change of situation occurred while the
automobile was yet some distance away; and from this moment it was not longer within the power of
the plaintiff to escape being run down by going to a place of greater safety. The control of the situation
had then passed entirely to the defendant; and it was his duty either to bring his car to an immediate
stop or, seeing that there were no other persons on the bridge, to take the other side and pass
sufficiently far away from the horse to avoid the danger of collision. Instead of doing this, the defendant
ran straight on until he was almost upon the horse. He was, we think, deceived into doing this by the
fact that the horse had not yet exhibited fright. But in view of the known nature of horses, there was an
appreciable risk that, if the animal in question was unacquainted with automobiles, he might get exited
and jump under the conditions which here confronted him. When the defendant exposed the horse and
rider to this danger he was, in our opinion, negligent in the eye of the law.
The test by which to determine the existence of negligence in a particular case may be stated as
follows: Did the defendant in doing the alleged negligent act use that person would have used in the
same situation? If not, then he is guilty of negligence. The law here in effect adopts the standard
supposed to be supplied by the imaginary conduct of the discreet paterfamilias of the Roman law. The
existence of negligence in a given case is not determined by reference to the personal judgment of the
actor in the situation before him. The law considers what would be reckless, blameworthy, or negligent
in the man of ordinary intelligence and prudence and determines liability by that.

The question as to what would constitute the conduct of a prudent man in a given situation must of
course be always determined in the light of human experience and in view of the facts involved in the
particular case. Abstract speculations cannot here be of much value but this much can be profitably
said: Reasonable men govern their conduct by the circumstances which are before them or known to
them. They are not, and are not supposed to be, omniscient of the future. Hence they can be expected
to take care only when there is something before them to suggest or warn of danger. Could a prudent
man, in the case under consideration, foresee harm as a result of the course actually pursued? If so, it
was the duty of the actor to take precautions to guard against that harm. Reasonable foresight of harm,
followed by ignoring of the suggestion born of this prevision, is always necessary before negligence
can be held to exist. Stated in these terms, the proper criterion for determining the existence of
negligence in a given case is this: Conduct is said to be negligent when a prudent man in the position
of the tortfeasor would have foreseen that an effect harmful to another was sufficiently probable to
warrant his foregoing conduct or guarding against its consequences.

Applying this test to the conduct of the defendant in the present case we think that negligence is clearly
established. A prudent man, placed in the position of the defendant, would in our opinion, have
recognized that the course which he was pursuing was fraught with risk, and would therefore have
foreseen harm to the horse and the rider as reasonable consequence of that course. Under these
circumstances the law imposed on the defendant the duty to guard against the threatened harm.

It goes without saying that the plaintiff himself was not free from fault, for he was guilty of antecedent
negligence in planting himself on the wrong side of the road. But as we have already stated, the
defendant was also negligent; and in such case the problem always is to discover which agent is
immediately and directly responsible. It will be noted that the negligent acts of the two parties were not
contemporaneous, since the negligence of the defendant succeeded the negligence of the plaintiff by
an appreciable interval. Under these circumstances the law is that the person who has the last fair
chance to avoid the impending harm and fails to do so is chargeable with the consequences, without
reference to the prior negligence of the other party.

The decision in the case of Rkes vs. Atlantic, Gulf and Pacific Co. (7 Phil. Rep., 359) should perhaps
be mentioned in this connection. This Court there held that while contributory negligence on the part of
the person injured did not constitute a bar to recovery, it could be received in evidence to reduce the
damages which would otherwise have been assessed wholly against the other party. The defendant
company had there employed the plaintiff, as a laborer, to assist in transporting iron rails from a barge
in Manila harbor to the company's yards located not far away. The rails were conveyed upon cars
which were hauled along a narrow track. At certain spot near the water's edge the track gave way by
reason of the combined effect of the weight of the car and the insecurity of the road bed. The car was
in consequence upset; the rails slid off; and the plaintiff's leg was caught and broken. It appeared in
evidence that the accident was due to the effects of the typhoon which had dislodged one of the
supports of the track. The court found that the defendant company was negligent in having failed to
repair the bed of the track and also that the plaintiff was, at the moment of the accident, guilty of
contributory negligence in walking at the side of the car instead of being in front or behind. It was held
that while the defendant was liable to the plaintiff by reason of its negligence in having failed to keep
the track in proper repair nevertheless the amount of the damages should be reduced on account of
the contributory negligence in the plaintiff. As will be seen the defendant's negligence in that case
consisted in an omission only. The liability of the company arose from its responsibility for the
dangerous condition of its track. In a case like the one now before us, where the defendant was
actually present and operating the automobile which caused the damage, we do not feel constrained to
attempt to weigh the negligence of the respective parties in order to apportion the damage according to
the degree of their relative fault. It is enough to say that the negligence of the defendant was in this
case the immediate and determining cause of the accident and that the antecedent negligence of the
plaintiff was a more remote factor in the case.

A point of minor importance in the case is indicated in the special defense pleaded in the defendant's
answer, to the effect that the subject matter of the action had been previously adjudicated in the court
of a justice of the peace. In this connection it appears that soon after the accident in question occurred,
the plaintiff caused criminal proceedings to be instituted before a justice of the peace charging the
defendant with the infliction of serious injuries (lesiones graves). At the preliminary investigation the
defendant was discharged by the magistrate and the proceedings were dismissed. Conceding that the
acquittal of the defendant at the trial upon the merits in a criminal prosecution for the offense
mentioned would be res adjudicata upon the question of his civil liability arising from negligence -- a
point upon which it is unnecessary to express an opinion -- the action of the justice of the peace in
dismissing the criminal proceeding upon the preliminary hearing can have no effect. (See U. S. vs.
Banzuela and Banzuela, 31 Phil. Rep., 564.)

From what has been said it results that the judgment of the lower court must be reversed, and
judgment is her rendered that the plaintiff recover of the defendant the sum of two hundred pesos
(P200), with costs of other instances. The sum here awarded is estimated to include the value of the
horse, medical expenses of the plaintiff, the loss or damage occasioned to articles of his apparel, and
lawful interest on the whole to the date of this recovery. The other damages claimed by the plaintiff are
remote or otherwise of such character as not to be recoverable. So ordered.

Arellano, C.J., Torres, Carson, Araullo, Avanceña, and Fisher, JJ., concur.
Johnson, J., reserves his vote.

Separate Opinions

MALCOLM, J., concurring:

After mature deliberation, I have finally decided to concur with the judgment in this case. I do so
because of my understanding of the "last clear chance" rule of the law of negligence as particularly
applied to automobile accidents. This rule cannot be invoked where the negligence of the plaintiff is
concurrent with that of the defendant. Again, if a traveler when he reaches the point of collision is in a
situation to extricate himself and avoid injury, his negligence at that point will prevent a recovery. But
Justice Street finds as a fact that the negligent act of the interval of time, and that at the moment the
plaintiff had no opportunity to avoid the accident. Consequently, the "last clear chance" rule is
applicable. In other words, when a traveler has reached a point where he cannot extricate himself and
vigilance on his part will not avert the injury, his negligence in reaching that position becomes the
condition and not the proximate cause of the injury and will not preclude a recovery. (Note especially
Aiken vs. Metcalf [1917], 102 Atl., 330.)

G.R. No. L-39587 March 24, 1934

ALEKO E. LILIUS, ET AL., plaintiffs-appellants,

vs.
THE MANILA RAILROAD COMPANY, defendant-appellant.

Harvey and O'Brien for plaintiffs-appellants.

Jose C. Abreu for defendant-appellant.

VILLA-REAL, J.:

This case involves two appeals, one by the defendant the Manila Railroad Company, and the other by
the plaintiffs Aleko E. Lilius et al., from the judgment rendered by the Court of First Instance of Manila,
the dispositive part of which reads as follows:

Wherefore, judgment is rendered ordering the defendant company to pay to the plaintiffs, for the
purposes above stated, the total amount of P30,865, with the costs of the suit. And although the
suit brought by the plaintiffs has the nature of a joint action, it must be understood that of the
amount adjudicated to the said plaintiffs in this judgment, the sum of P10,000 personally
belongs to the plaintiff Sonja Maria Lilius; the sum of P5,000, to the plaintiff Brita Marianne
Lilius; the sum of P250, to Dr. Marfori of the Calauan Hospital, Province of Laguna, and the
balance to the plaintiff Aleko E. Lilius.

In support of its appeal, the appellant the Manila Railroad Company assigns nine alleged errors
committed by the trial court in its said judgment, which will be discussed in the course of this decision.

As a ground of their appeal, the appellants Aleko E. Lilius et al., in turn, assign two alleged errors as
committed by the same court a quo in its judgment in question, which will be discussed later.

This case originated from a complaint filed by Aleko E. Lilius et al., praying, under the facts therein
alleged, that the Manila Railroad Company be ordered to pay to said plaintiffs, by way of indemnity for
material and moral damages suffered by them through the fault and negligence of the said defendant
entity's employees, the sum of P50,000 plus legal interest thereon from the date of the filing of the
complaint, with costs.

The defendant the Manila Railroad Company, answering the complaint, denies each and every
allegation thereof and, by way of special defense, alleges that the plaintiff Aleko E. Lilius, with the
cooperation of his wife and coplaintiff, negligently and recklessly drove his car, and prays that it be
absolved from the complaint.

The following facts have been proven at the trial, some without question and the others by a
preponderance of evidence, to wit:
The plaintiff Aleko E. Lilius has, for many years, been a well-known and reputed journalist, author and
photographer. At the time of the collision in question, he was a staff correspondent in the Far East of
the magazines The American Weekly of New York and The Sphere of London.

Some of his works have been translated into various languages. He had others in preparation when
the accident occurred. According to him, his writings netted him a monthly income of P1,500. He
utilized the linguistic ability of his wife Sonja Maria Lilius, who translated his articles and books into
English, German, and Swedish. Furthermore, she acted as his secretary.

At about 7 o'clock on the morning of May 10, 1931, the plaintiff, his wife Sonja Maria Lilius, and his 4-
year old daughter Brita Marianne Lilius, left Manila in their Studebaker car — driven by the said plaintiff
Aleko E. Lilius — for the municipality of Pagsanjan, Province of Laguna, on a sight-seeing trip. It was
the first time that he made said trip although he had already been to many places, driving his own car,
in and outside the Philippines. Where the road was clear and unobstructed, the plaintiff drove at the
rate of from 19 to 25 miles an hour. Prior thereto, he had made the trip as far as Calauan, but never
from Calauan to Pagsanjan, via Dayap. He was entirely unacquainted with the conditions of the road at
said points and had no knowledge of the existence of a railroad crossing at Dayap. Before reaching the
crossing in question, there was nothing to indicate its existence and inasmuch as there were many
houses, shrubs and trees along the road, it was impossible to see an approaching train. At about
seven or eight meters from the crossing, coming from Calauan, the plaintiff saw an autotruck parked on
the left side of the road. Several people, who seemed to have alighted from the said truck, were
walking on the opposite side. He slowed down to about 12 miles an hour and sounded his horn for the
people to get out of the way. With his attention thus occupied, he did not see the crossing but he heard
two short whistles. Immediately afterwards, he saw a huge black mass fling itself upon him, which
turned out to be locomotive No. 713 of the defendant company's train coming eastward from Bay to
Dayap station. The locomotive struck the plaintiff's car right in the center. After dragging the said car a
distance of about ten meters, the locomotive threw it upon a siding. The force of the impact was so
great that the plaintiff's wife and daughter were thrown from the car and were picked up from the
ground unconscious and seriously hurt. In spite of the efforts of engineer Andres Basilio, he was
unable to stop the locomotive until after it had gone about seventy meters from the crossing.

On the afternoon of the same day, the plaintiff's entered St. Paul's Hospital in the City of Manila where
they were treated by Dr. Waterous. The plaintiff Aleko E. Lilius suffered from a fractured nose, a
contusion above the left eye and a lacerated wound on the right leg, in addition to multiple contusions
and scratches on various parts of the body. As a result of the accident, the said plaintiff was highly
nervous and very easily irritated, and for several months he had great difficulty in concentrating his
attention on any matter and could not write articles nor short stories for the newspapers and
magazines to which he was a contributor, thus losing for some time his only means of livelihood.

The plaintiff Sonja Maria Lilius suffered from fractures of the pelvic bone, the tibia and fibula of the right
leg, below the knee, and received a large lacerated wound on the forehead. She underwent two
surgical operations on the left leg for the purpose of joining the fractured bones but said operations
notwithstanding, the leg in question still continues deformed. In the opinion of Dr. Waterous, the
deformity is permanent in character and as a result the plaintiff will have some difficulty in walking. The
lacerated wound, which she received on her forehead, has left a disfiguring scar.

The child Brita Marianne Lilius received two lacerated wounds, one on the forehead and the other on
the left side of the face, in addition to fractures of both legs, above and below the knees. Her condition
was serious and, for several days, she was hovering between life and death. Due to a timely and
successful surgical operation, she survived her wounds. The lacerations received by the child have left
deep scars which will permanently disfigure her face, and because of the fractures of both legs,
although now completely cured, she will be forced to walk with some difficulty and continuous extreme
care in order to keep her balance.

Prior to the accident, there had been no notice nor sign of the existence of the crossing, nor was there
anybody to warn the public of approaching trains. The flagman or switchman arrived after the collision,
coming from the station with a red flag in one hand and a green one in the other, both of which were
wound on their respective sticks. The said flagman and switchman had many times absented himself
from his post at the crossing upon the arrival of a train. The train left Bay station a little late and
therefore traveled at great speed.

Upon examination of the oral as well as of the documentary evidence which the parties presented at
the trial in support of their respective contentions, and after taking into consideration all the
circumstances of the case, this court is of the opinion that the accident was due to negligence on the
part of the defendant-appellant company, for not having had on that occasion any semaphore at the
crossing at Dayap, to serve as a warning to passers-by of its existence in order that they might take the
necessary precautions before crossing the railroad; and, on the part of its employees — the flagman
and switchman, for not having remained at his post at the crossing in question to warn passers-by of
the approaching train; the stationmaster, for failure to send the said flagman and switchman to his post
on time; and the engineer, for not having taken the necessary precautions to avoid an accident, in view
of the absence of said flagman and switchman, by slackening his speed and continuously ringing the
bell and blowing the whistle before arriving at the crossing. Although it is probable that the defendant-
appellant entity employed the diligence of a good father of a family in selecting its aforesaid
employees, however, it did not employ such diligence in supervising their work and the discharge of
their duties because, otherwise, it would have had a semaphore or sign at the crossing and, on
previous occasions as well as on the night in question, the flagman and switchman would have always
been at his post at the crossing upon the arrival of a train. The diligence of a good father of a family,
which the law requires in order to avoid damage, is not confined to the careful and prudent selection of
subordinates or employees but includes inspection of their work and supervision of the discharge of
their duties.

However, in order that a victim of an accident may recover indemnity for damages from the person
liable therefor, it is not enough that the latter has been guilty of negligence, but it is also necessary that
the said victim has not, through his own negligence, contributed to the accident, inasmuch as nobody
is a guarantor of his neighbor's personal safety and property, but everybody should look after them,
employing the care and diligence that a good father of a family should apply to his own person, to the
members of his family and to his property, in order to avoid any damage. It appears that the herein
plaintiff-appellant Aleko E. Lilius took all precautions which his skill and the presence of his wife and
child suggested to him in order that his pleasure trip might be enjoyable and have a happy ending,
driving his car at a speed which prudence demanded according to the circumstances and conditions of
the road, slackening his speed in the face of an obstacle and blowing his horn upon seeing persons on
the road, in order to warn them of his approach and request them to get out of the way, as he did when
he came upon the truck parked on the left hand side of the road seven or eight meters from the place
where the accident occurred, and upon the persons who appeared to have alighted from the said truck.
If he failed to stop, look and listen before going over the crossing, in spite of the fact that he was
driving at 12 miles per hour after having been free from obstacles, it was because, his attention having
been occupied in attempting to go ahead, he did not see the crossing in question, nor anything, nor
anybody indicating its existence, as he knew nothing about it beforehand. The first and only warning,
which he received of the impending danger, was two short blows from the whistle of the locomotive
immediately preceding the collision and when the accident had already become inevitable.

In view of the foregoing considerations, this court is of the opinion that the defendant the Manila
Railroad Company alone is liable for the accident by reason of its own negligence and that of its
employees, for not having employed the diligence of a good father of a family in the supervision of the
said employees in the discharge of their duties.

The next question to be decided refers to the sums of money fixed by the court a quo as indemnities
for damages which the defendant company should pay to the plaintiffs-appellants.

With respect to the plaintiff-appellant Aleko E. Lilius, although this court believes his claim of a net
income of P1,500 a month to be somewhat exaggerated, however, the sum of P5,000, adjudicated to
him by the trial court as indemnity for damages, is reasonable.

As to the sum of P10,635 which the court awards to the plaintiffs by way of indemnity for damages, the
different items thereof representing doctor's fees, hospital and nursing services, loss of personal
effects and torn clothing, have duly been proven at the trial and the sum in question is not excessive,
taking into consideration the circumstances in which the said expenses have been incurred.

Taking into consideration the fact that the plaintiff Sonja Maria Lilius, wife of the plaintiff Aleko E. Lilius
is — in the language of the court, which saw her at the trial — "young and beautiful and the big scar,
which she has on her forehead caused by the lacerated wound received by her from the accident,
disfigures her face and that the fracture of her left leg has caused a permanent deformity which
renders it very difficult for her to walk", and taking into further consideration her social standing, neither
is the sum of P10,000, adjudicated to her by the said trial court by way of indemnity for patrimonial and
moral damages, excessive. In the case of Gutierrez vs. Gutierrez (56 Phil., 177), the right leg of the
plaintiff Narciso Gutierrez was fractured as a result of a collision between the autobus in which he was
riding and the defendant's car, which fractured required medical attendance for a considerable period
of time. On the day of the trial the fracture had not yet completely healed but it might cause him
permanent lameness. The trial court sentenced the defendants to indemnify him in the sum of P10,000
which this court reduced to P5,000, in spite of the fact that the said plaintiff therein was neither young
nor good-looking, nor had he suffered any facial deformity, nor did he have the social standing that the
herein plaintiff-appellant Sonja Maria Lilius enjoys. 1ªvvphi1.ne+

As to the indemnity of P5,000 in favor of the child Brita Marianne Lilius, daughter of Aleko E. Lilius and
Sonja Maria Lilius, neither is the same excessive, taking into consideration the fact that the lacerations
received by her have left deep scars that permanently disfigure her face and that the fractures of both
her legs permanently render it difficult for her to walk freely, continuous extreme care being necessary
in order to keep her balance in addition to the fact that all of this unfavorably and to a great extent
affect her matrimonial future.

With respect to the plaintiffs' appeal, the first question to be decided is that raised by the plaintiff Aleko
E. Lilius relative to the insufficiency of the sum of P5,000 which the trial court adjudicated to him by
way of indemnity for damages consisting in the loss of his income as journalist and author as a result
of his illness. This question has impliedly been decided in the negative when the defendant-appellant
entity's petition for the reduction of said indemnity was denied, declaring it to be reasonable.

As to the amount of P10,000 claimed by the plaintiff Aleko E. Lilius as damages for the loss of his
wife's services in his business as journalist and author, which services consisted in going over his
writings, translating them into English, German and Swedish, and acting as his secretary, in addition to
the fact that such services formed part of the work whereby he realized a net monthly income of
P1,500, there is no sufficient evidence of the true value of said services nor to the effect that he
needed them during her illness and had to employ a translator to act in her stead.

The plaintiff Aleko E. Lilius also seeks to recover the sum of P2,500 for the loss of what is called Anglo-
Saxon common law "consortium" of his wife, that is, "her services, society and conjugal
companionship", as a result of personal injuries which she had received from the accident now under
consideration.

In the case of Goitia vs. Campos Rueda (35 Phil., 252, 255, 256), this court, interpreting the provisions
of the Civil Marriage Law of 1870, in force in these Islands with reference to the mutual rights and
obligations of the spouses, contained in articles 44-48 thereof, said as follows:

The above quoted provisions of the Law of Civil Marriage and the Civil Code fix the duties and
obligations of the spouses. The spouses must be faithful to, assist, and support each other. The
husband must live with and protect his wife. The wife must obey and live with her husband and
follow him when he changes his domicile or residence, except when he removes to a foreign
country. . . .

Therefore, under the law and the doctrine of this court, one of the husband's rights is to count on his
wife's assistance. This assistance comprises the management of the home and the performance of
household duties, including the care and education of the children and attention to the husband upon
whom primarily devolves the duty of supporting the family of which he is the head. When the wife's
mission was circumscribed to the home, it was not difficult to assume, by virtue of the marriage alone,
that she performed all the said tasks and her physical incapacity always redounded to the husband's
prejudice inasmuch as it deprived him of her assistance. However, nowadays when women, in their
desire to be more useful to society and to the nation, are demanding greater civil rights and are
aspiring to become man's equal in all the activities of life, commercial and industrial, professional and
political, many of them spending their time outside the home, engaged in their businesses, industry,
profession and within a short time, in politics, and entrusting the care of their home to a housekeeper,
and their children, if not to a nursemaid, to public or private institutions which take charge of young
children while their mothers are at work, marriage has ceased to create the presumption that a woman
complies with the duties to her husband and children, which the law imposes upon her, and he who
seeks to collect indemnity for damages resulting from deprivation of her domestic services must prove
such services. In the case under consideration, apart from the services of his wife Sonja Maria Lilius as
translator and secretary, the value of which has not been proven, the plaintiff Aleko E. Lilius has not
presented any evidence showing the existence of domestic services and their nature, rendered by her
prior to the accident, in order that it may serve as a basis in estimating their value.

Furthermore, inasmuch as a wife's domestic assistance and conjugal companionship are purely
personal and voluntary acts which neither of the spouses may be compelled to render (Arroyo vs.
Vazquez de Arroyo, 42 Phil., 54), it is necessary for the party claiming indemnity for the loss of such
services to prove that the person obliged to render them had done so before he was injured and that
he would be willing to continue rendering them had he not been prevented from so doing.

In view of the foregoing considerations this court is of the opinion and so holds: (1) That a railroad
company which has not installed a semaphore at a crossing an does not see to it that its flagman and
switchman faithfully complies with his duty of remaining at the crossing when a train arrives, is guilty of
negligence and is civilly liable for damages suffered by a motorist and his family who cross its line
without negligence on their part; (2) that an indemnity of P10,000 for a permanent deformity on the
face and on the left leg, suffered by a young and beautiful society woman, is not excessive; (3) that an
indemnity of P5,000 for a permanent deformity on the face and legs of a four-year old girl belonging to
a well-to-do family, is not excessive; and (4) that in order that a husband may recover damages for
deprivation of his wife's assistance during her illness from an accident, it is necessary for him to prove
the existence of such assistance and his wife's willingness to continue rendering it had she not been
prevented from so doing by her illness.

The plaintiffs-appellants are entitled to interest of 6 percent per annum on the amount of the
indemnities adjudicated to them, from the date of the appealed judgment until this judgment becomes
final, in accordance with the provisions of section 510 of Act No. 190.

Wherefore, not finding any error in the judgment appealed from, it is hereby affirmed in toto, with the
sole modification that interest of 6 per cent per annum from the date of the appealed judgment until this
judgment becomes final will be added to the indemnities granted, with the costs of both instances
against the appellant. So ordered.

Malcolm, Hull, Imperial, and Goddard, JJ., concur.

G.R. No. L-21291 March 28, 1969

PRECIOLITA V. CORLISS, plaintiff-appellant,

vs.
THE MANILA RAILROAD CO., defendant-appellant.

Moises C. Nicomedes for plaintiff-appellant.

The Government Corporate Counsel for defendant-appellee.

FERNANDO, J.:

Youth, the threshold of life, is invariably accompanied by that euphoric sense of well-being, and with
reason. The future, bright with promise, looms ahead. One's powers are still to be tested, but one feels
ready for whatever challenge may come his way. There is that heady atmosphere of self-confidence, at
times carried to excess. The temptation to take risks is there, ever so often, difficult, if not impossible,
to resist. There could be then a lessening of prudence and foresight, qualities usually associated with
age. For death seems so remote and contingent an event. Such is not always the case though, and a
slip may be attended with consequences at times unfortunate, even fatal.

Some such thought apparently was in the mind of the lower court when it dismissed the complaint for
recovery of damages filed by plaintiff-appellant, Preciolita V. Corliss whose husband, the late Ralph W.
Corliss, was, at the tender age of twenty-one, the victim of a grim tragedy, when the jeep he was
driving collided with a locomotive of defendant-appellee Manila Railroad Company, close to midnight
on the evening of Feb 21, 1957, at the railroad crossing in Balibago, Angeles, Pampanga, in front of
the Clark Air Force Base. In the decision appealed from, the lower court, after summarizing the
evidence, concluded that the deceased "in his eagerness to beat, so to speak, the oncoming
locomotive, took the risk and attempted to reach the other side, but unfortunately he became the victim
of his own miscalculation." 1

The negligence imputed to defendant-appellee was thus ruled out by the lower court, satisfactory
proof to that effect, in its opinion, being lacking. Hence this appeal direct to us, the amount sought in
the concept of damages reaching the sum of P282,065.40. An examination of the evidence of record
fails to yield a basis for a reversal of the decision appealed from. We affirm.

According to the decision appealed from, there is no dispute as to the following: "In December 1956,
plaintiff, 19 years of age, married Ralph W. Corliss Jr., 21 years of age, ...; that Corliss Jr. was an air
police of the Clark Air Force Base; that at the time of the accident, he was driving the fatal jeep; that he
was then returning in said jeep, together with a P.C. soldier, to the Base; and that Corliss Jr. died of
serious burns at the Base Hospital the next day, while the soldier sustained serious physical injuries
and burns." 2

Then came a summary of the testimony of two of the witnesses for plaintiff-appellant. Thus: "Ronald
J. Ennis, a witness of the plaintiff, substantially declared in his deposition, ..., that at the time of the
accident, he also awaiting transportation at the entrance of Clark Field, which was about 40 to 50 yards
away from the tracks and that while there he saw the jeep coming towards the Base. He said that said
jeep slowed down before reaching the crossing, that it made a brief stop but that it did not stop — dead
stop. Elaborating, he declared that while it was slowing down, Corliss Jr. shifted into first gear and that
was what he meant by a brief stop. He also testified that he could see the train coming from the
direction of San Fernando and that he heard a warning but that it was not sufficient enough to avoid
the accident." 3 Also: "Virgilio de la Paz, another witness of the plaintiff, testified that on the night of
February 21, 1957, he was at the Balibago checkpoint and saw the train coming from Angeles and a
jeep going towards the direction of Clark Field. He stated that he heard the whistle of the locomotive
and saw the collision. The jeep, which caught fire, was pushed forward. He helped the P.C. soldier. He
stated that he saw the jeep running fast and heard the tooting of the horn. It did not stop at the railroad
crossing, according to him." 4

After which reference was made to the testimony of the main witness for defendant-appellee,
Teodorico Capili, "who was at the engine at the time of the mishap," and who "testified that before the
locomotive, which had been previously inspected and found to be in good condition approached, the
crossing, that is, about 300 meters away, he blew the siren and repeated it in compliance with the
regulations until he saw the jeep suddenly spurt and that although the locomotive was running between
20 and 25 kilometers an hour and although he had applied the brakes, the jeep was caught in the
middle of the tracks." 5

1. The above finding as to the non-existence of negligence attributable to defendant-appellee Manila

Railroad Company comes to us encased in the armor of what admittedly appears to be a careful
judicial appraisal and scrutiny of the evidence of record. It is thus proof against any attack unless
sustained and overwhelming. Not that it is invulnerable, but it is likely to stand firm in the face of even
the most formidable barrage.
 In the more traditional terminology, the lower court judgment has in its favor the presumption of
correctness. It is entitled to great respect. After all, the lower court had the opportunity of weighing
carefully what was testified to and apparently did not neglect it. There is no affront to justice then if its
finding be accorded acceptance subject of course the contingency of reversal if error or errors,
substantial in character, be shown in the conclusion thus arrived at. It is a fair statement of the
governing, principle to say that the appellate function is exhausted when there is found to be a rational
basis for the result reached by the trial court.

As was held in a 1961 decision: "We have already ruled, that when the credibility of witnesses is the
one at issue, the trial court's judgment as to their degree of credence deserves serious consideration
by this Court." 6 An earlier expression of the same view is found in Jai-Alai Corporation v. Ching Kiat:
"After going over the record, we find no reason for rejecting the findings of the court below. The
questions raised hinge on credibility and it is well-settled that in the absence of compelling reasons, its
determination is best left to the trial judge why had the advantage of hearing the parties testify and
observing their demeanor on the witness stand." 7

In a 1964 opinion, we adhered to such an approach. Thus: "'Nothing in the record suggests any
arbitrary or abusive conduct on the part of the trial judge in the formulation of the ruling. His conclusion
on the matter is sufficiently borne out by the evidence presented. We are denied, therefore, the
prerogative to disturb that finding, consonant to the time honored tradition of the Tribunal to hold trial
judges better situated to make conclusions on questions of fact'." 8 On this ground alone we can rest
the affirmance of the judgment appealed from. lâwphi1.ñet

2. Nor is the result different even if no such presumption were indulged in and the matter examined as
if we were exercising original and not appellate jurisdiction. The sad and deplorable situation in which
plaintiff-appellant now finds herself, to the contrary notwithstanding we find no reason for reversing the
judgment of the lower court.

This action is predicated on negligence, the Civil Code making clear that whoever by act or omission
causes damage to another, there being negligence, is under obligation to pay for the damage
done. 9 Unless it could be satisfactorily shown, therefore, that defendant-appellee was guilty of
negligence then it could not be held liable. The crucial question, therefore, is the existence of
negligence.

The above Civil Code provision, which is a reiteration of that found in the Civil Code of Spain, formerly
applicable in this jurisdiction, 10 had been interpreted in earlier decisions. Thus, in Smith v. Cadwallader
Gibson Lumber Co., 11Manresa was cited to the following effect "'Among the questions most frequently
raised and upon which the majority of cases have been decided with respect to the application of this
liability, are those referring to the determination of the damage or prejudice, and to the fault or
negligence of the person responsible therefor. These are the two indispensable factors in the
obligations under discussion, for without damage or prejudice there can be no liability, and although
this element is present no indemnity can be awarded unless arising from some person's fault or
negligence'."

Negligence was defined by us in two 1912 decisions, United States v. Juanillo 12 and United States v.
Barias. 13Cooley' formulation was quoted with approval in both the Juanillo and Barias decisions. Thus:
"Judge Cooley in his work on Torts (3d ed.), Sec. 1324, defines negligence to be: "The failure to
observe for the protection of the interests of another person that degree of care, precaution and
vigilance which the circumstance justly demand whereby such other person suffers injury." There was
likewise a reliance on Ahern v. Oregon Telephone Co. 14 Thus: "Negligence is want of the care required
by the circumstances. It is a relative or comparative, not an absolute term and its application depends
upon the situation of the parties and the degree of care and vigilance which the circumstances
reasonably require. Where the danger is great, a high degree of care is necessary, and the failure to
observe it is a want of ordinary care under the circumstances."

To repeat, by such a test, no negligence could be imputed to defendant-appellee, and the action of
plaintiff-appellee must necessary fail. The facts being what they are, compel the conclusion that the
liability sought to be fastened on defendant-appellee had not arisen.

3. Plaintiff-appellant, in her brief, however, would seek a reversal of the judgment appealed from on
the ground that there was a failure to appreciate the true situation. Thus the first three assigned errors
are factual in character. The third assigned error could be summarily disposed of. It would go against
the evidence to maintain the view that the whistle was not sounded and the brakes not applied at a
distance of 300 meters before reaching the crossing.

The first two assigned errors would make much of the failure of the lower court to hold that the
crossing bars not having been put down and there being no guard at the gate-house, there still was a
duty on the part of Corliss to stop his jeep to avoid a collision and that Teodorico Capili, who drove the
engine, was not qualified to do so at the time of the accident. For one cannot just single out
circumstance and then confidently assign to it decisive weight and significance. Considered separately,
neither of the two above errors assigned would call for a judgment different in character. Nor would a
combination of acts allegedly impressed with negligence suffice to alter the result. The quantum of
proof required still not been met. The alleged errors fail of their said effect. The case for plaintiff-
appellant, such as it had not been improved. There is no justification for reversing the judgment of the
lower court.

It cannot be stressed too much that the decisive considerations are too variable, too dependent in the
lid analysis upon a common sense estimate of the situation as it presented itself to the parties for us to
be able to say that this or that element having been isolated, negligence is shown. The factors that
enter the judgment are too many and diverse for us to imprison them in a formula sufficient of itself to
yield the correct answer to the multi-faceted problems the question of negligence poses. Every case
must be dependent on its facts. The circumstances indicative of lack of due care must be judged in the
light of what could reasonably be expected of the parties. If the objective standard of prudence be met,
then negligence is ruled out.

In this particular case, it would be to show less than fidelity to the controlling facts to impute
negligence to defendant-appellee. The first three errors assigned certainly do not call for that
conclusion.

4. The fourth assigned error is deserving of a more extended treatment. Plaintiff-appellant apparently
had in mind this portion of the opinion of the lower court: "The weight of authorities is to the effect that
a railroad track is in itself a warning or a signal of danger to those who go upon it, and that those who,
for reasons of their own, ignore such warning, do so at their own risk and responsibility. Corliss Jr., who
undoubtedly had crossed the checkpoint frequently, if not daily, must have known that locomotive
engines and trains usually pass at that particular crossing where the accident had taken place." 15
 Her assignment of error, however, would single out not the above excerpt from the decision appealed
from but what to her is the apparent reliance of the lower court on Mestres v. Manila Electric Railroad &
Light Co. 16 and United States v. Manlabat & Pasibi. 17 In the Manabat case, the doctrine announced by
this Court follows: "A person in control of an automobile who crosses a railroad, even at a regular road
crossing, and who does not exercise that precaution and that control over it as to be able to stop the
same almost immediately upon the appearance of a train, is guilty of criminal negligence, providing a
collision occurs and injury results. Considering the purposes and the general methods adopted for the
management of railroads and railroad trains, we think it is incumbent upon one approaching a railroad
crossing to use all of his faculties of seeing and hearing. He should approach a railroad crossing
cautiously and carefully. He should look and listen and do everything that a reasonably prudent man
would do before he attempts to cross the track." The Mestres doctrine in a suit arising from a collision
between an automobile and a street car is substantially similar. Thus: "It may be said, however, that,
where a person is nearing a street crossing toward which a car is approaching, the duty is on the party
to stop and avoid a collision who can most readily adjust himself to the exigencies of the case, and
where such person can do so more readily, the motorman has a right to presume that such duty will be
performed."

It is true, as plaintiff-appellant would now allege that there has been a drift away from the apparent
rigid and inflexible doctrine thus set forth in the two above cases evidenced by Lilius v. Manila Railroad
Co., 18 the controlling facts of which, however, are easily distinguishable from what had been correctly
ascertained in the present case. Such a deviation from the earlier principle announced is not only true
of this jurisdiction but also of the United States.

This is made clear by Prosser. Speaking of a 1927 decision by Justice Holmes, he had the following
to say: "Especially noteworthy in this respect is the attempt Mr. Justice Holmes, in Baltimore & Ohio
Railway v. Goodman, to 'lay down a standard once for all,' which would require an automobile driver
approaching a railroad crossing with an obstructed view to stop, look and listen, and if he cannot be
sure otherwise that no train is coming to get out of the car. The basic idea behind this is sound enough:
it is by no means proper care to cross a railroad track without taking reasonable precautions against a
train, and normally such precautions will require looking, hearing, and a stop, or at least slow speed,
where the view is obstructed." 19

Then, barely seven years later, in 1934, came Pakora v. Wabash Railway, 20 where, according to
Prosser, it being shown that "the only effective stop must be made upon the railway tracks themselves,
in a position of obligation danger, the court disregarded any such uniform rule, rejecting the 'get out of
the car' requirement as 'an uncommon precaution, likely to be futile and sometimes even dangerous,'
and saying that the driver need not always stop. 'Illustrations such as these,' said Mr. Justice Cardozo
'bear witness to the need for caution in framing standards of behavior that amount to rules of law....
Extraordinary situations may not wisely or fairly be subjected to tests or regulations that are fitting for
the commonplace or normal." 21

What Justice Cardozo announced would merely emphasize what was set forth earlier that each and
every, case on questions of negligence is to be decided in accordance with the peculiar circumstances
that present themselves. There can be no hard and fast rule. There must be that observance of that
degree of care, precaution, and vigilance which the situation demands. Thus defendant-appellee acted.
It is undeniable then that no negligence can rightfully be imputed to it.
 What commends itself for acceptance is this conclusion arrived at by the lower court: "Predicated on
the testimonies of the plaintiff's witnesses, on the knowledge of the deceased and his familiarity with
the setup of the checkpoint, the existence of the tracks; and on the further fact that the locomotive had
blown its siren or whistle, which was heard by said witnesses, it is clear that Corliss Jr. was so
sufficiently warned in advance of the oncoming train that it was incumbent upon him to avoid a possible
accident — and this consisted simply in stopping his vehicle before the crossing and allowing the train
to move on. A prudent man under similar circumstances would have acted in this manner. This,
unfortunately, Corliss, Jr. failed to do." 22

WHEREFORE, the decision of the lower court of November 29, 1962 dismissing the complaint, is
affirmed. Without pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Capistrano, Teehankee
and Barredo, JJ., concur.

G.R. No. L-32611 November 3, 1930

CULION ICE, FISH AND ELECTRIC CO., INC., plaintiff-appellee,

vs.
PHILIPPINE MOTORS CORPORATION, defendant-appellant.

Gibbs and McDonough for appellant.

Benj. S. Ohnick for appellee.

STREET, J.:

This action was instituted in the Court of First Instance of Manila by the Culion Ice, Fish & Electric Co.,
Inc., for the purpose of recovering from the Philippine Motors Corporation the sum of P11,350, with
interest and costs. Upon hearing the cause the trial court gave judgment in favor of the plaintiff to
recover of the defendant the sum of P9,850, with interest at 6 per centum per annum from March
24,1927, the date of the filing of the complaint, until satisfaction of the judgment, with costs. From this
judgment the defendant appealed.

The plaintiff and defendant are domestic corporations; and at the time of the incident with which we are
here concerned, H.D. Cranston was the representative of the plaintiff in the City of Manila. At the same
time the plaintiff was the registered owner of the motor schooner Gwendoline, which was used in the
fishing trade in the Philippine Islands. In January, 1925, Cranston decided, if practicable, to have the
engine on the Gwendoline changed from a gasoline consumer to a crude oil burner, expecting thereby
to effect economy in the cost of running the boat. He therefore made known his desire to McLeod &
Co., a firm dealing in tractors, and was told by Mc Kellar, of said company, that he might make inquiries
of the Philippine Motors Corporations, which had its office on Ongpin Street, in the City of Manila.
Cranston accordingly repaired to the office of the Philippine Motors Corporation and had a conference
with C.E. Quest, its manager, who agreed to do the job, with the understanding that payment should be
made upon completion of the work.
The Philippine Motors Corporation was at this time engaged in business as an automobile agency, but,
under its charter, it had authority to deal in all sorts of machinery engines and motors, as well as to
build, operate, buy and sell the same and the equipment therof. Quest, as general manager, had full
charge of the corporations in all its branches.

As a result of the aforesaid interview, Quest, in company with Cranston, visited the Gwendoline while it
lay at anchor in the Pasig River, and the work of effecting the change in the engine was begun and
conducted under the supervision of Quest, chiefly by a mechanic whom Quest took with him to the
boat. In this work Quest had the assistance of the members of the crew of the Gwendoline, who had
been directed by Cranston to place themselves under Quest's directions.

Upon preliminary inspection of the engine, Quest came to the conclusion that the principal thing
necessary to accomplish the end in view was to install a new carburetor, and a Zenith carburetor was
chosen as the one most adapted to the purpose. After this appliance had been installed, the engine
was tried with gasoline as a fuel, supplied from the tank already in use. The result of this experiment
was satisfactory. The next problem was to introduce into the carburetor the baser fuel, consisting of a
low grade of oil mixed with distillate. For this purpose a temporary tank to contain the mixture was
placed on deck above and at a short distance from the compartment covering the engine. This tank
was connected with the carburetor by a piece of tubing, which was apparently not well fitted at the
point where it was connected with the tank. Owing to this fact the fuel mixture leaked from the tank and
dripped sown into the engine compartment. The new fuel line and that already in use between the
gasoline tank and carburetor were so fixed that it was possible to change from the gasoline fuel to the
mixed fuel. The purpose of this arrangement was to enable the operator to start the engine on gasoline
and then, after the engine had been operating for a few moments, to switch to the new fuel
supply. lawphil.net

In the course of the preliminary work upon the carburetor and its connections, it was observed that the
carburetor was flooding, and that the gasoline, or other fuel, was trickling freely from the lower part to
the carburetor to the floor. This fact was called to Quest's attention, but he appeared to think lightly of
the matter and said that, when the engine had gotten to running well, the flooding would disappear.

After preliminary experiments and adjustments had been made the boat was taken out into the bay for
a trial run at about 5 p.m. or a little later, on the evening of January 30,1925. The first part of the course
was covered without any untoward development, other than he fact that the engine stopped a few
times, owing no doubt to the use of an improper mixture of fuel. In the course of the trial Quest
remained outside of the engine compartment and occupied himself with making distillate, with a view to
ascertaining what proportion of the two elements would give best results in the engine.

As the boat was coming in from this run, at about 7:30 p.m. and when passing near Cavite, the engine
stopped, and connection again had to be made with the gasoline line to get a new start. After this had
been done the mechanic, or engineer, switched to the tube connecting with the new mixture. A moment
later a back fire occurred in the cylinder chamber. This caused a flame to shoot back into the
carburetor, and instantly the carburetor and adjacent parts were covered with a mass of flames, which
the members of the crew were unable to subdue. They were therefore compelled, as the fire spread, to
take to a boat, and their escape was safely effected, but the Gwendoline was reduced to a mere hulk.
The salvage from, the wreck, when sold, brought only the sum of P150. The value of the boat, before
the accident occured, as the court found, was P10,000.
A study of the testimony lead us to the conclusion that the loss of this boat was chargeable to the
negligence and lack of skill of Quest. The temporary tank in which the mixture was prepared was
apparently at too great an elevation from the carburetor, with the result that when the fuel line was
opened, the hydrostatic pressure in the carburetor was greater than the delicate parts of the carburetor
could sustain. This was no doubt the cause of the flooding of the carburetor; and the result was that;
when the back fire occurred, the external parts of the carburetor, already saturated with gasoline, burst
into flames, whence the fire was quickly communicated to the highly inflammable material near-by.
Ordinarily a back fire from an engine would not be followed by any disaster, but in this case the leak
along the pipe line and the flooding of the carburetor had created a dangerous situation, which a
prudent mechanic, versed in repairs of this nature, would have taken precautions to avoid. The back
fire may have been due either to the fact that the spark was too advanced or the fuel improperly mixed.

In this connection it must be remembered that when a person holds himself out as being competent to
do things requiring professional skill, he will be held liable for negligence if he fails to exhibit the care
and skill of one ordinarily skilled in the particular work which he attempts to do. The proof shows that
Quest had had ample experience in fixing the engines of automobiles and tractors, but it does not
appear that he was experienced in the doing of similar work on boats. For this reason, possibly the
dripping of the mixture form the tank on deck and the flooding of the carburetor did not convey to his
mind an adequate impression of the danger of fire. But a person skilled in that particular sort of work
would, we think have been sufficiently warned from those circumstances to cause him to take greater
and adequate precautions against the danger. In other words Quest did not use the skill that would
have been exhibited by one ordinarily expert in repairing gasoline engines on boats. There was here, in
our opinion, on the part of Quest, a blameworthy antecedent inadvertence to possible harm, and this
constitutes negligence. The burning of the Gwendoline may be said to have resulted from accident, but
this accident was in no sense an unavoidable accident. It would not have occured but for Quest's
carelessness or lack of skill. The test of liability is not whether the injury was accidental in a sense, but
whether Quest was free from blame.

We therefore see no escape from the conclusion that this accident is chargeable to lack of skill or
negligence in effecting the changes which Quest undertook to accomplish; and even supposing that
our theory as to the exact manner in which the accident occurred might appear to be in some respects
incorrect, yet the origin of the fire in not so inscrutable as to enable us to say that it was casus
fortuitus.

The trial judge seems to have proceeded on the idea that, inasmuch as Quest had control of
the Gwendoline during the experimental run, the defendant corporation was in the position of a bailee
and that, as a consequence, the burden of proof was on the defendant to exculpate itself from
responsibility by proving that the accident was not due to the fault of Quest. We are unable to accede
to this point of view. Certainly, Quest was not in charge of the navigation of the boat on this trial run.
His employment contemplated the installation of new parts in the engine only, and it seems rather
strained to hold that the defendant corporation had thereby become bailee of the boat. As a rule
workmen who make repairs on a ship in its owner's yard, or a mechanic who repairs a coach without
taking it to his shop, are not bailees, and their rights and liabilities are determined by the general rules
of law, under their contract. The true bailee acquires possession and what is usually spoken of as
special property in the chattel bailed. As a consequence of such possession and special property, the
bailee is given a lien for his compensation. These ideas seem to be incompatible with the situation now
under consideration. But though defendant cannot be held liable in the supposition that the burden of
proof had not been sustained by it in disproving the negligence of its manager, we are nevertheless of
the opinion that the proof shows by a clear preponderance that the accident to the Gwendolineand the
damages resulting therefrom are chargeable to the negligence or lack of skill of Quest.

This action was instituted about two years after the accident in question had occured, and after Quest
had ceased to be manager of the defendant corporation and had gone back to the United States. Upon
these facts, the defendant bases the contention that the action should be considered stale. It is
sufficient reply to say that the action was brought within the period limited by the statute of limitations
and the situation is not one where the defense of laches can be properly invoked.

It results that the judgment appealed from, awarding damages to the plaintiff in the amount of P9,850,
with interest, must be affirmed; and it is so ordered, with costs against the appellant.

Avanceña, C.J., Malcolm, Villamor, Ostrand, Romualdez and Villa-Real, JJ., concur.

G.R. No. 77679 September 30, 1987

VICENTE VERGARA, petitioner,

vs.
THE COURT OF APPEALS and AMADEO AZARCON, respondents.

RESOLUTION

PADILLA, J.:

An action for damages based on quasi-delict (Art. 2176 of the Civil Code) was filed by private
respondent against petitioner. The action arose from a vehicular accident that occurred on 5 August
1979 in Gapan, Nueva Ecija, when Martin Belmonte, while driving a cargo truck belonging to petitioner,
rammed "head-on" the store-residence of the private respondent, causing damages thereto which were
inventoried and assessed at P53,024.22.

In his answer to the complaint, the petitioner alleged principally: "that his driver Martin Belmonte
operated said cargo truck in a very diligent (and) careful manner; that the steering wheel refused to
respond to his effort and as a result of a blown-out tire and despite application of his brakes, the said
cargo truck hit the store-residence of plaintiff (private respondent) and that the said accident was an
act of God for which he cannot be held liable." 1

Petitioner also filed a third party complaint against Travellers Insurance and Surety Corporation,
alleging that said cargo truck involved in the vehicular accident, belonging to the petitioner, was
insured by the third party defendant insurance company. Petitioner asked that the latter be ordered to
pay him whatever amount he may be ordered by the court to pay to the private respondent.

The trial court rendered judgment in favor of private respondent. Upon appeal to the Court of Appeals,
the latter court affirmed in toto the decision of the trial court, which ordered Petitioner to pay, jointly and
severally with Travellers Insurance and Surety Corporation, to the private, respondent the following: (a)
P53,024.22 as actual damages; (b) P10,000.00 as moral damages; (c) P10,000.00 as exemplary
damages; and (d) the sum of P5,000.00 for attorney's fees and the costs. On the third party complaint,
the insurance company was sentenced to pay to the petitioner the following: (a) P50,000.00 for third
party liability under its comprehensive accident insurance policy; and (b) P3,000.00 for and as
attorney's fees.

Hence, this petition for review on certiorari.

Petitioner's contention that the respondent court erred in finding him guilty of fault or negligence is not
tenable. It was established by competent evidence that the requisites of a quasi-delict are present in
the case at bar. These requisites are: (1) damages to the plaintiff; (2) negligence, by act or omission, of
which defendant, or some person for whose acts he must respond, was guilty; and (3) the connection
of cause and effect between such negligence and the damages.

It is undisputed that private respondent suffered damages as a result of an act or omission of

petitioner. The issue of whether or not this act or omission can be considered as a "negligent" act or
omission was passed upon by the trial court. The findings of said court, affirmed by the respondent
court, which we are not prepared to now disturb, show that the fact of occurrence of the "vehicular
accident" was sufficiently established by the policy report and the testimony of Patrolman Masiclat. And
the fact of negligence may be deduced from the surrounding circumstances thereof. According to the
police report, "the cargo truck was travelling on the right side of the road going to Manila and then it
crossed to the center line and went to the left side of the highway; it then bumped a tricycle; and then
another bicycle; and then said cargo truck rammed the store warehouse of the plaintiff." 2

According to the driver of the cargo truck, he applied the brakes but the latter did not work due to
mechanical defect. Contrary to the claim of the petitioner, a mishap caused by defective brakes can not
be consideration as fortuitous in character. Certainly, the defects were curable and the accident
preventable.

Furthermore, the petitioner failed to adduce any evidence to overcome the disputable presumption of
negligence on his part in the selection and supervision of his driver.

Based on the foregoing finding by the respondent Court that there was negligence on the part of the
petitioner, the petitioner's contention that the respondent court erred in awarding private respondent
actual, moral and exemplary damages as well as attorney's fees and costs, is untenable.

ACCORDINGLY, the petition is DENIED.

SO ORDERED.

Yap (Chairman), Melencio-Herrera, Paras and Sarmiento, JJ., concur.

G.R. No. 137775. March 31, 2005

FGU INSURANCE CORPORATION, Petitioners,

vs.
THE COURT OF APPEALS, SAN MIGUEL CORPORATION, and ESTATE OF ANG GUI,
represented by LUCIO, JULIAN, and JAIME, all surnamed ANG, and CO TO, Respondents.

G.R. No. 140704. March 31, 2005

ESTATE OF ANG GUI, Represented by LUCIO, JULIAN and JAIME, all surnamed ANG, and
CO TO,Petitioners,
vs.
THE HONORABLE COURT OF APPEALS, SAN MIGUEL CORP., and FGU INSURANCE
CORP., Respondents.

DECISION

CHICO-NAZARIO, J.:

Before Us are two separate Petitions for review assailing the Decision 1 of the Court of Appeals in CA-
G.R. CV No. 49624 entitled, "San Miguel Corporation, Plaintiff-Appellee versus Estate of Ang Gui,
represented by Lucio, Julian and Jaime, all surnamed Ang, and Co To, Defendants-Appellants, Third–
Party Plaintiffs versus FGU Insurance Corporation, Third-Party Defendant-Appellant," which affirmed in
toto the decision2 of the Regional Trial Court of Cebu City, Branch 22. The dispositive portion of the
Court of Appeals decision reads:

WHEREFORE, for all the foregoing, judgment is hereby rendered as follows:

1) Ordering defendants to pay plaintiff the sum of P1,346,197.00 and an interest of 6% per annum to
be reckoned from the filing of this case on October 2, 1990;

2) Ordering defendants to pay plaintiff the sum of P25,000.00 for attorney’s fees and an additional sum
of P10,000.00 as litigation expenses;

3) With cost against defendants.

For the Third-Party Complaint:

1) Ordering third-party defendant FGU Insurance Company to pay and reimburse defendants the
amount of P632,700.00.3

The Facts

Evidence shows that Anco Enterprises Company (ANCO), a partnership between Ang Gui and Co To,
was engaged in the shipping business. It owned the M/T ANCO tugboat and the D/B Lucio barge which
were operated as common carriers. Since the D/B Lucio had no engine of its own, it could not
maneuver by itself and had to be towed by a tugboat for it to move from one place to another.

On 23 September 1979, San Miguel Corporation (SMC) shipped from Mandaue City, Cebu, on board
the D/B Lucio, for towage by M/T ANCO, the following cargoes:

Bill of Lading No. Shipment Destination

1 25,000 cases Pale Pilsen Estancia, Iloilo

350 cases Cerveza Negra Estancia, Iloilo

2 15,000 cases Pale Pilsen San Jose, Antique

200 cases Cerveza Negra San Jose, Antique

The consignee for the cargoes covered by Bill of Lading No. 1 was SMC’s Beer Marketing Division
(BMD)-Estancia Beer Sales Office, Estancia, Iloilo, while the consignee for the cargoes covered by Bill
of Lading No. 2 was SMC’s BMD-San Jose Beer Sales Office, San Jose, Antique.

The D/B Lucio was towed by the M/T ANCO all the way from Mandaue City to San Jose, Antique. The
vessels arrived at San Jose, Antique, at about one o’clock in the afternoon of 30 September 1979. The
tugboat M/T ANCO left the barge immediately after reaching San Jose, Antique.

When the barge and tugboat arrived at San Jose, Antique, in the afternoon of 30 September 1979, the
clouds over the area were dark and the waves were already big. The arrastre workers unloading the
cargoes of SMC on board the D/B Lucio began to complain about their difficulty in unloading the
cargoes. SMC’s District Sales Supervisor, Fernando Macabuag, requested ANCO’s representative to
transfer the barge to a safer place because the vessel might not be able to withstand the big waves.

ANCO’s representative did not heed the request because he was confident that the barge could
withstand the waves. This, notwithstanding the fact that at that time, only the M/T ANCO was left at the
wharf of San Jose, Antique, as all other vessels already left the wharf to seek shelter. With the waves
growing bigger and bigger, only Ten Thousand Seven Hundred Ninety (10,790) cases of beer were
discharged into the custody of the arrastre operator.

At about ten to eleven o’clock in the evening of 01 October 1979, the crew of D/B Lucio abandoned the
vessel because the barge’s rope attached to the wharf was cut off by the big waves. At around
midnight, the barge run aground and was broken and the cargoes of beer in the barge were swept
away.

As a result, ANCO failed to deliver to SMC’s consignee Twenty-Nine Thousand Two Hundred Ten
(29,210) cases of Pale Pilsen and Five Hundred Fifty (550) cases of Cerveza Negra. The value per
case of Pale Pilsen was Forty-Five Pesos and Twenty Centavos (P45.20). The value of a case of
Cerveza Negra was Forty-Seven Pesos and Ten Centavos (P47.10), hence, SMC’s claim against
ANCO amounted to One Million Three Hundred Forty-Six Thousand One Hundred Ninety-Seven
Pesos (P1,346,197.00).

As a consequence of the incident, SMC filed a complaint for Breach of Contract of Carriage and
Damages against ANCO for the amount of One Million Three Hundred Forty-Six Thousand One
Hundred Ninety-Seven Pesos (P1,346,197.00) plus interest, litigation expenses and Twenty-Five
Percent (25%) of the total claim as attorney’s fees.

Upon Ang Gui’s death, ANCO, as a partnership, was dissolved hence, on 26 January 1993, SMC filed
a second amended complaint which was admitted by the Court impleading the surviving partner, Co To
and the Estate of Ang Gui represented by Lucio, Julian and Jaime, all surnamed Ang. The substituted
defendants adopted the original answer with counterclaim of ANCO "since the substantial allegations
of the original complaint and the amended complaint are practically the same."

ANCO admitted that the cases of beer Pale Pilsen and Cerveza Negra mentioned in the complaint
were indeed loaded on the vessel belonging to ANCO. It claimed however that it had an agreement
with SMC that ANCO would not be liable for any losses or damages resulting to the cargoes by reason
of fortuitous event. Since the cases of beer Pale Pilsen and Cerveza Negra were lost by reason of a
storm, a fortuitous event which battered and sunk the vessel in which they were loaded, they should
not be held liable. ANCO further asserted that there was an agreement between them and SMC to
insure the cargoes in order to recover indemnity in case of loss. Pursuant to that agreement, the
cargoes to the extent of Twenty Thousand (20,000) cases was insured with FGU Insurance
Corporation (FGU) for the total amount of Eight Hundred Fifty-Eight Thousand Five Hundred Pesos
(P858,500.00) per Marine Insurance Policy No. 29591.

Subsequently, ANCO, with leave of court, filed a Third-Party Complaint against FGU, alleging that
before the vessel of ANCO left for San Jose, Antique with the cargoes owned by SMC, the cargoes, to
the extent of Twenty Thousand (20,000) cases, were insured with FGU for a total amount of Eight
Hundred Fifty-Eight Thousand Five Hundred Pesos (P858,500.00) under Marine Insurance Policy No.
29591. ANCO further alleged that on or about 02 October 1979, by reason of very strong winds and
heavy waves brought about by a passing typhoon, the vessel run aground near the vicinity of San
Jose, Antique, as a result of which, the vessel was totally wrecked and its cargoes owned by SMC
were lost and/or destroyed. According to ANCO, the loss of said cargoes occurred as a result of risks
insured against in the insurance policy and during the existence and lifetime of said insurance policy.
ANCO went on to assert that in the remote possibility that the court will order ANCO to pay SMC’s
claim, the third-party defendant corporation should be held liable to indemnify or reimburse ANCO
whatever amounts, or damages, it may be required to pay to SMC.

In its answer to the Third-Party complaint, third-party defendant FGU admitted the existence of the
Insurance Policy under Marine Cover Note No. 29591 but maintained that the alleged loss of the
cargoes covered by the said insurance policy cannot be attributed directly or indirectly to any of the
risks insured against in the said insurance policy. According to FGU, it is only liable under the policy to
Third-party Plaintiff ANCO and/or Plaintiff SMC in case of any of the following:

a) total loss of the entire shipment;

b) loss of any case as a result of the sinking of the vessel; or

c) loss as a result of the vessel being on fire.

Furthermore, FGU alleged that the Third-Party Plaintiff ANCO and Plaintiff SMC failed to exercise
ordinary diligence or the diligence of a good father of the family in the care and supervision of the
cargoes insured to prevent its loss and/or destruction.

Third-Party defendant FGU prayed for the dismissal of the Third-Party Complaint and asked for actual,
moral, and exemplary damages and attorney’s fees.

The trial court found that while the cargoes were indeed lost due to fortuitous event, there was failure
on ANCO’s part, through their representatives, to observe the degree of diligence required that would
exonerate them from liability. The trial court thus held the Estate of Ang Gui and Co To liable to SMC
for the amount of the lost shipment. With respect to the Third-Party complaint, the court a quo found
FGU liable to bear Fifty-Three Percent (53%) of the amount of the lost cargoes. According to the trial
court:

. . . Evidence is to the effect that the D/B Lucio, on which the cargo insured, run-aground and was
broken and the beer cargoes on the said barge were swept away. It is the sense of this Court that the
risk insured against was the cause of the loss.
...

Since the total cargo was 40,550 cases which had a total amount of P1,833,905.00 and the amount of
the policy was only for P858,500.00, defendants as assured, therefore, were considered co-insurers of
third-party defendant FGU Insurance Corporation to the extent of 975,405.00 value of the
cargo. Consequently, inasmuch as there was partial loss of only P1,346,197.00, the assured shall bear
53% of the loss…4 [Emphasis ours]

The appellate court affirmed in toto the decision of the lower court and denied the motion for
reconsideration and the supplemental motion for reconsideration.

Hence, the petitions.

The Issues

In G.R. No. 137775, the grounds for review raised by petitioner FGU can be summarized into two: 1)
Whether or not respondent Court of Appeals committed grave abuse of discretion in holding FGU liable
under the insurance contract considering the circumstances surrounding the loss of the cargoes; and
2) Whether or not the Court of Appeals committed an error of law in holding that the doctrine of res
judicata applies in the instant case.

In G.R. No. 140704, petitioner Estate of Ang Gui and Co To assail the decision of the appellate court
based on the following assignments of error: 1) The Court of Appeals committed grave abuse of
discretion in affirming the findings of the lower court that the negligence of the crewmembers of the D/B
Lucio was the proximate cause of the loss of the cargoes; and 2) The respondent court acted with
grave abuse of discretion when it ruled that the appeal was without merit despite the fact that said
court had accepted the decision in Civil Case No. R-19341, as affirmed by the Court of Appeals and
the Supreme Court, as res judicata.

Ruling of the Court

First, we shall endeavor to dispose of the common issue raised by both petitioners in their respective
petitions for review, that is, whether or not the doctrine of res judicata applies in the instant case.

It is ANCO’s contention that the decision in Civil Case No. R-19341, 5 which was decided in its favor,
constitutes res judicata with respect to the issues raised in the case at bar.

The contention is without merit. There can be no res judicata as between Civil Case No. R-19341 and
the case at bar. In order for res judicata to be made applicable in a case, the following essential
requisites must be present: 1) the former judgment must be final; 2) the former judgment must have
been rendered by a court having jurisdiction over the subject matter and the parties; 3) the former
judgment must be a judgment or order on the merits; and 4) there must be between the first and
second action identity of parties, identity of subject matter, and identity of causes of action. 6

There is no question that the first three elements of res judicata as enumerated above are indeed
satisfied by the decision in Civil Case No. R-19341. However, the doctrine is still inapplicable due to
the absence of the last essential requisite of identity of parties, subject matter and causes of action.
The parties in Civil Case No. R-19341 were ANCO as plaintiff and FGU as defendant while in the
instant case, SMC is the plaintiff and the Estate of Ang Gui represented by Lucio, Julian and Jaime, all
surnamed Ang and Co To as defendants, with the latter merely impleading FGU as third-party
defendant.

The subject matter of Civil Case No. R-19341 was the insurance contract entered into by ANCO, the
owner of the vessel, with FGU covering the vessel D/B Lucio, while in the instant case, the subject
matter of litigation is the loss of the cargoes of SMC, as shipper, loaded in the D/B Lucio and the
resulting failure of ANCO to deliver to SMC’s consignees the lost cargo. Otherwise stated, the
controversy in the first case involved the rights and liabilities of the shipowner vis-à-vis that of the
insurer, while the present case involves the rights and liabilities of the shipper vis-à-vis that of the
shipowner. Specifically, Civil Case No. R-19341 was an action for Specific Performance and Damages
based on FGU Marine Hull Insurance Policy No. VMF-MH-13519 covering the vessel D/B Lucio, while
the instant case is an action for Breach of Contract of Carriage and Damages filed by SMC against
ANCO based on Bill of Lading No. 1 and No. 2, with defendant ANCO seeking reimbursement from
FGU under Insurance Policy No. MA-58486, should the former be held liable to pay SMC.

Moreover, the subject matter of the third-party complaint against FGU in this case is different from that
in Civil Case No. R-19341. In the latter, ANCO was suing FGU for the insurance contract over the
vessel while in the former, the third-party complaint arose from the insurance contract covering the
cargoes on board the D/B Lucio.

The doctrine of res judicata precludes the re-litigation of a particular fact or issue already passed upon
by a court of competent jurisdiction in a former judgment, in another action between the same parties
based on a different claim or cause of action. The judgment in the prior action operates as estoppel
only as to those matters in issue or points controverted, upon the determination of which the finding or
judgment was rendered.7 If a particular point or question is in issue in the second action, and the
judgment will depend on the determination of that particular point or question, a former judgment
between the same parties or their privies will be final and conclusive in the second if that same point or
question was in issue and adjudicated in the first suit. 8

Since the case at bar arose from the same incident as that involved in Civil Case No. R-19341, only
findings with respect to matters passed upon by the court in the former judgment are conclusive in the
disposition of the instant case. A careful perusal of the decision in Civil Case No. R-19341 will reveal
that the pivotal issues resolved by the lower court, as affirmed by both the Court of Appeals and the
Supreme Court, can be summarized into three legal conclusions: 1) that the D/B Lucio before and
during the voyage was seaworthy; 2) that there was proper notice of loss made by ANCO within the
reglementary period; and 3) that the vessel D/B Lucio was a constructive total loss.

Said decision, however, did not pass upon the issues raised in the instant case. Absent therein was
any discussion regarding the liability of ANCO for the loss of the cargoes. Neither did the lower court
pass upon the issue of the alleged negligence of the crewmembers of the D/B Lucio being the cause of
the loss of the cargoes owned by SMC.

Therefore, based on the foregoing discussion, we are reversing the findings of the Court of Appeals
that there is res judicata.
Anent ANCO’s first assignment of error, i.e., the appellate court committed error in concluding that the
negligence of ANCO’s representatives was the proximate cause of the loss, said issue is a question of
fact assailing the lower court’s appreciation of evidence on the negligence or lack thereof of the
crewmembers of the D/B Lucio. As a rule, findings of fact of lower courts, particularly when affirmed by
the appellate court, are deemed final and conclusive. The Supreme Court cannot review such findings
on appeal, especially when they are borne out by the records or are based on substantial
evidence.9 As held in the case of Donato v. Court of Appeals,10 in this jurisdiction, it is a fundamental
and settled rule that findings of fact by the trial court are entitled to great weight on appeal and should
not be disturbed unless for strong and cogent reasons because the trial court is in a better position to
examine real evidence, as well as to observe the demeanor of the witnesses while testifying in the
case.11

It is not the function of this Court to analyze or weigh evidence all over again, unless there is a showing
that the findings of the lower court are totally devoid of support or are glaringly erroneous as to
constitute palpable error or grave abuse of discretion. 12

A careful study of the records shows no cogent reason to fault the findings of the lower court, as
sustained by the appellate court, that ANCO’s representatives failed to exercise the extraordinary
degree of diligence required by the law to exculpate them from liability for the loss of the cargoes.

First, ANCO admitted that they failed to deliver to the designated consignee the Twenty Nine Thousand
Two Hundred Ten (29,210) cases of Pale Pilsen and Five Hundred Fifty (550) cases of Cerveza Negra.

Second, it is borne out in the testimony of the witnesses on record that the barge D/B Lucio had no
engine of its own and could not maneuver by itself. Yet, the patron of ANCO’s tugboat M/T ANCO left it
to fend for itself notwithstanding the fact that as the two vessels arrived at the port of San Jose,
Antique, signs of the impending storm were already manifest. As stated by the lower court, witness Mr.
Anastacio Manilag testified that the captain or patron of the tugboat M/T ANCO left the barge D/B Lucio
immediately after it reached San Jose, Antique, despite the fact that there were already big waves and
the area was already dark. This is corroborated by defendants’ own witness, Mr. Fernando
Macabueg.13

The trial court continued:

At that precise moment, since it is the duty of the defendant to exercise and observe extraordinary
diligence in the vigilance over the cargo of the plaintiff, the patron or captain of M/T ANCO,
representing the defendant could have placed D/B Lucio in a very safe location before they left
knowing or sensing at that time the coming of a typhoon. The presence of big waves and dark clouds
could have warned the patron or captain of M/T ANCO to insure the safety of D/B Lucio including its
cargo. D/B Lucio being a barge, without its engine, as the patron or captain of M/T ANCO knew, could
not possibly maneuver by itself. Had the patron or captain of M/T ANCO, the representative of the
defendants observed extraordinary diligence in placing the D/B Lucio in a safe place, the loss to the
cargo of the plaintiff could not have occurred. In short, therefore, defendants through their
representatives, failed to observe the degree of diligence required of them under the provision of Art.
1733 of the Civil Code of the Philippines.14

Petitioners Estate of Ang Gui and Co To, in their Memorandum, asserted that the contention of
respondents SMC and FGU that "the crewmembers of D/B Lucio should have left port at the onset of
the typhoon is like advising the fish to jump from the frying pan into the fire and an advice that borders
on madness."15

The argument does not persuade. The records show that the D/B Lucio was the only vessel left at San
Jose, Antique, during the time in question. The other vessels were transferred and temporarily moved
to Malandong, 5 kilometers from wharf where the barge remained. 16 Clearly, the transferred vessels
were definitely safer in Malandong than at the port of San Jose, Antique, at that particular time, a fact
which petitioners failed to dispute

ANCO’s arguments boil down to the claim that the loss of the cargoes was caused by the
typhoon Sisang, a fortuitous event (caso fortuito), and there was no fault or negligence on their part. In
fact, ANCO claims that their crewmembers exercised due diligence to prevent or minimize the loss of
the cargoes but their efforts proved no match to the forces unleashed by the typhoon which, in
petitioners’ own words was, by any yardstick, a natural calamity, a fortuitous event, an act of God, the
consequences of which petitioners could not be held liable for.17

The Civil Code provides:

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.

Such extraordinary diligence in vigilance over the goods is further expressed in Articles 1734, 1735,
and 1745 Nos. 5, 6, and 7 . . .

Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods,
unless the same is due to any of the following causes only:

(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;

...

Art. 1739. In order that the common carrier may be exempted from responsibility, the natural
disaster must have been the proximate and only cause of the loss . However, the common
carrier must exercise due diligence to prevent or minimize loss before, during and after the occurrence
of flood, storm, or other natural disaster in order that the common carrier may be exempted from
liability for the loss, destruction, or deterioration of the goods . . . (Emphasis supplied)

Caso fortuito or force majeure (which in law are identical insofar as they exempt an obligor from
liability)18 by definition, are extraordinary events not foreseeable or avoidable, events that could not be
foreseen, or which though foreseen, were inevitable. It is therefore not enough that the event should
not have been foreseen or anticipated, as is commonly believed but it must be one impossible to
foresee or to avoid.19

In this case, the calamity which caused the loss of the cargoes was not unforeseen nor was it
unavoidable. In fact, the other vessels in the port of San Jose, Antique, managed to transfer to another
place, a circumstance which prompted SMC’s District Sales Supervisor to request that the D/B Lucio
be likewise transferred, but to no avail. The D/B Lucio had no engine and could not maneuver by itself.
Even if ANCO’s representatives wanted to transfer it, they no longer had any means to do so as the
tugboat M/T ANCO had already departed, leaving the barge to its own devices. The captain of the
tugboat should have had the foresight not to leave the barge alone considering the pending storm.

While the loss of the cargoes was admittedly caused by the typhoon Sisang, a natural disaster, ANCO
could not escape liability to respondent SMC. The records clearly show the failure of petitioners’
representatives to exercise the extraordinary degree of diligence mandated by law. To be exempted
from responsibility, the natural disaster should have been the proximate and only cause of the
loss.20 There must have been no contributory negligence on the part of the common carrier. As held in
the case of Limpangco Sons v. Yangco Steamship Co.:21

. . . To be exempt from liability because of an act of God, the tug must be free from any previous
negligence or misconduct by which that loss or damage may have been occasioned. For, although the
immediate or proximate cause of the loss in any given instance may have been what is termed an act
of God, yet, if the tug unnecessarily exposed the two to such accident by any culpable act or omission
of its own, it is not excused.22

Therefore, as correctly pointed out by the appellate court, there was blatant negligence on the part of
M/T ANCO’s crewmembers, first in leaving the engine-less barge D/B Lucio at the mercy of the storm
without the assistance of the tugboat, and again in failing to heed the request of SMC’s representatives
to have the barge transferred to a safer place, as was done by the other vessels in the port; thus,
making said blatant negligence the proximate cause of the loss of the cargoes.

We now come to the issue of whether or not FGU can be held liable under the insurance policy to
reimburse ANCO for the loss of the cargoes despite the findings of the respondent court that such loss
was occasioned by the blatant negligence of the latter’s employees.

One of the purposes for taking out insurance is to protect the insured against the consequences of his
own negligence and that of his agents. Thus, it is a basic rule in insurance that the carelessness and
negligence of the insured or his agents constitute no defense on the part of the insurer. 23 This rule
however presupposes that the loss has occurred due to causes which could not have been prevented
by the insured, despite the exercise of due diligence.

The question now is whether there is a certain degree of negligence on the part of the insured or his
agents that will deprive him the right to recover under the insurance contract. We say there is.
However, to what extent such negligence must go in order to exonerate the insurer from liability must
be evaluated in light of the circumstances surrounding each case. When evidence show that the
insured’s negligence or recklessness is so gross as to be sufficient to constitute a willful act, the insurer
must be exonerated.

In the case of Standard Marine Ins. Co. v. Nome Beach L. & T. Co.,24 the United States Supreme Court
held that:

The ordinary negligence of the insured and his agents has long been held as a part of the risk which
the insurer takes upon himself, and the existence of which, where it is the proximate cause of the loss,
does not absolve the insurer from liability. But willful exposure, gross negligence, negligence
amounting to misconduct, etc., have often been held to release the insurer from such
liability.25 [Emphasis ours]

...
In the case of Williams v. New England Insurance Co., 3 Cliff. 244, Fed. Cas. No. 17,731, the owners
of an insured vessel attempted to put her across the bar at Hatteras Inlet. She struck on the bar and
was wrecked. The master knew that the depth of water on the bar was such as to make the attempted
passage dangerous. Judge Clifford held that, under the circumstances, the loss was not within the
protection of the policy, saying:

Authorities to prove that persons insured cannot recover for a loss occasioned by their own wrongful
acts are hardly necessary, as the proposition involves an elementary principle of universal application.
Losses may be recovered by the insured, though remotely occasioned by the negligence or
misconduct of the master or crew, if proximately caused by the perils insured against, because such
mistakes and negligence are incident to navigation and constitute a part of the perils which those who
engage in such adventures are obliged to incur; but it was never supposed that the insured could
recover indemnity for a loss occasioned by his own wrongful act or by that of any agent for whose
conduct he was responsible.26 [Emphasis ours]

From the above-mentioned decision, the United States Supreme Court has made a distinction between
ordinary negligence and gross negligence or negligence amounting to misconduct and its effect on the
insured’s right to recover under the insurance contract. According to the Court, while mistake and
negligence of the master or crew are incident to navigation and constitute a part of the perils that the
insurer is obliged to incur, such negligence or recklessness must not be of such gross character as to
amount to misconduct or wrongful acts; otherwise, such negligence shall release the insurer from
liability under the insurance contract.

In the case at bar, both the trial court and the appellate court had concluded from the evidence that the
crewmembers of both the D/B Lucio and the M/T ANCO were blatantly negligent. To wit:

There was blatant negligence on the part of the employees of defendants-appellants when the patron
(operator) of the tug boat immediately left the barge at the San Jose, Antique wharf despite the
looming bad weather. Negligence was likewise exhibited by the defendants-appellants’ representative
who did not heed Macabuag’s request that the barge be moved to a more secure place. The prudent
thing to do, as was done by the other sea vessels at San Jose, Antique during the time in question,
was to transfer the vessel to a safer wharf. The negligence of the defendants-appellants is proved by
the fact that on 01 October 1979, the only simple vessel left at the wharf in San Jose was the D/B
Lucio.27 [Emphasis ours]

As stated earlier, this Court does not find any reason to deviate from the conclusion drawn by the lower
court, as sustained by the Court of Appeals, that ANCO’s representatives had failed to exercise
extraordinary diligence required of common carriers in the shipment of SMC’s cargoes. Such blatant
negligence being the proximate cause of the loss of the cargoes amounting to One Million Three
Hundred Forty-Six Thousand One Hundred Ninety-Seven Pesos (P1,346,197.00)

This Court, taking into account the circumstances present in the instant case, concludes that the
blatant negligence of ANCO’s employees is of such gross character that it amounts to a wrongful act
which must exonerate FGU from liability under the insurance contract.

WHEREFORE, premises considered, the Decision of the Court of Appeals dated 24 February 1999 is
hereby AFFIRMED with MODIFICATION dismissing the third-party complaint.
SO ORDERED.

Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

G.R. No. L-24837 June 27, 1968

JULIAN C. SINGSON and RAMONA DEL CASTILLO, plaintiffs,

vs.
BANK OF THE PHILIPPINE ISLANDS and SANTIAGO FREIXAS, in his capacity as
President of the said Bank, defendants.

Gil B. Galang for plaintiffs.

Aviado and Aranda for defendants.

CONCEPCION, C.J.:

Appeal by plaintiffs, Julian Singson and his wife, Ramona del Castillo, from a decision of the Court of
First Instance of Manila dismissing their complaint against defendants herein, the Bank of the
Philippine Islands and Santiago Freixas.

It appears that Singson, was one of the defendants in civil case No. 23906 of the Court of First
Instance, Manila, in which judgment had been rendered sentencing him and his co-defendants therein,
namely, Celso Lobregat and Villa-Abrille & Co., to pay the sum of P105,539.56 to the plaintiff therein,
Philippine Milling Co. Singson and Lobregat had seasonably appealed from said judgment, but not
Villa-Abrille & Co., as against which said judgment, accordingly, became final and executory. In due
course, a writ of garnishment was subsequently served upon the Bank of the Philippine Islands — in
which the Singsons had a current account — insofar as Villa-Abrille's credits against the Bank were
concerned. What happened thereafter is set forth in the decision appealed from, from which we quote:

Upon receipt of the said Writ of Garnishment, a clerk of the bank in charge of all matters of
execution and garnishment, upon reading the name of the plaintiff herein in the title of the Writ
of Garnishment as a party defendants, without further reading the body of the said garnishment
and informing himself that said garnishment was merely intended for the deposits of defendant
Villa-Abrille & Co., Valentin Teus, Fernando F. de Villa-Abrille and Joaquin Bona, prepared a
letter for the signature of the President of the Bank informing the plaintiff Julian C. Singson of
the garnishment of his deposits by the plaintiff in that case. Another letter was also prepared
and signed by the said President of the Bank for the Special Sheriff dated April 17, 1963.

Subsequently, two checks issued by the plaintiff Julian C. Singson, one for the amount of P383
in favor of B. M. Glass Service dated April 16, 1963 and bearing No. C-424852, and check No.
C-394996 for the amount of P100 in favor of the Lega Corporation, and drawn against the said
Bank, were deposited by the said drawers with the said bank. Believing that the plaintiff
Singson, the drawer of the check, had no more control over the balance of his deposits in the
said bank, the checks were dishonored and were refused payment by the said bank. After the
first check was returned by the bank to the B. M. Glass Service, the latter wrote plaintiff Julian
C. Singson a letter, dated April 19, 1963, advising him that his check for P383.00 bearing No. C-
424852 was not honored by the bank for the reason that his account therein had already been
garnished. The said B. M. Glass Service further stated in the said letter that they were
constrained to close his credit account with them. In view thereof, plaintiff Julian C. Singson
 wrote the defendant bank a letter on April 19, 1963, claiming that his name was not included in
the Writ of Execution and Notice of Garnishment, which was served upon the bank. The
defendant President Santiago Freixas of the said bank took steps to verify this information and
after having confirmed the same, apologized to the plaintiff Julian C. Singson and wrote him a
letter dated April 22, 1963, requesting him to disregard their letter of April 17, 1963, and that the
action of garnishment from his account had already been removed. A similar letter was written
by the said official of the bank on April 22, 1963 to the Special Sheriff informing him that his
letter dated April 17, 1963 to the said Special Sheriff was considered cancelled and that they
had already removed the Notice of Garnishment from plaintiff Singson's account. Thus, the
defendants lost no time to rectify the mistake that had been inadvertently committed, resulting in
the temporary freezing of the account of the plaintiff with the said bank for a short time.

xxx xxx xxx

On May 8, 1963, the Singsong commenced the present action against the Bank and its president,
Santiago Freixas, for damages1 in consequence of said illegal freezing of plaintiffs'
account.1äwphï1.ñët

After appropriate proceedings, the Court of First Instance of Manila rendered judgment dismissing the
complaint upon the ground that plaintiffs cannot recover from the defendants upon the basis of a quasi-
delict, because the relation between the parties is contractual in nature; because this case does not fall
under Article 2219 of our Civil Code, upon which plaintiffs rely; and because plaintiffs have not
established the amount of damages allegedly sustained by them.

The lower court held that plaintiffs' claim for damages cannot be based upon a tort or quasi-delict, their
relation with the defendants being contractual in nature. We have repeatedly held, however, that the
existence of a contract between the parties does not bar the commission of a tort by the one against
the order and the consequent recovery of damages therefor.2 Indeed, this view has been, in effect,
reiterated in a comparatively recent case. Thus, in Air France vs. Carrascoso,3 involving an airplane
passenger who, despite his first-class ticket, had been illegally ousted from his first-class
accommodation and compelled to take a seat in the tourist compartment, was held entitled to recover
damages from the air-carrier, upon the ground of tort on the latter's part, for, although the relation
between a passenger and a carrier is "contractual both in origin and nature ... the act that breaks the
contract may also be a tort".

In view, however, of the facts obtaining in the case at bar, and considering, particularly, the
circumstance, that the wrong done to the plaintiff was remedied as soon as the President of the bank
realized the mistake he and his subordinate employee had committed, the Court finds that an award of
nominal damages — the amount of which need not be proven 4 — in the sum of P1,000, in addition to
attorney's fees in the sum of P500, would suffice to vindicate plaintiff's rights. 5

WHEREFORE, the judgment appealed from is hereby reversed, and another one shall be entered
sentencing the defendant Bank of the Philippine Islands to pay to the plaintiffs said sums of P1,000, as
nominal damages, and P500, as attorney's fees, apart from the costs. It is so ordered.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro and Angeles, JJ., concur.
Fernando, J., took no part.
G.R. No. L-29356 December 29, 1928

THE CITY OF MANILA, plaintiff-appellee,

vs.
THE MANILA ELECTRIC COMPANY, defendant-appellant.

Ross, Lawrence and Selph and Antonio T. Carrascoso, Jr., for appellant.
City Fiscal Guevara and Assistant City Fiscal Paredes for appellee.

MALCOLM, J.:

The Manila Electric Company appeals from a judgment of the Court of First Instance of Manila which
condemns it to pay to the City of Manila the sum of P1,788.27, with legal interest from September 10,
1927, and with costs. While the case in its fundamentals the cause suggested important questions
which possibly the parties have not entirely grasped. By way of preliminary statement, it also remains
to be said that the numerous deliberations of the court on the case have disclosed conflicting views
which it is difficult to reconcile. The present decision, therefore, will aim to present as best it may, the
principles for which a majority of the court stand, leaving it to the individual member to dissent or other
wise explain his vote as to him seems fit and proper.

On June 8, 1925, in the City of Manila, there occurred a collision between a street car of the Manila
Electric Company, of which Sixto Eustaquio was the motorman, and a truck belonging to the City of
Manila. As a result of the collision, the truck was damaged in the sum of P1,788.27. Sixto Eustaquio
was prosecuted for the crime of damage to property and slight injuries through reckless imprudence.
He was convicted by final judgment and was sentenced to pay a fine P900, to indemnify the offended
party, the City of Manila, in the sum of P1,788.27, with subsidary imprisonment in case of insolvency,
and to pay the costs. Not being able to collect the indemnity from the accused, the City of Manila
began an action to obtained payment from the Manila Electric Company. An allegation of the complaint
was "That the defendant Manila Electric Company as master of the said agent and servant, Sixto
Eustaquio, by virtue of its relation with the latter and by express provisions of law, is subsidiarily liable
to the herein plaintiff for the sum of P1,788.27, representing the damages caused by its agent and
servant, the said Sixto Eustaquio, in the discharge of his duties as motorman of the defendant's electric
car." The principal special defense set up in the answer to the complaint was that the defendant had
used all the diligence of a good father of a family to prevent the damage suffered by plaintiff. At the
trial, the parties agreed on certain stipulations and admissions. The Assistant City Fiscal also offered to
present two witnesses, but the trial judge thought this unnecessary and so took judicial cognizance of
the decision and the record in the criminal case which convicted the motorman, all against the protest
of counsel for the Manila Electric Company who noted his exceptions. The adverse judgment is now
contested on the ground that the trial court committed two errors, the first in admitting in evidence the
documents marked Exhibits A, B, C, D, E and F, constituting the record in the case of the People of the
Philippine Islands vs. Sixto Eustaquio; and the second in not absolving the appellant from the
complaint.

I. The first error plainly has merit. As a general rule, a record in a criminal action cannot be admitted in
evidence in a civil action except by way of inducement or to show a collateral fact. The very obvious
reason is that the parties and the issues in a criminal action and a civil action are not the same. It is
rudimentary that due process must be followed in the trial of all causes. No man or entity may be
condemmed without a day in court. (Almeida Chantangco and Lete vs. Abaroa [1910], 218 U. s., 476;
40 Phil., 1056; Ed. A. Keller & Co. vs. Ellerman & Bucknall Steamship Co. [1918], 38 Phil., 514.)

It needs to be repeated that the Manila Electric Company was not a party at the trial of the criminal
case. There is extant in the record no indication that the Manila Electric Company had any control over
the proceedings in the criminal case. All that the record in the criminal case showed was that the
"abogado defensor" (Attorney for the defense) was Antonio Carrascoso. All that the record in the civil
case showed was "Comparecieron: . . . Por la entidad demandada The Manila Electric Co., los
abogados senores Antonio T. Carrascoso, Jr., y Guillermo Cabrera" (Appearances: . . . For the
defendant Manila Electric Company attorneys Antonio T. Carrascoso, Jr., and Guillermo Cabrera). By a
coincidence, Attorney Carrascoso was both counsel for the defendant in the civil action. But there is
lacking any proof showing that the Manila Electric Company supplied the lawyer for the accused in the
criminal action and so is concluded by the judgment there rendered. (By way of parenthesis, it may be
said further that the statements just made are offered to meet the argument advanced during our
discussion to the effect that the court should treat the interests of the Manila Electric Company as
involved in both litigations and should thus consider the company as a real party without right now to
protest against the judgment.)

It is our ruling that prejudicial error was committed in the admission by the trial court of Exhibits A to F,
but that since the plaintiff made the proper offer to present its witnesses, the case should be remanded
for a new trial.

II. It has been suggested that having passed on the first error that would be sufficient. Theoretically,
that is true. Practically, it is a fallacious argument. A new trial left unguided would immediately raise
questions which would need to be passed upon eventually by this court. Also if the customary defense
in civil actions for damages is to be held sufficient, the new trial would be fruitless and the appeal might
just as well be dismissed now as later, in view of the stipulations appearing in the record.

We desire to pay our respect to the second error assigned and to the point of whether or not a case of
this character should be governed by the provisions of the Penal Code or by the provisions of the Civil
Code.

The Penal Code authorizes the imposition of subsidiary liability in default of the persons criminally
liable. Article 20 of the Penal Code provides that this subsidiary liability shall "apply to masters,
teachers, persons, and corporations engaged in any kind of industry for felonies and misdemeanors
committed by their servants, pupils, workmen, apprentices, or employees in the discharge of their
duties." It is under this provision that the City of Manila is attempting to collect damages from the
Manila Electric Company. If the Philippines still lay beneath the dominion of Spain, the pronouncement
of primary and subsidiary liability would be takenn much as a matter of course. (See decisions of the
Supreme Court of Spain of October 10, 1884, January 3, 1887, June 15, 1989, March 6, 1897,
December 14, 1894, February 19, 1902; 2 Viada Codigo Penal Comentado, 5th ed., pp. 487-497; 1
Hidalgo Codigo Penal, pp. 331-334; 1 Groizard Codigo Penal, pp. 736-738; Opinion of the Fiscal of the
Supreme Court of Justice of Spain of January 17, 1865, 22 Revista de Legislacion y Jurisprudencia,
p.412; Codigo Penal of Spain of 1928, art. 78.) The Penal Code then takes cognizance of the Civil
Code when in article 133 it is provided: "Civil liability arising from felonies or misdemeanors shall be
extiguished in the same manner as other obligations, in accordance with the rules of civil law."
In connection with the Penal Code, there must be taken into view certain provisions of the Civil Code.
Book IV, Title XVI, Chapter II, of the Civil Code concerns obligations which arise from fault or
negligence. It is provided in article 1903 that the obligation imposed for the damage to another caused
by fault or negligence is enforcible against those persons for whom another is responsible. But it is
added that "The liability imposed by this article shall cease in case the persons subject thereto prove
that they exercised all the diligence of a good father of a family to prevent the damage." Found prior to
these articles of the Civil Code in the Chapter of Title I, Book IV, pertaining to general provisions of
obligations, are articles 1092 and 1093. The first provides: "Civil obligations arising from crimes or
misdemeanors shall be governed by the provisions of the Penal Code." The last mentioned provides:
"Those arising from wrongful or negligent acts or ommissions not punishable by law shall be subject to
the provisions of Chapter second of Title sixteen of this book." — that is among others to the provisions
of article 1903 above-mentioned.

Manresa, speaking of article 1092 of the Civil Code, offers the following comment:

The Penal Code treats of this matter, first, in Chapter II, Title 2, of Book I, determining therein
who are civilly liable for crimes or misdemeanors and in what manner, and stating in Title 4 of
the same Book the extent and purposes of said obligations. Said Book I ends with article 135,
which makes express references to the civil legislation, which reference, as may be seen, is
also made in other provisions.

In those mutual references of one legislation to another, there is no doubt as to the application
of one or the other, nor can they be criticized, since they are well grounded.

The Civil Code refers to the Penal Code as the rule applicable in the first place, since the latter
determines and punishes the acts giving rise to said obligations, or creates said obligations,
thereby determining their existence and is, therefore, for that reason of preferential application.
But, then, as the Penal Code is concerned with, and is interested only in determining how the
civil obligation it creates comes into existence and develops under the influence of the illicit
character, it lays down only those rules inspired by those motives; and once the connection of
that obligation with the criminal liability is established in its provisions, with the consequences
that may be inferred from the fact that the former is based on the latter; and after an effort has
been made, within the sphere of that civil responsibility, toward making the indemnification
coextensive with the effects of the crime, and a special necessity, which is characteristic of
punishment and is the subject matter of the Penal Code, has been shown in the provisions
regulating said liability, the Penal Code, could not, without going beyond its one sphere, give all
the rules relative to said obligations, nor did it have any necessity for doing so, because once
the peculiar nature of said obligations is saved by its provisions, the essence thereof common
to the other obligations must, as in the latter, be defined by the civil law, which will thus become
an important source, although suppletory, of those derived from crime.

The peculiar rules of the Penal Code, as may be seen, are inspired by those motives which, as
we have stated, might make them necessary for said Code to establish, as distinguished from
the criterion of the civil law with regard to obligations in general. Thus, the fundamental
declaration of article 18 gives the connection of civil obligation with criminal liability and explains
the origin of the former: article 19 solves the doubt which that connection, among certain
liabilities, may create, and determining its limits in the nature and consequences of the act, it
mentions those which are of a civil nature, basing the civil liability upon principle of justice, and
 rather upon casualty than upon liability of a criminal character. The intention to make
indemnification proportionate to the nature and effects of the act, from which the obligation
arises, inspires the provisions contained in articles 121 to 124, both inclusive; the necessity to
distiguish, in order to give the consequences which the crime may produce within the sphere of
civil law, whether or not the persons thereby bound are guilty, prevails in article 128 and partly
in article 122; article 125 gives the essential difference between the civil obligation and the
personal criminal liability, and dissipates a doubt which, due to the latter's instranmissibility,
might arise as to the former by reason of its accessory character in connection with the other,
and by the intimate connection between both which the crime or misdemeanor creates and the
criminal law declares; the influence of the severity on the punishment is noted in articles 20 and
21, even though the latter coincide with the criterion followed in analogous cases by the Civil
Code, and already deviating from the latter's criterion by reason of that severity founded on the
illicit origin of the obligations which it declares, it provides for the latter a necessary solidarity in
article 127; and abandoning also the criterion of the civil law in article 126, it establishes within
that solidarity, not the presumption of equal division which the latter provides in such a case, but
a prudent division which may, and generally must be, unequal, in order that the influence of the
different participation in the crime or misdemeanor which is the origin of the former may also
reach the Civil obligation.

In all other respects, and even in some of those same features, either by the express reference
of the articles which provide for them, or by the latter's influence, the civil obligation shall be
subject to the Civil Code, which even in some of those peculiar rules has supposed a
modification in so far as it does not establish the benefit of exemption to the extent needed for
support, as provided for in the Penal Code.

While the Civil Code, in its article 1092, simply makes reference to the Penal Code, yet, it is
beyond doubt that by this reference it means those rules of a general nature which regulate the
civil liability arising from the particular crimes or misdemeanors therein mentioned, and that, in
connection therewith, they shall have the preferential application which this article recognizes in
favor of the Penal Code. (8 Manresa Codigo Civil Espanol, 3d ed., pp. 28-32.)

The case of Rakes vs. Atlantic, Gulf and Pacific Co. ([1907], 7 Phil., 359), is one of the widest known
authorities on the subject of damages. But that was strickly a civil action not predicated on or related to
a criminal action. It was said: "Inasmuch as no criminal proceeding had been instituted, growing out of
the accident in question, the provisions of the Penal Code cannot affect this action. This construction
renders it necessary to finally determine here whether this subsidary civil liability in penal actions has
survived the laws that fully regulated it or has been abrogated by the American civil and criminal
procedure now in force in the Philippines." That such subsidiary civil liability in penal actions has not
been abrogated by later laws, seems fairly well established. Section 107 of the Code of Criminal
Procedure recognizes the rights of persons injured by the offense to take part in the prosecution of the
offense and to recover damages. It is there provided that "the court upon conviction of the accused
may enter judgment against him for the damages occasioned by his wrongful act." Authoritative
decisions have also leaned in the direction of taking it for granted that civil liability could be fixed in the
criminal action. While the law of criminal procedure is silent on the subject of subsidiary liability, so far
as we can see, there could exist no good reason for not permitting the action to eb carried forward to
the second stage and there to fix subsidiary liability.
With this preliminary point out of the way, there is no escaping the conclusion that the provisions of the
Penal Code govern. The Penal Code in easily understandable language authorizes the determination
of subsidiary liability. The Civil Code negatives its application by providing that civil obligations arising
from crimes or misdemeanors shall be governed by the provisions of the Penal Code. The conviction of
the motorman was a misdemeanor falling under article 604 of the Penal Code. The act of the
motorman was not a wrongful or negligent act or ommision not punishable by law. Accordingly, the civil
obligation connected up with Penal Code and not with article 1903 of the Civil Code. In other words,
the Penal Code affirms its jurisdiction while the Civil Code negatives its jurisdiction. This is a case of
criminal negligence out of which civil liability arises and not a case of civil negligence.

The decision of the United States Supreme Court in the case of Almeida Chantangco and Lete vs.
Abaroa, supra, should be read in connection both with the discussion of the first assignment of error
and the question now before us. In that decision, Mr. Justice Lurton, delivering the opinion of the court,
said:

The case is, however, one which we conceive must be governed by the local law of the
Philippine Islands, and the single question to which we need address ourselves is as to whether
that law was right applied by the local tribunals.

Article 1902 of the Civil Code in force in the Philippine Islands reads thus: "A person who, by an
act or omission, causes damage to another when there is fault or negligence, shall be obliged to
repair the damage so done." By articles 1092 and 1093 of the same Code provision is made for
the enforcement of civil liability, varying in character according to the origin of the liability. Thus,
article 1092 provides that civil obligations arising from crimes and misdemeanors shall be
governed by the provisions of the Penal Code. On the other hand, article 1093 provides that
"those arising from acts or omissions, in which fault or negligence, not punished by law, occurs,
shall be subject to the provisions of chapter second of title sixteen of this book." The action here
involved comes directly under article 1092, above set out, and is not an action arising from "fault
or negligence, not punished by law." The complaint alleges that the act of burning was
"malicious and unlawful," and not that it was the result of any "fault or negligence." This was the
construction placed upon the complaint by both the courts below, and is a construction not
challenged here. It follows that he must turn to the Penal Code to discover when a civil action
arises out of a crime or misdemeanor, and the procedure of the enforcement of such civil
liability. Article 17 of the Penal Code reads as follows: "Every person criminally liable for a crime
or misdemeanor is also civilly liable." May this civil liability be enforced without a prior legal
determination of the fact of the defendant's guilt of crime? Does civil liability exist at all if the
defendant has been found not guilty of the acts out of which the civil liability arises? The opinion
of the Court below was that a judgment of conviction was essential to an action for
indemnification under the applicable local law. To this conclusion we assent, upon the following
considerations:

First, by the positive legislation of the Philippine Codes, civil and criminal, a distinction is drawn
between a civil liability which results from the mere negligence of the defendant and a liability
for the civil consequences of a crime by which another has sustained loss or injury.

Second, the plain inference from article 17, above set out, is that civil liability springs out of and
is dependent upon facts which, if true, would constitute a crime or misdemeanor.
 Third, the Philippine Code of Procedure plainly contemplates that the civil liability of the
defendant shall be ascertained and declared in the criminal proceedings. 1awphi1.net

Thus, section 742 of the Code of Criminal Procedure, after requiring that, in the criminal
proceeding, all of the minor or incidental offenses included in the principal crime shall be
decided, adds: "All questions relating to the civil liability which may have been the subject-
matter of the charge shall be decided in the sentence.

xxx xxx xxx

The foregoing considerations eliminate any question of the effect of such a judgment of
acquittal undere the principles of the common law and require an affirmance of the judgment of
the court below as properly based upon the applicable substantive law of the Philippine Islands,
which has not been superseded by legislation since the establishment of the present Philippine
Government.

The facts here are distinguishable from those in Chaves and Garcia vs. Manila Electric Railroad and
Light Company ([1915], 31 Phil., 47). In the cited case, while the motorman was prosecuted and
convicted, his sentence included no imposition of civil liability. So the court correctly held, although
without discussion, that the employer was not liable in damages resulting from the criminal negligence
of his employee, when he has exercised the care of a good father of a family in selecting said
employee.

In the later decision of this court in Francisco vs. Onrubia ([1924], 46 Phil., 327), the court gave
attention to a similar question. Speaking through Mr. Justice Villamor, the court reached the following
conclusions:

Article 1902 of the Civil Code has no application in the instant case, first, because said article
presupposes the existence of fault or negligence upon which the action is based, and second, it
refers to a fault or negligence not punishable by law, because if the fault or negligence is
punished by law, it ceases to be the quasi crime of negligence having purely civil effects, and
becomes a crime or misdemeanor, according to the gravity of the penalty imposed by the law,
and in that case it comes within the purview of article 1092 of the Civil Code. Under the facts set
forth in the complaint, if there was any fault or negligence on the part of the defendant, it must
necessarily be a fault punishable by law (arts. 586, 590, and 604 of the Penal Code), for
through said fault he caused the death of the plaintiff's son. Homicide through reckless
imprudence is punished as a crime, and therefore the provisions applicable would be those of
the Penal Code and the Law of Criminal Procedure above cited.

Our deduction, therefore, is that the case relates to the Penal Code and not to the Civil Code. Indeed,
as pointed out by the trial judge, any different ruling would premit the master to escape scot-free by
allging and proving that the master had exercised all diligence in the selection and training of its
servants to prevent the damage. That would be good defense to a strictly civil action, but might or
might not be to a civil action or misdemeanor. (By way of parenthesis, it may be said further that the
statements here made are offered to meet the argument advanced during our deliberations to the
effect that article 1092 of the Civil Code should be disregarded and codal articles 1093 and 1903
applied.)
In accordance with the foregoing, the judgment appealed from will be set aside, and the record
remanded to the lower court for a new trial. Without special finding as to costs in this instance, it will be
so ordered.

Avanceña, C. J., Street, Villamor, Romualdez and Villa-Real, JJ., concur.

G.R. No. L-7567 November 12, 1912

THE UNITED STATES, plaintiff-appellee,

vs.
SEGUNDO BARIAS, defendant-appellant.

Bruce, Lawrence, Ross and Block for appellant.

Office of the Solicitor-General Harvey, for appellee.

CARSON, J.:

This is an appeal from a sentence imposed by the Honorable A. S. Crossfield, judge of the Court of
First Instance of Manila, for homicide resulting from reckless negligence. The information charges:

That on or about November 2, 1911, in the city of Manila, Philippine Islands, the said Segundo
Barias was a motorman on street car No. 9, run 7 of the Pasay-Cervantes lines of the Manila
Electric Railroad and Light Company, a corporation duly organized and doing business in the
city of Manila, Philippine Islands; as a such motorman he was controlling and operating said
street car along Rizal Avenue, formerly Calle Cervantes, of this city, and as such motorman of
the said street car he was under obligation to run the same with due care and diligence to avoid
any accident that might occur to vehicles and pedestrians who were travelling on said Rizal
Avenue; said accused, at said time and place, did willfully, with reckless imprudence and
inexcusable negligence and in violation of the regulations promulgated to that effect, control and
operate said street car, without heeding the pedestrians crossing Rizal Avenue from one side to
the other, thus knocking down and causing by his carelessness and imprudent negligence that
said street car No. 9, operated and controlled by said accused, as hereinbefore stated, should
knock down and pass over the body and head of one Fermina Jose, a girl 2 years old, who at
said time and place was crossing the said Rizal Avenue, the body of said girl being dragged
along street-car on said Rizal Avenue for a long distance, thus crushing and destroying her
head and causing her sudden death as a result of the injury received; that if the acts executed
by the accused had been done with malice, he would be guilty of the serious crime of homicide.

The defendant was a motorman for the Manila Electric Railroad and Light Company. At about 6 o'clock
on the morning of November 2, 1911, he was driving his car along Rizal avenue and stopped it near
the intersection of that street with Calle Requesen to take on some passengers. When the car stopped,
the defendant looked backward, presumably to note whether all the passengers were aboard, and then
started his car. At that moment Fermina Jose, a child about 3 years old, walked or ran in front of he car.
She was knocked down and dragged some little distance underneath the car, and was left dead upon
the track. The motorman proceeded with his car to the end of the track, some distance from the place
of the accident, and apparently knew nothing of it until his return, when he was informed of what
happened.

There is no substantial dispute as to the facts. It is true that one witness testified that the defendant
started the car without turning his head, and while he was still looking backwards and that this
testimony was directly contradicted by that of another witness. But we do not deem it necessary to
make an express finding as to the precise direction in which the defendant's head was turned at the
moment when he started his car. It is sufficient for the purpose of our decision to hold, as we do, that
the evidence clearly discloses that he started his car from a standstill without looking over the track
immediately in front of the car to satisfy himself that it was clear. he did not see the child until after he
had run his car over it, and after he had return to the place where it was found dead, and we think we
are justified in saying that whenever he was looking at the moment when he started his car, he was not
looking at the track immediately in front of the car, and that he had not satisfied himself that this portion
of the tract was clear immediately before putting the car in the motion.

The trial court found the defendant guilty of imprudencia temeraria (reckless negligence) as charged in
the information, and sentenced him to over one year and one month of imprisonment in the Bilibid
Prison, and to pay the cause of the action.

The sole question raised by this appeal is whether the evidence shows such carelessness or want of
ordinary care on the part of the defendant as to amount to reckless negligence ( imprudencia
temeraria).

Judge Cooley in his work on Torts (3d ed., 1324) defines negligence to be: "The failure to observe, for
the protection of the interests of another person, that degree of care, precaution and vigilance which
the circumstances justly demand, whereby such other persons suffers injury."

In the case of U. S. vs. Nava, (1 Phil. Rep., 580), we held that: "Reckless negligence consists of the
failure to take such precautions or advance measures in the performance of an act as the most
prudence would suggest whereby injury is caused to persons or to property."

Silvela says in his "Derecho Penal," in speaking of reckless imprudence ( imprudencia temeraria):

The word "negligencia" used in the code, and the term "imprudencia" with which this punishable
act is defined, express this idea in such a clear manner that it is not necessary to enlarge upon
it. He who has done everything on his part to prevent his actions from causing damage to
another, although he has not succeeded in doing so, notwithstanding his efforts, is the victim of
an accident and can not be considered responsible for the same. (Vol. 2, p. 127 [153].)

Temerario is, in our opinion, one who omits, with regard to this actions, which are liable to cause
injury to another, that care and diligence, that attention, which can be required of the least
careful, attentive, or diligent. If a moment's attention and reflection would have shown a person
that the act which he was about to perform was liable to have the harmful consequence which it
had, such person acted with temerity and may be guilty of " imprudencia temeraria." It may be
that in practice this idea has been given a greater scope and the acts of imprudence which did
not show carelessness as carried to such high degree, might have been punished as
"imprudencia temeraria;" but in our opinion, the proper meaning of the word does not authorize
another interpretation. (Id., p. 133 [161].)
Groizard, commenting upon "imprudencia temeraria," on page 389, volume 8, of his work on the Penal
Code, says:

Prudence is that cardinal virtue which teaches us to discern and distinguish the good from bad,
in order to adopt or flee from it. It also means good judgment, temperance, and moderation in
one's actions. `Temerario is one who exposes himself to danger or rushes into it without
reflection and without examining the same. Consequently, he who from lack of good judgment,
temperance, or moderation in his actions, exposes himself without reflection and examination to
the danger of committing a crime, must be held responsible under the provision of law
aforementioned.

Negligence is want of the care required by the circumstances. It is a relative or comparative, not an
absolute, term and its application depends upon the situation of the parties and the degree of care and
vigilance which the circumstances reasonably require. Where the danger is great, a high degree of
care is necessary, and the failure to observe it is a want of ordinary care under the circumstances.
(Ahern vs. Oregon Telephone Co., 24 Oreg., 276, 294; 35 Pac., 549.)

Ordinary care, if the danger is great, may arise to the grade of a very exact and unchangeable
attention. (Parry Mfg. Co. vs. Eaton, 41 Ind. App., 81, 1908; 83 N. E., 510.)

In the case of U. S. vs. Reyes (1 Phil. Rep., 375-377), we held that: "The diligence with which the law
requires the individual at all the time to govern his conduct varies with the nature of the situation in
which he is placed and with the importance of the act which he is to perform. lawph!l.net

The question to be determined then, is whether, under all the circumstances, and having in mind the
situation of the defendant when he put his car in motion and ran it over the child, he was guilty of a
failure to take such precautions or advance measures as common prudence would suggest.

The evidence shows that the thoroughfare on which the incident occurred was a public street in a
densely populated section of the city. The hour was six in the morning, or about the time when the
residents of such streets begin to move about. Under such conditions a motorman of an electric street
car was clearly charged with a high degree of diligence in the performance of his duties. He was bound
to know and to recognize that any negligence on his part in observing the track over which he was
running his car might result in fatal accidents. He had no right to assume that the track before his car
was clear. It was his duty to satisfy himself of that fact by keeping a sharp lookout, and to do everything
in his power to avoid the danger which is necessarily incident to the operation of heavy street cars on
public thoroughfares in populous sections of the city.

Did he exercise the degree of diligence required of him? We think this question must be answered in
the negative. We do not go so far as to say that having brought his car to a standstill it was his
bounden duty to keep his eyes directed to the front. Indeed, in the absence of some regulation of his
employers, we can well understand that, at times, it might be highly proper and prudent for him to
glance back before again setting his car in motion, to satisfy himself that he understood correctly a
signal to go forward or that all the passengers had safely alighted or gotten on board. But we do insist
that before setting his car again in motion, it was his duty to satisfy himself that the track was clear,
and, for that purpose, to look and to see the track just in front of his car. This the defendant did not do,
and the result of his negligence was the death of the child.
In the case of Smith vs. St. Paul City Ry. Co., (32 Minn., p. 1), the supreme court of Minnesota, in
discussing the diligence required of street railway companies in the conduct of their business observed
that: "The defendant was a carrier of passengers for hire, owing and controlling the tracks and cars
operated thereon. It is therefore subject to the rules applicable to passenger carriers. (Thompson's
Carriers, 442; Barrett vs. Third Ave. R. Co., 1 Sweeny, 568; 8 Abb. Pr. (N.S.), 205.) As respects
hazards and dangers incident to the business or employment, the law enjoins upon such carrier the
highest degree of care consistent with its undertaking, and it is responsible for the slightest negligence.
(Wilson vs. Northern Pacific R. Co., 26 Minn., 278; Warren vs. Fitchburg R. Co., 8 Allen, 233; 43 Am.
Dec. 354, 356, notes and cases.) . . . The severe ruled which enjoins upon the carrier such
extraordinary care and diligence, is intended, for reasons of public policy, to secure the safe carriage of
passengers, in so far as human skill and foresight can affect such result." The case just cited was a
civil case, and the doctrine therein announced had special reference to the care which should be
exercised in securing the safety of passengers. But we hold that the reasons of public policy which
impose upon street car companies and their employees the duty of exercising the utmost degree of
diligence in securing the safety of passengers, apply with equal force to the duty of avoiding the
infliction of injuries upon pedestrians and others on the public streets and thoroughfares over which
these companies are authorized to run their cars. And while, in a criminal case, the courts will require
proof of the guilt of the company or its employees beyond a reasonable doubt, nevertheless the care or
diligence required of the company and its employees is the same in both cases, and the only question
to be determined is whether the proofs shows beyond a reasonable doubt that the failure to exercise
such care or diligence was the cause of the accident, and that the defendant was guilty thereof.

Counsel for the defendant insist that the accident might have happened despite the exercise of the
utmost care by the defendant, and they have introduced photographs into the record for the purpose of
proving that while the motorman was standing in his proper place on the front platform of the car, a
child might have walked up immediately in front of he car without coming within the line of his vision.
Examining the photographs, we think that this contention may have some foundation in fact; but only to
this extent, that standing erect, at the position he would ordinarily assume while the car is in motion,
the eye of the average motorman might just miss seeing the top of the head of a child, about three
years old, standing or walking close up to the front of the car. But it is also very evident that by inclining
the head and shoulders forward very slightly, and glancing in front of the car, a person in the position of
a motorman could not fail to see a child on the track immediately in front of his car; and we hold that it
is the manifest duty of a motorman, who is about to start his car on a public thoroughfare in a thickly-
settled district, to satisfy himself that the track is clear immediately in front of his car, and to incline his
body slightly forward, if that be necessary, in order to bring the whole track within his line of vision. Of
course, this may not be, and usually is not necessary when the car is in motion, but we think that it is
required by the dictates of the most ordinary prudence in starting from a standstill.

We are not unmindful of our remarks in the case of U. S. vs. Bacho (10 Phil. Rep., 577), to which our
attention is directed by counsel for appellant. In that case we said that:

. . . In the general experience of mankind, accidents apparently avoidable and often inexplicable
are unfortunately too frequent to permit us to conclude that some one must be criminally liable
for negligence in every case where an accident occurs. It is the duty of the prosecution in each
case to prove by competent evidence not only the existence of criminal negligence, but that the
accused was guilty thereof.
Nor do we overlook the ruling in the case of U. S. vs. Barnes (12 Phil. Rep., 93), to which our attention
is also invited, wherein we held that the defendant was not guilty of reckless negligence, where it
appeared that he killed another by the discharge of his gun under such circumstances that he might
have been held guilty of criminally reckless negligence had he had knowledge at that moment that
another person was in such position as to be in danger if the gun should be discharged. In this latter
case the defendant had no reason to anticipate that the person who was injured was in the line of fire,
or that there was any probability that he or anyone else would place himself in the line of fire. In the
case at bar, however, it was, as we have seen, the manifest duty of the motorman to take reasonable
precautions in starting his car to see that in doing so he was not endangering the life of any pedestrian,
old or young; and to this end it was further his duty to guard against the reasonable possibility that
some one might be on the track immediately in front of the car. We think that the evidence showing, as
it does, that the child was killed at the moment when the car was set in motion, we are justified in
holding that, had the motorman seen the child, he could have avoided the accident; the accident was
not, therefore, "unavailable or inexplicable," and it appearing that the motorman, by the exercise of
ordinary diligence, might have seen the child before he set the car in motion, his failure to satisfy
himself that the track was clear before doing so was reckless negligence, of which he was properly
convicted in the court below.

We think, however, that the penalty should be reduced to that of six months and one day of prision
correccional. Modified by substituting for so much thereof as imposes the penalty of one year and one
month of imprisonment, the penalty of six months and one day of prision correccional, the judgment of
the lower court convicting and sentencing the appellant is affirmed, with costs of both instances against
him. So ordered.

Arellano, C.J., Torres and Mapa, JJ., concur.

G.R. No. L-44264 September 19, 1988

HEDY GAN y YU, petitioner,

vs.
THE HONORABLE COURT OF APPEALS and the PEOPLE OF THE
PHILIPPINES, respondents.

Pacis, Baluyot, Reyes & De Leon for petitioner.

The Solicitor General for respondents.

FERNAN, C.J.:

Petitioner Hedy Gan was convicted of the crime of Homicide thru Reckless Imprudence in Criminal
Case No. 10201 of the then Court of First Instance of Manila, Branch XXII presided by Judge Federico
C. Alikpala. She was sentenced to an indeterminate penalty of four (4) months and one (1) day
of arresto mayor as minimum and two (2) years, four (4) months and one (1) day of prision
correccional as maximum and was made to indemnify the heirs of the victim the sum of P12,000.00
without any subsidiary imprisonment in case of insolvency and to pay the costs. On appeal, the trial
court's decision was modified and petitioner was convicted only of Homicide thru Simple Imprudence.
Still unsatisfied with the decision of the Court of Appeals, 1 petitioner has come to this Court for a
complete reversal of the judgment below.

The facts of the case as found by the appellate court are as follows:

In the morning of July 4, 1972 at about 8:00 o'clock, the accused Hedy Gan was driving
a Toyota car along North Bay Boulevard, Tondo, Manila. While in front of house no. 694
of North Bay Boulevard, there were two vehicles, a truck and a jeepney parked on one
side of the road, one following the other about two to three meters from each other. As
the car driven by the accused approached the place where the two vehicles were
parked, there was a vehicle coming from the opposite direction, followed by another
which tried to overtake and bypass the one in front of it and thereby encroached the lane
of the car driven by the accused. To avoid a head-on collision with the oncoming vehicle,
the defendant swerved to the right and as a consequence, the front bumper of the
Toyota Crown Sedan hit an old man who was about to cross the boulevard from south to
north, pinning him against the rear of the parked jeepney. The force of the impact caused
the parked jeepney to move forward hitting the rear of the parts truck ahead of it. The
pedestrian was injured, the Toyota Sedan was damaged on its front, the jeep suffered
damages on its rear and front paints, and the truck sustained scratches at the wooden
portion of its rear. The body of the old man who was later Identified as Isidoro Casino
was immediately brought to the Jose Reyes Memorial Hospital but was (pronounced)
dead on arrival.2

An information for Homicide thru Reckless Imprudence was filed against petitioner in view of the above
incident. She entered a plea of not guilty upon arraignment and the case was set for trial.

Meanwhile, petitioner sought and was granted a re-investigation by the City Fiscal, as a result of which
the trial fiscal moved for the dismissal of the case against petitioner during the resumption of hearing
on September 7, 1972. The grounds cited therefor were lack of interest on the part of the complaining
witness to prosecute the case as evidenced by an affidavit of desistance submitted to the trial court
and lack of eyewitness to sustain the charge.

The motion to dismiss filed by the fiscal was never resolved. The Court instead ordered the
prosecution to present its evidence. After the prosecution rested its case, the petitioner filed a motion
to dismiss the case on the ground of insufficiency of evidence.

On December 22, 1972, the trial court rendered judgment finding petitioner guilty beyond reasonable
doubt of the of- offense charged.

Petitioner appealed to the Court of Appeals in CA-G.R. No. 14472-CR. On May 3, 1976, the Court of
Appeals rendered a decision, the dispositive portion of which reads as follows:

Wherefore, as modified, the accused Hedy Gan is guilty beyond reasonable doubt of the
crime of homicide thru simple imprudence and, pursuant to paragraph 2, Article 365 of
the Revised Penal Code, she is hereby sentenced to the indeterminate penalty of three
(3) months and eleven (11) days of arresto mayor and to indemnify the heirs of Isidoro
Casino in the sum of Twelve Thousand Pesos (Pl2,000.00) without, however, any
subsidiary imprisonment in case of insolvency, and to pay the costs. 3
Petitioner now appeals to this Court on the following assignments of errors:

The Court of Appeals erred in holding that when the petitioner saw a car travelling
directly towards her, she should have stepped on the brakes immediately or in swerving
her vehicle to the right should have also stepped on the brakes or lessened her speed,
to avoid the death of a pedestrian.

II

The Court of Appeals erred in convicting the petitioner of the crime of Homicide thru
Simple Imprudence.

III

The Court of Appeals erred in adjudging the petitioner liable to indemnify the deceased
in the sum of P12,000.00.4

We reverse.

The test for determining whether or not a person is negligent in doing an act whereby injury or damage
results to the person or property of another is this: Would a prudent man in the position of the person to
whom negligence is attributed foresee harm to the person injured as a reasonable consequence of the
course about to be pursued? If so, the law imposes the duty oil the doer to take precaution against its
mischievous results and the failure to do so constitutes negligence. 5

A corollary rule is what is known in the law as the emergency rule. "Under that rule, one who suddenly
finds himself in a place of danger, and is required to act without time to consider the best means that
may be adopted to avoid the impending danger, is not guilty of negligence, if he fails to adopt what
subsequently and upon reflection may appear to have been a better method, unless the emergency in
which he finds himself is brought about by his own negligence." 6

Applying the above test to the case at bar, we find the petitioner not guilty of the crime of Simple
Imprudence resulting in Homicide.

The appellate court in finding the petitioner guilty said:

The accused should have stepped on the brakes when she saw the car going in the
opposite direction followed by another which overtook the first by passing towards its left.
She should not only have swerved the car she was driving to the right but should have
also tried to stop or lessen her speed so that she would not bump into the pedestrian
who was crossing at the time but also the jeepney which was then parked along the
street. 7

The course of action suggested by the appellate court would seem reasonable were it not for the fact
that such suggestion did not take into account the amount of time afforded petitioner to react to the
situation she was in. For it is undeniable that the suggested course of action presupposes sufficient
time for appellant to analyze the situation confronting her and to ponder on which of the different
courses of action would result in the least possible harm to herself and to others.

Due to the lack of eyewitnesses, no evidence was presented by the prosecution with respect to the
relative distances of petitioner to the parked jeepney and the oncoming overtaking vehicle that would
tend to prove that petitioner did have sufficient time to reflect on the consequences of her instant
decision to swerve her car to the light without stepping on her brakes. In fact, the evidence presented
by the prosecution on this point is the petitioner's statement to the police 8 stating::

And masasabi ko lang ho umiwas ho ako sa isang sasakyan na biglang nagovertake sa

sasakyan na aking kasalubong kung kaya ay aking kinabig sa kanan ang akin kotse
subalit siya naman biglangpagtawid ng tao o victim at hindi ko na ho naiwasan at ako ay
wala ng magawa . Iyan ho ang buong pangyayari nang nasabing aksidente. 9 (Emphasis
supplied)

The prosecution having presented this exhibit as its own evidence, we cannot but deem its veracity to
have been admitted by it. Thus, under the circumstances narrated by petitioner, we find that the
appellate court is asking too much from a mere mortal like the petitioner who in the blink of an eye had
to exercise her best judgment to extricate herself from a difficult and dangerous situation caused by the
driver of the overtaking vehicle. Petitioner certainly could not be expected to act with all the coolness of
a person under normal conditions. 10 The danger confronting petitioner was real and imminent,
threatening her very existence. She had no opportunity for rational thinking but only enough time to
heed the very powerfull instinct of self-preservation.

Also, the respondent court itself pronounced that the petitioner was driving her car within the legal
limits. We therefore rule that the "emergency rule" enunciated above applies with full force to the case
at bar and consequently absolve petitioner from any criminal negligence in connection with the incident
under consideration.

We further set aside the award of damages to the heirs of the victim, who by executing a release of the
claim due them, had effectively and clearly waived their right thereto.

WHEREFORE, judgment is hereby rendered acquitting petitioner HEDY GAN y YU of the crime of
Homicide thru Simple Imprudence. She is no longer liable for the P12,000.00 civil indemnity awarded
by the appellate court to the heirs of the victim.

SO ORDERED.

Feliciano, Bidin and Cortes, JJ., concur.

Gutierrez, Jr., J., is on leave.

G.R. No. 131588 March 27, 2001

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
GLENN DE LOS SANTOS, accused-appellant.
DAVIDE, JR., J. :

One may perhaps easily recall the gruesome and tragic event in Cagayan de Oro City, reported over
print and broadcast media, which claimed the lives of several members of the Philippine National
Police (PNP) who were undergoing an "endurance run" as part of the Special Counter Insurgency
Operation Unit Training. Not much effort was spared for the search of the one responsible therefor, as
herein accused-appellant Glenn de los Santos (hereafter GLENN) immediately surrendered to cal
authorities. GLENN was then charged with the crimes of Multiple Murder, Multiple Frustrated Murder,
and Multiple Attempted Murder in an information filed with the Regional Trial Court of Cagayan de Oro
City. The information reads as follows:

That on or about October 05, 1995, in the early morning, at Maitum Highway, within Barangay
Puerto, Cagayan de Oro City, Philippines, and within the jurisdiction of this Honorable Court, the
above-named accused, with deliberate intent to kill, taking advantage of his driven motor
vehicle, an Isuzu Elf, and with treachery, did then and there willfully, unlawfully and feloniously
kill and inflict mortal wounds from … behind in a sudden and unexpected manner with the use
of said vehicle … members of the Philippine National Police (PNP), undergoing a Special
Training Course (Scout Class 07-95), wearing black T-shirts and black short pants, performing
an "Endurance Run" of 35 kilometers coming from their camp in Manolo Fortich, Bukidnon,
heading to Regional Training Headquarters in Camp Alagar, Cagayan de Oro City, running in a
column of 3, with a distance of two feet, more or less, from one trainee to another, thus forming
a [sic] three lines, with a length of more or less 50 meters from the 1 st man to the last man,
unable to defend themselves, because the accused ran or moved his driven vehicle on the
direction of the backs of the PNP joggers in spite of the continuous warning signals made by six
of the joggers, namely: PO1 Allan Tabacon Espana, Waldon Sinda Sacro, Lemuel Ybanez
Pangca, Artemio Jamil Villaflor, Nardo Omasas Collantes and Joselito Buyser Escartin, who
were at the rear echelon of said run, acting as guards, by continuously waving their hands at
the accused for him to take the left lane of the highway, going to the City proper, from a distance
of 100 meters away from the jogger’s rear portion, but which accused failed and refused to
heed; instead, he proceeded to operate his driven vehicle (an Isuzu Elf) on high speed directly
towards the joggers, thus forcing the rear hitting, bumping, or ramming the first four (4) victims,
causing the bodies to be thrown towards the windshields of said Isuzu Elf, breaking said
windshield, and upon being aware that bodies of the victims flew on the windshield of his driven
vehicle, instead of applying his brake, continued to travel on a high speed, this time putting off
its headlights, thus hitting the succeeding joggers on said 1 st line, as a result thereof the
following were killed on the spot:

1. Vincent Labis Rosal 7. Antonio Flores Lasco

2. Allan Amoguis Abis 8. Igmedio Salinas Lituanas

3. Jose Arden M. Atisa 9. Roberto Cabussao Loren

 4. Nathaniel Mugot Baculio 10. Raul Plaza Martinez

5. Romil Gosila Legrano 11. Jerry Pedrosa Pajo

6. Arnulfo Limbago Jacutin 12. Rolando Paremcio Pancito

While another trainee/victim, Antonio Palomino Mino, died few days after the incident, while the
following eleven (11) other trainee/victims were seriously wounded, the accused thus performing all the
acts of execution which would produce the crime of Murder as a consequence but nevertheless did not
produce it by reason of some cause other than said accused’s spontaneous desistance, that is, by the
timely and able medical assistance rendered on the following victims which prevented their death, to
wit:

1. Rey Go Boquis 7. Melchor Hinlo

2. Rene Tuako Calabria 8. Noel Ganzan Oclarit

3. Nonata Ibarra Erno 9. Charito Penza Gepala

4. Rey Tamayo Estofil 10. Victor Malicse Olavo

5. Joel Rey Migue Galendez 11. Bimbo Glade Polboroza

6. Arman Neri Hernaiz

While the following Police Officers I (POI) sustained minor injuries, to wit:

1. Romanito Andrada 6. Romualdo Cotor Dacera

 2. Richard Canoy Caday 7. Ramil Rivas Gaisano

3. Rey Cayusa 8. Dibangkita Magandang

4. Avelino Chua 9. Martin Olivero Pelarion

5. Henry Gadis Coubeta 10. Flordicante Martin Piligro

After which said accused thereafter escaped from the scene of the incident, leaving behind the victims
afore-enumerated helpless.

Contrary to Article 248, in relation to Article 6 of the Revised Penal Code.

The evidence for the prosecution disclose that the Special Counter Insurgency Operation Unit Training
held at Camp Damilag, Manolo Fortich, Bukidnon, started on 1 September 1995 and was to end on 15
October 1995. The last phase of the training was the "endurance run" from said Camp to Camp Alagar,
Cagayan de Oro City. The run on 5 October 1995 started at 2:20 a.m. The PNP trainees were divided
into three columns; the first and second of which had 22 trainees each, and the third had 21. The
trainees were wearing black T-shirts, black short pants, and green and black combat shoes. At the start
of the run, a Hummer vehicle tailed the jogging trainees. When they reached Alae, the driver of the
Hummer vehicle was instructed to dispatch advanced security at strategic locations in Carmen Hill.
Since the jogging trainees were occupying the right lane of the highway, two rear security guards were
assigned to each rear column. Their duty was to jog backwards facing the oncoming vehicles and give
hand signals for other vehicles to take the left lane. 1

Prosecution witnesses Lemuel Y. Pangca and Weldon Sacro testified that they were assigned as rear
guards of the first column. They recalled that from Alae to Maitum Highway, Puerto, Cagayan de Oro
City, about 20 vehicles passed them, all of which slowed down and took the left portion of the road
when signaled to do so.2

While they were negotiating Maitum Highway, they saw an Isuzu Elf truck coming at high speed
towards them. The vehicle lights were in the high beam. At a distance of 100 meters, the rear security
guards started waving their hands for the vehicle to take the other side of the road, but the vehicle just
kept its speed, apparently ignoring their signals and coming closer and closer to them. Realizing that
the vehicle would hit them, the rear guards told their co-trainees to "retract." The guards forthwith
jumped in different directions. Lemuel and Weldon saw their co-trainees being hit by the said vehicle,
falling like dominoes one after the other. Some were thrown, and others were overrun by the vehicle.
The driver did not reduce his speed even after hitting the first and second columns. The guards then
stopped oncoming vehicles to prevent their comrades from being hit again. 3

The trial court judge, together with the City Prosecutor, GLENN and his counsel, conducted an ocular
inspection of the place where the incident happened. They then proceeded to inspect the Isuzu Elf at
the police station. The City Prosecutor manifested, thus:

The vehicle which we are now inspecting at the police station is the same vehicle which [was]
involved in the October 5, 1995 incident, an Isuzu Elf vehicle colored light blue with strips
painting along the side colored orange and yellow as well as in front. We further manifest that
… the windshield was totally damaged and 2/3 portion of the front just below the windshield was
heavily dented as a consequence of the impact. The lower portion was likewise damaged more
particularly in the radiator guard. The bumper of said vehicle was likewise heavily damaged in
fact there is a cut of the plastic used as a bumper; that the right side of the headlight was
likewise totally damaged. The front signal light, right side was likewise damaged. The side
mirror was likewise totally damaged. The height of the truck from the ground to the lower portion
of the windshield is 5 ft. and the height of the truck on the front level is 5 ft. 4

PO3 Jose Cabugwas testified that he was assigned at the Investigation Division at Precinct 6,
Cagayan de Oro City, and that at 4 a.m. of 5 October 1995, several members of the PNP came to their
station and reported that they had been bumped by a certain vehicle. Immediately after receiving the
report, he and two other policemen proceeded to the traffic scene to conduct an ocular inspection. Only
bloodstains and broken particles of the hit-and-run vehicle remained on the highway. They did not see
any brake marks on the highway, which led him to conclude that the brakes of the vehicle had not been
applied. The policemen measured the bloodstains and found them to be 70 ft. long. 5

GLENN’s version of the events that transpired that evening is as follows:

At about 10:30 p.m. of 4 October 1995, he was asked by his friend Enting Galindez and the latter’s
fellow band members to provide them with transportation, if possible an Isuzu Forward, that would
bring their band instruments, band utilities and band members from Macasandig and Corrales,
Cagayan de Oro City, to Balingoan. From there, they were supposed to be taken to Mambajao,
Camiguin, to participate in the San Miguel-sponsored "Sabado Nights" of the Lanzones Festival from
5-7 October 1995. It was the thirteenth time that Enting had asked such a favor from him. 6 Since the
arrangement was to fetch Galindez and his group at 4:00 a.m. of 5 October 1995, GLENN immediately
went to Cugman, Cagayan de Oro City, to get his Isuzu Elf truck. After which, he proceeded back to his
house at Bugo, Cagayan de Oro City, and told his wife that he would go to Bukidnon to get his aunt’s
Isuzu Forward truck because the twenty band members and nine utilities and band instruments could
not be accommodated in the Isuzu Elf truck. Three of his friends asked to go along, namely, Roldan
Paltonag, Andot Peña, and a certain Akut.7

After leaving GLENN’s house, the group decided to stop at Celebrity Plaza Restaurant. GLENN saw
his "kumpare" Danilo Cosin and the latter’s wife, and joined them at the table. GLENN finished three
bottles of pale pilsen beer. When the Cosin spouses left, GLENN joined his travelling companions at
their table. The group left at 12:00 midnight for Bukidnon. The environment was dark and foggy, with
occasional rains. It took them sometime looking for the Isuzu Forward truck. Finally, they saw the truck
in Agusan Canyon. Much to their disappointment, the said truck had mechanical problems. Hence,
GLENN decided to go back to Cagayan de Oro City to tell Enting that they would use the Isuzu Elf
truck instead.8

GLENN drove slowly because the road was slippery. The vicinity was dark: there was no moon or star;
neither were there lampposts. From the Alae junction, he and his companions used the national
highway, traversing the right lane going to Cagayan de Oro City. At the vicinity of Mambatangan
junction, as the Elf was negotiating a left curve going slightly downward, GLENN saw a very bright and
glaring light coming from the opposite direction of the national highway. GLENN blinked his headlights
as a signal for the other driver to switch his headlights from bright to dim. GLENN switched his own
lights from bright to dim and reduced his speed from 80 to 60 kilometers per hour. It was only when the
vehicles were at a distance of 10 to 15 meters from each other that the other car’s headlights were
switched from bright to dim. As a result, GLENN found it extremely hard to adjust from high brightness
to sudden darkness.9

It was while the truck was still cruising at a speed of 60 km./hr., and immediately after passing the
oncoming vehicle, that GLENN suddenly heard and felt bumping thuds. At the sound of the first
bumping thuds, GLENN put his right foot on the brake pedal. But the impact was so sudden that he
was astonished and afraid. He was trembling and could not see what were being bumped. At the
succeeding bumping thuds, he was not able to pump the brake, nor did he notice that his foot was
pushing the pedal. He returned to his senses only when one of his companions woke up and said to
him: "Gard, it seems we bumped on something. Just relax, we might all die." Due to its momentum, the
Elf continued on its track and was able to stop only when it was already very near the next curve. 10

GLENN could not distinguish in the darkness what he had hit, especially since the right headlights of
the truck had been busted upon the first bumping thuds. In his confusion and fear, he immediately
proceeded home. GLENN did not report the incident to the Puerto Police Station because he was not
aware of what exactly he had hit. It was only when he reached his house that he noticed that the grill of
the truck was broken; the side mirror and round mirror, missing; and the windshield, splintered. Two
hours later, he heard on Bombo Radyo that an accident had occurred, and he realized that it was the
PNP group that he had hit. GLENN surrendered that same day to Governor Emano. 11

The defense also presented Crescente Galindez, as well as Shirley Almazan of the PAG-ASA Office,
Cagayan de Oro City. The former testified that when he went to GLENN’s house at about 10:00 p.m. of
4 October 1995, there was heavy rain; and at 12:00 midnight, the rain was moderate. He corroborated
GLENN’s testimony that he (Cerscente) went to GLENN’s house that evening in order to hire a truck
that would bring the band instruments, band utilities and band members from Cagayan de Oro to
Camiguin for the Lanzones Festival.12 Almazan, on the other hand, testified that based on an observed
weather report within the vicinity of Cagayan de Oro City, there was rain from 8:00 p.m. of October
1995 to 2:00 a.m. the next day; and the sky was overcast from 11:00 p.m. of 4 October 1995 to 5:00
a.m. of 5 October 1995. What she meant by "overcast" is that there was no break in the sky; and,
definitely, the moon and stars could not be seen. 13

The prosecution presented rebuttal witness Danilo Olarita whose house was just 100 meters away
from the place where the incident occurred. He testified that he was awakened on that fateful night by
a series of loud thuds. Thereafter, a man came to his house and asked for a glass of water, claiming to
have been hit by a vehicle. Danilo further stated that the weather at the time was fair, and that the soil
was dry and not muddy.14
In its decision of 26 August 1997, the trial court convicted GLENN of the complex crime of multiple
murder, multiple frustrated murder and multiple attempted murder, with the use of motor vehicle as the
qualifying circumstance. It sentenced him to suffer the penalty of death and ordered him to indemnify
each group of the heirs of the deceased in the amount of P75,000; each of the victims of frustrated
murder in the amount of P30,000; and each of the victims of attempted murder in the amount of
P10,000.

Hence, this automatic review, wherein GLENN contends that the trial court erred (a) in finding that he
caused the Isuzu Elf truck to hit the trainees even after seeing the rear guards waving and the PNP
trainees jogging; (b) in finding that he caused the truck to run even faster after noticing the first thuds;
and (c) in finding that he could still have avoided the accident from a distance of 150 meters, despite
the bright and glaring light from the oncoming vehicle.

In convicting GLENN, the trial court found that "the accused out of mischief and dare-devilness [ sic], in
the exhilaration of the night breeze and having dr[u]nk at least three bottles of beer earlier, merely
wanted to scare the rear guard[s] and see them scamper away as they saw him and his vehicle coming
at them to ram them down."15

Likewise, the OSG posits that "the evil motive of the appellant in injuring the jogging trainees
was probably brought by the fact that he had dr[u]nk a total of three (3) bottles of beer earlier before
the incident."16

Not to be outdone, the defense also advances another speculation, i.e., "the possibility that [GLENN]
could have fallen asleep out of sheer fatigue in that unholy hour of 3:30 in the early morning, and thus
was not able to stop his Isuzu Elf truck when the bumping thuds were occurring in rapid succession;
and after he was able to wake up upon hearing the shout of his companions, it was already too late, as
the bumping thuds had already occurred." 17

Considering that death penalty is involved, the trial court should have been more scrupulous in
weighing the evidence. It we are to subscribe to the trial court’s finding that GLENN must have merely
wanted to scare the rear guards, then intent to kill was wanting. In the absence of a criminal intent, he
cannot be held liable for an intentional felony. All reasonable doubt intended to demonstrate
negligence, and not criminal intent, should be indulged. 18

From the convergence of circumstances, we are inclined to believe that the tragic event was more a
product of reckless imprudence than of a malicious intent on GLENN’s part.

First, as testified to by prosecution rebuttal witness Danilo Olarita, the place of the incident was "very
dark," as there was no moon. And according to PAG-ASA’s observed weather report within the vicinity
of Cagayan de Oro City covering a radius of 50 kilometers, at the time the event took place, the sky
was overcast, i.e., there was absolutely no break in the thick clouds covering the celestial dome globe;
hence, there was no way for the moon and stars to be seen. Neither were there lampposts that
illuminated the highway.1âwphi1.nêt

Second, the jogging trainees and the rear guards were all wearing black T-shirts, black short pants,
and black and green combat shoes, which made them hard to make out on that dark and cloudy night.
The rear guards had neither reflectorized vests or gloves nor flashlights in giving hand signals.
Third, GLENN was driving on the proper side of the road, the right lane. On the other hand, the jogging
trainees were occupying the wrong lane, the same lane as GLENN’s vehicle was traversing. Worse,
they were facing the same direction as GLENN’s truck such that their backs were turned towards the
oncoming vehicles from behind.

Fourth, no convincing evidence was presented to rebut GLENN’s testimony that he had been
momentarily blinded by the very bright and glaring lights of the oncoming vehicle at the opposite
direction as his truck rounded the curve. He must have been still reeling from the blinding effect of the
lights coming from the other vehicle when he plowed into the group of police trainees.

Indeed, as pointed out by appellant, instinct tells one ‘to stop or swerve to a safe place the moment he
sees a cow, dog, or cat on the road, in order to avoid bumping or killing the same"; and more so if the
one on the road is a person. It would therefore be inconceivable for GLENN, then a young college
graduate with a pregnant wife and three very young children who were dependent on him for support,
to have deliberately hit the group with his truck.

The conclusion of the trial court and the OSG the GLENN intentionally rammed and hit the jogging
trainees was premised on the assumption that despite the first bumping thuds, he continued to
accelerate his vehicle instead of applying his brakes, as shown by the absence of brake marks or skid
marks along the traffic scene.

For its part, the defense attributed the continuous movement of GLENN’s vehicle to the confluence of
the following factors:

1. The Isuzu Elf truck, a huge vehicle, was moving fast that even if the brakes were applied the
truck would have still proceeded further on account of its momentum, albeit at a reduced speed,
and would have stopped only after a certain distance.

2. The national highway, from Alae to Puerto, Cagayan de Oro City, was made of fine and
smooth asphalt, free from obstructions on the road such as potholes or excavations. Moreover,
the highway was going a little bit downward, more particularly from the first curve to the place of
incident. Hence, it was easier and faster to traverse a distance "20 to 25 meters which was the
approximate aggregate distance" from the first elements up to the 22 nd or 23rd elements of the
columns.

3. The weight of each of the trainees (the average of which could be 50 kilograms only) could
hardly make an impact on the 3,900 kilograms truck, which was moving at a speed ranging from
60 to 70 kilometers per hour.

4. Considering that the width of the truck from the right to the left tires was wide and the under
chassis was elevated, the truck could just pass over two persons lying flat on the ground
without its rubber tires running over the bodies. Thus, GLENN would not notice any
destabilization of the rubber tires.

5. Since the police trainees were jogging in the same direction as the truck was proceeding, the
forward movements constituted a force parallel to the momentum of the forward-moving truck
such that there was even much lesser force resisting the said ongoing momentum.
It is a well-entrenched rule that if the inculpatory facts are capable of two or more explanations – one
consistent with the innocence or lesser degree of liability of the accused, and the other consistent with
his guilt or graver responsibility – the Court should adopt the explanation which is more favorable to the
accused.19

We are convinced that the incident, tragic though it was in light of the number of persons killed and
seriously injured, was an accident and not an intentional felony. It is significant to note that there is no
shred of evidence that GLENN had an axe to grind against the police trainees that would drive him into
deliberately hitting them with intent to kill.

Although proof of motive is not indispensable to a conviction especially where the assailant is positively
identified, such proof is, nonetheless, important in determining which of two conflicting theories of the
incident is more likely to be true.20 Thus, in People v. Godinez,21 this Court said that the existence of a
motive on the part of the accused becomes decisive in determining the probability or credibility of his
version that the shooting was purely accidental.

Neither is there any showing of "a political angle of a leftist-sponsored massacre of police elements
disguised in a vehicular accident."22 Even if there be such evidence, i.e., that the motive of the killing
was in furtherance of a rebellion movement, GLENN cannot be convicted because if such were the
case, the proper charge would be rebellion, and not murder.23

GLENN’s offense is in failing to apply the brakes, or to swerve his vehicle to the left or to a safe place
the movement he heard and felt the first bumping thuds. Had he done so, many trainees would have
been spared.

We have once said:

A man must use common sense, and exercise due reflection in all his acts; it is his duty to be
cautious, careful, and prudent, if not from instinct, then through fear of incurring punishment. He
is responsible for such results as anyone might foresee and for acts which no one would have
performed except through culpable abandon. Otherwise his own person, rights and property,
and those of his fellow-beings, would ever be exposed to all manner of danger and injury.24

The test for determining whether a person is negligent in doing an act whereby injury or damage
results to the person or property of another is this: Could a prudent man, in the position of the person
to whom negligence is attributed, foresee harm to the person injured as a reasonable consequence of
the course actually pursued? If so, the law imposes a duty on the actor to refrain from that course or to
take precautions to guard against its mischievous results, and the failure to do so constitutes
negligence. Reasonable foresight of harm, followed by the ignoring of the admonition born of this
prevision, is always necessary before negligence can be held to exist. 25

GLENN showed an inexcusable lack of precaution. Article 365 of the Revised Penal Code states that
reckless imprudence consists in voluntarily, but without malice, doing or failing to do an act from which
material damage results by reason of inexcusable lack of precaution on the part of the person
performing or failing to perform such act, taking into consideration (1) his employment or occupation;
(2) his degree of intelligence; (4) his physical condition; and (3) other circumstances regarding
persons, time and place.
GLENN, being then a young college graduate and an experienced driver, should have known to apply
the brakes or swerve to a safe place immediately upon hearing the first bumping thuds to avoid further
hitting the other trainees. By his own testimony, it was established that the road was slippery and
slightly going downward; and, worse, the place of the incident was foggy and dark. He should have
observed due care in accordance with the conduct of a reasonably prudent man, such as by
slackening his speed, applying his brakes, or turning to the left side even if it would mean entering the
opposite lane (there being no evidence that a vehicle was coming from the opposite direction). It is
highly probable that he was driving at high speed at the time. And even if he was driving within the
speed limits, this did not mean that he was exercising due care under the existing circumstances and
conditions at the time.

Considering that the incident was not a product of a malicious intent but rather the result of a single act
of reckless driving, GLENN should be held guilty of the complex crime of reckless imprudence resulting
in multiple homicide with serious physical injuries and less serious physical injuries.

Article 48 of the Revised Penal Code provides that when the single act constitutes two or more grave
or less grave felonies, or when an offense is a necessary means for committing the other, the penalty
for the most serious crime shall be imposed, the same to be applied in its maximum period. Since
Article 48 speaks of felonies, it is applicable to crimes through negligence in view of the definition of
felonies in Article 3 as "acts or omissions punishable by law" committed either by means of deceit
{dolo) or fault (culpa).26 In Reodica v. Court of Appeals,27 we ruled that if a reckless, imprudent, or
negligent act results in two or more grave or less grave felonies, a complex crime is committed. Thus,
in Lapuz v. Court of Appeals,28 the accused was convicted, in conformity with Article 48 of the Revised
Penal Code, of the complex crime of "homicide with serious physical injuries and damage to property
through reckless imprudence," and was sentenced to a single penalty of imprisonment, instead of the
two penalties imposed by the trial court. Also, in Soriao v. Court of Appeals,29 the accused was
convicted of the complex crime of "multiple homicide with damage to property through reckless
imprudence" for causing a motor boat to capsize, thereby drowning to death its twenty-eight
passengers.

The slight physical injuries caused by GLENN to the ten other victims through reckless imprudence,
would, had they been intentional, have constituted light felonies. Being light felonies, which are not
covered by Article 48, they should be treated and punished as separate offenses. Separate
informations should have, therefore, been filed.

It must be noted that only one information (for multiple murder, multiple frustrated murder and multiple
attempted murder) was filed with the trial court. However, nothing appears in the record that GLENN
objected to the multiplicity of the information in a motion to quash before his arraignment. Hence, he is
deemed to have waived such defect.30Under Section 3, Rule 120 of the Rules of Court, when two or
more offenses are charged in a single complaint or information and the accused fails to object to it
before trial, the court may convict the accused of as many offenses as are charged and proved, and
impose on him the penalty for each of them.

Now, we come to the penalty. Under Article 365 of the Revised Penal Code, any person who, by
reckless imprudence, shall commit any act which, had it been intentional, would constitute a grave
felony shall suffer the penalty of arresto mayor in its maximum period to prision correccional in its
medium period; and if it would have constituted a light felony, the penalty of arresto menor in its
maximum period shall be imposed. The last paragraph thereof provides that the penalty next higher in
degree shall be imposed upon the offender who fails to lend on the spot to the injured parties such help
as may be in his hand to give. This failure to render assistance to the victim, therefore, constitutes a
qualifying circumstance because the presence thereof raises the penalty by one degree. 31Moreover,
the fifth paragraph thereof provides that in the imposition of the penalty, the court shall exercise its
sound discretion without regard to the rules prescribed in Article 64. Elsewise stated, in felonies
through imprudence or negligence, modifying circumstances need not be considered in the imposition
of the penalty.32

In the case at bar, it has been alleged in the information and proved during the trial that GLENN
"escaped from the scene of the incident, leaving behind the victims." It being crystal clear that GLENN
failed to render aid to the victims, the penalty provided for under Article 365 shall be raised by one
degree. Hence, for reckless imprudence resulting in multiple homicide with serious physical injuries
and less serious physical injuries, the penalty would be prision correccional in its maximum period
to prision mayor in its medium period. Applying Article 48, the maximum of said penalty, which
is prision mayor in its medium period, should be imposed. For the separate offenses of reckless
imprudence resulting in slight physical injuries, GLENN may be sentenced to suffer, for each count, the
penalty of arresto mayor in its minimum period.

Although it was established through the testimonies of prosecution witness Lemuel Pangca 33 and of
GLENN that the latter surrendered to Governor Emano of Misamis Oriental, such mitigating
circumstance need not be considered pursuant to the aforestated fifth paragraph of Article 365.

Under the Indeterminate Sentence Law, GLENN may be sentenced to suffer an indeterminate penalty
whose minimum is within the range of the penalty next lower in degree to that prescribed for the
offense, and whose maximum is that which could properly be imposed taking into account the
modifying circumstances. Hence, for the complex crime of reckless imprudence resulting in multiple
homicide with serious physical injuries and less serious physical injuries, qualified by his failure to
render assistance to the victims, he may be sentenced to suffer an indeterminate penalty ranging
from arresto mayor in its maximum period to prision correccional in its medium period, as minimum,
to prision mayor in its medium period, as maximum. As to the crimes of reckless imprudence resulting
in slight physical injuries, since the maximum term for each count is only two months the Indeterminate
Sentence Law will not apply.

As far as the award of damages is concerned, we find a necessity to modify the same. Conformably
with current jurisprudence,34 we reduce the trial court’s award of death indemnity from P75,000 to
P50,000 for each group of heirs of the trainees killed. Likewise, for lack of factual basis, we delete the
awards of P30,000 to each of those who suffered serious physical injuries and of P10,000 to each of
those who suffered minor physical injuries.

WHEREFORE, the decision of the Regional Trial Court, Branch 38, Cagayan de Oro City, is
hereby SET ASIDE, and another one is rendered holding herein accused-appellant GLENN DE LOS
SANTOS guilty beyond reasonable doubt of (1) the complex crime of reckless imprudence resulting in
multiple homicide with serious physical injuries and less serious physical injuries, and sentencing him
to suffer an indeterminate penalty of four (4) years of prision correccional, as minimum, to ten (10)
years of prision mayor, as maximum; and (2) ten (10) counts of reckless imprudence resulting in slight
physical injuries and sentencing him, for each count, to the penalty of two (2) months of arresto mayor.
Furthermore, the awards of death indemnity for each group of heirs of the trainees killed are reduced to
P50,000; and the awards in favor of the other victims are deleted. Costs against accused-
appellant.1âwphi1.nêt

SO ORDERED.

Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing, Pardo, Buena, Gonzaga-
Reyes, Ynares-Santiago, De Leon, Jr., and Sandoval-Gutierrez, JJ., concur.

G.R. No. L-65295 March 10, 1987

PHOENIX CONSTRUCTION, INC. and ARMANDO U. CARBONEL, petitioners,

vs.
THE INTERMEDIATE APPELLATE COURT and LEONARDO DIONISIO, respondents.

FELICIANO, J:

In the early morning of 15 November 1975 — at about 1:30 a.m. — private respondent Leonardo
Dionisio was on his way home — he lived in 1214-B Zamora Street, Bangkal, Makati — from a
cocktails-and-dinner meeting with his boss, the general manager of a marketing corporation. During
the cocktails phase of the evening, Dionisio had taken "a shot or two" of liquor. Dionisio was driving his
Volkswagen car and had just crossed the intersection of General Lacuna and General Santos Streets
at Bangkal, Makati, not far from his home, and was proceeding down General Lacuna Street, when his
car headlights (in his allegation) suddenly failed. He switched his headlights on "bright" and thereupon
he saw a Ford dump truck looming some 2-1/2 meters away from his car. The dump truck, owned by
and registered in the name of petitioner Phoenix Construction Inc. ("Phoenix"), was parked on the right
hand side of General Lacuna Street (i.e., on the right hand side of a person facing in the same
direction toward which Dionisio's car was proceeding), facing the oncoming traffic. The dump truck was
parked askew (not parallel to the street curb) in such a manner as to stick out onto the street, partly
blocking the way of oncoming traffic. There were no lights nor any so-called "early warning" reflector
devices set anywhere near the dump truck, front or rear. The dump truck had earlier that evening been
driven home by petitioner Armando U. Carbonel, its regular driver, with the permission of his employer
Phoenix, in view of work scheduled to be carried out early the following morning, Dionisio claimed that
he tried to avoid a collision by swerving his car to the left but it was too late and his car smashed into
the dump truck. As a result of the collision, Dionisio suffered some physical injuries including some
permanent facial scars, a "nervous breakdown" and loss of two gold bridge dentures.

Dionisio commenced an action for damages in the Court of First Instance of Pampanga basically
claiming that the legal and proximate cause of his injuries was the negligent manner in which Carbonel
had parked the dump truck entrusted to him by his employer Phoenix. Phoenix and Carbonel, on the
other hand, countered that the proximate cause of Dionisio's injuries was his own recklessness in
driving fast at the time of the accident, while under the influence of liquor, without his headlights on and
without a curfew pass. Phoenix also sought to establish that it had exercised due rare in the selection
and supervision of the dump truck driver.

The trial court rendered judgment in favor of Dionisio and against Phoenix and Carbonel and ordered
the latter:
 (1) To pay plaintiff jointly and severally the sum of P 15,000.00 for hospital bills and the
replacement of the lost dentures of plaintiff;

(2) To pay plaintiff jointly and severally the sum of P 1,50,000.-00 as loss of expected
income for plaintiff brought about the accident in controversy and which is the result of
the negligence of the defendants;

(3) To pay the plaintiff jointly and severally the sum of P 10,000. as moral damages for
the unexpected and sudden withdrawal of plaintiff from his lifetime career as a marketing
man; mental anguish, wounded feeling, serious anxiety, social humiliation, besmirched
reputation, feeling of economic insecurity, and the untold sorrows and frustration in life
experienced by plaintiff and his family since the accident in controversy up to the present
time;

(4) To pay plaintiff jointly and severally the sum of P 10,000.00 as damages for the
wanton disregard of defendants to settle amicably this case with the plaintiff before the
filing of this case in court for a smaller amount.

(5) To pay the plaintiff jointly and severally the sum of P 4,500.00 due as and for
attorney's fees; and

(6) The cost of suit. (Emphasis supplied)

Phoenix and Carbonel appealed to the Intermediate Appellate Court. That court in CA-G.R. No. 65476
affirmed the decision of the trial court but modified the award of damages to the following extent:

1. The award of P15,000.00 as compensatory damages was reduced

to P6,460.71, the latter being the only amount that the appellate court
found the plaintiff to have proved as actually sustained by him;

2. The award of P150,000.00 as loss of expected income was reduced

to P100,000.00, basically because Dionisio had voluntarily resigned his
job such that, in the opinion of the appellate court, his loss of income "was
not solely attributable to the accident in question;" and

3. The award of P100,000.00 as moral damages was held by the appellate

court as excessive and unconscionable and hence reduced
to P50,000.00.

The award of P10,000.00 as exemplary damages and P4,500.00 as

attorney's fees and costs remained untouched.

This decision of the Intermediate Appellate Court is now before us on a petition for review.

Both the trial court and the appellate court had made fairly explicit findings of fact relating to the
manner in which the dump truck was parked along General Lacuna Street on the basis of which both
courts drew the inference that there was negligence on the part of Carbonel, the dump truck driver, and
that this negligence was the proximate cause of the accident and Dionisio's injuries. We note, however,
that both courts failed to pass upon the defense raised by Carbonel and Phoenix that the true legal and
proximate cause of the accident was not the way in which the dump truck had been parked but rather
the reckless way in which Dionisio had driven his car that night when he smashed into the dump truck.
The Intermediate Appellate Court in its questioned decision casually conceded that Dionisio was "in
some way, negligent" but apparently failed to see the relevance of Dionisio's negligence and made no
further mention of it. We have examined the record both before the trial court and the Intermediate
Appellate Court and we find that both parties had placed into the record sufficient evidence on the
basis of which the trial court and the appellate court could have and should have made findings of fact
relating to the alleged reckless manner in which Dionisio drove his car that night. The petitioners
Phoenix and Carbonel contend that if there was negligence in the manner in which the dump truck was
parked, that negligence was merely a "passive and static condition" and that private respondent
Dionisio's recklessness constituted an intervening, efficient cause determinative of the accident and
the injuries he sustained. The need to administer substantial justice as between the parties in this
case, without having to remand it back to the trial court after eleven years, compels us to address
directly the contention put forward by the petitioners and to examine for ourselves the record pertaining
to Dionisio's alleged negligence which must bear upon the liability, or extent of liability, of Phoenix and
Carbonel.

There are four factual issues that need to be looked into: (a) whether or not private respondent Dionisio
had a curfew pass valid and effective for that eventful night; (b) whether Dionisio was driving fast or
speeding just before the collision with the dump truck; (c) whether Dionisio had purposely turned off his
car's headlights before contact with the dump truck or whether those headlights accidentally
malfunctioned moments before the collision; and (d) whether Dionisio was intoxicated at the time of the
accident.

As to the first issue relating to the curfew pass, it is clear that no curfew pass was found on the person
of Dionisio immediately after the accident nor was any found in his car. Phoenix's evidence here
consisted of the testimony of Patrolman Cuyno who had taken Dionisio, unconscious, to the Makati
Medical Center for emergency treatment immediately after the accident. At the Makati Medical Center,
a nurse took off Dionisio's clothes and examined them along with the contents of pockets together with
Patrolman Cuyno. 1 Private respondent Dionisio was not able to produce any curfew pass during the
trial. Instead, he offered the explanation that his family may have misplaced his curfew pass. He also
offered a certification (dated two years after the accident) issued by one Major Benjamin N. Libarnes of
the Zone Integrated Police Intelligence Unit of Camp Olivas, San Fernando, Pampanga, which was
said to have authority to issue curfew passes for Pampanga and Metro Manila. This certification was to
the effect that private respondent Dionisio had a valid curfew pass. This certification did not, however,
specify any pass serial number or date or period of effectivity of the supposed curfew pass. We find
that private respondent Dionisio was unable to prove possession of a valid curfew pass during the
night of the accident and that the preponderance of evidence shows that he did not have such a pass
during that night. The relevance of possession or non-possession of a curfew pass that night lies in the
light it tends to shed on the other related issues: whether Dionisio was speeding home and whether he
had indeed purposely put out his headlights before the accident, in order to avoid detection and
possibly arrest by the police in the nearby police station for travelling after the onset of curfew without a
valid curfew pass.

On the second issue — whether or not Dionisio was speeding home that night — both the trial court
and the appellate court were completely silent.
The defendants in the trial court introduced the testimony of Patrolman Cuyno who was at the scene of
the accident almost immediately after it occurred, the police station where he was based being barely
200 meters away. Patrolman Cuyno testified that people who had gathered at the scene of the accident
told him that Dionisio's car was "moving fast" and did not have its headlights on. 2 Dionisio, on the
other hand, claimed that he was travelling at a moderate speed at 30 kilometers per hour and had just
crossed the intersection of General Santos and General Lacuna Streets and had started to accelerate
when his headlights failed just before the collision took place. 3

Private respondent Dionisio asserts that Patrolman Cuyno's testimony was hearsay and did not fag
within any of the recognized exceptions to the hearsay rule since the facts he testified to were not
acquired by him through official information and had not been given by the informants pursuant to any
duty to do so. Private respondent's objection fails to take account of the fact that the testimony of
Patrolman Cuyno is admissible not under the official records exception to the hearsay rule 4 but rather
as part of the res gestae. 5 Testimonial evidence under this exception to the hearsay rule consists of
excited utterances made on the occasion of an occurrence or event sufficiently startling in nature so as
to render inoperative the normal reflective thought processes of the observer and hence made as a
spontaneous reaction to the occurrence or event, and not the result of reflective thought. 6

We think that an automobile speeding down a street and suddenly smashing into a stationary object in
the dead of night is a sufficiently startling event as to evoke spontaneous, rather than reflective,
reactions from observers who happened to be around at that time. The testimony of Patrolman Cuyno
was therefore admissible as part of the res gestae and should have been considered by the trial court.
Clearly, substantial weight should have been ascribed to such testimony, even though it did not, as it
could not, have purported to describe quantitatively the precise velocity at winch Dionisio was travelling
just before impact with the Phoenix dump truck.

A third related issue is whether Dionisio purposely turned off his headlights, or whether his headlights
accidentally malfunctioned, just moments before the accident. The Intermediate Appellate Court
expressly found that the headlights of Dionisio's car went off as he crossed the intersection but was
non-committal as to why they did so. It is the petitioners' contention that Dionisio purposely shut off his
headlights even before he reached the intersection so as not to be detected by the police in the police
precinct which he (being a resident in the area) knew was not far away from the intersection. We
believe that the petitioners' theory is a more credible explanation than that offered by private
respondent Dionisio — i.e., that he had his headlights on but that, at the crucial moment, these had in
some mysterious if convenient way malfunctioned and gone off, although he succeeded in switching
his lights on again at "bright" split seconds before contact with the dump truck.

A fourth and final issue relates to whether Dionisio was intoxicated at the time of the accident. The
evidence here consisted of the testimony of Patrolman Cuyno to the effect that private respondent
Dionisio smelled of liquor at the time he was taken from his smashed car and brought to the Makati
Medical Center in an unconscious condition. 7This testimony has to be taken in conjunction with the
admission of Dionisio that he had taken "a shot or two" of liquor before dinner with his boss that night.
We do not believe that this evidence is sufficient to show that Dionisio was so heavily under the
influence of liquor as to constitute his driving a motor vehicle per se an act of reckless
imprudence. 8 There simply is not enough evidence to show how much liquor he had in fact taken and
the effects of that upon his physical faculties or upon his judgment or mental alertness. We are also
aware that "one shot or two" of hard liquor may affect different people differently.
The conclusion we draw from the factual circumstances outlined above is that private respondent
Dionisio was negligent the night of the accident. He was hurrying home that night and driving faster
than he should have been. Worse, he extinguished his headlights at or near the intersection of General
Lacuna and General Santos Streets and thus did not see the dump truck that was parked askew and
sticking out onto the road lane.

Nonetheless, we agree with the Court of First Instance and the Intermediate Appellate Court that the
legal and proximate cause of the accident and of Dionisio's injuries was the wrongful — or negligent
manner in which the dump truck was parked in other words, the negligence of petitioner Carbonel. That
there was a reasonable relationship between petitioner Carbonel's negligence on the one hand and the
accident and respondent's injuries on the other hand, is quite clear. Put in a slightly different manner,
the collision of Dionisio's car with the dump truck was a natural and foreseeable consequence of the
truck driver's negligence.

The petitioners, however, urge that the truck driver's negligence was merely a "passive and static
condition" and that private respondent Dionisio's negligence was an "efficient intervening cause and
that consequently Dionisio's negligence must be regarded as the legal and proximate cause of the
accident rather than the earlier negligence of Carbonel. We note that the petitioners' arguments are
drawn from a reading of some of the older cases in various jurisdictions in the United States but we are
unable to persuade ourselves that these arguments have any validity for our jurisdiction. We note,
firstly, that even in the United States, the distinctions between "cause" and "condition" which the
'petitioners would have us adopt have already been "almost entirely discredited." Professors and
Keeton make this quite clear:

Cause and condition. Many courts have sought to distinguish between the active "cause"
of the harm and the existing "conditions" upon which that cause operated. If the
defendant has created only a passive static condition which made the damage possible,
the defendant is said not to be liable. But so far as the fact of causation is concerned, in
the sense of necessary antecedents which have played an important part in producing
the result it is quite impossible to distinguish between active forces and passive
situations, particularly since, as is invariably the case, the latter are the result of other
active forces which have gone before. The defendant who spills gasoline about the
premises creates a "condition," but the act may be culpable because of the danger of
fire. When a spark ignites the gasoline, the condition has done quite as much to bring
about the fire as the spark; and since that is the very risk which the defendant has
created, the defendant will not escape responsibility. Even the lapse of a considerable
time during which the "condition" remains static will not necessarily affect liability; one
who digs a trench in the highway may still be liable to another who fans into it a month
afterward. "Cause" and "condition" still find occasional mention in the decisions; but the
distinction is now almost entirely discredited. So far as it has any validity at all, it must
refer to the type of case where the forces set in operation by the defendant have come to
rest in a position of apparent safety, and some new force intervenes. But even in such
cases, it is not the distinction between "cause" and "condition" which is important but the
nature of the risk and the character of the intervening cause . 9

We believe, secondly, that the truck driver's negligence far from being a "passive and static condition"
was rather an indispensable and efficient cause. The collision between the dump truck and the private
respondent's car would in an probability not have occurred had the dump truck not been parked askew
without any warning lights or reflector devices. The improper parking of the dump truck created an
unreasonable risk of injury for anyone driving down General Lacuna Street and for having so created
this risk, the truck driver must be held responsible. In our view, Dionisio's negligence, although later in
point of time than the truck driver's negligence and therefore closer to the accident, was not an efficient
intervening or independent cause. What the Petitioners describe as an "intervening cause" was no
more than a foreseeable consequent manner which the truck driver had parked the dump truck. In
other words, the petitioner truck driver owed a duty to private respondent Dionisio and others similarly
situated not to impose upon them the very risk the truck driver had created. Dionisio's negligence was
not of an independent and overpowering nature as to cut, as it were, the chain of causation in fact
between the improper parking of the dump truck and the accident, nor to sever the juris vinculum of
liability. It is helpful to quote once more from Professor and Keeton:

Foreseeable Intervening Causes. If the intervening cause is one which in ordinary

human experience is reasonably to be anticipated or one which the defendant has
reason to anticipate under the particular circumstances, the defendant may be
negligence among other reasons, because of failure to guard against it; or the defendant
may be negligent only for that reason. Thus one who sets a fire may be required to
foresee that an ordinary, usual and customary wind arising later wig spread it beyond the
defendant's own property, and therefore to take precautions to prevent that event. The
person who leaves the combustible or explosive material exposed in a public place may
foresee the risk of fire from some independent source. ... In all of these cases there is an
intervening cause combining with the defendant's conduct to produce the result and in
each case the defendant's negligence consists in failure to protect the plaintiff against
that very risk.

Obviously the defendant cannot be relieved from liability by the fact that the risk or a
substantial and important part of the risk, to which the defendant has subjected the
plaintiff has indeed come to pass. Foreseeable intervening forces are within the scope
original risk, and hence of the defendant's negligence. The courts are quite generally
agreed that intervening causes which fall fairly in this category will not supersede the
defendant's responsibility.

Thus it has been held that a defendant will be required to anticipate the usual weather of
the vicinity, including all ordinary forces of nature such as usual wind or rain, or snow or
frost or fog or even lightning; that one who leaves an obstruction on the road or a
railroad track should foresee that a vehicle or a train will run into it; ...

The risk created by the defendant may include the intervention of the foreseeable
negligence of others. ... [The standard of reasonable conduct may require the defendant
to protect the plaintiff against 'that occasional negligence which is one of the ordinary
incidents of human life, and therefore to be anticipated.' Thus, a defendant who blocks
the sidewalk and forces the plaintiff to walk in a street where the plaintiff will be exposed
to the risks of heavy traffic becomes liable when the plaintiff is run down by a car, even
though the car is negligently driven; and one who parks an automobile on the highway
without lights at night is not relieved of responsibility when another negligently drives into
it. --- 10
We hold that private respondent Dionisio's negligence was "only contributory," that the "immediate and
proximate cause" of the injury remained the truck driver's "lack of due care" and that consequently
respondent Dionisio may recover damages though such damages are subject to mitigation by the
courts (Article 2179, Civil Code of the Philippines).

Petitioners also ask us to apply what they refer to as the "last clear chance" doctrine. The theory here
of petitioners is that while the petitioner truck driver was negligent, private respondent Dionisio had the
"last clear chance" of avoiding the accident and hence his injuries, and that Dionisio having failed to
take that "last clear chance" must bear his own injuries alone. The last clear chance doctrine of the
common law was imported into our jurisdiction by Picart vs. Smith 11 but it is a matter for debate
whether, or to what extent, it has found its way into the Civil Code of the Philippines. The historical
function of that doctrine in the common law was to mitigate the harshness of another common law
doctrine or rule that of contributory negligence. 12 The common law rule of contributory negligence
prevented any recovery at all by a plaintiff who was also negligent, even if the plaintiff's negligence was
relatively minor as compared with the wrongful act or omission of the defendant. 13 The common law
notion of last clear chance permitted courts to grant recovery to a plaintiff who had also been negligent
provided that the defendant had the last clear chance to avoid the casualty and failed to do
so. 14 Accordingly, it is difficult to see what role, if any, the common law last clear chance doctrine has
to play in a jurisdiction where the common law concept of contributory negligence as an absolute bar to
recovery by the plaintiff, has itself been rejected, as it has been in Article 2179 of the Civil Code of the
Philippines. 15

Is there perhaps a general concept of "last clear chance" that may be extracted from its common law
matrix and utilized as a general rule in negligence cases in a civil law jurisdiction like ours? We do not
believe so. Under Article 2179, the task of a court, in technical terms, is to determine whose negligence
— the plaintiff's or the defendant's — was the legal or proximate cause of the injury. That task is not
simply or even primarily an exercise in chronology or physics, as the petitioners seem to imply by the
use of terms like "last" or "intervening" or "immediate." The relative location in the continuum of time of
the plaintiff's and the defendant's negligent acts or omissions, is only one of the relevant factors that
may be taken into account. Of more fundamental importance are the nature of the negligent act or
omission of each party and the character and gravity of the risks created by such act or omission for
the rest of the community. The petitioners urge that the truck driver (and therefore his employer) should
be absolved from responsibility for his own prior negligence because the unfortunate plaintiff failed to
act with that increased diligence which had become necessary to avoid the peril precisely created by
the truck driver's own wrongful act or omission. To accept this proposition is to come too close to
wiping out the fundamental principle of law that a man must respond for the forseeable consequences
of his own negligent act or omission. Our law on quasi-delicts seeks to reduce the risks and burdens of
living in society and to allocate them among the members of society. To accept the petitioners' pro-
position must tend to weaken the very bonds of society.

Petitioner Carbonel's proven negligence creates a presumption of negligence on the part of his
employer Phoenix 16in supervising its employees properly and adequately. The respondent appellate
court in effect found, correctly in our opinion, that Phoenix was not able to overcome this presumption
of negligence. The circumstance that Phoenix had allowed its truck driver to bring the dump truck to his
home whenever there was work to be done early the following morning, when coupled with the failure
to show any effort on the part of Phoenix to supervise the manner in which the dump truck is parked
when away from company premises, is an affirmative showing of culpa in vigilando on the part of
Phoenix.
Turning to the award of damages and taking into account the comparative negligence of private
respondent Dionisio on one hand and petitioners Carbonel and Phoenix upon the other hand, 17 we
believe that the demands of substantial justice are satisfied by allocating most of the damages on a 20-
80 ratio. Thus, 20% of the damages awarded by the respondent appellate court, except the award of
P10,000.00 as exemplary damages and P4,500.00 as attorney's fees and costs, shall be borne by
private respondent Dionisio; only the balance of 80% needs to be paid by petitioners Carbonel and
Phoenix who shall be solidarity liable therefor to the former. The award of exemplary damages and
attorney's fees and costs shall be borne exclusively by the petitioners. Phoenix is of course entitled to
reimbursement from Carbonel. 18 We see no sufficient reason for disturbing the reduced award of
damages made by the respondent appellate court.

WHEREFORE, the decision of the respondent appellate court is modified by reducing the aggregate
amount of compensatory damages, loss of expected income and moral damages private respondent
Dionisio is entitled to by 20% of such amount. Costs against the petitioners.

SO ORDERED.

Yap (Chairman), Narvasa, Cruz, Gancayco and Sarmiento, JJ., concur.

Melencio-Herrera, J., is on leave.

G.R. No. 1719 January 23, 1907

M. H., RAKES, plaintiff-appellee,

vs.
THE ATLANTIC, GULF AND PACIFIC COMPANY, defendant-appellant.

A. D. Gibbs for appellant.

F. G. Waite, & Thimas Kepner for appellee.

TRACEY, J.:

This is an action for damages. The plaintiff, one of a gang of eight negro laborers in the employment of
the defendant, was at work transporting iron rails from a barge in the harbor to the company's yard
near the malecon in Manila. Plaintiff claims that but one hand car was used in this work. The defendant
has proved that there were two immediately following one another, upon which were piled lengthwise
seven rails, each weighing 560 pounds, so that the ends of the rails lay upon two crosspieces or sills
secured to the cars, but without side pieces or guards to prevent them from slipping off. According to
the testimony of the plaintiff, the men were either in the rear of the car or at its sides. According to that
defendant, some of them were also in front, hauling by a rope. At a certain spot at or near the water's
edge the track sagged, the tie broke, the car either canted or upset, the rails slid off and caught the
plaintiff, breaking his leg, which was afterwards amputated at about the knee.

This first point for the plaintiff to establish was that the accident happened through the negligence of
the defendant. The detailed description by the defendant's witnesses of the construction and quality of
the track proves that if was up to the general stranded of tramways of that character, the foundation
consisting on land of blocks or crosspieces of wood, by 8 inches thick and from 8 to 10 feet long laid,
on the surface of the ground, upon which at a right angle rested stringers of the same thickness, but
from 24 to 30 feet in length. On the across the stringers the parallel with the blocks were the ties to
which the tracks were fastened. After the road reached the water's edge, the blocks or crosspieces
were replaced with pilling, capped by timbers extending from one side to the other. The tracks were
each about 2 feet wide and the two inside rails of the parallel tracks about 18 inches apart. It was
admitted that there were no side pieces or guards on the car; that where no ends of the rails of the
track met each other and also where the stringers joined, there were no fish plates. the defendant has
not effectually overcome the plaintiff's proof that the joints between the rails were immediately above
the joints between the underlying stringers.

The cause of the sagging of the tracks and the breaking of the tie, which was the immediate occasion
of the accident, is not clear in the evidence, but is found by the trial court and is admitted in the briefs
and in the argument to have been the dislodging of the crosspiece or piling under the stringer by the
water of the bay raised by a recent typhoon. The superintendent of the company attributed it to the
giving way of the block laid in the sand. No effort was made to repair the injury at the time of the
occurrence. According to plaintiffs witnesses, a depression of the track, varying from one half inch to
one inch and a half, was therafter apparent to the eye, and a fellow workman of the plaintiff swears that
the day before the accident he called the attention of McKenna, the foreman, to it and asked by simply
straightening out the crosspiece, resetting the block under the stringer and renewing the tie, but
otherwise leaving the very same timbers as before. It has not proven that the company inspected the
track after the typhoon or had any proper system of inspection.

In order to charge the defendant with negligence, it was necessary to show a breach of duty on its part
in failing either to properly secure the load on iron to vehicles transporting it, or to skillfully build the
tramway or to maintain it in proper condition, or to vigilantly inspect and repair the roadway as soon as
the depression in it became visible. It is upon the failure of the defendant to repair the weakened track,
after notice of its condition, that the judge below based his judgment.

This case presents many important matters for our decision, and first among them is the standard of
duty which we shall establish in our jurisprudence on the part of employees toward employees.

The lack or the harshness of legal rules on this subject has led many countries to enact designed to
put these relations on a fair basis in the form of compensation or liability laws or the institution of
insurance. In the absence of special legislation we find no difficulty in so applying the general principles
of our law as to work out a just result.

Article 1092 of the Civil Code provides:

Civil obligations, arising from crimes or misdemeanors, shall be governed by the provisions of
the Penal Code.

And article 568 of the latter code provides:

He who shall execute through reckless negligence an act that if done with malice would
constitute a grave crime, shall be punished.

And article 590 provides that the following shall be punished:

4. Those who by simple imprudence or negligence, without committing any infraction of

regulations, shall cause an injury which, had malice intervened, would have constituted a crime
or misdemeanor.
And finally by articles 19 and 20, the liability of owners and employers for the faults of their servants
and representatives is declared to be civil and subsidiary in its character.

It is contented by the defendant, as its first defense to the action, that the necessary conclusion from
these collated laws is that the remedy for injuries through negligence lies only in a criminal action in
which the official criminally responsible must be made primarily liable and his employer held only
subsidiarily to him. According to this theory the plaintiff should have procured the arrest of the
representative of the company accountable for not repairing the tract, and on his prosecution a suitable
fine should have been imposed, payable primarily by him and secondarily by his employer.

This reasoning misconceived the plan of the Spanish codes upon this subject. Article 1093 of the Civil
Code makes obligations arising from faults or negligence not punished by the law, subject to the
provisions of Chapter 11 of Title XVI. Section 1902 of that chapter reads:

A person who by an act or omission causes damage to another when there is fault or
negligence shall be obliged to repair the damage so done.

SEC. 1903. The obligation imposed by the preceding article is demandable, not only for
personal acts and omissions, but also for those of the persons for whom they should be
responsible.

The father, and on his death or incapacity, the mother, is liable for the damages caused by the
minors who live with them.

xxx xxx xxx

Owners or directors of an establishment or enterprise are equally liable for the damages caused
by their employees in the service of the branches in which the latter may be employed or in the
performance of their duties.

xxx xxx xxx

The liability referred to in this article shall cease when the persons mentioned therein prove that
they employed all the diligence of a good father of a family to avoid the damages.

As an answer to the argument urged in this particular action it may be sufficient to point out that
nowhere in our general statutes is the employer penalized for failure to provide or maintain safe
appliances for his workmen. His obligation therefore is one "not punished by the law " and falls under
civil rather than criminal jurisprudence. But the answer may be a broader one. We should be reluctant,
under any conditions, to adopt a forced construction of these scientific codes, such as is proposed by
the defendant, that would rob some of these articles of effect, would shut out litigants their will from the
civil courts, would make the assertion of their rights dependent upon the selection for prosecution of
the proper criminal offender, and render recovery doubtful by reason of the strict rules of proof
prevailing in criminal actions. Even if these articles had always stood alone, such a construction would
be unnecessary, but clear light is thrown upon their meaning by the provisions of the Law of Criminal
Procedure of Spain (Ley de Enjuiciamiento Criminal), which, though n ever in actual force in these
Islands, was formerly given a suppletory or explanatory effect. Under article 111 of this law, both
classes of action, civil and criminal, might be prosecuted jointly or separately, but while the penal action
was pending the civil was suspended. According to article 112, the penal action once started, the civil
remedy should be sought therewith, unless it had been waived by the party injured or been expressly
reserved by him for civil proceedings for the future. If the civil action alone was prosecuted, arising out
of a crime that could be enforced by only on private complaint, the penal action thereunder should be
extinguished. These provisions are in harmony with those of articles 23 and 133 of our Penal Code on
the same subject.

An examination of this topic might be carried much further, but the citations of these articles suffices to
show that the civil liability was not intended to be merged in the criminal nor even to be suspended
thereby, except as expressly provided by law. Where an individual is civilly liable for a negligent act or
omission, it is not required that the inured party should seek out a third person criminally liable whose
prosecution must be a condition precedent to the enforcement of the civil right.

Under article 20 of the Penal Code the responsibility of an employer may be regarded as subsidiary in
respect of criminal actions against his employees only while they are process of prosecution, or in so
far as they determinate the existence of the criminal act from which liability arises, and his obligation
under the civil law and its enforcement in the civil courts is not barred thereby unless by election of the
injured person. Inasmuch as no criminal in question, the provisions of the Penal Code can not affect
this action. This construction renders it unnecessary to finally determine here whether this subsidiary
civil liability in penal actions survived the laws that fully regulated it or has been abrogated by the
American civil and criminal procedure now in force in the Philippines.

The difficulty in construing the articles of the code above cited in this case appears from the briefs
before us to have arisen from the interpretation of the words of article 1093, "fault or negligence not
punished by law," as applied to the comprehensive definition of offenses in articles 568 and 590 of the
Penal Code. It has been shown that the liability of an employer arising out of his relation to his
employee who is the offender is not to be regarded as derived from negligence punished by the law,
within the meaning of articles 1092 and 1093. More than this, however, it can not be said to fall within
the class of acts unpunished by the law, the consequences of which are regulated by articles 1902 and
1903 of the Civil Code. The acts to which these articles are applicable are understood to be those and
growing out of preexisting duties of the parties to one another. But were relations already formed give
rise to duties, whether springing from contract or quasi contract, then breaches of those duties are
subject to articles 1101, 1103, and 1104, of the same code. A typical application of the distinction may
be found in the consequences of a railway accident due to defective machinery supplied by the
employer. His liability to his employee would arise out of the contract of employment, that to the
passengers out of the contract for passage. while that to that injured bystander would originate in the
negligent act itself. This distinction is thus clearly set forth by Manresa in his commentary on article
1093.

We are with reference to such obligations, that culpa, or negligence, may be understood in two
difference senses; either as culpa, substantive and independent, which on account of its origin
arises in an obligation between two persons not formerly bound by any other obligation; or as
an incident in the performance of an obligation; or as already existed, which can not be
presumed to exist without the other, and which increases the liability arising from the already
exiting obligation.

Of these two species of culpa the first one mentioned, existing by itself, may be also considered
as a real source of an independent obligation, and, as chapter 2, title 16 of this book of the code
is devoted to it, it is logical to presume that the reference contained in article 1093 is limited
 thereto and that it does not extend to those provisions relating to the other species
of culpa (negligence), the nature of which we will discuss later. (Vol. 8, p. 29.)

And in his commentary on articles 1102 and 1104 he says that these two species of negligence may be
somewhat inexactly described as contractual and extra-contractual, the letter being the culpa
aquiliana of the Roman law and not entailing so strict an obligation as the former. This terminology is
unreservedly accepted by Sanchez-Roman (Derecho Civil, fourth section, Chapter XI, Article II, No.
12), and the principle stated is supported be decisions of the supreme court of Spain, among them
those of November 20, 1896 (80 Jurisprudencia Civil, No. 151), and June 27, 1894 (75 Jurisprudencia
Civil, No. 182). The contract is one for hire and not one of mandate. (March 10, 1897, 81
Jurisprudencia Civil, No. 107.)

Spanish Jurisprudencia prior to the adoption of the Working Men's Accident Law of January 30, 1900,
throws uncertain light on the relation between master and workman. Moved by the quick industrial
development of their people, the courts of France early applied to the subject the principles common to
the law of both countries, which are lucidly discussed by the leading French commentators.

The original French theory, resting the responsibility of owners of industrial enterprises upon articles
1382, 1383, and 1384 of the Code Napoleon, corresponding in scope to articles 1902 and 1903 of the
Spanish Code, soon yielded to the principle that the true basis is the contractual obligation of the
employer and employee. (See 18 Dalloz, 196, Title Travail, 331.)

Later the hardships resulting from special exemptions inserted in contracts for employment led to the
discovery of a third basis for liability in an article of he French Code making the possessor of any
object answerable for damage done by it while in his charge. Our law having no counterpart of this
article, applicable to every kind of object, we need consider neither the theory growing out of it nor that
of "professional risk" more recently imposed by express legislation, but rather adopting the
interpretation of our Civil Code above given, find a rule for this case in the contractual obligation. This
contractual obligation, implied from the relation and perhaps so inherent in its nature to be invariable
by the parties, binds the employer to provide safe appliances for the use of the employee, thus closely
corresponding to English and American Law. On these principles it was the duty of the defendant to
build and to maintain its track in reasonably sound condition, so as to protect its workingmen from
unnecessary danger. It is plain that in one respect or the other it failed in its duty, otherwise the
accident could not have occurred; consequently the negligence of the defendant is established.

Another contention of the defense is that the injury resulted to the plaintiff as a risk incident to his
employment and, as such, one assumed by him. It is evident that this can not be the case if the
occurrence was due to the failure to repair the track or to duly inspect, it for the employee is not
presumed to have stipulated that the employer might neglect his legal duty. Nor may it be excused
upon the ground that the negligence leading to the accident was that of a fellow-servant of the injured
man. It is not apparent to us that the intervention of a third person can relieve the defendant from the
performance of its duty nor impose upon the plaintiff the consequences of an act or omission not his
own. Sua cuique culpa nocet. This doctrine, known as "the fellow-servant, rule," we are not disposed to
introduce into our jurisprudence. Adopted in England by Lord Abinger in the case of Prescott vs. Fowler
(3 Meeson & Welsby, 1) in 1837, it has since been effectually abrogated by "the Employers' Liability
Acts" and the "Compensation Law." The American States which applied it appear to be gradually
getting rid of it; for instance, the New York State legislature of 1906 did away with it in respect to
railroad companies, and had in hand a scheme for its total abolition. It has never found place in the
civil law of continental Europe. (Dalloz, vol. 39, 1858, Title Responsibilite, 630, and vol. 15, 1895, same
title, 804. Also more recent instances in Fuzier-Herman, Title Responsibilite Civile, 710.)

The French Cour de Cassation clearly laid down the contrary principle in its judgment of June 28,
1841, in the case of Reygasse, and has since adhered to it.

The most controverted question in the case is that of the negligence of the plaintiff, contributing to the
accident, to what extent it existed in fact and what legal effect is to be given it. In two particulars is he
charged with carelessness:

First. That having noticed the depression in the track he continued his work; and

Second. That he walked on the ends of the ties at the side of the car instead of along the boards, either
before or behind it.

As to the first point, the depression in the track night indicate either a serious or a rival difficulty. There
is nothing in the evidence to show that the plaintiff did or could see the displaced timber underneath
the sleeper. The claim that he must have done so is a conclusion drawn from what is assumed to have
been a probable condition of things not before us, rather than a fair inference from the testimony. While
the method of construction may have been known to the men who had helped build the road, it was
otherwise with the plaintiff who had worked at this job less than two days. A man may easily walk along
a railway without perceiving a displacement of the underlying timbers. The foreman testified that he
knew the state of the track on the day of the accident and that it was then in good condition, and one
Danridge, a witness for the defendant, working on the same job, swore that he never noticed the
depression in the track and never saw any bad place in it. The sagging of the track this plaintiff did
perceive, but that was reported in his hearing to the foreman who neither promised nor refused to
repair it. His lack of caution in continuing at his work after noticing the slight depression of the rail was
not of so gross a nature as to constitute negligence, barring his recovery under the severe American
rule. On this point we accept the conclusion of the trial judge who found as facts that "the plaintiff did
not know the cause of the one rail being lower than then other" and "it does not appear in this case that
the plaintiff knew before the accident occurred that the stringers and rails joined in the same place."

Were we not disposed to agree with these findings they would, nevertheless, be binding upon us,
because not "plainly and manifestly against the weight of evidence," as those words of section 497,
paragraph 3 of the Code of Civil Procedure were interpreted by the Supreme Court of the United
States in the De la Rama case (201 U. S., 303).

In respect of the second charge of negligence against the plaintiff, the judgment below is not so
specific. While the judge remarks that the evidence does not justify the finding that the car was pulled
by means of a rope attached to the front end or to the rails upon it, and further that the circumstances
in evidence make it clear that the persons necessary to operate the car could not walk upon the plank
between the rails and that, therefore, it was necessary for the employees moving it to get hold upon it
as best they could, there is no specific finding upon the instruction given by the defendant to its
employees to walk only upon the planks, nor upon the necessity of the plaintiff putting himself upon the
ties at the side in order to get hold upon the car. Therefore the findings of the judge below leave the
conduct of the plaintiff in walking along the side of the loaded car, upon the open ties, over the
depressed track, free to our inquiry.
While the plaintiff and his witnesses swear that not only were they not forbidden to proceed in this way,
but were expressly directed by the foreman to do so, both the officers of the company and three of the
workmen testify that there was a general prohibition frequently made known to all the gang against
walking by the side of the car, and the foreman swears that he repeated the prohibition before the
starting of this particular load. On this contradiction of proof we think that the preponderance is in favor
of the defendant's contention to the extent of the general order being made known to the workmen. If
so, the disobedience of the plaintiff in placing himself in danger contributed in some degree to the
injury as a proximate, although not as its primary cause. This conclusion presents sharply the question,
What effect is to be given such an act of contributory negligence? Does it defeat a recovery, according
to the American rule, or is it to be taken only in reduction of damages?

While a few of the American States have adopted to a greater or less extent the doctrine of
comparative negligence, allowing a recovery by a plaintiff whose own act contributed to his injury,
provided his negligence was slight as compared with that of the defendant, and some others have
accepted the theory of proportional damages, reducing the award to a plaintiff in proportion to his
responsibility for the accident, yet the overwhelming weight of adjudication establishes the principle in
American jurisprudence that any negligence, however slight, on the part of the person injured which is
one of the causes proximately contributing to his injury, bars his recovery. (English and American
Encyclopedia of law, Titles "Comparative Negligence" and Contributory Negligence.")

In Grant Trunk Railway Company vs. Ives (144 U. S., 408, at page 429) the Supreme Court of the
United States thus authoritatively states the present rule of law:

Although the defendant's' negligence may have been the primary cause of the injury
complained of, yet an action for such injury can not be maintained if the proximate and
immediate cause of the injury can be traced to the want of ordinary care and caution in the
person injured; subject to this qualification, which has grown up in recent years (having been
first enunciated in Davies vs. Mann, 10 M. & W., 546) that the contributory negligence of the
party injured will not defeat the action if it be shown that the defendant might, by the exercise of
reasonable care and prudence, have avoided the consequences of the injured party's
negligence.

There are may cases in the supreme court of Spain in which the defendant was exonerated, but when
analyzed they prove to have been decided either upon the point that he was not negligent or that the
negligence of the plaintiff was the immediate cause of the casualty or that the accident was due
to casus fortuitus. Of the first class in the decision of January 26, 1887 (38 Jurisprudencia Criminal,
No. 70), in which a railway employee, standing on a car, was thrown therefrom and killed by the shock
following the backing up of the engine. It was held that the management of the train and engine being
in conformity with proper rules of the company, showed no fault on its part.

Of the second class are the decision of the 15th of January, the 19th of February, and the 7th of March,
1902, stated in Alcubilla's Index of that year; and of the third class the decision of the 4th of June, 1888
(64 Jurisprudencia Civil, No. 1), in which the breaking down of plaintiff's dam by the logs of the
defendant impelled against it by the Tajo River, was held due to a freshet as a fortuitous cause.

The decision of the 7th of March, 1902, on which stress has been laid, rested on two bases, one, that
the defendant was not negligent, because expressly relieved by royal order from the common
obligation imposed by the police law of maintaining a guard at the road crossing; the other, because
the act of the deceased in driving over level ground with unobstructed view in front of a train running at
speed, with the engine whistle blowing was the determining cause of the accident. It is plain that the
train was doing nothing but what it had a right to do and that the only fault lay with the injured man. His
negligence was not contributory, it was sole, and was of such an efficient nature that without it no
catastrophe could have happened.

On the other hand, there are many cases reported in which it seems plain that the plaintiff sustaining
damages was not free from contributory negligence; for instance, the decision of the 14th of December,
1894 (76 Jurisprudencia Civil, No. 134), in which the owner of a building was held liable for not
furnishing protection to workmen engaged in hanging out flags, when the latter must have perceived
beforehand the danger attending the work.

None of those cases define the effect to be given the negligence of a plaintiff which contributed to his
injury as one of its causes, though not the principal one, and we are left to seek the theory of the civil
law in the practice of other countries.

In France in the case of Marquant, August 20, 1879, the cour de cassation held that the carelessness
of the victim did not civilly relieve the person without whose fault the accident could not have
happened, but that the contributory negligence of the injured man had the effect only of reducing the
damages. The same principle was applied in the case of Recullet, November 10, 1888. and that of
Laugier of the 11th of November, 1896. (Fuzier-Herman, Title Responsibilite Cirile, 411, 412.) Of like
tenor are citations in Dalloz (vol. 18, 1806, Title Trail, 363, 364, and vol. 15, 1895, Title Responsibilite,
193, 198).

In the Canadian Province of Quebee, which has retained for the most part the French Civil Law, now
embodied in a code following the Code Napoleon, a practice in accord with that of France is laid down
in many cases collected in the annotations to article 1053 of the code edited by Beauchamps, 1904.
One of these is Luttrell vs. Trottier, reported in La Revue de Jurisprudence, volume 6, page 90, in
which the court of Kings bench, otherwise known as the court of appeals, the highest authority in the
Dominion of Canada on points of French law, held that contributory negligence did not exonerate the
defendants whose fault had been the immediate cause of the accident, but entitled him to a reduction
of damages. Other similar cases in the provincial courts have been overruled by appellate tribunals
made up of common law judges drawn from other provinces, who have preferred to impose uniformally
throughout the Dominion the English theory of contributory negligence. Such decisions throw no light
upon the doctrines of the civil law. Elsewhere we find this practice embodied in legislation; for instance,
section 2 of article 2398 of the Code of Portugal reads as follows:

If in the case of damage there was fault or negligence on the part of the person injured or in the
part of some one else, the indemnification shall be reduced in the first case, and in the second
case it shall be appropriated in proportion to such fault or negligence as provided in paragraphs
1 and 2 of section 2372.

And in article 1304 of the Austrian Code provides that the victim who is partly changeable with the
accident shall stand his damages in proportion to his fault, but when that proportion is incapable of
ascertainment, he shall share the liability equally with the person principally responsible. The principle
of proportional damages appears to be also adopted in article 51 of the Swiss Code. Even in the
United States in admirality jurisdictions, whose principles are derived from the civil law, common fault in
cases of collision have been disposed of not on the ground of contradictor negligence, but on that of
equal loss, the fault of the one part being offset against that of the other. (Ralli vs. Troop, 157 U. S.
386; 97.)

The damage of both being added together and the sum equally divided, a decree is entered in favor of
the vessel sustaining the greater loss against the other for the excess of her damages over one-half of
the aggregate sum. (The Manitoba, 122 U. S., 97)

Exceptional practice appears to prevail in maritime law in other jurisdictions. The Spanish Code of
Commerce, article 827, makes each vessel for its own damage when both are the fault; this provision
restricted to a single class of the maritime accidents, falls for short of a recognition of the principle of
contributory negligence as understood in American Law, with which, indeed, it has little in common.
This is a plain from other articles of the same code; for instance, article 829, referring to articles 826,
827, and 828, which provides: "In the cases above mentioned the civil action of the owner against the
person liable for the damage is reserved, as well as the criminal liability which may appear."

The rule of the common law, a hard and fast one, not adjustable with respects of the faults of the
parties, appears to have grown out the original method of trial by jury, which rendered difficult a nice
balancing of responsibilities and which demanded an inflexible standard as a safeguard against too
ready symphaty for the injured. It was assumed that an exact measure of several concurring faults was
unattainable.

The reason why, in cases of mutual concurring negligence, neither party can maintain an action
against the other, is, not the wrong of the one is set off against the wrong of the other; it that the
law can not measure how much of the damage suffered is attributable to the plaintiff's own fault.
If he were allowed to recover, it might be that he would obtain from the other party
compensation for hiss own misconduct. (Heil vs. Glanding, 42 Penn. St. Rep., 493, 499.)

The parties being mutually in fault, there can be no appointment of damages. The law has no
scales to determine in such cases whose wrongdoing weighed most in the compound that
occasioned the mischief. (Railroad vs. Norton, 24 Penn. St. 565, 469.)

Experience with jury trials in negligence cases has brought American courts to review to relax the vigor
of the rule by freely exercising the power of setting aside verdicts deemed excessive, through the
device of granting new trials, unless reduced damages are stipulated for, amounting to a partial
revision of damages by the courts. It appears to us that the control by the court of the subject matter
may be secured on a moral logical basis and its judgment adjusted with greater nicety to the merits of
the litigants through the practice of offsetting their respective responsibilities. In the civil law system the
desirable end is not deemed beyond the capacity of its tribunals.

Whatever may prove to be the doctrine finally adopted in Spain or in other countries under the stress
and counter stress of novel schemers of legislation, we find the theory of damages laid down in the
judgment the most consistent with the history and the principals of our law in these Islands and with its
logical development.

Difficulty seems to be apprehended in deciding which acts of the injured party shall be considered
immediate causes of the accident. The test is simple. Distinction must be between the accident and the
injury, between the event itself, without which there could have been no accident, and those acts of the
victim not entering into it, independent of it, but contributing under review was the displacement of the
crosspiece or the failure to replace it. this produced the event giving occasion for damages — that is,
the shinking of the track and the sliding of the iron rails. To this event, the act of the plaintiff in walking
by the side of the car did not contribute, although it was an element of the damage which came to
himself. Had the crosspiece been out of place wholly or partly thorough his act of omission of duty, the
last would have been one of the determining causes of the event or accident, for which he would have
been responsible. Where he contributes to the principal occurrence, as one of its determining factors,
he can not recover. Where, in conjunction with the occurrence, he contributes only to his own injury, he
may recover the amount that the defendant responsible for the event should pay for such injury, less a
sum deemed a suitable equivalent for his own imprudence.

Accepting, though with some hesitation, the judgment of the trial court, fixing the damage incurred by
the plaintiff at 5,000 pesos, the equivalent of 2,500 dollars, United States money, we deduct therefrom
2,500 pesos, the amount fairly attributable to his negligence, and direct judgment to be entered in favor
of the plaintiff for the resulting sum of 2,500 pesos, with cost of both instances, and ten days hereafter
let the case be remanded to the court below for proper action. So ordered.

Arellano, C.J. Torres and Mapa, JJ., concur.

G.R. Nos. L-10308 and L-10385-8 April 30, 1957

MARIA PAZ S. ALBA, ETC., ET AL., petitioners,

vs.
RACIO BULAONG, ET AL., ETC., respondents.

Abad Santos and Pablo for petitioners.

Antonio C. Masaquel and Adaucto P. Ocampo for respondents.

BENGZON, J. :

This is a petition to reverse the decision of the Commissioner of the Workmen's Compensation
Commission in five cases denying the claims for compensation, against Dr. Horacio Bulaong, of herein
petitioners, who were his employees and dependents of his employees.

On March 12, 1955, petitioners Gregorio de la Cruz, Pedro C. Bulaong and Pacifico Bulaong were
employees of Dr. Horacio Bulaong in his business of threshing palay. Other employees were Engracio
Alba (husband of petitioner Maria Paz S. Alba) and Vicente A. Sebastian (husband of petitioner Elisea
S. Sebastian). Early in the morning of that day said five employees were, upon specific orders of Dr.
Bulaong, on their way to Barrio Baringan, Malolos, Bulacan, to thresh palay, riding on a tractor which
was pulling a threshing machine. Suddenly a speeding bus of the Victory Liner Inc. collided with the
thresher which in turn hit the tractor, and as a result those on board were violently thrown out. Engracio
Alba and Vicente Sebastian died; Gregorio de la Cruz, Pedro C. Bulaong and Pacifica Bulaong
sustained physical injuries.

WHEREFORE, five separate claims were filed before the Workmen's Compensation Commission
against the employer Dr. Bulaong. Three defenses were set up by him: ( a) claimants were not his
employees, but industrial partners, (b) the injuries were not sustained in the course of employment and
(c) the claims, if any, had been extinguished by virtue of the monetary settlements which petitioners
had concluded with the Victory Liner Inc.
The referee overruled the defenses, having found the five men to be employees who had died or were
injured in the course of employment. Consequently he required the employer to make compensation in
the amounts specified in his award. However on appeal, the Workmen's Compensation Commissioner
absolved Dr. Bulaong from all liability, because he found that the claimants had received, after the
mishap, various amounts of money from the owner of the colliding bus, the Victory Liner Inc., each of
them having executed a written release or waiver in favor of said Liner, the pertinent part of which
reads as follows:

And I likewise freely and completely cede and transfer into said Company (Victory Liner Inc.)
any right given to me by law against any person or company that should be liable for the said
accident except my right to claim against Dr. Horacio Bulaong in accordance with and under the
Workmen's Compensation Act (Rep. Act 772).

Claimants, the Commissioner declared, had elected to hold the Liner responsible for the accident, and
could not thereafter turn around to recover their employer. He cited section 6 of the Workmen's
Compensation Law, which for convenience is quoted:

SEC. 6. Liability of third parties. — In case an employee suffers an injury for which
compensation is due under this Act by any other person besides his employer, it shall be
optional with such injured employee either to claim compensation from his employer, under this
Act, or sue such other person for damages in accordance with law; and in case compensation is
claimed and allowed in accordance with this Act, the employer who paid such compensation or
was found liable to pay the same, shall succeed the injured employee to the right of recovering
from such person what he paid: Provided, That in case the employer recovers from such third
person damages in excess of those paid or allowed under this Act, such excess shall be
delivered to the injured employee or any other person entitled thereto, after deduction of at the
expenses of the employer and the costs of the proceedings .The sum paid by the employer for
compensation to which the employee or his dependents are entitled of this Act, shall not be
admissible as evidence in any damage suit or action. (As amended.)

Naturally the argument before this Court dwelt mostly on the interpretation of the above section and its
application to the circumstances of record. There was no election, petitioners contend, to recover from
the Liner to the exclusion of Dr. Bulaong, because the document itself signed by petitioners reserved
their right to claim against Dr. Horacio Bulaong under the Workmen's Compensation Act.

Such reservation, counter the respondents, besides being void and against the law, cannot bind Dr.
Bulaong who was not a party to the instrument.

There is no question that the Liner was a "third party" within the meaning of section 6. There is also no
question that petitioner have not sued the Liner for damages. Wherefore they are not deemed to have
made the election specified in section 6. However, the plain intent of the law is that they shall not
receive payment twice for the same injuries (from the third party and from the employer). Hence
if without suing they receive full damages from the third party, they should be deemed to have
practically made the election under the law, and should be prevented from thereafter suing the
employer. Full damages means, of course what they would have demanded in a suit against the third
party or what they would receive in a compensation as complete settlement. Needless to say, where
the injured employee is offered, by the third party, compensation which he deems insufficient, he may
reject it and thereafter litigate with such third party. Or choose instead to complain against his
employer.

Nevertheless there is nothing in the law to prevent him from accepting such insufficient compensation
but expressly reserving at the same time his right to recover additional damages from his employer. If
the third party agrees to the reservation, such partial payment may legally be made and accepted. We
say "if", because the reservation necessarily entails some disadvantage to the third party, inasmuch as
pursuant to legal principles when the employer subsequently pays, he may in turn recover from the
third party (See sec. 6). The employer can not validly object to such reservation by the employee,
because in effect the settlement helps to reduce the amount he will afterwards have to disgorge.

As we see it, the five employees' acceptance of the Victory Liner's offer of compensation, under the
circumstances disclosed by this record, especially the written acknowledgments, showed they were not
content with the amount received — they did not consider it sufficient — so they reserved their right to
require additional compensation from their employer. Hence their action against Dr. Bulaong is not
barred by section 6. He may in turn demand reimbursement from Victory Liner Inc.

The implied reservation of Dr. Bulaong's right against Victory Liner Inc. is not unprecedented in the
roam of jurisprudence. When a promissory note is dishonored for non-payment, the holder may
recover its value either from the maker or from the indorser. If he sues the indorser and recovers, the
latter may in turn recoup from the maker. The statute expressly permits him to renounce his right
against the maker and reserve his right to recover from the indorser (Sec. 120 ( e) Negotiable
Instruments Law). When that happens, the courts say the indorser's right to recover from the maker is
also reserved. (Bootman's Sav. vs. Johnson, 24 Mo. App. 317; Tolentino Commercial Laws Vol. I (7th
Ed.)p. 361.1)

In the situation resulting after the collision, we could regard the five employees, the Victory Liner and
Dr. Bulaong in the same juridical position, respectively, of holder, maker and indorser. The release with
express reservation produced the implied reservation already stated.

What then, it may be asked, was the advantage accruing to the Liner from the settlement it had worked
to accomplish? For one thing its driver would not be prosecuted by petitioners; besides earning such
driver's gratitude, the Liner thereby avoided losses in time and services. For another, even if it be liable
to the employer for whatever the latter might have to satisfy, the Liner could expect the settlement
between employer and employees to be reasonable considering their relationship, more reasonable
perhaps than a settlement between itself and the injured employees.

It is therefore our view that the moneys received from Victory Liner Inc. did not necessarily have the
effect of releasing Dr. Bulaong. Inasmuch as the five men were his employees, and they were injured
by reason of and in the course of their employment, he must pay compensation to be fixed in
accordance with law. Bearing in mind, however, the law's intention not to give double compensation,
the amounts they have received from the Victory Liner shall be deducted from the sums so determined.

In this connection we notice that the referee who has investigated the matter has made some
calculations of monetary award. However they were not passed upon by the Commissioner.
Wherefore, for the purpose of ascertaining and awarding such compensation to petitioners, the record
will be remanded to the Workmen's Compensation Commission for further action in accordance with
this opinion. No costs. So ordered.

Padilla, Reyes, A., Bautista Angelo, Labrador, Concepcion, Endencia and Felix, JJ., concur.
Montemayor, J., concurs in the result.

G.R. No. 122039 May 31, 2000

VICENTE CALALAS, petitioner,

vs.
COURT OF APPEALS, ELIZA JUJEURCHE SUNGA and FRANCISCO SALVA, respondents.

MENDOZA, J .:

This is a petition for review on certiorari of the decision1 of the Court of Appeals, dated March 31, 1991,
reversing the contrary decision of the Regional Trial Court, Branch 36, Dumaguete City, and awarding
damages instead to private respondent Eliza Jujeurche Sunga as plaintiff in an action for breach of
contract of carriage.

The facts, as found by the Court of Appeals, are as follows:

At 10 o'clock in the morning of August 23, 1989, private respondent Eliza Jujeurche G. Sunga, then a
college freshman majoring in Physical Education at the Siliman University, took a passenger jeepney
owned and operated by petitioner Vicente Calalas. As the jeepney was filled to capacity of about 24
passengers, Sunga was given by the conductor an "extension seat," a wooden stool at the back of the
door at the rear end of the vehicle.

On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a passenger off. As
she was seated at the rear of the vehicle, Sunga gave way to the outgoing passenger. Just as she was
doing so, an Isuzu truck driven by Iglecerio Verena and owned by Francisco Salva bumped the left rear
portion of the jeepney. As a result, Sunga was injured. She sustained a fracture of the "distal third of
the left tibia-fibula with severe necrosis of the underlying skin." Closed reduction of the fracture, long
leg circular casting, and case wedging were done under sedation. Her confinement in the hospital
lasted from August 23 to September 7, 1989. Her attending physician, Dr. Danilo V. Oligario, an
orthopedic surgeon, certified she would remain on a cast for a period of three months and would have
to ambulate in crutches during said period.

On October 9, 1989, Sunga filed a complaint for damages against Calalas, alleging violation of the
contract of carriage by the former in failing to exercise the diligence required of him as a common
carrier. Calalas, on the other hand, filed a third-party complaint against Francisco Salva, the owner of
the Isuzu truck.

The lower court rendered judgment against Salva as third-party defendant and absolved Calalas of
liability, holding that it was the driver of the Isuzu truck who was responsible for the accident. It took
cognizance of another case (Civil Case No. 3490), filed by Calalas against Salva and Verena, for
quasi-delict, in which Branch 37 of the same court held Salva and his driver Verena jointly liable to
Calalas for the damage to his jeepney.

On appeal to the Court of Appeals, the ruling of the lower court was reversed on the ground that
Sunga's cause of action was based on a contract of carriage, not quasi-delict, and that the common
carrier failed to exercise the diligence required under the Civil Code. The appellate court dismissed the
third-party complaint against Salva and adjudged Calalas liable for damages to Sunga. The dispositive
portion of its decision reads:

WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE, and
another one is entered ordering defendant-appellee Vicente Calalas to pay plaintiff-
appellant:

(1) P50,000.00 as actual and compensatory damages;

(2) P50,000.00 as moral damages;

(3) P10,000.00 as attorney's fees; and

(4) P1,000.00 as expenses of litigation; and

(5) to pay the costs.

SO ORDERED.

Hence, this petition. Petitioner contends that the ruling in Civil Case No. 3490 that the negligence of
Verena was the proximate cause of the accident negates his liability and that to rule otherwise would
be to make the common carrier an insurer of the safety of its passengers. He contends that the
bumping of the jeepney by the truck owned by Salva was a caso fortuito. Petitioner further assails the
award of moral damages to Sunga on the ground that it is not supported by evidence.

The petition has no merit.

The argument that Sunga is bound by the ruling in Civil Case No. 3490 finding the driver and the owner
of the truck liable for quasi-delict ignores the fact that she was never a party to that case and,
therefore, the principle of res judicata does not apply.

Nor are the issues in Civil Case No. 3490 and in the present case the same. The issue in Civil Case
No. 3490 was whether Salva and his driver Verena were liable for quasi-delict for the damage caused
to petitioner's jeepney. On the other hand, the issue in this case is whether petitioner is liable on his
contract of carriage. The first, quasi-delict, also known as culpa aquiliana or culpa extra contractual ,
has as its source the negligence of the tortfeasor. The second, breach of contract or culpa contractual,
is premised upon the negligence in the performance of a contractual obligation.

Consequently, in quasi-delict, the negligence or fault should be clearly established because it is the
basis of the action, whereas in breach of contract, the action can be prosecuted merely by proving the
existence of the contract and the fact that the obligor, in this case the common carrier, failed to
transport his passenger safely to his destination. 2 In case of death or injuries to passengers, Art. 1756
of the Civil Code provides that common carriers are presumed to have been at fault or to have acted
negligently unless they prove that they observed extraordinary diligence as defined in Arts. 1733 and
1755 of the Code. This provision necessarily shifts to the common carrier the burden of proof.

There is, thus, no basis for the contention that the ruling in Civil Case No. 3490, finding Salva and his
driver Verena liable for the damage to petitioner's jeepney, should be binding on Sunga. It is immaterial
that the proximate cause of the collision between the jeepney and the truck was the negligence of the
truck driver. The doctrine of proximate cause is applicable only in actions for quasi-delict, not in actions
involving breach of contract. The doctrine is a device for imputing liability to a person where there is no
relation between him and another party. In such a case, the obligation is created by law itself. But,
where there is a pre-existing contractual relation between the parties, it is the parties themselves who
create the obligation, and the function of the law is merely to regulate the relation thus created. Insofar
as contracts of carriage are concerned, some aspects regulated by the Civil Code are those respecting
the diligence required of common carriers with regard to the safety of passengers as well as the
presumption of negligence in cases of death or injury to passengers. It provides:

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.

Such extraordinary diligence in the vigilance over the goods is further expressed in
articles 1734, 1735, and 1746, Nos. 5, 6, and 7, while the extraordinary diligence for the
safety of the passengers is further set forth in articles 1755 and 1756.

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
due regard for all the circumstances.

Art. 1756. In case of death of or injuries to passengers, common carriers are presumed
to have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence as prescribed by articles 1733 and 1755.

In the case at bar, upon the happening of the accident, the presumption of negligence at once arose,
and it became the duty of petitioner to prove that he had to observe extraordinary diligence in the care
of his passengers.

Now, did the driver of jeepney carry Sunga "safely as far as human care and foresight could provide,
using the utmost diligence of very cautious persons, with due regard for all the circumstances" as
required by Art. 1755? We do not think so. Several factors militate against petitioner's contention.

First, as found by the Court of Appeals, the jeepney was not properly parked, its rear portion being
exposed about two meters from the broad shoulders of the highway, and facing the middle of the
highway in a diagonal angle. This is a violation of the R.A. No. 4136, as amended, or the Land
Transportation and Traffic Code, which provides:

Sec. 54. Obstruction of Traffic. — No person shall drive his motor vehicle in such a
manner as to obstruct or impede the passage of any vehicle, nor, while discharging or
taking on passengers or loading or unloading freight, obstruct the free passage of other
vehicles on the highway.
Second, it is undisputed that petitioner's driver took in more passengers than the allowed seating
capacity of the jeepney, a violation of §32(a) of the same law. It provides:

Exceeding registered capacity. — No person operating any motor vehicle shall allow
more passengers or more freight or cargo in his vehicle than its registered capacity.

The fact that Sunga was seated in an "extension seat" placed her in a peril greater than that to which
the other passengers were exposed. Therefore, not only was petitioner unable to overcome the
presumption of negligence imposed on him for the injury sustained by Sunga, but also, the evidence
shows he was actually negligent in transporting passengers.

We find it hard to give serious thought to petitioner's contention that Sunga's taking an "extension seat"
amounted to an implied assumption of risk. It is akin to arguing that the injuries to the many victims of
the tragedies in our seas should not be compensated merely because those passengers assumed a
greater risk of drowning by boarding an overloaded ferry. This is also true of petitioner's contention that
the jeepney being bumped while it was improperly parked constitutes caso fortuito. A caso fortuito is an
event which could not be foreseen, or which, though foreseen, was inevitable. 3 This requires that the
following requirements be present: (a) the cause of the breach is independent of the debtor's will; (b)
the event is unforeseeable or unavoidable; (c) the event is such as to render it impossible for the
debtor to fulfill his obligation in a normal manner, and (d) the debtor did not take part in causing the
injury to the
creditor.4 Petitioner should have foreseen the danger of parking his jeepney with its body protruding two
meters into the highway.

Finally, petitioner challenges the award of moral damages alleging that it is excessive and without
basis in law. We find this contention well taken.

In awarding moral damages, the Court of Appeals stated:

Plaintiff-appellant at the time of the accident was a first-year college student in that
school year 1989-1990 at the Silliman University, majoring in Physical Education.
Because of the injury, she was not able to enroll in the second semester of that school
year. She testified that she had no more intention of continuing with her schooling,
because she could not walk and decided not to pursue her degree, major in Physical
Education "because of my leg which has a defect already."

Plaintiff-appellant likewise testified that even while she was under confinement, she cried
in pain because of her injured left foot. As a result of her injury, the Orthopedic Surgeon
also certified that she has "residual bowing of the fracture side." She likewise decided
not to further pursue Physical Education as her major subject, because "my left leg . . .
has a defect already."

Those are her physical pains and moral sufferings, the inevitable bedfellows of the
injuries that she suffered. Under Article 2219 of the Civil Code, she is entitled to recover
moral damages in the sum of P50,000.00, which is fair, just and reasonable.

As a general rule, moral damages are not recoverable in actions for damages predicated on a breach
of contract for it is not one of the items enumerated under Art. 2219 of the Civil Code. 5 As an exception,
such damages are recoverable: (1) in cases in which the mishap results in the death of a passenger,
as provided in Art. 1764, in relation to Art. 2206(3) of the Civil Code; and (2) in the cases in which the
carrier is guilty of fraud or bad faith, as provided in Art. 2220. 6

In this case, there is no legal basis for awarding moral damages since there was no factual finding by
the appellate court that petitioner acted in bad faith in the performance of the contract of carriage.
Sunga's contention that petitioner's admission in open court that the driver of the jeepney failed to
assist her in going to a nearby hospital cannot be construed as an admission of bad faith. The fact that
it was the driver of the Isuzu truck who took her to the hospital does not imply that petitioner was utterly
indifferent to the plight of his injured passenger. If at all, it is merely implied recognition by Verena that
he was the one at fault for the accident.

WHEREFORE, the decision of the Court of Appeals, dated March 31, 1995, and its resolution, dated
September 11, 1995, are AFFIRMED, with the MODIFICATION that the award of moral damages is
DELETED.

SO ORDERED.

Bellosillo and Buena, JJ., concur.

Quisumbing and De Leon, Jr., JJ., are on leave.

G.R. No. 121413 January 29, 2001

PHILIPPINE COMMERCIAL INTERNATIONAL BANK (formerly INSULAR BANK OF ASIA

AND AMERICA),petitioner,
vs.
COURT OF APPEALS and FORD PHILIPPINES, INC. and CITIBANK, N.A., respondents.

G.R. No. 121479 January 29, 2001

FORD PHILIPPINES, INC., petitioner-plaintiff,

vs.
COURT OF APPEALS and CITIBANK, N.A. and PHILIPPINE COMMERCIAL
INTERNATIONAL BANK, respondents.

G.R. No. 128604 January 29, 2001

FORD PHILIPPINES, INC., petitioner,

vs.
CITIBANK, N.A., PHILIPPINE COMMERCIAL INTERNATIONAL BANK and COURT OF
APPEALS, respondents.

QUISUMBING, J .:

These consolidated petitions involve several fraudulently negotiated checks.

The original actions a quo were instituted by Ford Philippines to recover from the drawee bank,
CITIBANK, N.A. (Citibank) and collecting bank, Philippine Commercial International Bank (PCIBank)
[formerly Insular Bank of Asia and America], the value of several checks payable to the Commissioner
of Internal Revenue, which were embezzled allegedly by an organized syndicate. 1âwphi1.nêt

G.R. Nos. 121413 and 121479 are twin petitions for review of the March 27, 1995 Decision 1 of the
Court of Appeals in CA-G.R. CV No. 25017, entitled "Ford Philippines, Inc. vs. Citibank, N.A. and
Insular Bank of Asia and America (now Philipppine Commercial International Bank), and the August 8,
1995 Resolution,2 ordering the collecting bank, Philippine Commercial International Bank, to pay the
amount of Citibank Check No. SN-04867.

In G.R. No. 128604, petitioner Ford Philippines assails the October 15, 1996 Decision 3 of the Court of
Appeals and its March 5, 1997 Resolution4 in CA-G.R. No. 28430 entitled "Ford Philippines, Inc. vs.
Citibank, N.A. and Philippine Commercial International Bank," affirming in toto the judgment of the trial
court holding the defendant drawee bank, Citibank, N.A., solely liable to pay the amount of
P12,163,298.10 as damages for the misapplied proceeds of the plaintiff's Citibanl Check Numbers SN-
10597 and 16508.

I. G.R. Nos. 121413 and 121479

The stipulated facts submitted by the parties as accepted by the Court of Appeals are as follows:

"On October 19, 1977, the plaintiff Ford drew and issued its Citibank Check No. SN-04867 in
the amount of P4,746,114.41, in favor of the Commissioner of Internal Revenue as payment of
plaintiff;s percentage or manufacturer's sales taxes for the third quarter of 1977.

The aforesaid check was deposited with the degendant IBAA (now PCIBank) and was
subsequently cleared at the Central Bank. Upon presentment with the defendant Citibank, the
proceeds of the check was paid to IBAA as collecting or depository bank.

The proceeds of the same Citibank check of the plaintiff was never paid to or received by the
payee thereof, the Commissioner of Internal Revenue.

As a consequence, upon demand of the Bureau and/or Commissioner of Internal Revenue, the
plaintiff was compelled to make a second payment to the Bureau of Internal Revenue of its
percentage/manufacturers' sales taxes for the third quarter of 1977 and that said second
payment of plaintiff in the amount of P4,746,114.41 was duly received by the Bureau of Internal
Revenue.

It is further admitted by defendant Citibank that during the time of the transactions in question,
plaintiff had been maintaining a checking account with defendant Citibank; that Citibank Check
No. SN-04867 which was drawn and issued by the plaintiff in favor of the Commissioner of
Internal Revenue was a crossed check in that, on its face were two parallel lines and written in
between said lines was the phrase "Payee's Account Only"; and that defendant Citibank paid
the full face value of the check in the amount of P4,746,114.41 to the defendant IBAA.

It has been duly established that for the payment of plaintiff's percentage tax for the last quarter
of 1977, the Bureau of Internal Revenue issued Revenue Tax Receipt No. 18747002, dated
 October 20, 1977, designating therein in Muntinlupa, Metro Manila, as the authorized agent
bank of Metrobanl, Alabang branch to receive the tax payment of the plaintiff.

On December 19, 1977, plaintiff's Citibank Check No. SN-04867, together with the Revenue
Tax Receipt No. 18747002, was deposited with defendant IBAA, through its Ermita Branch. The
latter accepted the check and sent it to the Central Clearing House for clearing on the samd
day, with the indorsement at the back "all prior indorsements and/or lack of indorsements
guaranteed." Thereafter, defendant IBAA presented the check for payment to defendant
Citibank on same date, December 19, 1977, and the latter paid the face value of the check in
the amount of P4,746,114.41. Consequently, the amount of P4,746,114.41 was debited in
plaintiff's account with the defendant Citibank and the check was returned to the plaintiff.

Upon verification, plaintiff discovered that its Citibank Check No. SN-04867 in the amount of
P4,746,114.41 was not paid to the Commissioner of Internal Revenue. Hence, in separate
letters dated October 26, 1979, addressed to the defendants, the plaintiff notified the latter that
in case it will be re-assessed by the BIR for the payment of the taxes covered by the said
checks, then plaintiff shall hold the defendants liable for reimbursement of the face value of the
same. Both defendants denied liability and refused to pay.

In a letter dated February 28, 1980 by the Acting Commissioner of Internal Revenue addressed
to the plaintiff - supposed to be Exhibit "D", the latter was officially informed, among others, that
its check in the amount of P4, 746,114.41 was not paid to the government or its authorized
agent and instead encashed by unauthorized persons, hence, plaintiff has to pay the said
amount within fifteen days from receipt of the letter. Upon advice of the plaintiff's lawyers,
plaintiff on March 11, 1982, paid to the Bureau of Internal Revenue, the amount of
P4,746,114.41, representing payment of plaintiff's percentage tax for the third quarter of 1977.

As a consequence of defendant's refusal to reimburse plaintiff of the payment it had made for
the second time to the BIR of its percentage taxes, plaintiff filed on January 20, 1983 its original
complaint before this Court.

On December 24, 1985, defendant IBAA was merged with the Philippine Commercial
International Bank (PCI Bank) with the latter as the surviving entity.

Defendant Citibank maintains that; the payment it made of plaintiff's Citibank Check No. SN-
04867 in the amount of P4,746,114.41 "was in due course"; it merely relied on the clearing
stamp of the depository/collecting bank, the defendant IBAA that "all prior indorsements and/or
lack of indorsements guaranteed"; and the proximate cause of plaintiff's injury is the gross
negligence of defendant IBAA in indorsing the plaintiff's Citibank check in question.

It is admitted that on December 19, 1977 when the proceeds of plaintiff's Citibank Check No.
SN-048867 was paid to defendant IBAA as collecting bank, plaintiff was maintaining a checking
account with defendant Citibank."5

Although it was not among the stipulated facts, an investigation by the National Bureau of Investigation
(NBI) revealed that Citibank Check No. SN-04867 was recalled by Godofredo Rivera, the General
Ledger Accountant of Ford. He purportedly needed to hold back the check because there was an error
in the computation of the tax due to the Bureau of Internal Revenue (BIR). With Rivera's instruction,
PCIBank replaced the check with two of its own Manager's Checks (MCs). Alleged members of a
syndicate later deposited the two MCs with the Pacific Banking Corporation.

Ford, with leave of court, filed a third-party complaint before the trial court impleading Pacific Banking
Corporation (PBC) and Godofredo Rivera, as third party defendants. But the court dismissed the
complaint against PBC for lack of cause of action. The course likewise dismissed the third-party
complaint against Godofredo Rivera because he could not be served with summons as the NBI
declared him as a "fugitive from justice".

On June 15, 1989, the trial court rendered its decision, as follows:

"Premises considered, judgment is hereby rendered as follows:

"1. Ordering the defendants Citibank and IBAA (now PCI Bank), jointly and severally, to
pay the plaintiff the amount of P4,746,114.41 representing the face value of plaintiff's
Citibank Check No. SN-04867, with interest thereon at the legal rate starting January 20,
1983, the date when the original complaint was filed until the amount is fully paid, plus
costs;

"2. On defendant Citibank's cross-claim: ordering the cross-defendant IBAA (now PCI
Bank) to reimburse defendant Citibank for whatever amount the latter has paid or may
pay to the plaintiff in accordance with next preceding paragraph;

"3. The counterclaims asserted by the defendants against the plaintiff, as well as that
asserted by the cross-defendant against the cross-claimant are dismissed, for lack of
merits; and

"4. With costs against the defendants.

SO ORDERED."6

Not satisfied with the said decision, both defendants, Citibank and PCIBank, elevated their respective
petitions for review on certiorari to the Courts of Appeals. On March 27, 1995, the appellate court
issued its judgment as follows:

"WHEREFORE, in view of the foregoing, the court AFFIRMS the appealed decision with
modifications.

The court hereby renderes judgment:

1. Dismissing the complaint in Civil Case No. 49287 insofar as defendant Citibank N.A.
is concerned;

2. Ordering the defendant IBAA now PCI Bank to pay the plaintiff the amount of
P4,746,114.41 representing the face value of plaintiff's Citibank Check No. SN-04867,
with interest thereon at the legal rate starting January 20, 1983, the date when the
original complaint was filed until the amount is fully paid;
 3. Dismissing the counterclaims asserted by the defendants against the plaintiff as well
as that asserted by the cross-defendant against the cross-claimant, for lack of merits.

Costs against the defendant IBAA (now PCI Bank).

IT IS SO ORDERED."7

PCI Bank moved to reconsider the above-quoted decision of the Court of Appeals, while Ford filed a
"Motion for Partial Reconsideration." Both motions were denied for lack of merit.

Separately, PCIBank and Ford filed before this Court, petitions for review by certiorari under Rule 45.

In G.R. No. 121413, PCIBank seeks the reversal of the decision and resolution of the Twelfth Division
of the Court of Appeals contending that it merely acted on the instruction of Ford and such casue of
action had already prescribed.

PCIBank sets forth the following issues for consideration:

I. Did the respondent court err when, after finding that the petitioner acted on the check drawn
by respondent Ford on the said respondent's instructions, it nevertheless found the petitioner
liable to the said respondent for the full amount of the said check.

II. Did the respondent court err when it did not find prescription in favor of the petitioner. 8

In a counter move, Ford filed its petition docketed as G.R. No. 121479, questioning the same decision
and resolution of the Court of Appeals, and praying for the reinstatement in toto of the decision of the
trial court which found both PCIBank and Citibank jointly and severally liable for the loss.

In G.R. No. 121479, appellant Ford presents the following propositions for consideration:

I. Respondent Citibank is liable to petitioner Ford considering that:

1. As drawee bank, respondent Citibank owes to petitioner Ford, as the drawer of the
subject check and a depositor of respondent Citibank, an absolute and contractual duty
to pay the proceeds of the subject check only to the payee thereof, the Commissioner of
Internal Revenue.

2. Respondent Citibank failed to observe its duty as banker with respect to the subject
check, which was crossed and payable to "Payee's Account Only."

3. Respondent Citibank raises an issue for the first time on appeal; thus the same should
not be considered by the Honorable Court.

4. As correctly held by the trial court, there is no evidence of gross negligence on the
part of petitioner Ford.9

II. PCI Bank is liable to petitioner Ford considering that:

1. There were no instructions from petitioner Ford to deliver the proceeds of the subject
check to a person other than the payee named therein, the Commissioner of the Bureau
 of Internal Revenue; thus, PCIBank's only obligation is to deliver the proceeds to the
Commissioner of the Bureau of Internal Revenue. 10

2. PCIBank which affixed its indorsement on the subject check ("All prior indorsement
and/or lack of indorsement guaranteed"), is liable as collecting bank. 11

3. PCIBank is barred from raising issues of fact in the instant proceedings. 12

4. Petitioner Ford's cause of action had not prescribed. 13

II. G.R. No. 128604

The same sysndicate apparently embezzled the proceeds of checks intended, this time, to settle Ford's
percentage taxes appertaining to the second quarter of 1978 and the first quarter of 1979.

The facts as narrated by the Court of Appeals are as follows:

Ford drew Citibank Check No. SN-10597 on July 19, 1978 in the amount of P5,851,706.37
representing the percentage tax due for the second quarter of 1978 payable to the Commissioner of
Internal Revenue. A BIR Revenue Tax Receipt No. 28645385 was issued for the said purpose.

On April 20, 1979, Ford drew another Citibank Check No. SN-16508 in the amount of P6,311,591.73,
representing the payment of percentage tax for the first quarter of 1979 and payable to the
Commissioner of Internal Revenue. Again a BIR Revenue Tax Receipt No. A-1697160 was issued for
the said purpose.

Both checks were "crossed checks" and contain two diagonal lines on its upper corner between, which
were written the words "payable to the payee's account only."

The checks never reached the payee, CIR. Thus, in a letter dated February 28, 1980, the BIR, Region
4-B, demanded for the said tax payments the corresponding periods above-mentioned.

As far as the BIR is concernced, the said two BIR Revenue Tax Receipts were considered "fake and
spurious". This anomaly was confirmed by the NBI upon the initiative of the BIR. The findings forced
Ford to pay the BIR a new, while an action was filed against Citibank and PCIBank for the recovery of
the amount of Citibank Check Numbers SN-10597 and 16508.

The Regional Trial Court of Makati, Branch 57, which tried the case, made its findings on the modus
operandi of the syndicate, as follows:

"A certain Mr. Godofredo Rivera was employed by the plaintiff FORD as its General Ledger
Accountant. As such, he prepared the plaintiff's check marked Ex. 'A' [Citibank Check No. Sn-
10597] for payment to the BIR. Instead, however, fo delivering the same of the payee, he
passed on the check to a co-conspirator named Remberto Castro who was a pro-manager of
the San Andres Branch of PCIB.* In connivance with one Winston Dulay, Castro himself
subsequently opened a Checking Account in the name of a fictitious person denominated as
'Reynaldo reyes' in the Meralco Branch of PCIBank where Dulay works as Assistant Manager.
 After an initial deposit of P100.00 to validate the account, Castro deposited a worthless Bank of
America Check in exactly the same amount as the first FORD check (Exh. "A", P5,851,706.37)
while this worthless check was coursed through PCIB's main office enroute to the Central Bank
for clearing, replaced this worthless check with FORD's Exhibit 'A' and accordingly tampered
the accompanying documents to cover the replacement. As a result, Exhibit 'A' was cleared by
defendant CITIBANK, and the fictitious deposit account of 'Reynaldo Reyes' was credited at the
PCIB Meralco Branch with the total amount of the FORD check Exhibit 'A'. The same method
was again utilized by the syndicate in profiting from Exh. 'B' [Citibank Check No. SN-16508]
which was subsequently pilfered by Alexis Marindo, Rivera's Assistant at FORD.

From this 'Reynaldo Reyes' account, Castro drew various checks distributing the sahres of the
other participating conspirators namely (1) CRISANTO BERNABE, the mastermind who
formulated the method for the embezzlement; (2) RODOLFO R. DE LEON a customs broker
who negotiated the initial contact between Bernabe, FORD's Godofredo Rivera and PCIB's
Remberto Castro; (3) JUAN VASTILLO who assisted de Leon in the initial arrangements; (4)
GODOFREDO RIVERA, FORD's accountant who passed on the first check (Exhibit "A") to
Castro; (5) REMERTO CASTRO, PCIB's pro-manager at San Andres who performed the
switching of checks in the clearing process and opened the fictitious Reynaldo Reyes account
at the PCIB Meralco Branch; (6) WINSTON DULAY, PCIB's Assistant Manager at its Meralco
Branch, who assisted Castro in switching the checks in the clearing process and facilitated the
opening of the fictitious Reynaldo Reyes' bank account; (7) ALEXIS MARINDO, Rivera's
Assistant at FORD, who gave the second check (Exh. "B") to Castro; (8) ELEUTERIO
JIMENEZ, BIR Collection Agent who provided the fake and spurious revenue tax receipts to
make it appear that the BIR had received FORD's tax payments.

Several other persons and entities were utilized by the syndicate as conduits in the
disbursements of the proceeds of the two checks, but like the aforementioned participants in the
conspiracy, have not been impleaded in the present case. The manner by which the said funds
were distributed among them are traceable from the record of checks drawn against the original
"Reynaldo Reyes" account and indubitably identify the parties who illegally benefited therefrom
and readily indicate in what amounts they did so." 14

On December 9, 1988, Regional Trial Court of Makati, Branch 57, held drawee-bank, Citibank, liable
for the value of the two checks while adsolving PCIBank from any liability, disposing as follows:

"WHEREFORE, judgment is hereby rendered sentencing defendant CITIBANK to reimburse

plaintiff FORD the total amount of P12,163,298.10 prayed for in its complaint, with 6% interest
thereon from date of first written demand until full payment, plus P300,000.00 attorney's fees
and expenses litigation, and to pay the defendant, PCIB (on its counterclaim to crossclaim) the
sum of P300,000.00 as attorney's fees and costs of litigation, and pay the costs.

SO ORDERED."15

Both Ford and Citibank appealed to the Court of Appeals which affirmed, in toto, the decision of the
trial court. Hence, this petition.

Petitioner Ford prays that judgment be rendered setting aside the portion of the Court of Appeals
decision and its resolution dated March 5, 1997, with respect to the dismissal of the complaint against
PCIBank and holding Citibank solely responsible for the proceeds of Citibank Check Numbers SN-
10597 and 16508 for P5,851,706.73 and P6,311,591.73 respectively.

Ford avers that the Court of Appeals erred in dismissing the complaint against defendant PCIBank
considering that:

I. Defendant PCIBank was clearly negligent when it failed to exercise the diligence required to
be exercised by it as a banking insitution.

II. Defendant PCIBank clearly failed to observe the diligence required in the selection and
supervision of its officers and employees.

III. Defendant PCIBank was, due to its negligence, clearly liable for the loss or damage resulting
to the plaintiff Ford as a consequence of the substitution of the check consistent with Section 5
of Central Bank Circular No. 580 series of 1977.

IV. Assuming arguedo that defedant PCIBank did not accept, endorse or negotiate in due
course the subject checks, it is liable, under Article 2154 of the Civil Code, to return the money
which it admits having received, and which was credited to it its Central bank account. 16

The main issue presented for our consideration by these petitions could be simplified as follows: Has
petitioner Ford the right to recover from the collecting bank (PCIBank) and the drawee bank (Citibank)
the value of the checks intended as payment to the Commissioner of Internal Revenue? Or has Ford's
cause of action already prescribed?

Note that in these cases, the checks were drawn against the drawee bank, but the title of the person
negotiating the same was allegedly defective because the instrument was obtained by fraud and
unlawful means, and the proceeds of the checks were not remitted to the payee. It was established
that instead of paying the checks to the CIR, for the settlement of the approprite quarterly percentage
taxes of Ford, the checks were diverted and encashed for the eventual distribution among the mmbers
of the syndicate. As to the unlawful negotiation of the check the applicable law is Section 55 of the
Negotiable Instruments Law (NIL), which provides:

"When title defective -- The title of a person who negotiates an instrument is defective within the
meaning of this Act when he obtained the instrument, or any signature thereto, by fraud, duress,
or fore and fear, or other unlawful means, or for an illegal consideration, or when he negotiates
it in breach of faith or under such circumstances as amount to a fraud."

Pursuant to this provision, it is vital to show that the negotiation is made by the perpetator in breach of
faith amounting to fraud. The person negotiating the checks must have gone beyond the authority
given by his principal. If the principal could prove that there was no negligence in the performance of
his duties, he may set up the personal defense to escape liability and recover from other parties who.
Though their own negligence, alowed the commission of the crime.

In this case, we note that the direct perpetrators of the offense, namely the embezzlers belonging to a
syndicate, are now fugitives from justice. They have, even if temporarily, escaped liability for the
embezzlement of millions of pesos. We are thus left only with the task of determining who of the
present parties before us must bear the burden of loss of these millions. It all boils down to thequestion
of liability based on the degree of negligence among the parties concerned.
Foremost, we must resolve whether the injured party, Ford, is guilty of the "imputed contributory
negligence" that would defeat its claim for reimbursement, bearing ing mind that its employees,
Godofredo Rivera and Alexis Marindo, were among the members of the syndicate.

Citibank points out that Ford allowed its very own employee, Godofredo Rivera, to negotiate the
checks to his co-conspirators, instead of delivering them to the designated authorized collecting bank
(Metrobank-Alabang) of the payee, CIR. Citibank bewails the fact that Ford was remiss in the
supervision and control of its own employees, inasmuch as it only discovered the syndicate's activities
through the information given by the payee of the checks after an unreasonable period of time.

PCIBank also blames Ford of negligence when it allegedly authorized Godofredo Rivera to divert the
proceeds of Citibank Check No. SN-04867, instead of using it to pay the BIR. As to the subsequent
run-around of unds of Citibank Check Nos. SN-10597 and 16508, PCIBank claims that the proximate
cause of the damge to Ford lies in its own officers and employees who carried out the fradulent
schemes and the transactions. These circumstances were not checked by other officers of the
company including its comptroller or internal auditor. PCIBank contends that the inaction of Ford
despite the enormity of the amount involved was a sheer negligence and stated that, as between two
innocent persons, one of whom must suffer the consequences of a breach of trust, the one who made
it possible, by his act of negligence, must bear the loss.

For its part, Ford denies any negligence in the performance of its duties. It avers that there was no
evidence presented before the trial court showing lack of diligence on the part of Ford. And, citing the
case of Gempesaw vs. Court of Appeals,17 Ford argues that even if there was a finding therein that the
drawer was negligent, the drawee bank was still ordered to pay damages.

Furthermore, Ford contends the Godofredo rivera was not authorized to make any representation in its
behalf, specifically, to divert the proceeds of the checks. It adds that Citibank raised the issue of
imputed negligence against Ford for the first time on appeal. Thus, it should not be considered by this
Court.

On this point, jurisprudence regarding the imputed negligence of employer in a master-servant

relationship is instructive. Since a master may be held for his servant's wrongful act, the law imputes to
the master the act of the servant, and if that act is negligent or wrongful and proximately results in
injury to a third person, the negligence or wrongful conduct is the negligence or wrongful conduct of the
master, for which he is liable.18 The general rule is that if the master is injured by the negligence of a
third person and by the concuring contributory negligence of his own servant or agent, the latter's
negligence is imputed to his superior and will defeat the superior's action against the third person,
asuming, of course that the contributory negligence was the proximate cause of the injury of which
complaint is made.19

Accordingly, we need to determine whether or not the action of Godofredo Rivera, Ford's General
Ledger Accountant, and/or Alexis Marindo, his assistant, was the proximate cause of the loss or
damage. AS defined, proximate cause is that which, in the natural and continuous sequence, unbroken
by any efficient, intervening cause produces the injury and without the result would not have
occurred.20

It appears that although the employees of Ford initiated the transactions attributable to an organized
syndicate, in our view, their actions were not the proximate cause of encashing the checks payable to
the CIR. The degree of Ford's negligence, if any, could not be characterized as the proximate cause of
the injury to the parties.

The Board of Directors of Ford, we note, did not confirm the request of Godofredo Rivera to recall
Citibank Check No. SN-04867. Rivera's instruction to replace the said check with PCIBank's Manager's
Check was not in theordinary course of business which could have prompted PCIBank to validate the
same.

As to the preparation of Citibank Checks Nos. SN-10597 and 16508, it was established that these
checks were made payable to the CIR. Both were crossed checks. These checks were apparently
turned around by Ford's emploees, who were acting on their own personal capacity.

Given these circumstances, the mere fact that the forgery was committed by a drawer-payor's
confidential employee or agent, who by virtue of his position had unusual facilities for perpertrating the
fraud and imposing the forged paper upon the bank, does notentitle the bank toshift the loss to the
drawer-payor, in the absence of some circumstance raising estoppel against the drawer. 21 This rule
likewise applies to the checks fraudulently negotiated or diverted by the confidential employees who
hold them in their possession.

With respect to the negligence of PCIBank in the payment of the three checks involved, separately, the
trial courts found variations between the negotiation of Citibank Check No. SN-04867 and the
misapplication of total proceeds of Checks SN-10597 and 16508. Therefore, we have to scrutinize,
separately, PCIBank's share of negligence when the syndicate achieved its ultimate agenda of stealing
the proceeds of these checks.

G.R. Nos. 121413 and 121479

Citibank Check No. SN-04867 was deposited at PCIBank through its Ermita Branch. It was coursed
through the ordinary banking transaction, sent to Central Clearing with the indorsement at the back "all
prior indorsements and/or lack of indorsements guaranteed," and was presented to Citibank for
payment. Thereafter PCIBank, instead of remitting the proceeds to the CIR, prepared two of its
Manager's checks and enabled the syndicate to encash the same.

On record, PCIBank failed to verify the authority of Mr. Rivera to negotiate the checks. The neglect of
PCIBank employees to verify whether his letter requesting for the replacement of the Citibank Check
No. SN-04867 was duly authorized, showed lack of care and prudence required in the circumstances.

Furthermore, it was admitted that PCIBank is authorized to collect the payment of taxpayers in behalf
of the BIR. As an agent of BIR, PCIBank is duty bound to consult its principal regarding the
unwarranted instructions given by the payor or its agent. As aptly stated by the trial court, to wit:

"xxx. Since the questioned crossed check was deposited with IBAA [now PCIBank], which
claimed to be a depository/collecting bank of BIR, it has the responsibility to make sure that the
check in question is deposited in Payee's account only.

xxx xxx xxx

As agent of the BIR (the payee of the check), defendant IBAA should receive instructions only
from its principal BIR and not from any other person especially so when that person is not
 known to the defendant. It is very imprudent on the part of the defendant IBAA to just rely on the
alleged telephone call of the one Godofredo Rivera and in his signature considering that the
plaintiff is not a client of the defendant IBAA."

It is a well-settled rule that the relationship between the payee or holder of commercial paper and the
bank to which it is sent for collection is, in the absence of an argreement to the contrary, that of
principal and agent.22 A bank which receives such paper for collection is the agent of the payee or
holder.23

Even considering arguendo, that the diversion of the amount of a check payable to the collecting bank
in behalf of the designated payee may be allowed, still such diversion must be properly authorized by
the payor. Otherwise stated, the diversion can be justified only by proof of authority from the drawer, or
that the drawer has clothed his agent with apparent authority to receive the proceeds of such check.

Citibank further argues that PCI Bank's clearing stamp appearing at the back of the questioned checks
stating that ALL PRIOR INDORSEMENTS AND/OR LACK OF INDORSEMENTS GURANTEED should
render PCIBank liable because it made it pass through the clearing house and therefore Citibank had
no other option but to pay it. Thus, Citibank had no other option but to pay it. Thus, Citibank assets that
the proximate cause of Ford's injury is the gross negligence of PCIBank. Since the questione dcrossed
check was deposited with PCIBank, which claimed to be a depository/collecting bank of the BIR, it had
the responsibility to make sure that the check in questions is deposited in Payee's account only.

Indeed, the crossing of the check with the phrase "Payee's Account Only," is a warning that the check
should be deposited only in the account of the CIR. Thus, it is the duty of the collecting bank PCIBank
to ascertain that the check be deposited in payee's account only. Therefore, it is the collecting bank
(PCIBank) which is bound to scruninize the check and to know its depositors before it could make the
clearing indorsement "all prior indorsements and/or lack of indorsement guaranteed".

In Banco de Oro Savings and Mortgage Bank vs. Equitable Banking Corporation, 24 we ruled:

"Anent petitioner's liability on said instruments, this court is in full accord with the ruling of the
PCHC's Board of Directors that:

'In presenting the checks for clearing and for payment, the defendant made an express
guarantee on the validity of "all prior endorsements." Thus, stamped at the back of the checks
are the defedant's clear warranty: ALL PRIOR ENDORSEMENTS AND/OR LACK OF
ENDORSEMENTS GUARANTEED. Without such warranty, plaintiff would not have paid on the
checks.'

No amount of legal jargon can reverse the clear meaning of defendant's warranty. As the
warranty has proven to be false and inaccurate, the defendant is liable for any damage arising
out of the falsity of its representation." 25

Lastly, banking business requires that the one who first cashes and negotiates the check must take
some percautions to learn whether or not it is genuine. And if the one cashing the check through
indifference or othe circumstance assists the forger in committing the fraud, he should not be permitted
to retain the proceeds of the check from the drawee whose sole fault was that it did not discover the
forgery or the defect in the title of the person negotiating the instrument before paying the check. For
this reason, a bank which cashes a check drawn upon another bank, without requiring proof as to the
identity of persons presenting it, or making inquiries with regard to them, cannot hold the proceeds
against the drawee when the proceeds of the checks were afterwards diverted to the hands of a third
party. In such cases the drawee bank has a right to believe that the cashing bank (or the collecting
bank) had, by the usual proper investigation, satisfied itself of the authenticity of the negotiation of the
checks. Thus, one who encashed a check which had been forged or diverted and in turn received
payment thereon from the drawee, is guilty of negligence which proximately contributed to the success
of the fraud practiced on the drawee bank. The latter may recover from the holder the money paid on
the check.26

Having established that the collecting bank's negligence is the proximate cause of the loss, we
conclude that PCIBank is liable in the amount corresponding to the proceeds of Citibank Check No.
SN-04867.

G.R. No. 128604

The trial court and the Court of Appeals found that PCIBank had no official act in the ordinary course of
business that would attribute to it the case of the embezzlement of Citibank Check Numbers SN-10597
and 16508, because PCIBank did not actually receive nor hold the two Ford checks at all. The trial
court held, thus:

"Neither is there any proof that defendant PCIBank contributed any official or conscious
participation in the process of the embezzlement. This Court is convinced that the switching
operation (involving the checks while in transit for "clearing") were the clandestine or hidden
actuations performed by the members of the syndicate in their own personl, covert and private
capacity and done without the knowledge of the defendant PCIBank…" 27

In this case, there was no evidence presented confirming the conscious particiapation of PCIBank in
the embezzlement. As a general rule, however, a banking corporation is liable for the wrongful or
tortuous acts and declarations of its officers or agents within the course and scope of their
employment.28 A bank will be held liable for the negligence of its officers or agents when acting within
the course and scope of their employment. It may be liable for the tortuous acts of its officers even as
regards that species of tort of which malice is an essential element. In this case, we find a situation
where the PCIBank appears also to be the victim of the scheme hatched by a syndicate in which its
own management employees had particiapted.

The pro-manager of San Andres Branch of PCIBank, Remberto Castro, received Citibank Check
Numbers SN-10597 and 16508. He passed the checks to a co-conspirator, an Assistant Manager of
PCIBank's Meralco Branch, who helped Castro open a Checking account of a fictitious person named
"Reynaldo Reyes." Castro deposited a worthless Bank of America Check in exactly the same amount
of Ford checks. The syndicate tampered with the checks and succeeded in replacing the worthless
checks and the eventual encashment of Citibank Check Nos. SN 10597 and 16508. The PCIBank
Ptro-manager, Castro, and his co-conspirator Assistant Manager apparently performed their activities
using facilities in their official capacity or authority but for their personal and private gain or benefit.

A bank holding out its officers and agents as worthy of confidence will not be permitted to profit by the
frauds these officers or agents were enabled to perpetrate in the apparent course of their employment;
nor will t be permitted to shirk its responsibility for such frauds, even though no benefit may accrue to
the bank therefrom. For the general rule is that a bank is liable for the fraudulent acts or
representations of an officer or agent acting within the course and apparent scope of his employment
or authority.29 And if an officer or employee of a bank, in his official capacity, receives money to satisfy
an evidence of indebetedness lodged with his bank for collection, the bank is liable for his
misappropriation of such sum.30

Moreover, as correctly pointed out by Ford, Section 531 of Central Bank Circular No. 580, Series of
1977 provides that any theft affecting items in transit for clearing, shall be for the account of sending
bank, which in this case is PCIBank.

But in this case, responsibility for negligence does not lie on PCIBank's shoulders alone.

The evidence on record shows that Citibank as drawee bank was likewise negligent in the performance
of its duties. Citibank failed to establish that its payment of Ford's checjs were made in due course and
legally in order. In its defense, Citibank claims the genuineness and due execution of said checks,
considering that Citibank (1) has no knowledge of any informity in the issuance of the checks in
question (2) coupled by the fact that said checks were sufficiently funded and (3) the endorsement of
the Payee or lack thereof was guaranteed by PCI Bank (formerly IBAA), thus, it has the obligation to
honor and pay the same.

For its part, Ford contends that Citibank as the drawee bank owes to Ford an absolute and contractual
duty to pay the proceeds of the subject check only to the payee thereof, the CIR. Citing Section 62 32 of
the Negotiable Instruments Law, Ford argues that by accepting the instrument, the acceptro which is
Citibank engages that it will pay according to the tenor of its acceptance, and that it will pay only to the
payee, (the CIR), considering the fact that here the check was crossed with annotation "Payees
Account Only."

As ruled by the Court of Appeals, Citibank must likewise answer for the damages incurred by Ford on
Citibank Checks Numbers SN 10597 and 16508, because of the contractual relationship existing
between the two. Citibank, as the drawee bank breached its contractual obligation with Ford and such
degree of culpability contributed to the damage caused to the latter. On this score, we agree with the
respondent court's ruling.

Citibank should have scrutinized Citibank Check Numbers SN 10597 and 16508 before paying the
amount of the proceeds thereof to the collecting bank of the BIR. One thing is clear from the record:
the clearing stamps at the back of Citibank Check Nos. SN 10597 and 16508 do not bear any initials.
Citibank failed to notice and verify the absence of the clearing stamps. Had this been duly examined,
the switching of the worthless checks to Citibank Check Nos. 10597 and 16508 would have been
discovered in time. For this reason, Citibank had indeed failed to perform what was incumbent upon it,
which is to ensure that the amount of the checks should be paid only to its designated payee. The fact
that the drawee bank did not discover the irregularity seasonably, in our view, consitutes negligence in
carrying out the bank's duty to its depositors. The point is that as a business affected with public
interest and because of the nature of its functions, the bank is under obligation to treat the accounts of
its depositors with meticulous care, always having in mind the fiduciary nature of their relationship. 33

Thus, invoking the doctrine of comparative negligence, we are of the view that both PCIBank and
Citibank failed in their respective obligations and both were negligent in the selection and supervision
of their employees resulting in the encashment of Citibank Check Nos. SN 10597 AND 16508. Thus,
we are constrained to hold them equally liable for the loss of the proceeds of said checks issued by
Ford in favor of the CIR.

Time and again, we have stressed that banking business is so impressed with public interest where the
trust and confidence of the public in general is of paramount umportance such that the appropriate
standard of diligence must be very high, if not the highest, degree of diligence. 34 A bank's liability as
obligor is not merely vicarious but primary, wherein the defense of exercise of due diligence in the
selection and supervision of its employees is of no moment. 35

Banks handle daily transactions involving millions of pesos. 36 By the very nature of their work the
degree of responsibility, care and trustworthiness expected of their employees and officials is far
greater than those of ordinary clerks and employees. 37 Banks are expected to exercise the highest
degree of diligence in the selection and supervision of their employees. 38

On the issue of prescription, PCIBank claims that the action of Ford had prescribed because of its
inability to seek judicial relief seasonably, considering that the alleged negligent act took place prior to
December 19, 1977 but the relief was sought only in 1983, or seven years thereafter.

The statute of limitations begins to run when the bank gives the depositor notice of the payment, which
is ordinarily when the check is returned to the alleged drawer as a voucher with a statement of his
account,39 and an action upon a check is ordinarily governed by the statutory period applicable to
instruments in writing.40

Our laws on the matter provide that the action upon a written contract must be brought within ten year
from the time the right of action accrues. 41 hence, the reckoning time for the prescriptive period begins
when the instrument was issued and the corresponding check was returned by the bank to its
depositor (normally a month thereafter). Applying the same rule, the cause of action for the recovery of
the proceeds of Citibank Check No. SN 04867 would normally be a month after December 19, 1977,
when Citibank paid the face value of the check in the amount of P4,746,114.41. Since the original
complaint for the cause of action was filed on January 20, 1984, barely six years had lapsed. Thus, we
conclude that Ford's cause of action to recover the amount of Citibank Check No. SN 04867 was
seasonably filed within the period provided by law.

Finally, we also find thet Ford is not completely blameless in its failure to detect the fraud. Failure on
the part of the depositor to examine its passbook, statements of account, and cancelled checks and to
give notice within a reasonable time (or as required by statute) of any discrepancy which it may in the
exercise of due care and diligence find therein, serves to mitigate the banks' liability by reducing the
award of interest from twelve percent (12%) to six percent (6%) per annum. As provided in Article 1172
of the Civil Code of the Philippines, respondibility arising from negligence in the performance of every
kind of obligation is also demandable, but such liability may be regulated by the courts, according to
the circumstances. In quasi-delicts, the contributory negligence of the plaintiff shall reduce the
damages that he may recover.42

WHEREFORE, the assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV No.
25017 are AFFIRMED. PCIBank, know formerly as Insular Bank of Asia and America, id declared
solely responsible for the loss of the proceeds of Citibank Check No SN 04867 in the amount
P4,746,114.41, which shall be paid together with six percent (6%) interest thereon to Ford Philippines
Inc. from the date when the original complaint was filed until said amount is fully paid.
However, the Decision and Resolution of the Court of Appeals in CA-G.R. No. 28430
are MODIFIED as follows: PCIBank and Citibank are adjudged liable for and must share the loss,
(concerning the proceeds of Citibank Check Numbers SN 10597 and 16508 totalling P12,163,298.10)
on a fifty-fifty ratio, and each bank is ORDERED to pay Ford Philippines Inc. P6,081,649.05, with six
percent (6%) interest thereon, from the date the complaint was filed until full payment of said
amount.1âwphi1.nêt

Costs against Philippine Commercial International Bank and Citibank N.A.

SO ORDERED.

Bellosillo, Mendoza, Buena, De Leon, Jr., JJ, concur.

G.R. No. L-29462 March 7, 1929

IGNACIO DEL PRADO, plaintiff-appellee,

vs.
MANILA ELECTRIC CO., defendant-appellant.

Ross, Lawrence and Selph and Antonio T. Carrascoso, jr., for appellant.
Vicente Sotto for appellee.

STREET, J.:

This action was instituted in the Court of First Instance of Manila by Ignacio del Prado to recover
damages in the amount of P50,000 for personal injuries alleged to have been caused by the
negligence of te defendant, the Manila Electric Company, in the operation of one of its street cars in the
City of Manila. Upon hearing the cause the trial court awarded to the plaintiff the sum of P10,000, as
damages, with costs of suit, and the defendant appealed.

The appellant, the Manila Electric Company, is engaged in operating street cars in the City for the
conveyance of passengers; and on the morning of November 18, 1925, one Teodorico Florenciano, as
appellant's motorman, was in charge of car No. 74 running from east to west on R. Hidalgo Street, the
scene of the accident being at a point near the intersection of said street and Mendoza Street. After the
car had stopped at its appointed place for taking on and letting off passengers, just east of the
intersection, it resumed its course at a moderate speed under the guidance of the motorman. The car
had proceeded only a short distance, however, when the plaintiff, Ignacio del Prado, ran across the
street to catch the car, his approach being made from the left. The car was of the kind having entrance
and exist at either end, and the movement of the plaintiff was so timed that he arrived at the front
entrance of the car at the moment when the car was passing.

The testimony of the plaintiff and of Ciriaco Guevara, one of his witnesses, tends to shows that the
plaintiff, upon approaching the car, raised his hand as an indication to the motorman of his desire to
board the car, in response to which the motorman eased up a little, without stopping. Upon this the
plaintiff seized, with his hand, the front perpendicular handspot, at the same time placing his left foot
upon the platform. However, before the plaintiff's position had become secure, and even before his
raised right foot had reached the flatform, the motorman applied the power, with the result that the car
gave a slight lurch forward. This sudden impulse to the car caused the plaintiff's foot to slip, and his
hand was jerked loose from the handpost, He therefore fell to the ground, and his right foot was caught
and crushed by the moving car. The next day the member had to be amputated in the hospital. The
witness, Ciriaco Guevara, also stated that, as the plaintiff started to board the car, he grasped the
handpost on either side with both right and left hand. The latter statement may possibly be incorrect as
regards the use of his right hand by the plaintiff, but we are of the opinion that the finding of the trial
court to the effect that the motorman slowed up slightly as the plaintiff was boarding the car that the
plaintiff's fall was due in part at lease to a sudden forward movement at the moment when the plaintiff
put his foot on the platform is supported by the evidence and ought not to be disturbed by us.

The motorman stated at the trial that he did not see the plaintiff attempting to board the car; that he did
not accelerate the speed of the car as claimed by the plaintiff's witnesses; and that he in fact knew
nothing of the incident until after the plaintiff had been hurt and some one called to him to stop. We are
not convinced of the complete candor of this statement, for we are unable to see how a motorman
operating this car could have failed to see a person boarding the car under the circumstances revealed
in this case. It must be remembered that the front handpost which, as all witness agree, was grasped
by the plaintiff in attempting to board the car, was immediately on the left side of the motorman.

With respect to the legal aspects of the case we may observe at the outset that there is no obligation
on the part of a street railway company to stop its cars to let on intending passengers at other points
than those appointed for stoppage. In fact it would be impossible to operate a system of street cars if a
company engage in this business were required to stop any and everywhere to take on people who
were too indolent, or who imagine themselves to be in too great a hurry, to go to the proper places for
boarding the cars. Nevertheless, although the motorman of this car was not bound to stop to let the
plaintiff on, it was his duty to do act that would have the effect of increasing the plaintiff's peril while he
was attempting to board the car. The premature acceleration of the car was, in our opinion, a breach of
this duty.

The relation between a carrier of passengers for hire and its patrons is of a contractual nature; and in
failure on the part of the carrier to use due care in carrying its passengers safely is a breach of duty
(culpa contructual) under articles 1101, 1103 and 1104 of the Civil Code. Furthermore, the duty that the
carrier of passengers owes to its patrons extends to persons boarding the cars as well as to those
alighting therefrom. The case of Cangco vs. Manila Railroad Co. (38 Phil., 768), supplies an instance
of the violation of this duty with respect to a passenger who was getting off of a train. In that case the
plaintiff stepped off of a moving train, while it was slowing down in a station, and at the time when it
was too dark for him to see clearly where he was putting his feet. The employees of the company had
carelessly left watermelons on the platform at the place where the plaintiff alighted, with the result that
his feet slipped and he fell under the car, where his right arm badly injured. This court held that the
railroad company was liable for breach positive duty ( culpa contractual), and the plaintiff was awarded
damages in the amount of P2,500 for the loss of his arm. In the opinion in that case the distinction is
clearly drawn between a liability for negligence arising from breach of contructual duty and that arising
articles 1902 and 1903 of the Civil Code (culpa aquiliana).

The distiction between these two sorts of negligence is important in this jurisdiction, for the reason that
where liability arises from a mere tort (culpa aquiliana), not involving a breach of positive obligation, an
employer, or master, may exculpate himself, under the last paragraph of article 1903 of the Civil Code,
by providing that he had exercised due degligence to prevent the damage; whereas this defense is not
available if the liability of the master arises from a breach of contrauctual duty ( culpa contractual). In
the case bfore us the company pleaded as a special defense that it had used all the deligence of a
good father of a family to prevent the damage suffered by the plaintiff; and to establish this contention
the company introduced testimony showing that due care had been used in training and instructing the
motorman in charge of this car in his art. But this proof is irrelevant in view of the fact that the liability
involved was derived from a breach of obligation under article 1101 of the Civil Code and related
provisions. (Manila Railroad Co. vs. Compana Transatlantica and Atlantic, Gulf & Pacific Co., 38 Phil.,
875, 887; De Guia vs. Manila Electric Railroad & Light Co., 40 Phil., 706, 710.)

Another practical difference between liability for negligence arising under 1902 of the Civil Code and
liability arising from negligence in the performance of a positive duty, under article 1101 and related
provisions of the Civil Code, is that, in dealing with the latter form of negligence, the court is given a
discretion to mitigate liability according to the circumstances of the case (art 1103). No such general
discretion is given by the Code in dealing with liability arising under article 1902; although possibly the
same end is reached by courts in dealing with the latter form of liability because of the latitude of the
considerations pertinent to cases arising under this article.

As to the contributory negligence of the plaintiff, we are of the opinion that it should be treated, as in
Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil., 359), as a mitigating circumstance under article 1103
of the Civil Code. It is obvious that the plaintiff's negligence in attempting to board the moving car was
not the proximate cause of the injury. The direct and proximate cause of the injury was the act of
appellant's motorman in putting on the power prematurely. A person boarding a moving car must be
taken to assume the risk of injury from boarding the car under the conditions open to his view, but he
cannot fairly be held to assume the risk that the motorman, having the situation in view, will increase
his peril by accelerating the speed of the car before he is planted safely on the platform. Again, the
situation before us is one where the negligent act of the company's servant succeeded the negligent
act of the plaintiff, and the negligence of the company must be considered the proximate cause of the
injury. The rule here applicable seems to be analogous to, if not identical with that which is sometimes
referred to as the doctrine of "the last clear chance." In accordance with this doctrine, the contributory
negligence of the party injured will not defeat the action if it be shown that the defendant might, by the
exercise of reasonable care and prudence, have avoided the consequences of the negligence of the
injured party (20 R. C. L., p. 139; Carr vs. Interurban Ry. Co., 185 Iowa, 872; 171 N. W., 167). The
negligence of the plaintiff was, however, contributory to the accident and must be considered as a
mitigating circumstance.

With respect to the effect of this injury upon the plaintiff's earning power, we note that, although he lost
his foot, he is able to use an artificial member without great inconvenience and his earning capacity
has probably not been reduced by more than 30 per centum. In view of the precedents found in our
decisions with respect to the damages that ought to be awarded for the loss of limb, and more
particularly Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil., 359); Cangco vs. Manila Railroad Co. (38
Phil., 768); and Borromeo vs. Manila Electric Railroad and Light Co. (44 Phil., 165), and in view of all
the circumstances connected with the case, we are of the opinion that the plaintiff will be adequately
compensated by an award of P2,500.

It being understood, therefore, that the appealed judgment is modified by reducing the recovery to the
sum of P2,500, the judgment, as thus modified, is affirmed. So ordered, with costs against the
appellant.

Malcolm, Villamor, Ostrand, Romualdez and Villa-Real, JJ., concur.

G.R. Nos. 103442-45 May 21, 1993

NATIONAL POWER CORPORATION, ET AL., petitioners,
vs.
THE COURT OF APPEALS, GAUDENCIO C. RAYO, ET AL., respondents.

The Solicitor General for plaintiff-appellee.

Ponciano G. Hernandez for private respondents.

DAVIDE, JR., J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court urging this Court
to set aside the 19 August 1991 consolidated Decision of the Court of Appeals in CA.-G.R. CV Nos.
27290-931 which reversed the Decision of Branch 5 of the then Court of First Instance (now Regional
Trial Court) of Bulacan, and held petitioners National Power Corporation (NPC) and Benjamin Chavez
jointly and severally liable to the private respondents for actual and moral damages, litigation expenses
and attorney's fees.

This present controversy traces its beginnings to four (4) separate complaints 2 for damages filed
against the NPC and Benjamin Chavez before the trial court. The plaintiffs therein, now private
respondents, sought to recover actual and other damages for the loss of lives and the destruction to
property caused by the inundation of the town of Norzagaray, Bulacan on 26-27 October 1978. The
flooding was purportedly caused by the negligent release by the defendants of water through the
spillways of the Angat Dam (Hydroelectric Plant). In said complaints, the plaintiffs alleged, inter alia,
that: 1) defendant NPC operated and maintained a multi-purpose hydroelectric plant in the Angat River
at Hilltop, Norzagaray, Bulacan; 2) defendant Benjamin Chavez was the plant supervisor at the time of
the incident in question; 3) despite the defendants' knowledge, as early as 24 October 1978, of the
impending entry of typhoon "Kading," they failed to exercise due diligence in monitoring the water level
at the dam; 4) when the said water level went beyond the maximum allowable limit at the height of the
typhoon, the defendants suddenly, negligently and recklessly opened three (3) of the dam's spillways,
thereby releasing a large amount of water which inundated the banks of the Angat River; and 5) as a
consequence, members of the household of the plaintiffs, together with their animals, drowned, and
their properties were washed away in the evening of 26 October and the early hours of 27 October
1978.3

In their Answers, the defendants, now petitioners, alleged that: 1) the NPC exercised due care,
diligence and prudence in the operation and maintenance of the hydroelectric plant; 2) the NPC
exercised the diligence of a good father in the selection of its employees; 3) written notices were sent
to the different municipalities of Bulacan warning the residents therein about the impending release of
a large volume of water with the onset of typhoon "Kading" and advise them to take the necessary
precautions; 4) the water released during the typhoon was needed to prevent the collapse of the dam
and avoid greater damage to people and property; 5) in spite of the precautions undertaken and the
diligence exercised, they could still not contain or control the flood that resulted and; 6) the damages
incurred by the private respondents were caused by a fortuitous event or force majeure and are in the
nature and character of damnum absque injuria. By way of special affirmative defense, the defendants
averred that the NPC cannot be sued because it performs a purely governmental function. 4
Upon motion of the defendants, a preliminary hearing on the special defense was conducted. As a
result thereof, the trial court dismissed the complaints as against the NPC on the ground that the
provision of its charter allowing it to sue and be sued does not contemplate actions based on tort. The
parties do not, however, dispute the fact that this Court overruled the trial court and ordered the
reinstatement of the complaints as against the NPC. 5

Being closely interrelated, the cases were consolidated and trial thereafter ensued.

The lower court rendered its decision on 30 April 1990 dismissing the complaints "for lack of sufficient
and credible evidence."6 Consequently, the private respondents seasonably appealed therefrom to the
respondent Court which then docketed the cases as CA-G.R. CV Nos. 27290-93.

In its joint decision promulgated on 19 August 1991, the Court of Appeals reversed the appealed
decision and awarded damages in favor of the private respondents. The dispositive portion of the
decision reads:

CONFORMABLY TO THE FOREGOING, the joint decision appealed from is hereby

REVERSED and SET ASIDE, and a new one is hereby rendered:

1. In Civil Case No. SM-950, ordering defendants-appellees to pay, jointly and severally,
plaintiffs-appellants, with legal interest from the date when this decision shall become
final and executory, the following:

A. Actual damages, to wit:

1) Gaudencio C. Rayo, Two Hundred Thirty One Thousand Two Hundred

Sixty Pesos (P231,260.00);

2) Bienvenido P. Pascual, Two Hundred Four Thousand Five Hundred

Pesos (P204.500.00);

3) Tomas Manuel, One Hundred Fifty Five Thousand Pesos

(P155,000.00);

4) Pedro C. Bartolome, One Hundred Forty Seven Thousand Pesos

(P147,000.00);.

5) Bernardino Cruz, One Hundred Forty Three Thousand Five Hundred

Fifty Two Pesos and Fifty Centavos (P143,552.50);

6) Jose Palad, Fifty Seven Thousand Five Hundred Pesos (P57,500.00);

7) Mariano S. Cruz, Forty Thousand Pesos (P40,000.00);

8) Lucio Fajardo, Twenty nine Thousand Eighty Pesos (P29,080.00); and

B. Litigation expenses of Ten Thousand Pesos (P10,000.00);

2. In Civil case No. SM-951, ordering defendants-appellees to pay jointly and severally,
plaintiff-appellant, with legal interest from the date when this decision shall have become
final and executory, the following :

A. Actual damages of Five Hundred Twenty Thousand Pesos

(P520,000.00);.

B. Moral damages of five hundred Thousand Pesos (P500,000.00); and.

C. Litigation expenses of Ten Thousand Pesos (P10,000.00);.

3. In Civil Case No. SM-953, ordering defendants-appellees to pay, jointly and severally,
with legal interest from the date when this decision shall have become final and
executory;

A. Plaintiff-appellant Angel C. Torres:

1) Actual damages of One Hundred Ninety Nine Thousand One Hundred Twenty Pesos
(P199,120.00);

2) Moral Damages of One Hundred Fifty Thousand Pesos (P150,000.00);

B. Plaintiff-appellant Norberto Torres:

1) Actual damages of Fifty Thousand Pesos (P50,000.00);

2) Moral damages of Fifty Thousand Pesos (P50,000.00);

C. Plaintiff-appellant Rodelio Joaquin:

1) Actual damages of One Hundred Thousand Pesos (P100,000.00);

2) Moral damages of One Hundred Thousand Pesos (P100,000.00); and

D. Plaintifsf-appellants litigation expenses of Ten Thousand Pesos (P10,000.00);

4. In Civil case No. SM-1247, ordering defendants-appellees to pay, jointly and severally,
with legal interest from the date when this decision shall have become final and
executory :

A. Plaintiffs-appellants Presentacion Lorenzo and Clodualdo Lorenzo:

1) Actual damages of Two Hundred Fifty Six Thousand Six Hundred Pesos
(P256,600.00);

2) Moral damages of Fifty Thousand Pesos (P50,000.00);

B. Plaintiff-appellant Consolacion Guzman :

1) Actual damages of One Hundred forty Thousand Pesos (P140,000.00);

 2) Moral damages of Fifty Thousand Pesos (P50,000.00);

C. Plaintiff-appellant Virginia Guzman :

1) Actual damages of Two Hundred Five Hundred Twenty Pesos

(205,520.00); and

D. Plaintiffs-appellants litigation expenses of Ten Thousand Pesos (10,000.00).

In addition, in all the four (4) instant cases, ordering defendants-appellees to pay, jointly
and severally, plaintiffs-appellants attorney fees in an amount equivalent to 15% of the
total amount awarded.

No pronouncement as to costs.7

The foregoing judgment is based on the public respondent's conclusion that the petitioners were guilty
of:

. . . a patent gross and evident lack of foresight, imprudence and negligence . . . in the
management and operation of Angat Dam. The unholiness of the hour, the extent of the
opening of the spillways, And the magnitude of the water released, are all but products of
defendants-appellees' headlessness, slovenliness, and carelessness. The resulting flash
flood and inundation of even areas (sic) one (1) kilometer away from the Angat River
bank would have been avoided had defendants-appellees prepared the Angat Dam by
maintaining in the first place, a water elevation which would allow room for the expected
torrential rains.8

This conclusion, in turn, is anchored on its findings of fact, to wit:

As early as October 21, 1978, defendants-appellees knew of the impending onslaught of

and imminent danger posed by typhoon "Kading". For as alleged by defendants-
appellees themselves, the coming of said super typhoon was bannered by Bulletin
Today, a newspaper of national circulation, on October 25, 1978, as "Super Howler to hit
R.P." The next day, October 26, 1978, said typhoon once again merited a headline in
said newspaper as "Kading's Big Blow expected this afternoon" (Appellee's Brief, p. 6).
Apart from the newspapers, defendants-appellees learned of typhoon "Kading' through
radio announcements (Civil Case No. SM-950, TSN, Benjamin Chavez, December 4,
1984, pp. 7-9).

Defendants-appellees doubly knew that the Angat Dam can safely hold a normal
maximum headwater elevation of 217 meters (Appellee's brief, p. 12; Civil Case No. SM-
951, Exhibit "I-6"; Civil Case No. SM-953, Exhibit "J-6"; Civil Case No. SM-1247, Exhibit
"G-6").

Yet, despite such knowledge, defendants-appellees maintained a reservoir water

elevation even beyond its maximum and safe level, thereby giving no sufficient
allowance for the reservoir to contain the rain water that will inevitably be brought by the
coming typhoon.
 On October 24, 1978, before typhoon "Kading" entered the Philippine area of
responsibility, water elevation ranged from 217.61 to 217.53, with very little opening of
the spillways, ranging from 1/2 to 1 meter. On October 25, 1978, when typhoon "Kading"
entered the Philippine area of responsibility, and public storm signal number one was
hoisted over Bulacan at 10:45 a.m., later raised to number two at 4:45 p.m., and then to
number three at 10:45 p.m., water elevation ranged from 217.47 to 217.57, with very
little opening of the spillways, ranging from 1/2 to 1 meter. On October 26, 1978, when
public storm signal number three remained hoisted over Bulacan, the water elevation still
remained at its maximum level of 217.00 to 218.00 with very little opening of the
spillways ranging from 1/2 to 2 meters, until at or about midnight, the spillways were
suddenly opened at 5 meters, then increasing swiftly to 8, 10, 12, 12.5, 13, 13.5, 14,
14.5 in the early morning hours of October 27, 1978, releasing water at the rate of 4,500
cubic meters per second, more or less. On October 27, 1978, water elevation remained
at a range of 218.30 to 217.05 (Civil Case No. SM-950, Exhibits "D" and series, "L", "M",
"N", and "O" and Exhibits "3" and "4"; Civil Case No. SM-951, Exhibits "H" and "H-1";
Civil Case No. SM-953, Exhibits "I" and "I-1"; Civil Case No. SM 1247, Exhibits "F" and
"F-1").

xxx xxx xxx

From the mass of evidence extant in the record, We are convinced, and so hold that the
flash flood on October 27, 1978, was caused not by rain waters ( sic), but by stored
waters (sic) suddenly and simultaneously released from the Angat Dam by defendants-
appellees, particularly from midnight of October 26, 1978 up to the morning hours of
October 27,
1978.9

The appellate court rejected the petitioners' defense that they had sent "early warning written notices"
to the towns of Norzagaray, Angat, Bustos, Plaridel, Baliwag and Calumpit dated 24 October 1978
which read:

TO ALL CONCERN (sic):

Please be informed that at present our reservoir (dam) is full and that we have been
releasing water intermittently for the past several days.

With the coming of typhoon "Rita" (Kading) we expect to release greater ( sic) volume of
water, if it pass (sic) over our place.

In view of this kindly advise people residing along Angat River to keep alert and stay in
safe places.

BE
NJ
AM
IN
L.
CH
 AV
EZ
Po
wer
Pla
nt
Su
peri
nte
nde
nt10

because:

Said notice was delivered to the "towns of Bulacan" on October 26, 1978 by defendants-
appellees driver, Leonardo Nepomuceno (Civil Case No. SM-950, TSN, Benjamin
Chavez, December 4, 1984, pp. 7-11 and TSN, Leonardo Nepomuceno, March 7, 1985,
pp. 10-12).

Said notice is ineffectual, insufficient and inadequate for purposes of the opening of the
spillway gates at midnight of October 26, 1978 and on October 27, 1978. It did not
prepare or warn the persons so served, for the volume of water to be released, which
turned out to be of such magnitude, that residents near or along the Angat River, even
those one (1) kilometer away, should have been advised to evacuate. Said notice,
addressed "TO ALL CONCERN (sic)," was delivered to a policeman (Civil Case No. SM-
950, pp. 10-12 and Exhibit "2-A") for the municipality of Norzagaray. Said notice was not
thus addressed and delivered to the proper and responsible officials who could have
disseminated the warning to the residents directly affected. As for the municipality of Sta.
Maria, where plaintiffs-appellants in Civil Case No. SM-1246 reside, said notice does not
appear to have been served.11

Relying on Juan F. Nakpil & Sons vs. Court of Appeals,12 public respondent rejected the petitioners'
plea that the incident in question was caused by force majeure and that they are, therefore, not liable
to the private respondents for any kind of damage — such damage being in the nature of damnum
absque injuria.

The motion for reconsideration filed by the petitioners, as well as the motion to modify judgment filed
by the public respondents,13 were denied by the public respondent in its Resolution of 27 December
1991.14

Petitioners thus filed the instant petition on 21 February 1992.

After the Comment to the petition was filed by the private respondents and the Reply thereto was filed
by the petitioners, We gave due course to the petition on 17 June 1992 and directed the parties to
submit their respective Memoranda,15 which they subsequently complied with.

The petitioners raised the following errors allegedly committed by the respondent Court :
 I. THE COURT OF APPEALS ERRED IN APPLYING THE RULING OF NAKPIL & SONS
V. COURT OF APPEALS AND HOLDING THAT PETITIONERS WERE GUILTY OF
NEGLIGENCE.

II. THE COURT OF APPEALS ERRED IN HOLDING THAT THE WRITTEN NOTICES
OF WARNING ISSUED BY PETITIONERS WERE INSUFFICIENT.

III. THE COURT OF APPEALS ERRED IN HOLDING THAT THE DAMAGE SUFFERED
BY PRIVATE RESPONDENTS WAS NOT DAMNUM ABSQUE INJURIA.

IV. THE COURT OF APPEALS ERRED IN NOT AWARDING THE COUNTERCLAIM OF

PETITIONERS FOR ATTORNEY'S FEES AND EXPENSES OF LITIGATION.16

These same errors were raised by herein petitioners in G.R. No. 96410, entitled National Power
Corporation, et al., vs. Court of Appeals, et al. ,17 which this Court decided on 3 July 1992. The said
case involved the very same incident subject of the instant petition. In no uncertain terms, We declared
therein that the proximate cause of the loss and damage sustained by the plaintiffs therein — who
were similarly situated as the private respondents herein — was the negligence of the petitioners, and
that the 24 October 1978 "early warning notice" supposedly sent to the affected municipalities, the
same notice involved in the case at bar, was insufficient. We thus cannot now rule otherwise not only
because such a decision binds this Court with respect to the cause of the inundation of the town of
Norzagaray, Bulacan on 26-27 October 1978 which resulted in the loss of lives and the destruction to
property in both cases, but also because of the fact that on the basis of its meticulous analysis and
evaluation of the evidence adduced by the parties in the cases subject of CA-G.R. CV Nos. 27290-93,
public respondent found as conclusively established that indeed, the petitioners were guilty of "patent
gross and evident lack of foresight, imprudence and negligence in the management and operation of
Angat Dam," and that "the extent of the opening of the spillways, and the magnitude of the water
released, are all but products of defendants-appellees' headlessness, slovenliness, and
carelessness."18 Its findings and conclusions are biding upon Us, there being no showing of the
existence of any of the exceptions to the general rule that findings of fact of the Court of Appeals are
conclusive upon this Court.19 Elsewise stated, the challenged decision can stand on its own merits
independently of Our decision in G.R. No. 96410. In any event, We reiterate here in Our
pronouncement in the latter case that Juan F. Nakpil & Sons vs. Court of Appeals20 is still good law as
far as the concurrent liability of an obligor in the case of force majeure is concerned. In
the Nakpil case, We held:

To exempt the obligor from liability under Article 1174 of the Civil Code, for a breach of
an obligation due to an "act of God," the following must concur: (a) the cause of the
breach of the obligation must be independent of the will of the debtor; (b) the event must
be either unforseeable or unavoidable; (c) the event must be such as to render it
impossible for the debtor to fulfill his obligation in a moral manner; and (d) the debtor
must be free from any participation in, or aggravation of the injury to the creditor.
(Vasquez v. Court of Appeals, 138 SCRA 553; Estrada v. Consolacion, 71 SCRA 423;
Austria v. Court of Appeals, 39 SCRA 527; Republic of the Phil. v. Luzon Stevedoring
Corp., 21 SCRA 279; Lasam v. Smith, 45 Phil. 657).

Thus, if upon the happening of a fortuitous event or an act of God, there concurs a
corresponding fraud, negligence, delay or violation or contravention in any manner of the
 tenor of the obligation as provided for in Article 1170 of the Civil Code, which results in
loss or damage, the obligor cannot escape liability.

The principle embodied in the act of God doctrine strictly requires that the act must be
one occasioned exclusively by the violence of nature and all human agencies are to be
excluded from creating or entering into the cause of the mischief. When the effect, the
cause of which is to be considered, is found to be in part the result of the participation of
man, whether it be from active intervention or neglect, or failure to act, the whole
occurrence is thereby humanized, as it were, and removed from the rules applicable to
the acts of God. (1 Corpus Juris, pp. 1174-1175).

Thus it has been held that when the negligence of a person concurs with an act of God
in producing a loss, such person is not exempt from liability by showing that the
immediate cause of the damage was the act of God. To be exempt from liability for loss
because of an act of God, he must be free from any previous negligence or misconduct
by which that loss or damage may have been occasioned. (Fish & Elective Co. v. Phil.
Motors, 55 Phil. 129; Tucker v. Milan, 49 O.G. 4379; Limpangco & Sons v. Yangco
Steamship Co., 34 Phil. 594, 604; Lasam v. Smith, 45 Phil. 657). 21

Accordingly, petitioners cannot be heard to invoke the act of God or force majeure to escape liability for
the loss or damage sustained by private respondents since they, the petitioners, were guilty of
negligence. The event then was not occasioned exclusively by an act of God or force majeure; a
human factor — negligence or imprudence — had intervened. The effect then of the force majeure in
question may be deemed to have, even if only partly, resulted from the participation of man. Thus, the
whole occurrence was thereby humanized, as it were, and removed from the laws applicable to acts of
God.

WHEREFORE, for want of merit, the instant petition is hereby DISMISSED and the Consolidated
Decision of the Court of Appeals in CA-G.R. CV Nos. 27290-93 is AFFIRMED, with costs against the
petitioners.

SO ORDERED.

Feliciano, Bidin, Romero and Melo, JJ., concur.

G.R. No. 101683 February 23, 1995

LBC AIR CARGO, INC. FERNANDO M. YU and JAIME TANO, petitioners,

vs.
HON. COURT OF APPEALS, Fourth Division, SHERWIN MONTEROLA y OYON-OYON,
represented by PATROCENIA GRONDIANO y MONTEROLA, and PATROCENIA
GRONDIANO y MONTEROLA, respondents.

VITUG, J.:
In this petition for review, the application of the doctrines of "proximate cause" and "last clear chance"
is, once again, being put to test. The petition questions the decision of the Court of Appeals, dated 18
July 1991, which has reversed that of the trial court.

The case arose from a vehicular collision which occurred at about 11:30 in the morning of 15
November 1987. Rogelio Monterola, a licensed driver, was traveling on board his Suzuki motorcycle
towards Mangagoy on the right lane along a dusty national road in Bislig, Surigao del Sur. At about the
same time, a cargo van of the LBC Air Cargo Incorporated, driven by defendant Jaime Tano, Jr., was
coming from the opposite direction on its way to the Bislig Airport. On board were passengers
Fernando Yu, Manager of LBC Air Cargo, and his son who was seated beside Tano. When Tano was
approaching the vicinity of the airport road entrance on his left, he saw two vehicles racing against
each other from the opposite direction. Tano stopped his vehicle and waited for the two racing vehicles
to pass by. The stirred cloud of dust made visibility extremely bad. Instead of waiting for the dust to
settled, Tano started to make a sharp left turn towards the airport road. When he was about to reach
the center of the right lane, the motorcycle driven by Monterola suddenly emerged from the dust and
smashed head-on against the right side of the LBC van. Monterola died from the severe injuries he
sustained.

A criminal case for "homicide thru reckless imprudence" was filed against Tano. A civil suit was likewise
instituted by the heirs of deceased Monterola against Tano, along with Fernando Yu and LBC Air Cargo
Incorporated, for the recovery of damages. The two cases were tried jointly by the Regional Trial Court,
Branch 29, of Surigao del Sur.

On 29 July 1990, the trial court dismissed both cases on the ground that the proximate cause of the
"accident" was the negligence of deceased Rogelio Monterola.

Private respondent appealed the dismissal of the civil case to the Court of Appeals. On 18 July 1991,
the appellate court reversed the court a quo. It held:

WHEREFORE, the judgment appealed from is REVERSED, and another one is hereby
rendered ordering the defendants Jaime Tano and LBC Air Cargo, Inc. to jointly and
severally pay the plaintiff Patrocinia Monterola the following amounts:

To SHERWIN MONTEROLA:

1. Indemnity for the death of

Rogelio Monterola P50,000.00

2. For Moral damages P20,000.00

To PATROCINIA GRONDIANO Y MONTEROLA:

3. Actual Damages P7,361.00

4. Hospitals & Burial Expenses 15,000.00

5. Attorneys' Fees and expenses

of Litigation 10,000.00
 Plus the costs.

Actual payment of the aforementioned amounts should however be reduced to twenty

(20%) percent.1

In the instant petition for review, petitioners contend that —

1. The Court of Appeals erred in finding that Jaime Tano, Jr. was negligent in the driving
of his vehicle and in failing to give a signal to approaching vehicles of his intention to
make a left turn.

2. The Court of Appeals erred in not finding that the proximate cause of the accident was
the victim's negligence in the driving of his motorcycle in a very fast speed and thus
hitting the petitioner's cargo van.2

The issues raised are thus essentially factual. The intrinsic merit of, as well as cogency in, the detailed
analyses made by the Court of Appeals in arriving at its findings is at once apparent. Said the appellate
court:

That visibility was poor when Jaime Tano made a left turn was admitted by the latter.

Q When these two vehicles passed by your parked vehicle, as you said,
there were clouds of dust, did I get you right?

A Yes sir, the road was dusty.

Q So much so that you could no longer see the vehicles from the opposite
direction following these vehicles?

A It is not clear, sir, so I even turned on my left signal and the headlight.

Q What do you mean by it was not clear, you could not see the incoming
vehicles?

A I could not see because of the cloud of dust.

Q And it was at this juncture, when you were to follow your theory, when
you started your LBC van again and swerved to the left leading to the
Bislig airport?

A I did not enter immediately the airport, I waited the dust to clear a little
before I drove.

xxx xxx xxx

Q In other words when you said that it was slightly clear, you would like to
tell the Honorable Court that you could only clearly see big vehicles . . .
but not small vehicles like a motorcycle?

A I could see clearly big vehicles but not small vehicles like a motorcycle.
 Q Like the motorcycle of Rogelio Monterola?

A Yes, sir. I could not see clearly. (Tano, tsn, April 18, 1989, pp. 26-30) (p.
15, Appellant's brief).

Tano should not have made a left turn under the conditions admitted by him. Under the
Land Transportation and Traffic Code, the driver of any vehicle upon a highway, before
starting, stopping or turning from a direct line, is called upon to first see that such
movement can be made in safety, and whenever the operation of any other vehicle
approaching may be affected by such movement, shall give a signal plainly visible to the
driver of such other vehicles of the intention to make such movement (Sec. 44, R.A.
4136, as amended). This means that before a driver turns from a direct line, in this case
to the left, the driver must first see to it that there are no approaching vehicles and, if
there are, to make the turn only if it can be made in safety, or at the very least give a
signal that is plainly visible to the driver of such other vehicle. Tano did neither in this
case, for he recklessly made a left turn even as visibility was still very poor, and thus
failed to see the approaching motorcycle and warn the latter, of his intention to make a
left turn. This is plain and simple negligence.

In thus making the left turn, he placed his vehicle directly at the path of the motorcycle
which, unaware of Tano's intention to make a left turn, smashed at Tano's vehicle. It was
Tano's negligence that created the risk or the condition of danger that set into operation
the event that led to the smashedup and untimely death of Rogelio Monterola.

Rogelio Monterola's motorcycle would not have hit the cargo van had Tano, in operating
it, not recklessly turned left when visibility was still poor, and instead observed the direct
line of the Land Transportation Code that before doing so, he should first see to it that
such movement can be made in safety, and that whenever any other vehicle
approaching may be affected by such movement, should give a signal plainly visible to
the driver of such other vehicle of the intention to make such movement.

That Rogelio Monterola was running fast despite poor visibility as evidenced by the
magnitude of the damage to the vehicles is no defense. His negligence would at most be
contributory (Article 2179, N.C.C.). Having negligently created the condition of danger,
defendants may not avoid liability by pointing to the negligence of the former.

xxx xxx xxx

Tano's proven negligence created a presumption of negligence on the part of his

employer, the LBC Air Cargo Corporation, in supervising its employees properly and
adequately (Phoenix Construction, Inc. vs. Intermediate Appellate Court, supra), which
may only be destroyed by proof of due diligence in the selection and supervision of his
employees to prevent the damage (Article 2180, N.C.C.). No such defense was
interposed by defendants in their answer.

We, however, fail to see Fernando Yu's liability as Manager of LBC-Mangagoy Branch
Office, there being no employer-employee relationship between him and Jaime Tano
who is a driver of the LBC Air Cargo Inc. It was held in Philippine Rabbit Bus Lines
 Inc. et al. vs. Phil. American Forwarders, Inc., 63 SCRA 231, that the term "Manager" in
Article 2180 is used in the sense of "employer." Hence, no tortuous or quasi-delictual
liability can be fastened on Fernando Yu as branch manager of LBC Air Cargo Inc.

Now for the amount of damages. Aside from the indemnity for death which has been
pegged at P50,000.00 (Resolution En Banc, August 30, 1990, cited in People vs. Sazon,
189 SCRA 700), the evidence disclose that as a result of the accident, Rogelio
Monterola's motorcycle was damaged, the repair cost of which amounted to P7,361.00
(Exh. E-1), for hospitalization, wake and burial expenses, plaintiff spent P15,000.00.
There is likewise no question that by reason of Rogelio Monterola's untimely death, his
only child 14 years old Sherwin Monterola, suffered mental anguish, fright, serious
anxiety, wounded feelings and moral shock that entitles him to moral damages which we
hereby fix at P20,000.00. Because of defendants' refusal to indemnify the plaintiff for his
father's death, the latter was compelled to litigate and engage the services of counsel.
He is therefore entitled to an additional amount of P10,000.00 for attorney's fees and
expenses of litigation.

Considering, however, the contributory negligence of Rogelio Monterola in driving at a

fast clip despite the fact that the road was dusty, we reduce the aggregate amount of
damages to which the plaintiff is entitled by twenty per cent (Phoenix Construction Inc.
vs. Intermediate Appellate Court, Supra). 3

From every indication, the proximate cause of the accident was the negligence of Tano who, despite
extremely poor visibility, hastily executed a left turn (towards the Bislig airport road entrance) without
first waiting for the dust to settle. It was this negligent act of Tano, which had placed his vehicle (LBC
van) directly on the path of the motorcycle coming from the opposite direction, that almost
instantaneously caused the collision to occur. Simple prudence required him not to attempt to cross the
other lane until after it would have been safe from and clear of any oncoming vehicle.

Petitioners poorly invoke the doctrine of "last clear chance" (also referred to, at times, as "supervening
negligence" or as "discovered peril"). The doctrine, in essence, is to the effect that where both parties
are negligent, but the negligent act of one is appreciably later in time than that of the other, or when it
is impossible to determine whose fault or negligence should be attributed to the incident, the one who
had the last clear opportunity to avoid the impending harm and failed to do so is chargeable with the
consequences thereof (see Picart vs. Smith, 37 Phil. 809). Stated differently, the rule would also mean
that an antecedent negligence of a person does not preclude the recovery of damages for supervening
negligence of, or bar a defense against the liability sought by, another if the latter, who had the last fair
chance, could have avoided the impending harm by the exercise of due diligence (Pantranco North
Express, Inc. vs. Baesa, 179 SCRA 384; Glan People's Lumber and Hardware vs. Intermediate
Appellate Court, 173 SCRA 464).

In the case at bench, the victim was traveling along the lane where he was rightly supposed to be. The
incident occurred in an instant. No appreciable time had elapsed, from the moment Tano swerved to
his left to the actual impact; that could have afforded the victim a last clear opportunity to avoid the
collision.

It is true however, that the deceased was not all that free from negligence in evidently speeding too
closely behind the vehicle he was following. We, therefore, agree with the appellate court that there
indeed was contributory negligence on the victim's part that could warrant a mitigation of petitioners
liability for damages.

WHEREFORE, the appealed decision is AFFIRMED. Costs against petitioners.

SO ORDERED.

Feliciano, Romero, Melo and Francisco, JJ., concur.

G.R. No. 45985 May 18, 1990

CHINA AIR LINES, LTD., petitioner,

vs.
COURT OF APPEALS, JOSE PAGSIBIGAN, PHILIPPINE AIR LINES, INC. and ROBERTO
ESPIRITU, respondents.

G.R. No. 46036 May 18, 1990

PHILIPPINE AIR LINES, INC. and ROBERTO ESPIRITU, petitioners,

vs.
COURT OF APPEALS, JOSE PAGSIBIGAN and CHINA AIR LINES, LTD., respondents.

Balgos & Perez Law Offices for petitioner China Air Lines, Ltd.

Siguion Reyna, Montecillo & Ongsiako for petitioners in G.R. No. 46036.

Syquia Law Offices for Jose Pagsibigan.

REGALADO, J.:

These consolidated petitions seek the review of the decision of respondent court in CA-G.R. No.
53023-R entitled "Jose E. Pagsibigan, Plaintiff-Appellant, vs. Philippine Air Lines, Inc. and Roberto
Espiritu, Defendants-Appellants; China Air Lines, Ltd., Defendant-Appellee," 1 the dispositive portion of
which declares:

WHEREFORE, except for a modification of the judgment in the sense that the award of
P20,000.00 in favor of the plaintiff shall be in the concept of nominal damages instead of
exemplary damages, and that defendant China Air Lines, Ltd. shall likewise be liable with
its two co-defendants in a joint and solidary capacity, the judgment appealed from is
hereby affirmed in all other respects, without costs. 2

The challenged decision of respondent court contains a synthesis of the facts that spawned these
cases and the judgment of the court a quo which it affirmed with modifications, thus:

On June 4, 1968, plaintiff Jose E. Pagsibigan, then Vice-President and General Manager
of Rentokil (Phils.) Inc., a local firm dealing in insecticides, pesticides and related
services appurtenant thereto, purchased a plane ticket for a Manila-Taipei-Hongkong-
Manila flight from the Transaire Travel Agency. The said agency, through its Cecille
Baron, contacted the Manila Hotel branch of defendant Philippine Air Lines which at that
time was a sales and ticketing agent of defendant China Air lines. On June 6, 1968, PAL,
through its ticketing clerk defendant Roberto Espiritu, cut and issued PAL Ticket No. 01
7991 for a Manila-Taipei-Hongkong-Manila flight. According to the plane ticket, the
plaintiff was booked on CAL CI Flight No. 812 to depart from Manila for Taipei on June
10, 1968 at 17:20 hours (5:20 p.m.), Exhibit A.

On June 10, 1968, one hour before the scheduled time of the flight as stated in his ticket,
the plaintiff arrived at the airport to check in for CI Flight No. 812. Upon arriving at the
airport, the plaintiff was informed that the plane he was supposed to take for Taipei had
left at 10:20 in the morning of that day. The PAL employees at the airport made
appropriate arrangements for the plaintiff to take PAL's flight to Taipei the following day,
June 11, 1968. The plaintiff took said flight and arrived in Taipei around noontime of the
said date.

On July 8, 1968, the plaintiff, through counsel, made formal demand on defendant PAL,
for moral damages in not less than P125,000.00 for what the plaintiff allegedly suffered
as a result of his failure to take the flight as stated in his plane ticket. (Exhibit E) After a
series of negotiations among the plaintiff, PAL and CAL failed to reach an amicable
settlement, the plaintiff instituted this action in the Court of First Instance of Rizal on
September 22, 1969. In his complaint, plaintiff prays for the recovery of P125,000.00 as
moral damages and P25,000.00 for and as attorney's fees. The moral damages
allegedly arose from the gross negligence of defendant Roberto Espiritu in stating on the
plane ticket that the time of departure was 17:20 hours, instead of 10:20 hours which
was the correct time of departure in the revised summer schedule of CAL. Plaintiff claims
that by reason of his failure to take the plane, he suffered besmirched reputation,
embarrassment, mental anguish, wounded feelings and sleepless nights, inasmuch as
when he went to the airport, he was accompanied by his business associates, close
friends and relatives. He further averred that his trip to Taipei was for the purpose of
conferring with a certain Peng Siong Lim, President of the Union Taiwan Chemical
Corporation, scheduled at 9:00 a.m. on June 11, 1968.

Defendant Philippine Air Lines alleged in its answer that the departure time indicated by
Espiritu in the ticket was furnished and confirmed by the reservation office of defendant
China Air Lines. It further averred that CAL had not informed PAL's Manila Hotel Branch
of the revised schedule of its flight, nor provided it with revised timetable; that when the
travel agency sought to purchase the ticket for the plaintiff on CAL CI Flight No. 812 for
June 10, 1968, Espiritu who was then the ticketing clerk on duty, checked with the
reservation office of CAL on the availability of space, the date and the time of said flight;
that CAL's Dory Chan informed Espiritu that the departure time of Flight No. 812 on June
10, 1968 was at 5:20 in the afternoon of said date. PAL asserted a cross-claim against
CAL for attorney's fees and for reimbursement of whatever amount the court may
adjudge PAL to be liable to the plaintiff. Defendant Espiritu adopted the defenses of his
co-defendant PAL.

Defendant China Air Lines, for its part, disclaims liability for the negligence and
incompetence of the employees of PAL. It avers that it had revised its schedule since
April 1, 1968, the same to be effective on April 20, 1968, and the said revised schedule
 was adopted only after proper petition with and approval of the Civil Aeronautics Board
of which all airlines, including defendant PAL, were notified; that both printed copies of
the international timetable and of the mimeographed notices of the official schedule and
flight departure schedules were distributed to all its sales agents, including PAL, that
after the effectivity of the new time schedules, PAL's Manila Hotel office had been
issuing and selling tickets based on the revised time schedule; and that, assuming that
the plaintiff is entitled to recover damages, the liability is on PAL and not on CAL. A
cross-claim was likewise asserted by CAL against its co-defendant PAL.

After due trial, the Court a quo rendered judgment laying the blame for the erroneous
entry in the ticket as to the time of departure to defendant Roberto Espiritu, ticketing
agent of defendant PAL, and that no employee of CAL contributed to such erroneous
entry. It was further ruled that the plaintiff had no reason to claim moral damages but
may be entitled to recover exemplary damages. The dispositive portion of the decision
makes the following adjudication:

WHEREFORE, premises considered, judgment is hereby rendered

sentencing the defendants Philippine Air Lines, Inc. and Roberto Espiritu,
to pay to plaintiff Jose Pagsibigan jointly and severally, by way of
exemplary damages, the sum of Twenty Thousand Pesos (P20,000.00)
plus Two Thousand Pesos (P2,000.00) as reimbursement for attorney's
fees and the costs.

The complaint is dismissed with respect to the defendant China Air Lines,
Ltd. The cross-claim filed by defendant PAL and Espiritu against defendant
CAL as well as the cross-claim filed by the defendant CAL against
defendant PAL and Espiritu are also hereby dismissed. 3

From said decision of the court below, all the parties, except China Air Lines, Ltd. appealed to
respondent court which, however, sustained the ruling of the trial court denying Pagsibigan's claim for
moral damages. It concluded that Roberto Espiritu did not act with malice or in bad faith in making a
wrong entry of the time of departure on the ticket, and that the mistake committed by Espiritu appears
to be an honest one done in good faith.

Respondent court also ruled out the claim for exemplary damages for lack of legal basis. Nonetheless,
as earlier noted, it awarded Pagsibigan P20,000.00 as nominal damages, under Article 2221 of the
Civil Code, for the vindication of a legal wrong committed against him. As regards the liability of the
parties, respondent court held:

There can be little question as to the liability of PAL and Espiritu for the damage caused
to the plaintiff due to the erroneous entry in the plane ticket made by the latter. They
seek to justify the erroneous statement as to the time of departure on the ground that
such was the time given by Dory Chan to Espiritu when the latter called up for the
reservation in favor of plaintiff. Aside from the fact that Dory Chan had vigorously
disclaimed having given such information to Espiritu, We are convinced that, as the trial
court had found, CAL had no share in the error committed by Espiritu in indicating the
time of departure of Flight No. 812. PAL had shown through the testimony of Carmen
Ibazeta Gallaga, ticket representative of PAL at the Manila Hotel Office, that they
 received circulars and timetables of airlines in the PAL main office. It further appears that
on two occasions, defendant PAL cut and issued tickets for CAL based on the new
schedule even before June 10, 1968. As a matter of fact, the other entries of time
departures in the ticket issued to the plaintiff are in accordance with the revised
schedule, and that the only error therein was with respect to the departure from Manila
on June 10, 1968.

However, in proving that the fault lied with Espiritu, defendant CAL derives no solace nor
gains an advantage. It may not claim exemption from liability by reason thereof. Espiritu
was an employee of PAL and whatever negligence was committed by him is attributable
to PAL. It is an admitted fact that PAL is an authorized agent of CAL. In this relationship,
the responsibility of defendant PAL for the tortious act of its agent or representative is
inescapable. . . .

xxx xxx xxx

A similar principle is recognized in our Civil Code in its Art. 2180 . . . . Unlike in the
doctrine of respondeat superior, however, the Civil Code permits the employer to escape
this liability upon proof of having observed all the diligence of a good father of a family to
prevent the damage. We find the evidence of defendant CAL to be insufficient to
overcome the presumption of negligence on its part for the act done by defendant
Roberto Espiritu. (Emphasis supplied)

The liability for the damage sustained by the plaintiff should, therefore, be borne by all of
the defendants in a joint and solidary capacity (Art. 2194). The liability of an employer
under Art. 2180 is primary and direct. . . .

xxx xxx xxx

It appearing that defendant CAL, as employer or principal, did not contribute to the
negligence committed by defendants PAL and Roberto Espiritu, its liability to the plaintiff
could be passed on to said defendants. Defendant CAL, however, did not take an appeal
and did not, therefore, take exception to the dismissal of its cross-claim against
defendants PAL and Espiritu. This serves as an obstacle for a rendition of judgment
favorable to CAL on its said counterclaim. 4

In its petition for review on certiorari in G.R. No. L-45985, petitioner China Air Lines, Ltd. (CAL) relied
on the following grounds:

1. A principal cannot be held liable, much less solidarily, for the negligence of the sub-
agent, where the former never participated in, ratified or authorized the latter's act or
omission.

2. Dismissal of the cross-claim of petitioner against the private respondents Philippine Air
Lines, Inc. and Roberto Espiritu will not prevent the release of the petitioner from liability
to the private respondent Pagsibigan.

3. The award of damages was unwarranted both legally and factually. 5

On their part, petitioners Philippine Air Lines, Inc. (PAL) and Roberto Espiritu made the following
submissions in G.R. No. L-46036, to wit:

1. The respondent Court of Appeals erred in not holding that respondent China Air Lines,
Ltd., being the principal, is solely liable to respondent Pagsibigan.

2. The respondent Court of Appeals erred in awarding respondent Pagsibigan the sum of
P20,000.00 as nominal damages. 6

In G.R. No. L-45985, respondent Pagsibigan contends, by way of refutation, that CAL's liability is
based on breach of contract of transportation which was the proximate result of the negligence and/or
error committed by PAL and Espiritu; that even assuming that CAL has no share in the negligence of
PAL and Espiritu, the liability of CAL does not cease upon proof that it exercised all the diligence of a
good father of a family in the selection and supervision of its employees. Traversing such contentions,
CAL argues that it can not be made liable under Article 2180 of the Civil Code because of the absence
of employer-employee relationship between it and PAL.

On the other hand, in G.R. No. L-46036, respondent Pagsibigan claims that PAL is liable under Article
1909 of the said code which holds an agent responsible not only for fraud but also for negligence
which shall be judged with more or less rigor by the courts, according to whether the agency was or
was not for a compensation. PAL, however, maintains that for lack of privity with Pagsibigan, the suit
for breach of contract should have been directed against CAL.

What surfaces as a procedural maneuver taken by respondent Pagsibigan in the course of the
proceedings in these cases has confused the real issues in the controversy subject of both petitions
before us.

Respondent Pagsibigan has opted to seek redress by pursuing two remedies at the same time, that is,
to enforce the civil liability of CAL for breach of contract and, likewise, to recover from PAL and Espiritu
for tort or culpa aquiliana. What he has overlooked is the proscription against double recovery under
Article 2177 of the Civil Code which, while not preventing recourse to any appropriate remedy,
prevents double relief for a single wrong.

To avoid inequitable effects under such confluence of remedies, the true nature of the action instituted
by respondent Pagsibigan must be determined. A careful perusal of the complaint of respondent
Pagsibigan will readily disclose that the allegations thereof clearly and unmistakably make out a case
for a quasi-delict in this wise:

4. That at all pertinent times particularly in June of 1968, defendant China Air Lines Ltd.
has been operating regular scheduled flights to and from Manila, and has offered
accommodations thereon through, among others, defendant PAL as its authorized sales
agent and/or ticketing agent, such that China Airlines Ltd. is here impleaded as being the
principal of defendant PAL;

5. That at all pertinent times, particularly in June of 1968, defendant Roberto Espiritu has
been in the employ of defendant PAL at its sales counter at the PAL Manila Hotel branch
office and is here impleaded as defendant as being the proximate malfeasor in this
cause of action;
 xxx xxx xxx

12. That plaintiff missed the initial Manila-Taipei leg (CI Flight 812) on June 10, 1968, as
set forth in his ticket (Annex "A") solely and exclusively by reason of gross incompetence
and inexcusable negligence amounting to bad faith of defendant PAL — acting, through
its sales representative, the defendant Roberto Espiritu, of its Manila Hotel branch office
— in the discharge of its duties as sales agent and/or ticketing agent for defendant China
Airlines Ltd. as principal.

13. That as a direct result of culpable incompetence and negligence of defendant

Roberto Espiritu as sales representative of defendant PAL, plaintiff was unable to attend
to previously scheduled business commitments in Taipei . . . resulting in direct and
indirect prejudice to plaintiff that has yet to be fully assessed; (Emphasis supplied) 7

xxx xxx xxx

Had the intention of respondent Pagsibigan been to maintain an action based on breach of contract of
carriage, he could have sued CAL alone considering that PAL is not a real party to the contract.
Moreover, in cases of such nature, the aggrieved party does not have to prove that the common carrier
was at fault or was negligent. All he has to prove is the existence of the contract and the fact of its non-
performance by the carrier. 8

The records disclose that the trial court delved much into the issues of who was at fault, and its
decision is primarily anchored on its factual findings regarding the civil liability arising from culpa
aquiliana of the erring party, to this effect:

Plaintiff said that the erroneous entry in his ticket which made it appear that his CAL
flight of June 10, 1968 was to be at 5:20 in the afternoon was due to the fault or
negligence of PAL's Roberto Espiritu, a co-defendant herein, as well as the employees of
the defendant CAL. In making CAL co-responsible, plaintiff appears to rely on the
doctrine that the principal is responsible for the act of an agent done within the scope of
the agency.

There is no proof extant that any of the employees of PAL had contributed to the
erroneous entry in plaintiffs PAL ticket for Taipei which placed his time of departure to
5:20 o'clock in the afternoon of June 10, 1968. Only defendant Roberto Espiritu appears
to be solely and exclusively responsible for such error and therefor the conclusion
becomes inevitable that CAL must be absolved from any blame because defendant
Roberto Espiritu who committed the error is not an employee or agent of the defendant
CAL. 9

It, therefore, becomes evident that respondent Pagsibigan, having sensed that he can not hold CAL
liable on a quasi-delict, decided on appeal to instead make a sinistral detour, so to speak, by claiming
that his action against CAL is based on a breach of contract of carriage.

We can not permit respondent Pagsibigan to change his theory at this stage; it would be unfair to the
adverse party who would have no more opportunity to present further evidence, material to the new
theory, which it could have done had it been aware earlier of the new theory at the time of the hearing
before the trial court. 10
There is indeed no basis whatsoever to hold CAL liable on a quasi-delict or culpa aquiliana. As
hereinbefore stated, the court a quo absolved CAL of any liability for fault or negligence. This finding
was shared by respondent court when it concluded that defendant CAL did not contribute to the
negligence committed by therein defendants-appellants PAL and Roberto Espiritu.

Respondent Pagsibigan insists that CAL was barred from proving that it observed due diligence in the
selection and supervision of its employees. This argument is obviously misplaced. CAL is not the
employer of PAL or Espiritu. In Duavit vs. The Hon. Court of Appeals, et al., 11 we have stressed the
need of first establishing the existence of an employer-employee relationship before an employer may
be vicariously liable under Article 2180 of the Civil Code.

With respect to PAL and Espiritu, they disclaim any liability on the theory that the former is merely an
agent of CAL and that the suit should have been directed against CAL alone. There is no question that
the contractual relation between both airlines is one of agency. Suffice it to say, however, that in an
action premised on the employee's negligence, whereby respondent Pagsibigan seeks recovery for the
resulting damages from both PAL and Espiritu without qualification, what is sought to be imposed is the
direct and primary liability of PAL as an employer under said Article 2180.

When an injury is caused by the negligence of an employee, there instantly arises a presumption of
law that there was negligence on the part of the employer either in the selection of the employee or in
the supervision over him after such selection. The presumption, however, may be rebutted by a clear
showing on the part of the employer that it has exercised the care and diligence of a good father of a
family in the selection and supervision of his employee. 12

Hence, to escape solidary liability for the quasi-delict committed by Espiritu, it is imperative that PAL
must adduce sufficient proof that it exercised such degree of care. PAL failed to overcome the
presumption. As found by respondent court, CAL had revised its schedule of flights since April 1, 1968;
that after the Civil Aeronautics Board had approved the revised schedule of flights, PAL was duly
informed thereof and, in fact, PAL's Manila Hotel branch office had been issuing and selling tickets
based on the revised time schedule before June 10, 1968.

PAL's main defense is that it is only an agent. As a general proposition, an agent who duly acts as
such is not personally liable to third persons. However, there are admitted exceptions, as in this case
where the agent is being sued for damages arising from a tort committed by his employee.

The respondent court found that the mistake committed by Espiritu was done in good faith. While there
is no evidence that he acted with malice, we can not entirely condone his actuations. As an employee
of PAL, the nature of his functions requires him to observe for the protection of the interests of another
person that degree of care, precaution and vigilance which the circumstances justly demand. He
committed a clear neglect of duty.

Ergo, for his negligence, Espiritu is primarily liable to respondent Pagsibigan under Article 2176 of the
Civil Code. For the failure of PAL to rebut the legal presumption of negligence in the selection and
supervision of its employee, it is also primarily liable under Article 2180 of the same code which
explicitly provides that 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.
Under the aforesaid provision, all that is required is that the employee, by his negligence, committed
a quasi-delictwhich caused damage to another, and this suffices to hold the employer primarily and
solidarity responsible for the tortious act of the employee. PAL, however, can demand from Espiritu
reimbursement of the amount which it will have to pay the offended party's claim. 13

On the issue of damages, we agree, except as to the amount, that nominal damages may be awarded
to respondent Pagsibigan to vindicate the legal wrong committed against him. It appearing that the
wrong committed was immediately rectified when PAL promptly booked him for the next morning's
flight to Taipei where he arrived before noon of June 11, 1968 and was able to attend his scheduled
conference, and considering the concept and purpose of nominal damages, the award of P20,000.00
must accordingly be reduced to an amount equal or at least commensurate to the injury sustained.

WHEREFORE, the decision of respondent Court of Appeals is MODIFIED accordingly. China Air Lines,
Ltd. is hereby absolved from liability. Philippine Air Lines, Inc. and Roberto Espiritu are declared jointly
and severally liable to pay the sum of P10,000.00 by way of nominal damages, without prejudice to the
right of Philippine Air Lines, Inc. to recover from Roberto Espiritu reimbursement of the damages that it
may pay respondent Jose Pagsibigan.

SO ORDERED.

Melencio-Herrera, Paras, Padilla and Sarmiento, JJ., concur.

G. R. No. 91378 June 9, 1992

FIRST MALAYAN LEASING AND FINANCE CORPORATION, petitioner,

vs.
THE HON. COURT OF APPEALS, CRISOSTOMO B. VITUG and ESTATE OF VICENTE
TRINIDAD, Represented by Widow GLORIA D. TRINIDAD, respondents.

GRIÑO-AQUINO. J .:

This case brings to the fore the importance of motor vehicle registration in determining who should be
liable for the death or injuries suffered by passengers or third persons as a consequence of the
operation of a motor vehicle.

On June 26, 1984, Crisostomo B. Vitug filed Civil Case No. 84-25186 in the Regional Trial Court of
Manila. Branch XLIII, against the defendant. First Malayan Leasing and Finance Corporation (FMLFC
for short), to recover damages for physical injuries, loss of personal effects, and the wreck of his car as
a result of a three-vehicle collision on December 14, 1983. involving his car, another car, and an Isuzu
cargo truck registered in the name of FMLFC and driven by one Crispin Sicat.

The evidence shows that while Vitug's car was at a full stop at the intersection of New York Street and
Epifanio delos Santos Avenue (EDSA) in Cubao, Quezon City, northward-bound, the on-coming Isuzu
cargo truck bumped, a Ford Granada car behind him with such force that the Ford car was thrown on
top of Vitug's car crushing its roof. The cargo truck thereafter struck Vitug's car in the rear causing the
gas tank to explode and setting the car ablaze.
Stunned by the impact. Vitug was fortunately extricated from his car by solicitous bystanders before the
vehicle exploded. However, two of his passengers were burned to death. Vitug's car, valued at
P70,000, was a total loss.

When he regained consciousness in the hospital, Vitug discovered that he had lost various personal
articles valued at P48,950, namely a necklace with a diamond pendant, a GP watch, a pair of Christian
Dior eyeglasses. a gold Cross pen and a pair of Bally shoes. Vitug also suffered injuries producing
recurring pains in his neck and back. Upon his physician's advice, he received further medical
treatment in the United States which cost him US$2,373.64 for his first trip, and US$5,596.64 for the
second.

At the time of the accident on December 14, 1983, the Isuzu cargo truck was registered in the name of
the First Malayan Leasing and Finance Corporation (FMLFC).

However, FMLFC denied any liability, alleging that it was not the owner of the truck. neither the
employer of the driver Crispin Sicat, because it had sold the truck to Vicente Trinidad on September
24. 1980, after the latter had paid all his monthly amortizations under the financing lease agreement
between FMLFC and Trinidad.

On FMLFC's motion, the lower court granted FMLFC's leave to file a third-party complaint against
Trinidad and admitted the third-party complaint filed therewith.

Answering the third-party complaint the Estate of Vicente Trinidad admitted that the truck was operated
by the deceased during his lifetime. Nevertheless it raised the defense that the estate of Vicente
Trinidad was no longer existing because the same had long been settled and partitioned extra judicially
by his heirs.

On August 25, 1986, the trial court rendered a decision sentencing FMLFC to pay Vitug the sum of
P133,950 with interest at the legal rate from the filing of the complaint until fully paid, plus the sum of
P10,000 as attorneys fees and costs.

FMLFC appealed in due time to the Court of Appeals which rendered a decision on November 27,
1989 modifying the appealed judgment by ordering the third-party defendant-appellee (Estate of
Vicente Trinidad) to indemnify the appellant, FMLFC, for whatever amount the latter may pay Vitug
under the judgment. In all other respects, the trial court's decision was affirmed.

FMLFC has filed this petition for review on certiorari praying that the decision of the appellate court be
reversed and set aside.

On February 14, 1990, the Court dismissed the petition for insufficiency in form and substance, having
failed to comply with the Rules of Court and Circular 1-88 requiring the submission of (1) proof of
service of the petition on the adverse party, and (2) a certified true copy of the decision of the Court of
Appeals. Moreover, the petition was filed late on February 1, 1990, the due date being January 27,
1990.

The petitioner filed a motion for reconsideration. On April 16, 1990. we granted the same and
reinstated the petition. Without giving it due course, we required the respondents to comment.
After deliberating on the petition, the comments of the private respondents and the petitioner's reply
thereto, we find the petition to be bereft of merit, hence, resolved to deny it.

In the first place, the factual finding of the trial court and the Court of Appeals that the Isuzu vehicle
which figured in the mishap was still registered in the name of FMLFC at the time of the accident is not
reviewable by this Court in a petition for certiorari under Rule 45 of Rules of Court.

This Court has consistently ruled that regardless of who the actual owner of a motor vehicle might be,
the registered owner is the operator of the same with respect to the public and third persons, and as
such, directly and primarily responsible for the consequences of its operation. In contemplation of law,
the owner/operator of record is the employer of the driver, the actual operator and employer being
considered merely as his agent (MYC-Agro-Industrial Corporation vs. Vda. de Caldo, 132 SCRA
10. citing Vargas vs. Langcay. 6 SCRA 174; Tamayo vs. Aquino. 105 Phil. 949).

We believe that it is immaterial whether or not the driver was actually employed by the
operator of record. It is even not necessary to prove who the actual owner of the vehicle
and the employer of the driver is. Granting that, in this case, the father of the driver is the
actual owner and that he is the actual employer, following the well-settled principle that
the operator of record continues to be the operator of the vehicle in contemplation of law,
as regards the public and third persons, and as such is responsible for the
consequences incident to its operation we must hold and consider such owner-operator
of record as the employer, in contemplation of law, of the driver. And, to give effect to this
policy of law as enunciated in the above cited decisions of this Court, we must now
extend the same and consider the actual operator and employer as the agent of the
operator of record." (Vargas vs. Langcay, 6 SCRA 178; citing Montoya vs. Ignacio, G.R.
No. L-5868, Dec. 29, 1953; Timbol vs. Osias, G.R. No. L-7547, April 30, 1955; Vda. de
Medina vs. Cresencia, G.R. No. L-8194, July 11, 1956; Necesito vs. Paras, G.R. No.
L10605, June 30, 1955.)

. . . Were the registered owner allowed to evade responsibility by proving who the
supposed transferee or owner is, it would be easy for him by collusion with others or
otherwise, to escape said responsibility and transfer the same to an indefinite person, or
to one who possesses no property with which to respond financially for the damage or
injury done (Erezo vs. Jepte, 102 Phil 103.)

. . . The registered owner or operator of record is the one liable for damages caused by a
vehicle regardless of any alleged sale or lease made thereon." (MYC-Agro- Industrial
Corp. vs. Vda. de Caldo, 132 SCRA 11.)

In order for a transfer of ownership of a motor vehicle to be valid against third persons. it must be
recorded in the Land Transportation Office. For, although valid between the parties, the sale cannot
affect third persons who rely on the public registration of the motor vehicle as conclusive evidence of
ownership. In law, FMLFC was the owner and operator of the Izusu cargo truck, hence, fully liable to
third parties injured by its operation due to the fault or negligence of the driver thereof.

WHEREFORE, the petition for review is DENIED for lack of merit. Costs against the petitioner.

SO ORDERED.
Cruz, Medialdea and Bellosillo, JJ ., concur.

G.R. No. L-30212 September 30, 1987

BIENVENIDO GELISAN, petitioner,

vs.
BENITO ALDAY, respondent.

PADILLA, J.:

Review on certiorari of the judgment * rendered by the Court of Appeals, dated 11 October 1968, as
amended by its resolution, dated 11 February 1969, in CA-G.R. No. 32670-R, entitled: "Benito Alday,
plaintiff-appellant, vs. Roberto Espiritu and Bienvenido Gelisan, defendants-appellees," which ordered
the herein petitioner Bienvenido Gelisan to pay, jointly and severally, with Roberto Espiritu, the
respondent Benito Alday the amount of P5,397.30, with. legal interest thereon from the filing of the
complaint, and the costs of suit; and for the said Roberto Espiritu to pay or refund the petitioner
Bienvenido Gelisan whatever amount the latter may have paid to the respondent Benito Alday by virtue
of the judgment.

The uncontroverted facts of the case are, as follows:

Defendant Bienvenido Gelisan is the owner of a freight truck bearing plate No. TH-2377.
On January 31, 1962, defendant Bienvenido Gelisan and Roberto Espiritu entered into a
contract marked Exhibit 3-Gelisan under which Espiritu hired the same freight truck of
Gelisan for the purpose of hauling rice, sugar, flour and fertilizer at an agreed price of
P18.00 per trip within the limits of the City of Manila provided the loads shall not exceed
200 sacks. It is also agreed that Espiritu shall bear and pay all losses and damages
attending the carriage of the goods to be hauled by him. The truck was taken by a driver
of Roberto Espiritu on February 1, 1962. Plaintiff Benito Alday, a trucking operator, and
who owns about 15 freight trucks, had known the defendant Roberto Espiritu since 1948
as a truck operator. Plaintiff had a contract to haul the fertilizers of the Atlas Fertilizer
Corporation from Pier 4, North Harbor, to its Warehouse in Mandaluyong. Alday met
Espiritu at the gate of Pier 4 and the latter offered the use of his truck with the driver and
helper at 9 centavos per bag of fertilizer. The offer was accepted by plaintiff Alday and he
instructed his checker Celso Henson to let Roberto Espiritu haul the fertilizer. Espiritu
made two hauls of 200 bags of fertilizer per trip. The fertilizer was delivered to the driver
and helper of Espiritu with the necessary way bill receipts, Exhibits A and B. Espiritu,
however, did not deliver the fertilizer to the Atlas Fertolizer bodega at Mandaluyong. The
signatures appearing in the way bill receipts Exhibits A and B of the Alday Transportation
admittedly not the signature of any representative or employee of the Atlas Fertilizer
Corporation. Roberto Espiritu could not be found, and plaintiff reported the loss to the
Manila Police Department. Roberto Espiritu was later arrested and booked for theft. ...

Subsequently, plaintiff Aiday saw the truck in question on Sto. Cristo St. and he notified
the Manila Police Department, and it was impounded by the police. It was claimed by
Bienvenido Gelisan from the Police Department after he had been notified by his
 employees that the truck had been impounded by the police; but as he could not
produce at the time the registration papers, the police would not release the truck to
Gelisan. As a result of the impounding of the truck according to Gelisan, ... and that for
the release of the truck he paid the premium of P300 to the surety company. 1

Benito Alday was compelled to pay the value of the 400 bags of fertilizer, in the amount of P5,397.33,
to Atlas Fertilizer Corporation so that, on 12 February 1962, he (Alday) filed a complaint against
Roberto Espiritu and Bienvenido Gelisan with the Court of First Instance of Manila, docketed therein as
Civil Case No. 49603, for the recovery of damages suffered by him thru the criminal acts committed by
the defendants.

The defendant, Roberto Espiritu failed to file an answer and was, accordingly, declared in default.

The defendant, Bienvenido Gelisan, upon the other hand, disowned responsibility. He claimed that he
had no contractual relations with the plaintiff Benito Alday as regards the hauling and/or delivery of the
400 bags of fertilizer mentioned in the complaint; that the alleged misappropriation or nondelivery by
defendant Roberto Espiritu of plaintiff's 400 bags of fertilizer, was entirely beyond his (Gelisan's)
control and knowledge, and which fact became known to him, for the first time, on 8 February 1962
when his freight truck, with plate No. TH-2377, was impounded by the Manila Police Department, at the
instance of the plaintiff; and that in his written contract of hire with Roberto Espiritu, it was expressly
provided that the latter will bear and pay all loss and damages attending the carriage of goods to be
hauled by said Roberto Espiritu.

After trial, the Court of First Instance of Manila ruled that Roberto Espiritu alone was liable to Benito
Alday, since Bienvenido Gelisan was not privy to the contract between Espiritu and Alday. The
dispositive portion of the decision reads, as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the
defendant Roberto Espiritu for the sum of P6,000 with interest at the legal rate from the
time of the filing of the complaint, and the costs of the suit. Plantiff's complaint is
dismissed with respect to defendant Bienvenido Gelisan, and judgment is rendered in
favor of defendant Bienvenido Gelisan and against the plaintiff for the sum of P350. 2

On appeal, however, the Court of Appeals, citing the case of Montoya vs. Ignacio, 3 found that
Bienvenido Gelisan is likewise liable for being the registered owner of the truck; and that the lease
contract, executed by and between Bienvenido Gelisan and Roberto Espiritu, is not binding upon
Benito Alday for not having been previously approved by the Public Service Commission. Accordingly,
it sentenced Bienvenido Gelisan to pay, jointly and severally with Roberto Espiritu, Benito Alday the
amount of P5,397.30, with legal interest thereon from the filing of the complaint; and to pay the costs.
Roberto Espiritu, in turn, was ordered to pay or refund Bienvenido Gelisan whatever amount the latter
may have paid to Benito Alday by virtue of the judgment. 4

Hence, the present recourse by Bienvenido Gelisan.

The petition is without merit. The judgment rendered by the Court of Appeals, which is sought to be
reviewed, is in accord with the facts and the law on the case and we find no cogent reason to disturb
the same. The Court has invariably held in several decisions that the registered owner of a public
service vehicle is responsible for damages that may arise from consequences incident to its operation
or that may be caused to any of the passengers therein. 5 The claim of the petitioner that he is not
hable in view of the lease contract executed by and between him and Roberto Espiritu which exempts
him from liability to third persons, cannot be sustained because it appears that the lease contract,
adverted to, had not been approved by the Public Service Commission. It is settled in our
jurisprudence that if the property covered by a franchise is transferred or leased to another without
obtaining the requisite approval, the transfer is not binding upon the public and third persons. 6

We also find no merit in the petitioner's argument that the rule requiring the previous approval by the
Public Service Commission, of the transfer or lease of the motor vehicle, may be applied only in cases
where there is no positive Identification of the owner or driver, or where there are very scant means of
Identification, but not in those instances where the person responsible for damages has been fixed or
determined beforehand, as in the case at bar. The reason for the rule we reiterate in the present case,
was explained by the Court in Montoya vs. Ignacio, 7 thus:

There is merit in this contention. The law really requires the approval of the Public
Service Commission in order that a franchise, or any privilege pertaining thereto, may be
sold or leased without infringing the certificate issued to the grantee. The reason is
obvious. Since a franchise is personal in nature any transfer or lease thereof should be
notified to the Public Service Commission so that the latter mav take proper safeguards
to protect the interest of the public. In fact, the law requires that, before the approval is
granted, there should be a public hearing, with notice to all interested parties, in order
that the Commission may determine if there are good and reasonable grounds justifying
the transfer or lease of the property covered by the franchise, or if the sale or lease is
detrimental to public interest. Such being the reason and philosophy behind this
requirement, it follows that if the property covered by the franchise is transferred, or
leased to another without obtaining the requisite approval, the transfer is not binding
against the Public Service Commission and in contemplation of law the grantee
continues to be responsible under the franchise in relation to the Commission and to the
Public. Since the lease of the jeepney in question was made without such approval the
only conclusion that can be drawn is that Marcelino Ignacio still continues to be its
operator in contemplation of law, and as such is responsible for the consequences
incident to its operation, one of them being the collision under consideration.

Bienvenido Gelisan, the registered owner, is not however without recourse. He has a right to be
indemnified by Roberto Espiritu for the amount titat he may be required to pay as damages for the
injury caused to Benito Alday, since the lease contract in question, although not effective against the
public for not having been approved by the Public Service Commission, is valid and binding between
the contracting parties. 8

We also find no merit in the petitioner's contention that his liability is only subsidiary. The Court has
consistently considered the registered owner/operator of a public service vehicle to be jointly and
severally liable with the driver for damages incurred by passengers or third persons as a consequence
of injuries sustained in the operation of said vehicles. Thus, in the case of Vargas vs. Langcay, 9 the
Court said:

We hold that the Court of Appeals erred in considering appellant-petitioner Diwata

Vargas only subsidiarily liable under Article 103 of the Revised Penal Code. This court, in
previous decisions, has always considered the registered owner/operator of a passenger
 vehicle, jointly and severally liable with the driver, for damages incurred by passengers
or third persons as a consequence of injuries (or death) sustained in the operation of
said vehicles. (Montoya vs. Ignacio, 94 Phil., 182; Timbol vs. Osias, G.R. No. L-7547,
April 30, 1955; Vda. de Medina vs. Cresencia, 99 Phil., 506; Necesito vs. Paras, 104
Phil., 75; Erezo vs. Jepte, 102 Phil., 103; Tamayo vs. Aquino and Rayos vs Tamayo, 105
Phil., 949; 56 Off. Gaz. [36] 5617.) In the case of Erezo vs. Jepte, Supra, We held:

* * * In synthesis, we hold that the registered owner, the defendant-appellant herein, is

primarily responsible for the damage caused * * * (Emphasis supplied)

In the case of Tamayo vs. Aquino, supra, We said:

* * * As Tamayo is the registered owner of the truck, his responsibffity to the public or to
any passenger riding in the vehicle or truck must be direct * * * (Emphasis supplied)

WHEREFORE, the petition is hereby DENIED. With costs against the petitioner.

SO ORDERED.

Yap (Chairman), Melencio-Herrera, Paras and Sarmiento, JJ., concur.