Day 7 Torts Digest and Whole

CONSTRUCTION DEVELOPMENT CORPORATION OF THE PHILIPPINES, petitioner, vs. REBECCA G. ESTRELLA, RACHEL E. FLETCHER, PHILIPPINE PHOENIX SURETY & INSURANCE INC., BATANGAS LAGUNA TAYABAS BUS CO., and WILFREDO DATINGUINOO, respondents. September 8, 2006 December 29, 1978, respondents Rebecca G. Estrella and her granddaughter, Rachel E. Fletcher, boarded in San Pablo City, a BLTB bus bound for Pasay City. However, they never reached their destination because their bus was rammed from behind by a tractortruck of CDCP in the South Expressway. The strong impact pushed forward their seats and pinned their knees to the seats in front of them. They regained consciousness only when rescuers created a hole in the bus and extricated their legs from under the seats. They were brought to the Makati Medical Center where the doctors diagnosed their injuries to be as follows: Medical Certificate of Rebecca Estrella Fracture, left tibia mid 3rd Lacerated wound, chin Contusions with abrasions, left lower leg Fracture, 6th and 7th ribs, right3 Medical Certificate of Rachel Fletcher Extensive lacerated wounds, right leg posterior aspect popliteal area and antero-lateral aspect mid lower leg with severance of muscles. Partial amputation BK left leg with severance of gastro-soleus and antero-lateral compartment of lower leg. Fracture, open comminuted, both tibial Thereafter, respondents filed a Complaint for damages against CDCP, BLTB, Espiridion Payunan, Jr. and Wilfredo Datinguinoo before the Regional Trial Court of Manila, Branch 13. They alleged (1) that Payunan, Jr. and Datinguinoo, who were the drivers of CDCP and BLTB buses, respectively, were negligent and did not obey traffic laws; (2) that BLTB and CDCP did not exercise the diligence of a good father of a family in the selection and supervision of their employees; (3) that BLTB allowed its bus to operate knowing that it lacked proper maintenance thus exposing its passengers to grave danger; (4) that they suffered actual damages amounting to P250,000.00 for Estrella and P300,000.00 for Fletcher; (5) that they suffered physical discomfort, serious anxiety, fright and mental anguish, besmirched reputation and wounded feelings, moral shock, and lifelong social humiliation; (6) that defendants failed to act with justice, give respondents their due, observe honesty and good faith which entitles them to claim for exemplary damage; and (7) that they are entitled to a reasonable amount of attorney's fees and litigation expenses. CDCP filed its Answer which was later amended to include a third-party complaint against Philippine Phoenix Surety and Insurance, Inc. (Phoenix). On February 9, 1993, the trial court rendered a decision finding CDCP and BLTB and their employees liable for damages, the dispositive portion of which, states: WHEREFORE, judgment is rendered: In the Complaint – 1. In favor of the plaintiffs and against the defendants BLTB, Wilfredo Datinguinoo, Construction and Development Corporation of the Philippines (now PNCC) and Espiridion Payunan, Jr., ordering said defendants, jointly and severally to pay the plaintiffs the sum of P79,254.43 as actual damages and to pay the sum of P10,000.00 as attorney's fees or a total of P89,254.43; 2. In addition, defendant Construction and Development Corporation of the Philippines and defendant Espiridion Payunan, Jr., shall pay the plaintiffs the amount of Fifty Thousand (P50,000.00) Pesos to plaintiff Rachel Fletcher and Twenty Five Thousand (P25,000.00) Pesos to plaintiff Rebecca Estrella; 3. On the counterclaim of BLTB Co. and Wilfredo Datinguinoo – Dismissing the counterclaim; 4. On the crossclaim against Construction and Development Corporation of the Philippines (now PNCC) and Espiridion Payunan, Jr. – Dismissing the crossclaim; 5. On the counterclaim of Construction and Development Corporation of the Philippines (now PNCC) – Dismissing the counterclaim; 6. On the crossclaim against BLTB – Dismissing the crossclaim; 7. On the Third Party Complaint by Construction and Development Corporation of the Philippines against Philippine Phoenix Surety and Insurance, Incorporated – Dismissing the Third Party Complaint. SO ORDERED.8 The trial court held that BLTB, as a common carrier, was bound to observe extraordinary diligence in the vigilance over the safety of its passengers. It must carry the passengers safely as far as human care and foresight provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. Thus, where a passenger dies or is injured, the carrier is presumed to have been at fault or has acted negligently. BLTB's inability to carry respondents to their destination gave rise to an action for breach of contract of carriage while its failure to rebut the presumption of negligence made it liable to respondents for the breach.9

Regarding CDCP, the trial court found that the tractor-truck it owned bumped the BLTB bus from behind. Evidence showed that CDCP's driver was reckless and driving very fast at the time of the incident. The gross negligence of its driver raised the presumption that CDCP was negligent either in the selection or in the supervision of its employees which it failed to rebut thus making it and its driver liable to respondents.10 Unsatisfied with the award of damages and attorney's fees by the trial court, respondents moved that the decision be reconsidered but was denied. Respondents elevated the case11 to the Court of Appeals which affirmed the decision of the trial court but modified the amount of damages, the dispositive portion of which provides: WHEREFORE, the assailed decision dated October 7, 1993 of the Regional Trial Court, Branch 13, Manila is hereby AFFIRMED with the following MODIFICATION: 1. The interest of six (6) percent per annum on the actual damages of P79,354.43 should commence to run from the time the judicial demand was made or from the filing of the complaint on February 4, 1980; 2. Thirty (30) percent of the total amount recovered is hereby awarded as attorney's fees; 3. Defendants-appellants Construction and Development Corporation of the Philippines (now PNCC) and Espiridion Payunan, Jr. are ordered to pay plaintiff-appellants Rebecca Estrella and Rachel Fletcher the amount of Twenty Thousand (P20,000.00) each as exemplary damages and P80,000.00 by way of moral damages to Rachel Fletcher. SO ORDERED. The Court of Appeals held that the actual or compensatory damage sought by respondents for the injuries they sustained in the form of hospital bills were already liquidated and were ascertained. Accordingly, the 6% interest per annum should commence to run from the time the judicial demand was made or from the filing of the complaint and not from the date of judgment. The Court of Appeals also awarded attorney's fees equivalent to 30% of the total amount recovered based on the retainer agreement of the parties. The appellate court also held that respondents are entitled to exemplary and moral damages. Finally, it affirmed the ruling of the trial court that the claim of CDCP against Phoenix had already prescribed. Hence, this petition raising the following issues: I WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING RESPONDENTS BLTB AND/OR ITS DRIVER WILFREDO DATINGUINOO SOLELY LIABLE FOR THE DAMAGES SUSTAINED BY HEREIN RESPONDENTS FLETCHER AND ESTRELLA. II WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN AWARDING EXCESSIVE OR UNFOUNDED DAMAGES, ATTORNEY'S FEES AND LEGAL INTEREST TO RESPONDENTS FLETCHER AND ESTRELLA. III WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING RESPONDENT PHOENIX LIABLE UNDER ITS INSURANCE POLICY ON THE GROUND OF PRESCRIPTION. The issues for resolution are as follows: (1) whether BLTB and its driver Wilfredo Datinguinoo are solely liable for the damages sustained by respondents; (2) whether the damages, attorney's fees and legal interest awarded by the CA are excessive and unfounded; (3) whether CDCP can recover under its insurance policy from Phoenix. Petitioner contends that since it was made solidarily liable with BLTB for actual damages and attorney's fees in paragraph 1 of the trial court's decision, then it should no longer be held liable to pay the amounts stated in paragraph 2 of the same decision. Petitioner claims that the liability for actual damages and attorney's fees is based on culpa contractual, thus, only BLTB should be held liable. As regards paragraph 2 of the trial court's decision, petitioner claims that it is ambiguous and arbitrary because the dispositive portion did not state the basis and nature of such award. Respondents, on the other hand, argue that petitioner is also at fault, hence, it was properly joined as a party. There may be an action arising out of one incident where questions of fact are common to all. Thus, the cause of action based on culpa aquiliana in the civil suit they filed against it was valid. The petition lacks merit. The case filed by respondents against petitioner is an action for culpa aquiliana or quasi-delict under Article 2176 of the Civil Code.13 In this regard, Article 2180 provides that the obligation imposed by Article 2176 is demandable for the acts or omissions of those persons for whom one is responsible. Consequently, an action based on quasi-delict may be instituted against the employer for an employee's act or omission. The liability for the negligent conduct of the subordinate is direct and primary, but is subject to the defense of due diligence in the selection and supervision of the employee.14 In the instant case, the trial court found that petitioner failed to prove that it exercised the diligence of a good father of a family in the selection and supervision of Payunan, Jr.

The trial court and the Court of Appeals found petitioner solidarily liable with BLTB for the actual damages suffered by respondents because of the injuries they sustained. It was established that Payunan, Jr. was driving recklessly because of the skid marks as shown in the sketch of the police investigator. t is well-settled in Fabre, Jr. v. Court of Appeals,15 that the owner of the other vehicle which collided with a common carrier is solidarily liable to the injured passenger of the same. We held, thus: The same rule of liability was applied in situations where the negligence of the driver of the bus on which plaintiff was riding concurred with the negligence of a third party who was the driver of another vehicle, thus causing an accident. In Anuran v. Buño, Batangas Laguna Tayabas Bus Co. v. Intermediate Appellate Court, and Metro Manila Transit Corporation v. Court of Appeals, the bus company, its driver, the operator of the other vehicle and the driver of the vehicle were jointly and severally held liable to the injured passenger or the latter's heirs. The basis of this allocation of liability was explained in Viluan v. Court of Appeals, thus: Nor should it make any difference that the liability of petitioner [bus owner] springs from contract while that of respondents [owner and driver of other vehicle] arises from quasi-delict. As early as 1913, we already ruled in Gutierrez vs. Gutierrez, 56 Phil. 177, that in case of injury to a passenger due to the negligence of the driver of the bus on which he was riding and of the driver of another vehicle, the drivers as well as the owners of the two vehicles are jointly and severally liable for damages. x x x As in the case of BLTB, private respondents in this case and her co-plaintiffs did not stake out their claim against the carrier and the driver exclusively on one theory, much less on that of breach of contract alone. After all, it was permitted for them to allege alternative causes of action and join as many parties as may be liable on such causes of action so long as private respondent and her co-plaintiffs do not recover twice for the same injury. What is clear from the cases is the intent of the plaintiff there to recover from both the carrier and the driver, thus justifying the holding that the carrier and the driver were jointly and severally liable because their separate and distinct acts concurred to produce the same injury.16 (Emphasis supplied) In a "joint" obligation, each obligor answers only for a part of the whole liability; in a "solidary" or "joint and several" obligation, the relationship between the active and the passive subjects is so close that each of them must comply with or demand the fulfillment of the whole obligation. In Lafarge Cement v. Continental Cement Corporation,17 we reiterated that joint tort feasors are jointly and severally liable for the tort which they commit. Citing Worcester v. Ocampo,18 we held that: x x x The difficulty in the contention of the appellants is that they fail to recognize that the basis of the present action is tort. They fail to recognize the universal doctrine that each joint tort feasor is not only individually liable for the tort in which he participates, but is also jointly liable with his tort feasors. x x x It may be stated as a general rule that joint tort feasors are all the persons who command, instigate, promote, encourage, advise, countenance, cooperate in, aid or abet the commission of a tort, or who approve of it after it is done, if done for their ben efit. They are each liable as principals, to the same extent and in the same manner as if they had performed the wrongful act themselves. x x x Joint tort feasors are jointly and severally liable for the tort which they commit. The persons injured may sue all of them or any number less than all. Each is liable for the whole damages caused by all, and all together are jointly liable for the whole damage. It is no defense for one sued alone, that the others who participated in the wrongful act are not joined with him as defendants; nor is it any excuse for him that his participation in the tort was insignificant as compared to that of the others. x x x Joint tort feasors are not liable pro rata. The damages can not be apportioned among them, except among themselves. They cannot insist upon an apportionment, for the purpose of each paying an aliquot part. They are jointly and severally liable for the whole amount. x x x A payment in full for the damage done, by one of the joint tort feasors, of course satisfies any claim which might exist against the others. There can be but satisfaction. The release of one of the joint tort feasors by agreement generally operates to discharge all. x x x Of course the court during trial may find that some of the alleged tort feasors are liable and that others are not liable. The courts may release some for lack of evidence while condemning others of the alleged tort feasors. And this is true even though they are charged jointly and severally.19 Petitioner's claim that paragraph 2 of the dispositive portion of the trial court's decision is ambiguous and arbitrary and also entitles respondents to recover twice is without basis. In the body of the trial court's decision, it was clearly stated that petitioner and its driver Payunan, Jr., are jointly and solidarily liable for moral damages in the amount of P50,000.00 to respondent Fletcher and P25,000.00 to respondent Estrella.20 Moreover, there could be no double recovery because the award in paragraph 2 is for moral damages while the award in paragraph 1 is for actual damages and attorney's fees. Petitioner next claims that the damages, attorney's fees, and legal interest awarded by the Court of Appeals are excessive. Moral damages may be recovered in quasi-delicts causing physical injuries.21 The award of moral damages in favor of Fletcher and Estrella in the amount of P80,000.00 must be reduced since prevailing jurisprudence fixed the same at P50,000.00.22 While moral

damages are not intended to enrich the plaintiff at the expense of the defendant, the award should nonetheless be commensurate to the suffering inflicted.23 The Court of Appeals correctly awarded respondents exemplary damages in the amount of P20,000.00 each. Exemplary damages may be awarded in addition to moral and compensatory damages.24 Article 2231 of the Civil Code also states that in quasidelicts, exemplary damages may be granted if the defendant acted with gross negligence.25 In this case, petitioner's driver was driving recklessly at the time its truck rammed the BLTB bus. Petitioner, who has direct and primary liability for the negligent conduct of its subordinates, was also found negligent in the selection and supervision of its employees. In Del Rosario v. Court of Appeals,26 we held, thus: ART. 2229 of the Civil Code also provides that such damages may be imposed, by way of example or correction for the public good. While exemplary damages cannot be recovered as a matter of right, they need not be proved, although plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded. Exemplary Damages are imposed not to enrich one party or impoverish another but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions. Regarding attorney's fees, we held in Traders Royal Bank Employees Union-Independent v. National Labor Relations Commission,27 that: There are two commonly accepted concepts of attorney's fees, the so-called ordinary and extraordinary. In its ordinary concept, an attorney's fee is the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter. The basis of this compensation is the fact of his employment by and his agreement with the client. In its extraordinary concept, an attorney's fee is an indemnity for damages ordered by the court to be paid by the losing party in a litigation. The basis of this is any of the cases provided by law where such award can be made, such as those authorized in Article 2208, Civil Code, and is payable not to the lawyer but to the client, unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof.28 (Emphasis supplied) In the instant case, the Court of Appeals correctly awarded attorney's fees and other expenses of litigation as they may be recovered as actual or compensatory damages when exemplary damages are awarded; when the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's valid, just and demandable claim; and in any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered.29 Regarding the imposition of legal interest at the rate of 6% from the time of the filing of the complaint, we held in Eastern Shipping Lines, Inc. v. Court of Appeals,30 that when an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for payment of interest in the concept of actual and compensatory damages,31 subject to the following rules, to wit – 1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. 2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged. 3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.32 (Emphasis supplied) Accordingly, the legal interest of 6% shall begin to run on February 9, 1993 when the trial court rendered judgment and not on February 4, 1980 when the complaint was filed. This is because at the time of the filing of the complaint, the amount of the damages to which plaintiffs may be entitled remains unliquidated and unknown, until it is definitely ascertained, assessed and determined by

the court and only upon presentation of proof thereon.33 From the time the judgment becomes final and executory, the interest rate shall be 12% until its satisfaction. Anent the last issue of whether petitioner can recover under its insurance policy from Phoenix, we affirm the findings of both the trial court and the Court of Appeals, thus: As regards the liability of Phoenix, the court a quo correctly ruled that defendantappellant CDCP's claim against Phoenix already prescribed pursuant to Section 384 of P.D. 612, as amended, which provides: Any person having any claim upon the policy issued pursuant to this chapter shall, without any unnecessary delay, present to the insurance company concerned a written notice of claim setting forth the nature, extent and duration of the injuries sustained as certified by a duly licensed physician. Notice of claim must be filed within six months from date of the accident, otherwise, the claim shall be deemed waived. Action or suit for recovery of damage due to loss or injury must be brought in proper cases, with the Commissioner or Courts within one year from denial of the claim, otherwise, the claimant's right of action shall prescribe. (As amended by PD 1814, BP 874.)34 The law is clear and leaves no room for interpretation. A written notice of claim must be filed within six months from the date of the accident. Since petitioner never made any claim within six months from the date of the accident, its claim has already prescribed. WHEREFORE, the instant petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No. 46896 dated March 29, 2001, which modified the Decision of the Regional Trial Court of Manila, Branch 13, in Civil Case No. R-82-2137, is AFFIRMED with the MODIFICATIONS that petitioner is held jointly and severally liable to pay (1) actual damages in the amount of P79,354.43; (2) moral damages in the amount of P50,000.00 each for Rachel Fletcher and Rebecca Estrella; (3) exemplary damages in the amount of P20,000.00 each for Rebecca Estrella and Rachel Fletcher; and (4) thirty percent (30%) of the total amount recovered as attorney's fees. The total amount adjudged shall earn interest at the rate of 6% per annum from the date of judgment of the trial court until finality of this judgment. From the time this Decision becomes final and executory and the judgment amount remains unsatisfied, the same shall earn interest at the rate of 12% per annum until its satisfaction. G.R. No. L-10134

June 29, 1957

SABINA EXCONDE, plaintiff-appellant, vs. DELFIN CAPUNO and DANTE CAPUNO, defendants-appellees. Magno T. Bueser for appellant. Alver Law Offices and Edon B. Brion and Vencedor A. Alimario for appellees. BAUTISTA ANGELO, J.: Dante Capuno, son of Delfin Capuno, was accused of double homicide through reckless imprudence for the death of Isidoro Caperina and Amado Ticzon on March 31, 1949 in the Court of First Instance of Laguna (Criminal Case No. 15001). During the trial, Sabina Exconde, as mother of the deceased Isidoro Caperina, reserved her right to bring a separate civil action for damages against the accused. After trial, Dante Capuno was found guilty of the crime charged and, on appeal, the Court Appeals affirmed the decision. Dante Capuno was only (15) years old when he committed the crime. In line with her reservation, Sabina Exconde filed the present action against Delfin Capuno and his son Dante Capuno asking for damages in the aggregate amount of P2,959.00 for the death of her son Isidoro Caperiña. Defendants set up the defense that if any one should be held liable for the death of Isidoro Caperina, he is Dante Capuno and not his father Delfin because at the time of the accident, the former was not under the control, supervision and custody, of the latter. This defense was sustained by the lower court and, as a consequence it only convicted Dante Capuno to pay the damages claimed in the complaint. From decision, plaintiff appealed to the Court of Appeals but the case was certified to us on the ground that the appeal only involves questions of law. It appears that Dante Capuno was a member of the Boy Scouts Organization and a student of the Bilintawak Elementary School situated in a barrio in the City of San Pablo and on March 31, 1949 he attended a parade in honor of Dr. Jose Rizal in said city upon instruction of the city school's supervisor. From the school Dante, with other students, boarded a jeep and when the same started to run, he took hold of the wheel and drove it while the driver sat on his left side. They have not gone far when the jeep turned turtle and two of its passengers, Amado Ticzon and Isidore Caperiña, died as a consequence. It further appears that Delfin Capuno, father of Dante, was not with his son at the time of the accident, nor did he know that his son was going to attend a parade. He only came to know it when his son told him after the accident that he attended the parade upon instruction of his teacher.

The only issue involved in this appeal is whether defendant Delfin Capuno can be held civilly liable, jointly and severally with his son Dante, for damages resulting from the death of Isidoro Caperiña caused by the negligent act of minor Dante Capuno. The case comes under Article 1903 of the Spanish Civil Code, paragraph 1 and 5, which provides: ART. 1903. The obligation impossed by the next preceding articles is enforceable not only for personal acts and omissions, but also for those of persons for whom another is responsible. The father, and, in case of his death or incapacity, the mother, are liable for any damages caused by the minor children who live with them. xxx

xxx

xxx

Finally, teachers or directors of arts and trades are liable for any damages caused by their pupils or apprentices while they are under their custody. Plaintiff contends that defendant Delfin Capuno is liable for the damages in question jointly and severally with his son Dante because at the time the latter committed the negligent act which resulted in the death of the victim, he was a minor and was then living with his father, and inasmuch as these facts are not disputed, the civil liability of the father is evident. And so, plaintiff contends, the lower court erred in relieving the father from liability. We find merit in this claim. It is true that under the law above quoted, "teachers or directors of arts and trades are liable for any damages caused by their pupils or apprentices while they are under their custody", but this provision only applies to an institution of arts and trades and not to any academic educational institution (Padilla, Civil Law, 1953, Ed., Vol. IV, p. 841; See 12 Manresa, 4th Ed., p. 557). Here Dante capuno was then a student of the Balintawak Elementary School and as part of his extracurricular activity, he attended the parade in honor of Dr. Jose Rizal upon instruction of the city school's supervisor. And it was in connection with that parade that Dante boarded a jeep with some companions and while driving it, the accident occurred. In the circumstances, it is clear that neither the head of that school, nor the city school's supervisor, could be held liable for the negligent act of Dante because he was not then a student of an institute of arts and trades as provided by law. The civil liability which the law impose upon the father, and, in case of his death or incapacity, the mother, for any damages that may be caused by the minor children who live with them, is obvious. This is necessary consequence of the parental authority they exercise over them which imposes upon the parents the "duty of supporting them, keeping them in their company, educating them and instructing them in proportion to their means", while, on the other hand, gives them the "right to correct and punish them in moderation" (Articles 154 and 155, Spanish Civil Code). The only way by which they can relieve themselves of this liability is if they prove that they exercised all the diligence of a good father of a family to prevent the damage(Article 1903, last paragraph, Spanish Civil Code). This defendants failed to prove. WHEREFORE, the decision appealed from is modified in the sense that defendants Delfin Capuno and Dante Capuno shall pay to plaintiff, jointly and severally, the sum of P2,959.00 as damages, and the costs of action. Bengzon, Montemayor, Labrador and Endencia, JJ., concur. Paras, C.J., concurs in the result. Separate Opinions REYES, J.B.L., J., dissenting: After mature consideration I believe we should affirm the judgement relieving the father of liability. I can see no sound reason for limiting Art. 1903 of the old Civil Code to teachers of arts and trades and not to academic ones. What substantial difference is there between them in so far as, concerns the proper supervision and vigilance over their pupils? It cannot be seriously contended that an academic teacher is exempt from the duty of watching do not commit a tort to the detriment of third persons, so long as they are in a position to exercise authority and supervision over the pupil. In my opinion, in the phrase "teachers or heads of establishments of arts and trades" used in Art. 1903 of the old Civil Code, the words "arts and trades" does not qualify "teachers" but only "heads of establishments". The phrase is only an updated version of the equivalent terms "preceptors y artesanos" used in the Italian and French Civil Codes. If, as conceded by all commentators, the basis of the presumption of negligence of Art. 1903 in some culpa in vigilando that the parents, teachers, etc. are supposed to have incurred in the exercise of their authority, it would seem clear that where the parent places the child under the effective authority of the teacher, the latter, and not the parent, should be the one answerable for the torts committed while under his custody, for the very reason that the parent is not supposed to interfere with the discipline of

the school nor with the authority and supervision of the teacher while the child is under instruction. And if there is no authority, there can be no responsibility. In the case before us, there is no question that the pupil, Dante Capuno, was instructed by the City School Supervisor to attend the Rizal parade. His father could not properly refuse to allow the child to attend, in defiance of the school authorities. The father had every reason to assume that in ordering a minor to attend a parade with other children, the school authorities would provide adequate supervision over them. If a teacher or scout master was present, then he should be the one responsible for allowing the minor to drive the jeep without being qualified to do so. On the other hand, if no teacher or master was at hand to watch over the pupils, the school authorities are the ones answerable for that negligence, and not the father. At any rate, I submit that the father should not be held liable for a tort that he was in no way able to prevent, and which he had every right to assume the school authorities would avoid. Having proved that he trusted his child to the custody of school authorities that were competent to exercise vigilance over him, the father has rebutted the presumption of Art. 1903 and the burden of proof shifted to the claimant to show actual negligence on the part of the parent in order to render him liable. G.R. No. L-24101 September 30, 1970 MARIA TERESA Y. CUADRA, minor represented by her father ULISES P. CUADRA, ET AL., plaintiffs-appellees, vs. ALFONSO MONFORT, defendant-appellant. Rodolfo J. Herman for plaintiffs-appellees. Luis G. Torres and Abraham E. Tionko for defendant-appellant. MAKALINTAL, J.: This is an action for damages based on quasi-delict, decided by the Court of First Instance of Negros Occidental favorably to the plaintiffs and appealed by the defendant to the Court of Appeals, which certified the same to us since the facts are not in issue. Maria Teresa Cuadra, 12, and Maria Teresa Monfort, 13, were classmates in Grade Six at the Mabini Elementary School in Bacolod City. On July 9, 1962 their teacher assigned them, together with three other classmates, to weed the grass in the school premises. While thus engaged Maria Teresa Monfort found a plastic headband, an ornamental object commonly worn by young girls over their hair. Jokingly she said aloud that she had found an earthworm and, evidently to frighten the Cuadra girl, tossed the object at her. At that precise moment the latter turned around to face her friend, and the object hit her right eye. Smarting from the pain, she rubbed the injured part and treated it with some powder. The next day, July 10, the eye became swollen and it was then that the girl related the incident to her parents, who thereupon took her to a doctor for treatment. She underwent surgical operation twice, first on July 20 and again on August 4, 1962, and stayed in the hospital for a total of twenty-three days, for all of which the parents spent the sum of P1,703.75. Despite the medical efforts, however, Maria Teresa Cuadra completely lost the sight of her right eye. In the civil suit subsequently instituted by the parents in behalf of their minor daughter against Alfonso Monfort, Maria Teresa Monfort's father, the defendant was ordered to pay P1,703.00 as actual damages; P20,000.00 as moral damages; and P2,000.00 as attorney's fees, plus the costs of the suit. The legal issue posed in this appeal is the liability of a parent for an act of his minor child which causes damage to another under the specific facts related above and the applicable provisions of the Civil Code, particularly Articles 2176 and 2180 thereof, which read: ART. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by provisions of this Chapter. ART 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. The father and, in case of his death or incapacity are responsible for the damages caused by the minor children who live in their company. Xxx The responsibility treated of in this Article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. The underlying basis of the liability imposed by Article 2176 is the fault or negligence accompanying the act or the omission, there being no willfulness or intent to cause damage thereby. When the act or omission is that of one person for whom another is responsible, the latter then becomes himself liable under Article 2180, in the different cases enumerated therein, such as that of the

father or the mother under the circumstances above quoted. The basis of this vicarious, although primary, liability is, as in Article 2176, fault or negligence, which is presumed from that which accompanied the causative act or omission. The presumption is merely prima facie and may therefore be rebutted. This is the clear and logical inference that may be drawn from the last paragraph of Article 2180, which states "that the responsibility treated of in this Article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage." Since the fact thus required to be proven is a matter of defense, the burden of proof necessarily rests on the defendant. But what is the exact degree of diligence contemplated, and how does a parent prove it in connection with a particular act or omission of a minor child, especially when it takes place in his absence or outside his immediate company? Obviously there can be no meticulously calibrated measure applicable; and when the law simply refers to "all the diligence of a good father of the family to prevent damage," it implies a consideration of the attendant circumstances in every individual case, to determine whether or not by the exercise of such diligence the damage could have been prevented. In the present case there is nothing from which it may be inferred that the defendant could have prevented the damage by the observance of due care, or that he was in any way remiss in the exercise of his parental authority in failing to foresee such damage, or the act which caused it. On the contrary, his child was at school, where it was his duty to send her and where she was, as he had the right to expect her to be, under the care and supervision of the teacher. And as far as the act which caused the injury was concerned, it was an innocent prank not unusual among children at play and which no parent, however careful, would have any special reason to anticipate much less guard against. Nor did it reveal any mischievous propensity, or indeed any trait in the child's character which would reflect unfavorably on her upbringing and for which the blame could be attributed to her parents. The victim, no doubt, deserves no little commiseration and sympathy for the tragedy that befell her. But if the defendant is at all obligated to compensate her suffering, the obligation has no legal sanction enforceable in court, but only the moral compulsion of good conscience. The decision appealed from is reversed, and the complaint is dismissed, without pronouncement as to costs. Reyes, J.B.L., Actg. C.J., Dizon, Zaldivar, Castro, Teehankee, Villamor and Makasiar, JJ., concur. Concepcion, C.J., is on leave. Fernando, J., took no part. Separate Opinions BARREDO, J., dissenting: I am afraid I cannot go along with my esteemed colleagues in holding that the act of appellant's daughter does not constitute fault within the contemplation of our law or torts. She was 13 years and should have known that by jokingly saying "aloud that she had found an earthworm and, evidently to frighten the Cuadra girl, tossed the object at her," it was likely that something would happen to her friend, as in fact, she was hurt. As to the liability of appellant as father, I prefer to hold that there being no evidence that he had properly advised his daughter to behave properly and not to play dangerous jokes on her classmate and playmates, he can be liable under Article 2180 of the Civil Code. There is nothing in the record to show that he had done anything at all to even try to minimize the damage caused upon plaintiff child. WHOLE CASE Philippine Rabbit Bus Lines, Inc. and Felix Pangalangan appealed on pure questions of law from the order of the Court of First Instance of Tarlac, dismissing their complaint against Archimedes J. Balingit. The dismissal was based on the ground that Balingit as the manager of Phil-American Forwarders, Inc., which together with Fernando Pineda and Balingit, was sued for damages in an action based on quasi-delict or culpa aquiliana, is not the manager of an establishment contemplated in article 2180 of the Civil Code (Civil Case No. 3865). In the complaint for damages filed by the bus company and Pangalangan against Phil-American Forwarders, Inc., Balingit and Pineda, it was alleged that on November 24, 1962, Pineda drove recklessly a freight truck, owned by Phil-American Forwarders, Inc., along the national highway at Sto. Tomas, Pampanga. The truck bumped the bus driven by Pangalangan, which was owned by Philippine Rabbit Bus Lines, Inc. As a result of the bumping, Pangalangan suffered injuries and the bus was damaged and could not be used for seventy-nine days, thus depriving the company of earnings amounting to P8,665.51. Balingit was the manager of Phil-American Forwarders, Inc.

Among the defenses interposed by the defendants in their answer was that Balingit was not Pineda's employer. Balingit moved that the complaint against him be dismissed on the ground that the bus company and the bus driver had no cause of action against him. As already stated, the lower court dismissed the action as to Balingit. The bus company and its driver appealed. The Civil Code provides: ART. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. ART. 2180. The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. The owners and managers 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 the occasion of their functions. 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. The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. (1903a) The novel and unprecedented legal issue in this appeal is whether the terms "employers" and "owners and managers of an establishment or enterprise" (dueños o directores de un establicimiento o empresa) used in article 2180 of the Civil Code, formerly article 1903 of the old Code, embrace the manager of a corporation owning a truck, the reckless operation of which allegedly resulted in the vehicular accident from which the damage arose. We are of the opinion that those terms do not include the manager of a corporation. It may be gathered from the context of article 2180 that the term "manager" ("director" in the Spanish version) is used in the sense of "employer". Hence, under the allegations of the complaint, no tortious or quasi-delictual liability can be fastened on Balingit as manager of Phil-American Forwarders, Inc., in connection with the vehicular accident already mentioned because he himself may be regarded as an employee or dependiente of his employer, Phil-American Forwarders, Inc. The bus company and its driver, in their appellants' brief, injected a new factual issue which was not alleged in their complaint. They argue that Phil- American Forwarders, Inc. is merely a business conduit of Balingit because out of its capital stock with a par value of P41,200, Balingit and his wife had subscribed P40,000 and they paid P10,000 on their subscription, while the other incorporators, namely, Rodolfo Limjuco, Ponciano Caparas and Rafael Suntay paid P250.25 and P25, respectively. That argument implies that the veil of corporate fiction should be pierced and that Phil-American Forwarders, Inc. and Balingit and his wife should be treated as one and the same civil personality. We cannot countenance that argument in this appeal. It was not raised in the lower court. The case has to be decided on the basis of the pleadings filed in the trial court where it was assumed that Phil-American Forwarders, Inc. has a personality separate and distinct from that of the Balingit spouses. The legal issue, which the plaintiffs-appellants can ventilate in this appeal, is one which was raised in the lower court and which is within the issues framed by the parties (Sec. 18, Rule 46, Rules of Court). When a party deliberately adopts a certain theory and the case is decided upon that theory in the court below, he will not be permitted to change his theory on appeal because, to permit him to do so, could be unfair to the adverse party (2 Moran's Comments on the Rules of Court, 1970 Ed. p. 505). WHEREFORE, the lower court's order of dismissal is affirmed. Costs against the plaintiffs-appellants. DIGEST PHILIPPINE RABBIT BUS LINES and FELIX PANGALANGAN v. PHIL-AMERICAN FORWARDERS, ARCHIMEDES BALINGIT, and FERNANDO PINEDA 1975 / Aquino / Appeal from CFI order FACTS Pineda recklessly drove a freight truck [owned by Phil-American Forwarders] along the national highway at Pampanga, and the truck bumped the PRBL bus driven by Pangalangan. As a result, Pangalangan suffered injuries and the bus was damaged and could not be used for 79 days, thus depriving PRBL of earnings amounting to P8,665.51. Balingit was the manager of Phil-American Forwarders.

PRBL and Pangalangan filed a complaint for damages against Phil-American Forwarders, Balingit, and Pineda. Defendants said Balingit was not Pineda's employer. Balingit moved that the complaint against him be dismissed on the ground that PRBL and Pangalangan had no cause of action against him. CFI dismissed the complaint against Balingit, on the ground that he is not the manager of an establishment as contemplated in NCC 2180. ISSUE AND HOLDING WON the terms "employers" and "owners and managers of an establishment or enterprise" embrace the manager of a corporation owning a truck, the reckless operation of which allegedly resulted in the vehicular accident from which the damage arose. NO. RATIO Those terms do not include the manager of a corporation. It may be gathered from the context of NCC 2180 that the term "manager" ("director" in the Spanish version) is used in the sense of "employer". Hence, no tortious or quasi-delictual liability can be imposed on Balingit as manager of Phil-American Forwarders, in connection with the vehicular accident in question, because he himself may be regarded as an employee or dependiente of Phil-American Forwarders. G.R. No. 104658. April 7, 1993. PILIPINAS SHELL PETROLEUM CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS and CLARITA T. CAMACHO, respondents. Angara, Abello, Concepcion, Regala & Cruz for petitioner. Yolanda Quisumbing-Javellana & Associates for private respondent. SYLLABUS 1. LABOR LAWS AND SOCIAL LEGISLATION; EMPLOYER-EMPLOYEE RELATIONSHIP; FACTORS CONSIDERED IN DETERMINING EXISTENCE THEREOF; CASE AT BAR. — It is firmly settled that the existence or non-existence of the employer-employee relationship is commonly to be determined by examination of certain factors or aspects of that relationship. These include: (a) the manner of selection and engagement of the putative employee; (b) the mode of payment of wages; (c) the presence or absence of a power to control the putative employee's conduct, although the latter is the most important element . . . As aptly held by the trial court, petitioner did not exercise control and supervision over Feliciano with regard to the manner in which he conducted the hydro-pressure test. All that petitioner did, through its Field Engineer, Roberto Mitra, was relay to Feliciano the request of private respondent for a hydro-pressure test, to determine any possible leakages in the storage tanks in her gasoline station. The mere hiring of Feliciano by petitioner for that particular task is not the form of control and supervision contemplated by law which may be the basis for establishing an employer-employee relationship between petitioner and Feliciano. The fact that there was no such control is further amplified by the absence of any shell representative in the job site at the time when the test was conducted. Roberto Mitra was never there. Only Feliciano and his men were. True, it was petitioner who sent Feliciano to private respondent's gasoline station to conduct the hydro-pressure test as per the request of private respondent herself. But this single act did not automatically make Feliciano an employee of petitioner. As discussed earlier, more than mere hiring is required. It must further be established that petitioner is the one who is paying Feliciano's salary on a regular basis; that it has the power to dismiss said employee, and more importantly, that petitioner has control and supervision over the work of Feliciano. The last requisite was sorely missing in the instant case. 2. ID.; JOB CONTRACTING; REQUISITES; HALLMARKS OF INDEPENDENT CONTRACTOR. — Section 8 of Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code provides: "Sec. 8. Job contracting. — There is job contracting permissible under the Code if the following conditions are met: (1) The contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and (2) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business." Feliciano is independently maintaining a business under a duly registered business name, "JFS Repair and Maintenance Service," and is duly registered with the Bureau of Domestic Trade. He does not enjoy a fixed salary but instead charges a lump sum consideration for every piece of work he accomplishes. If he is not able to finish his work, he does not get paid, as what happened in this case. Further, Feliciano utilizes his own tools and equipment and has a complement of workers. Neither is he required to work on a regular basis. Instead, he merely awaits calls from clients such as petitioner whenever repairs and maintenance services are requested. Moreover, Feliciano does not exclusively service petitioner because he can accept other business but not from other oil companies. All these are the hallmarks of an independent contractor.

3. CIVIL LAW; QUASI-DELICTS; INDEPENDENT CONTRACTOR RESPONSIBLE FOR HIS OWN ACTS AND OMISSIONS. — Being an independent contractor, Feliciano is responsible for his own acts and omissions. As he alone was in control over the manner of how he was to undertake the hydro-pressure test, he alone must bear the consequences of his negligence, if any, in the conduct of the same. CAMPOS, JR., J p: Was the hydro-pressure test of the underground storage tank in private respondent Clarita T. Camacho's gasoline station conducted by an independent contractor or not? A negative answer will make petitioner Pilipinas Shell Petroleum Corporation (Shell, for brevity) liable for the said independent contractor's acts or omissions; otherwise, no. This is the issue that this Court is called upon to resolve in this case. The facts are as follows: Private respondent Clarita T. Camacho (private respondent for short) was the operator of a gasoline station in Naguilian Road, Baguio City, wherein she sells petitioner Shell's petroleum products. Sometime in April 1983, private respondent requested petitioner to conduct a hydro-pressure test on the underground storage tanks of the said station in order to determine whether or not the sales losses she was incurring for the past several months were due to leakages therein. Petitioner acceded to the said request and on April 27, 1983, one Jesus "Jessie" Feliciano together with other workers, came to private respondent's station with a Job Order from petitioner to perform the hydro-pressure test. On the same day, Feliciano and his men drained the underground storage tank which was to be tested of its remaining gasoline. After which, they filled the tank with water through a water hose from the deposit tank of private respondent. Then, after requesting one of private respondent's gasoline boys to shut off the water when the tank was filled, Feliciano and his men left. At around 2:00 a.m. the following day, private respondent saw that the water had reached the lip of the pipe of the underground storage tank and so, she shut off the water faucet. At around 5:30 a.m., private respondent's husband opened the station and started selling gasoline. But at about 6:00 a.m., the customers who had bought gasoline returned to the station complaining that their vehicles stalled because there was water in the gasoline that they bought. On account of this, private respondent was constrained to replace the gasoline sold to the said customers. However, a certain Eduardo Villanueva, one of the customers, filed a complaint with the police against private respondent for selling the adulterated gasoline. In addition, he caused the incident to be published in two local newspapers. Feliciano, who arrived later that morning, did not know what caused the water pollution of the gasoline in the adjacent storage tank. So he called up Nick Manalo, Superintendent of Shell's Poro Point Installation at San Fernando, La Union, and referred the matter to the latter. Manalo went up to Baguio in the afternoon to investigate. Thereafter, he and Feliciano again filled with water the underground storage tank undergoing hydro-pressure test whereat they noticed that the water was transferring to the other tanks from whence came the gasoline being sold. Manalo asked permission from Shell's Manila Office to excavate the underground pipes of the station. Upon being granted permission to do so, Feliciano and his men began excavating the driveway of private respondent's station in order to expose the underground pipeline. The task was continued by one Daniel "Danny" Pascua who replaced Feliciano, Pascua removed the corroded pipeline and installed new independent vent pipe for each storage tank. Meanwhile, petitioner undertook to settle the criminal complaint filed by Villanueva. Subsequently, Villanueva filed an Affidavit of Desistance, 1 declaring, inter alia — "THAT, after careful evaluation of the surrounding circumstances, especially the explanation of the representatives of SHELL Phils., that the gasoline tanks of Mrs. Camacho were subject to Hydro test, in such a way that water was used for the said test, I believe that she may not have had anything to do with the filling of water in the tank of my car; xxx xxx xxx THAT, said representatives of SHELL Phils. have interceded for and in behalf of Mrs. Camacho and have fully satisfied my claim against her. THAT, in view of all the foregoing I do not intend to prosecute the case and I am therefore asking for the dismissal of the case against Mrs. Camacho." Thereafter, private respondent demanded from petitioner the payment of damages in the amount of P10,000.00. Petitioner, instead, offered private respondent additional credit line and other beneficial terms, which offer was, however, rejected. cdrep Subsequently, or on October 12, 1983, private respondent filed before the trial court a complaint for damages against petitioner due to the latter's alleged negligence in the conduct of the hydro-pressure test in her gasoline station. For its part, petitioner

denied liability because, according to it, the hydro-pressure test on the underground storage tanks was conducted by an independent contractor. The trial court dismissed private respondent's complaint for damages for the reason that: "The hydro-pressure test which brought about the incident was conducted by Jesus Feliciano, who was neither an employee nor agent nor representative of the defendant. Jesus Feliciano is responsible for his own acts and omissions. He alone was in control of the manner of how he is to undertake the hydro-pressure test. Considering that the conduct of said hydro-pressure test was under the sole and exclusive control and supervision of Jesus Feliciano, the overflow with water causing the same to sip into the adjoining tank cannot be attributed to the fault or negligence of defendant. 2 From the adverse decision of the trial court, private respondent appealed to the Court of Appeals which court reversed the decision of the trial court. Thus, "PREMISES CONSIDERED, the decision being appealed from is hereby SET ASIDE and, in lieu thereof, another rendered ordering defendant to pay plaintiff: 1.

P100,000.00 as moral damages;

2. P2,639.25 and P15,000.00 representing the actual losses suffered by plaintiff as a result of the water pollution of the gasoline. SO ORDERED." 3 Petitioner moved to have the above decision reconsidered but the same was denied in a Resolution dated March 9, 1992. Hence, this recourse. As stated at the very outset, the pivotal issue in this case is whether or not petitioner should be held accountable for the damage to private respondent due to the hydro-pressure test conducted by Jesus Feliciano. It is a well-entrenched rule that an employer-employee relationship must exist before an employer may be held liable for the negligence of his employee. It is likewise firmly settled that the existence or non-existence of the employer-employee relationship is commonly to be determined by examination of certain factors or aspects of that relationship. These include: (a) the manner of selection and engagement of the putative employee; (b) the mode of payment of wages; (c) the presence or absence of a power to control the putative employee's conduct, 4 although the latter is the most important element. 5 In this case, respondent Court of Appeals held petitioner liable for the damage caused to private respondent as a result of the hydropressure test conducted by Jesus Feliciano due to the following circumstances: 6 1.

Feliciano was hired by petitioner;

2.

He received his instructions from the Field Engineer of petitioner, Mr. Roberto Mitra;

3.

While he was at private respondent's service station, he also received instructions from Nick Manalo, petitioner's Poro Point Depot Superintendent;

4.

Instructions from petitioner's Manila Office were also relayed to him while he was at .the job site at Baguio City;

5.

His work was under the constant supervision of petitioner's engineer;

6. Before he could complete the work, he was instructed by Mr. Manalo, petitioner's Superintendent, to discontinue the same and it was turned over to Daniel Pascua, who was likewise hired by petitioner.

Based on the foregoing, respondent Court of Appeals concluded that Feliciano was not an independent contractor but was under the control and supervision of petitioner in the performance of the hydro-pressure test, hence, it held petitioner liable for the former's acts and omissions. We are not in accord with the above finding of respondent Court of Appeals. As aptly held by the trial court, petitioner did not exercise control and supervision over Feliciano with regard to the manner in which he conducted the hydro-pressure test. All that petitioner did, through its Field Engineer, Roberto Mitra, was relay to Feliciano the request of private respondent for a hydropressure test, to determine any possible leakages in the storage tanks in her gasoline station. The mere hiring of Feliciano by petitioner for that particular task is not the form of control and supervision contemplated by may be the basis for establishing an employer-employee relationship between petitioner and Feliciano. The fact that there was no such control is further amplified by

the absence of any Shell representative in the job site time when the test was conducted. Roberto Mitra was never there. Only Feliciano and his men were. True, it was petitioner who sent Feliciano to private respondent's gasoline station in conduct the hydro-pressure test as per the request of private respondent herself. But this single act did not automatically make Feliciano an employee of petitioner. As discussed earlier, more than mere hiring is required. It must further be established that petitioner is the one who is paying Felicia's salary on a regular basis; that it has the power to dismiss said employee, and more importantly, that petitioner has control and supervision over the work of Feliciano. The last requisite was sorely missing in the instant case. A careful perusal of the records will lead to the conclusion that Feliciano is an independent contractor. Section 8 of Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code provides: "Sec. 8. Job contracting. — There is job contracting permissible under the Code if the following conditions are met: (1) The contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and (2) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business." Feliciano is independently maintaining a business under a duly registered business name, "JFS Repair and Maintenance Service," and is duly registered with the Bureau of Domestic Trade. 7 He does not enjoy a fixed salary but instead charges a lump sum consideration for every piece of work he accomplishes. 8 If he is not able to finish his work, he does not get paid, as what happened in this case. 9 Further, Feliciano utilizes his own tools and equipment and has a complement of workers. Neither is he required to work on a regular basis. Instead, he merely awaits calls from clients such as petitioner whenever repairs and maintenance services are requested. Moreover, Feliciano does not exclusively service petitioner because he can accept other business but not from other oil companies. 10 All these are the hallmarks of an independent contractor. Being an independent contractor, Feliciano is responsible for his own acts and omissions. As he alone was in control over the manner of how he was to undertake the hydro-pressure test, he alone must bear the consequences of his negligence, if any, in the conduct of the same. Anent the issue of damages, the same has been rendered moot by the failure of private respondent to establish an employer employee relationship between petitioner and Feliciano. Absent said relationship, petitioner cannot be held liable for the acts and omissions of the independent contractor, Feliciano. WHEREFORE, premises considered, the appealed decision of respondent Court of Appeals is hereby SET ASIDE and the decision of the trial court REINSTATED. Without pronouncement as to costs. SO ORDERED. [G. R. No. 141089. August 1, 2002] METRO MANILA TRANSIT CORPORATION and APOLINARIO AJOC, petitioners, vs. THE COURT OF APPEALS and COL. MARTIN P. SABALBURO, NAPOLEON G. SABALBURO, MARTIN G. SABALBURO, JR., BABY MARIFLOR G. SABALBURO, and MIRASOL G. SABALBURO, respondents. DECISION QUISUMBING, J.: On appeal is the decision[1] of the Court of Appeals promulgated on August 25, 1999 in CA-G.R. CV No. 45002, which affirmed in toto the judgment of the Regional Trial Court of Makati, Branch 62, in Civil Case No. 16062. The trial court found herein petitioners liable for the death of Florentina Sabalburo in a vehicular accident involving a passenger bus owned by petitioner Metro Manila Transit Corporation (MMTC) and driven by petitioner Apolinario Ajoc, and ordered them to pay damages to private respondents. The factual backdrop of this case, as found by the Court of Appeals, is as follows: The eyewitness account of plaintiffs’ witness, Maria Zenaida Baylon, tends to show that in the afternoon of December 24, 1986, she, her daughter Maria Zenia and the victim, Florentina Sabalburo, were on their way to Baclaran to buy foodstuffs for their Noche Buena. For some time, they stood on the island at the intersection of St. Andrews Street[2] and Domestic Road, [Pasay City] waiting for the traffic light to change so they could cross to the other side of St. Andrews Street where they intended to take a

ride for Baclaran. When the traffic light turned red and the vehicles along St. Andrews Street had stopped, the three of them stepped off the island. Just as they started to cross the street, she (Baylon) saw an MMTC bus coming from their right (Tramo) which was moving at a fast speed. The next moment, the left front portion of the bus hit the victim on the right side of her head. The impact was of such force that the victim’s right ear was slashed off and she thereupon fell on the cement and became unconscious. The victim was brought by the bus driver, Apolinario Ajoc and the bus conductress to the San Juan de Dios Hospital where she was given medical attention. Florentina Sabalburo never regained consciousness and it was on January 3, 1987 that she succumbed to her injuries.[3] On February 16, 1987, private respondents filed a complaint[4] for damages against MMTC and its driver, Ajoc, with the Regional Trial Court of Makati. Docketed as Civil Case No. 16062, the complaint essentially alleged that Ajoc drove the MMTC bus in a wanton and reckless manner, in gross violation of traffic rules and regulations, without due regard for the safety of others, thus causing the untimely death of the victim. Petitioners denied the material allegations of the complaint, disclaimed any liability for the incident, and insisted that the accident was solely due to the victim’s own negligence. The appellate court summed up their version of the incident as follows: That at the time material to this case, bus no. 033, with defendant Ajoc driving, then bound towards the direction of Baclaran proper, was slowly accelerating speed on the outer right lane of the road, in response to the go signal of the traffic light situated in the intersection of Domestic Road [and Andrew Avenue], while the vehicles on the inner right lane which were going to turn left towards Domestic Road were at a stop position, the deceased FLORENTINA G. SABALBURO, whose stationary position was then covered from Ajoc’s peripheral vision by a big truck then bound to MIA Road [that] was at a stop position, suddenly, without regard to her own safety and in total defiance of traffic signs designed to protect pedestrian[s], suddenly darted across the road; Ajoc, thus caught by surprise, tried to prevent impact by releasing his accelerator pedal and applying his brakes but the time lag between the deceased’s negligent act and Ajoc’s prudent and diligent reaction to the former made the impact a certainty.[5] As special and affirmative defenses, petitioners also claimed that: (1) MMTC “hires its drivers, conductors and other employees only after they have successfully passed rigid and extensive theoretical and practical examinations designed to determine their skills and competence…and imposes upon its drivers the duty to undergo regular seminars in defensive driving techniques and road safety habits;”*6+ (2) MMTC had “taken every human care and foresight possible in carrying their passengers safely to their respective place (sic) of destination as well as in avoiding harm to the life and limbs or risk against pedestrians so that they not be held liable;”*7+ and (3) “*T+he buses of the defendant corporation, including its bus no. 033 were all properly maintained…before the buses left the garage for their respective routes on that particular day, as in all other days, they were rigidly inspected and examined and properly certified as roadworthy.”*8+ The trial court found private respondents’ version more credible and on August 12, 1993, decided the case as follows: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against defendants as follows: 1. Ordering defendants to jointly and severally pay plaintiff Martin Sabalburo actual damages in the sum of P63,943.88 representing the unpaid expenses of plaintiff in connection with the death of Florentina Sabalburo; 2. Ordering defendants to jointly and severally pay plaintiffs the sum of P180,000.00 for the loss of the earning capacity of the deceased for a period of ten (10) years; 3. Ordering defendants to jointly and severally pay plaintiff Martin Sabalburo the amount of P500,000.00 as moral damages; 4. Ordering defendants to jointly and severally pay plaintiff Martin Sabalburo the sum of P50,000.00 as exemplary damages; 5. Ordering defendants *to+ jointly and severally pay plaintiff Martin Sabalburo the sum of P50,000.00 as attorney’s fees; 6. Ordering defendants jointly and severally to pay plaintiffs the costs of this suit.

Petitioners seasonably appealed to the Court of Appeals, which docketed their appeal as CA-G.R. CV No. 45002. Before the appellate court, petitioners insisted that the accident was solely the fault of the victim since she suddenly crossed a very busy street with complete disregard for her safety and in violation of traffic rules and regulations designed to protect pedestrians. As earlier stated, the appellate court, in CA-G.R. CV No. 45002, affirmed the trial court’s decision, thus: IN JUDGMENT, we hold that the appeal interposed by appellants is not meritorious and the judgment of the lower court which we find to be in accordance with law and the evidence is therefore AFFIRMED in toto. Costs against appellants.

SO ORDERED.[10] Petitioners then moved for reconsideration, but the appellate court denied their motion in its resolution of December 10, 1999.[11] Hence, the present petition. Petitioners submit as sole issue for our resolution the following: WHETHER OR NOT ARTICLE 2179[12] AS AN EXCEPTION TO ARTICLE 2176[13] OF THE CIVIL CODE IS APPLICABLE IN THE INSTANT CASE. Petitioners insist that a closer look at the facts established by the trial court would show that the incident happened at around 3:30 in the afternoon of December 24, 1986 or barely eight (8) hours before Christmas Eve. Thus, the victim’s thoughts were naturally directed towards the Noche Buena. The victim then crossed busy Andrew Avenue for the purpose of getting a ride to Baclaran to buy food for the Christmas Eve celebration. Since her thoughts were on the Christmas Eve feast, she crossed where there was no pedestrian lane and while the green light for vehicular traffic was on. Petitioner MMTC submits that petitioner Ajoc cannot be charged with negligence considering that he cannot see what is in the mind of a pedestrian. Considering that the victim’s own negligence was the direct and proximate cause of her injuries and untimely demise, it was error for the Court of Appeals not to have applied Article 2179 of the Civil Code to the instant case. Petitioners’ claim that at the time of the incident, the victim’s mind was preoccupied with the preparations for the Noche Buena, is naught but pure conjecture and speculation, with nary a scintilla of proof to support it, according to respondents. Both the trial and appellate courts established that the immediate and proximate cause of the victim’s death was the negligent and careless driving by petitioner Ajoc. Therefore, the full force of Article 2176 of the Civil Code applies, concluded respondents. In asking us to apply Article 2179 of the Civil Code, we note that petitioners are asking us to make a finding that the victim’s own negligence was the direct and proximate cause of her death. This we cannot do. The issue of whether a person is negligent or not is a question of fact.[14] The Supreme Court is not a trier of facts,[15] although it has the power and authority to review and reverse the factual findings of lower courts where these do not conform to the evidence[16] or where the courts below came up with contradictory factual findings.[17] We have thoroughly perused the records of this case, and nowhere do we find evidence to support petitioners’ claim that the victim was so engrossed in thinking about Noche Buena while crossing a busy street. Petitioners’ stance regarding the victim’s alleged negligence is non sequitur. It simply does not follow that one who is run over by a vehicle on Christmas Eve (or any other holiday for that matter) is negligent because his thoughts were on the holiday festivities. Instead, the records support private respondents’ claim that the MMTC bus was being driven carelessly. As found by the trial court and affirmed by the Court of Appeals, the victim and her companions were standing on the island of Andrew Avenue, waiting for the traffic light to change so they could cross. Upon seeing the red light, the victim and her companions started to cross. It was then when petitioner Ajoc, who was trying to beat the red light, hit the victim. As the court a quo noted, Ajoc’s claim that “he failed to see the victim and her companions proves his recklessness and lack of caution in driving his vehicle.”*18+ Findings of fact of the trial court, especially when affirmed by the Court of Appeals, are binding and conclusive on the Supreme Court.[19] More so, as in this case, where petitioners have not adequately shown that the courts below overlooked or disregarded certain facts or circumstances of such import as would have altered the outcome of the case. Contrary to petitioners’ insistence, the applicable law in this case is Article 2176 of the Civil Code and not Article 2179. Petitioner MMTC next contends that the Court of Appeals erred in finding it solidarily liable for damages with its driver/employee, Ajoc, pursuant to the relevant paragraphs of Article 2180[20] of the Civil Code. It argues that the act of Ajoc in bringing the victim to a hospital reflects MMTC’s diligence in the selection and supervision of its drivers, particularly with regard to safety measures. Hence, having exercised the diligence of a good father of a family in the selection and supervision of its employees to prevent damage, MMTC should not be held vicariously liable. It should be stressed, however, that whenever an employee’s negligence causes damage or injury to another, there instantly arises a presumption juris tantum that there was negligence on the part of the employer, either in the selection of the employee (culpa in eligiendo) or the supervision over him after the selection (culpa in vigilando).[21] Hence, to escape solidary liability for a quasi-delict committed by his employee, an employer must rebut the presumption by presenting convincing proof that in the selection and supervision of his employee, he has exercised the care and diligence of a good father of a family.[22] In the present case, petitioner MMTC failed to rebut the presumption of negligence on its part. The claim that Ajoc’s act of bringing the victim to the nearest medical facility shows adequate supervision by MMTC over its employees deserves but scant consideration. For one, the act was after the fact of negligence on Ajoc’s part. For another, the

evidence on record shows that Ajoc’s act was neither voluntary nor spontaneous; he had to be prevailed upon by the victim’s companions to render assistance to his victim.[23] Moreover, the evidence to show that MMTC had exercised due diligence in the selection and supervision of its employees consisted merely of the pertinent guidelines for the screening and selection of its drivers, as well as periodic seminars on road safety. As found by the trial court, and affirmed by the appellate court, petitioner MMTC failed to show that its driver, Ajoc, had actually undergone such screening or had attended said seminars. As previously held, “*t+he mere formulation of various company policies on safety without showing that they were being complied with is not sufficient to exempt (an employer) from liability arising from negligence of its employees. It is incumbent upon petitioner to show that in recruiting and employing the erring driver the recruitment procedures and company policies on efficiency and safety were followed.”*24+ In this case, MMTC has made no satisfactory showing that it had paid more than lip service to its guidelines and policies in hiring and supervision. Its failure to do so cannot but warrant the proper sanctions from this Court, considering that MMTC is a government-owned public utility organized for the public welfare. Having failed to rebut the presumption of negligence on its part, MMTC is primarily and directly liable for the damages caused by its employee, the erring driver, Ajoc, pursuant to Article 2180 of the Civil Code, which provides as follows: ART. 2180. The obligation imposed by Article 2176 is demandable not only for one’s own acts or omissions-, but also for those of persons for whom one is responsible. The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor children who live in their company. Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and live in their company. The owners and managers 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 the occasion of their functions. 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. The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in Article 2176 shall be applicable. Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their custody. The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. The owners of public utilities fall within the scope of this article.[25] As earlier stated, MMTC is a public utility, organized and owned by the government for public transport service. Hence, its liability to private respondents, for the negligent and reckless acts of its driver, Ajoc, under Article 2180 of the Civil Code is both manifest and clear. WHEREFORE, the instant petition is DISMISSED. The assailed decision of the Court of Appeals in CA-G.R. CV No. 45002 is AFFIRMED. Costs against petitioners. SO ORDERED.Bellosillo, (Chairman), Mendoza, and Corona, JJ., concur. [G.R. No. 148737. June 16, 2004] ERNESTO PLEYTO and PHILIPPINE RABBIT BUS LINES, INC., petitioners, vs. MARIA D. LOMBOY and CARMELA LOMBOY, respondents. DECISION QUISUMBING, J.: For review on certiorari is the Decision[1] dated October 31, 2000 of the Court of Appeals in CA-G.R. CV No. 61300, which affirmed with modification the Decision[2] dated June 26, 1998 of the Regional Trial Court (RTC) of Dagupan City, Branch 42, in Civil Case No. 95-00724-D. The RTC ordered herein petitioners to solidarily pay damages to respondents. Petitioners likewise assail the Resolution[3] dated June 21, 2001 of the appellate court, which denied their Motion for Reconsideration. Petitioner Philippine Rabbit Bus Lines, Inc. (PRBL), with principal office at Tarlac City, Tarlac, is a public carrier, engaged in carrying passengers and goods for a fare. It serviced various routes in Central and Northern Luzon. Petitioner Ernesto Pleyto was a bus driver employed by PRBL at the time of the incident in question.

Respondent Maria D. Lomboy of Calasiao, Pangasinan, is the surviving spouse of the late Ricardo Lomboy, who died in Pasolingan, Gerona, Tarlac, in a vehicular accident at around 11:30 a.m. of May 16, 1995. The accident was a head-on collision between the PRBL bus driven by petitioner Pleyto and the car where Ricardo was a passenger. Respondent Carmela Lomboy is the eldest daughter of Ricardo and Maria Lomboy. Carmela suffered injuries requiring hospitalization in the same accident which resulted in her father’s death. On November 29, 1995, herein respondents, as pauper-litigants, filed an action for damages against PRBL and its driver, Pleyto, with the RTC of Dagupan City. In their complaint, which was docketed as Civil Case No. 95-00724-D, the Lomboys prayed that they be indemnified for the untimely death of Ricardo Lomboy, his lost earnings, the medical and hospitalization expenses of Carmela, and moral damages. The facts, established during trial and affirmed by the appellate court, are as follows: At approximately 11:30 a.m. of May 16, 1995, PRBL Bus No. 1539, with Plate No. CVD 556, driven by petitioner Pleyto, was traveling along MacArthur Highway in Gerona, Tarlac bound for Vigan, Ilocos Sur. It was drizzling that morning and the macadam road was wet. Right in front of the bus, headed north, was the tricycle with Plate No. CX 7844, owned and driven by one Rodolfo Esguerra. According to Rolly Orpilla, a witness and one of the bus passengers, Pleyto tried to overtake Esguerra’s tricycle but hit it instead. Pleyto then swerved into the left opposite lane. Coming down the lane, some fifty meters away, was a southbound Mitsubishi Lancer car, with Plate No. PRS 941, driven by Arnulfo Asuncion. The car was headed for Manila with some passengers. Seated beside Arnulfo was his brother-in-law, Ricardo Lomboy, while in the back seat were Ricardo’s 18-year old daughter Carmela and her friend, one Rhino Daba. PRBL Bus No. 1539 smashed head-on the car, killing Arnulfo and Ricardo instantly. Carmela and Rhino suffered injuries, but only Carmela required hospitalization. In their Answer, petitioners PRBL and Ernesto Pleyto both claimed that the bus was running slowly at the time of the accident. They pointed out that Bus No. 1539 had been inspected by driver Pleyto and examined by a mechanic prior to the trip, in accordance with the company’s standard operating procedure. It was found in good working condition. Pleyto claimed that while cruising along the highway at Gerona, Tarlac, he noticed Esguerra’s tricycle and followed it at a safe distance after he was unable to overtake it. Suddenly and without warning, the tricycle stopped in the middle of the road. Pleyto stepped on the brakes and the bus lost speed. But, since it skidded towards the direction of the tricycle, he swerved the bus to the other lane to avoid hitting it, only to collide with the Manila-bound Mitsubishi car. On June 26, 1998, the trial court decided Civil Case No. 95-00724-D as follows: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and against the defendants ordering the defendants to pay solidarily the plaintiffs the following amounts: 1) P50,000.00 as indemnification for the death of Ricardo Lomboy; 2) P1,642,521.00 for lost earnings of Ricardo Lomboy; 3) P59,550.00 as actual damages for the funeral, wake, religious services and prayer for the soul of the departed; 4) P52,000.00 for the medical treatment and medicine of Carmela Lomboy; 5) P500,000.00 as moral damages for the wife and children excluding Carmela Lomboy; 6) P50,000.00 as moral damages for Carmela Lomboy; and 7) To pay costs.

The filing fee the plaintiffs should have paid is hereby ordered to be paid by the plaintiffs to the Clerk of Court of this Court upon satisfaction of the foregoing amounts to the plaintiffs by the defendants. In ruling for respondents, the RTC found Pleyto negligent and lacking in precaution when he overtook the tricycle with complete disregard of the approaching car in the other lane. It found the testimony of Rolly Orpilla credible and persuasive as against Pleyto’s self-serving and unbelievable testimony. The court found that Pleyto should have been more prudent in overtaking a tricycle, considering that it was drizzling, the road was slippery, and another vehicle was approaching from the opposite direction. The RTC found that Pleyto had clearly violated traffic rules and regulations, and thus was negligent under Article 2185[5] of the Civil Code of the Philippines because petitioner Pleyto failed to present any proof to rebut the presumption. The lower court likewise held

co-petitioner PRBL equally liable under Article 2180[6] of the Civil Code for its failure to show that it had maintained proper supervision of its employees notwithstanding strict standards in employee selection. Petitioners appealed the judgment of the trial court to the Court of Appeals in CA-G.R. CV No. 61300. The appellate court, however, affirmed the decision of the trial court, with modification in the award of damages, thus: Wherefore, with the MODIFICATION that the award for actual damages is reduced to P39,550.00 for funeral and religious services and P27,000.00 for medical expenses of Carmela Lomboy; and the award for loss of earning capacity is accordingly corrected to P1,152,000.00, the appealed decision is AFFIRMED. The Court of Appeals affirmed the findings of the RTC with respect to Pleyto’s fault and negligence. The appellate court noted that this was evident in his overtaking Esguerra’s tricycle despite the drizzle, the slippery road, and an oncoming car a mere fifty meters away. The court reasoned that the bus must have been speeding since despite braking, the bus still hit the tricycle, and then rammed the car in the opposite lane with such force as to throw the car off the road. The appellate court also found petitioner PRBL liable as owner of the bus and as employer of Pleyto pursuant to Article 2180 of the Civil Code, for its failure to observe the required diligence in its supervision of its employees and the safe maintenance of its buses. In modifying the award of damages, the appellate court took note of the amounts that were duly supported by receipts only. Petitioners then moved for reconsideration, but the appellate court denied it. Hence, the instant petition, premised on the following grounds: A. THE SUPREME COURT MAY REVIEW THE CONCLUSION DRAWN BY THE COURT OF APPEALS, NAMELY, THAT THE PRBL BUS OVERTOOK A TRICYCLE THUS CAUSING THE ACCIDENT, SINCE IT WAS MADE IN DISREGARD OF FACTS UNDISPUTED BY THE PARTIES. B. THE COURT OF APPEALS DISREGARDED THE DOCTRINE LAID DOWN IN VILLA REY TRANSIT, INC. v. COURT OF APPEALS, G.R. NO. L25499, FEBRUARY 18, 1970, 31 SCRA 511, WHEN IT ARBITRARILY PEGGED THE MONTHLY LIVING EXPENSES AT 50% OF GROSS EARNINGS.[8] At the outset, it appears that petitioners call for this Court to review the factual findings and conclusions of the Court of Appeals. Petitioners assail the appellate court’s affirmance of the finding by the trial court that Pleyto was negligent. The issue of negligence is factual and, in quasi-delicts, crucial in the award of damages.[9] But it is well established that under Rule 45 of the 1997 Rules of Civil Procedure, only questions of law, not of fact, may be raised before the Supreme Court. It must be stressed that this Court is not a trier of facts, and it is not its function to re-examine and weigh anew the respective evidence of the parties.[10] Factual findings of the trial court, especially those affirmed by the Court of Appeals, are conclusive on this Court when supported by the evidence on record.[11] In the present petition, no compelling reason is shown by petitioners whatsoever for this Court to reverse those findings. Our examination of the records shows that the evidence clearly supports the following findings of the appellate court: The negligence and fault of appellant driver is manifest. He overtook the tricycle despite the oncoming car only fifty (50) meters away from him. Defendant-appellant’s claim that he was driving at a mere 30 to 35 kilometers per hour does not deserve credence as it would have been easy to stop or properly maneuver the bus at this speed. The speed of the bus, the drizzle that made the road slippery, and the proximity of the car coming from the opposite direction were duly established by the evidence. The speed at which the bus traveled, inappropriate in the light of the aforementioned circumstances, is evident from the fact despite the application of the brakes, the bus still bumped the tricycle, and then proceeded to collide with the incoming car with such force that the car was pushed beyond the edge of the road to the ricefield (Paragraph 8, Affidavit of Rolly Orpilla marked Exh. “D” and Traffic Report marked Exh. “E”, Folder of Exhibits)….*12+ Indeed, petitioner Pleyto violated traffic rules and regulations when he overtook the tricycle despite the presence of an oncoming car in the other lane. Article 2185 of the Civil Code lays down the presumption that a person driving a motor vehicle has been negligent if at the time of the mishap, he was violating any traffic regulation. As found by both the Court of Appeals and the trial court, petitioners failed to present any convincing proof rebutting such presumption. A driver abandoning his proper lane for the purpose of overtaking another vehicle in an ordinary situation has the duty to see to it that the road is clear and not to proceed if he cannot do so in safety. When a motor vehicle is approaching or rounding a curve, there is special necessity for keeping to the right side of the road and the driver does not have the right to drive on the left hand side relying upon having time to turn to the right if a car approaching from the opposite direction comes into view.[13] The Court of Appeals found PRBL liable for Pleyto’s negligence pursuant to Article 2180 in relation to Article 2176*14+ of the Civil Code. Under Article 2180, when an injury is caused by the negligence of a servant or an employee, the master or employer is

presumed to be negligent either in the selection or in the supervision of that employee. This presumption may be overcome only by satisfactorily showing that the employer exercised the care and the diligence of a good father of a family in the selection and the supervision of its employee.[15] In fine, when the employee causes damage due to his own negligence while performing his own duties, there arises the juris tantum presumption that the employer is negligent, rebuttable only by proof of observance of the diligence of a good father of a family.[16] Thus, in the selection of prospective employees, employers are required to examine them as to their qualifications, experience and service records. With respect to the supervision of employees, employers must formulate standard operating procedures, monitor their implementation and impose disciplinary measures for breaches thereof. These facts must be shown by concrete proof, including documentary evidence.[17] In the present case, petitioners presented several documents[18] in evidence to show the various tests and pre-qualification requirements imposed upon petitioner Pleyto before his hiring as a driver by PRBL. However, no documentary evidence was presented to prove that petitioner PRBL exercised due diligence in the supervision of its employees, including Pleyto. Citing precedents, the Court of Appeals opined, “in order that the defense of due diligence in the selection and supervision of employees may be deemed sufficient and plausible, it is not enough for the employer to emptily invoke the existence of company guidelines and policies on hiring and supervision. As the negligence of the employee gives rise to the presumption of negligence on the part of the employer, the latter has the burden of proving that it has been diligent not only in the selection of employees but also in the actual supervision of their work. The mere allegation of the existence of hiring procedures and supervisory policies without anything more is decidedly not sufficient to overcome such presumption. (Metro Manila Transit Corp. vs. CA (223 SCRA 521). The trial court ratiocinated: Indeed, the testimony of the said two witnesses of the PRBL would impress one to believe that the PRBL has always exercised the strictest standard of selecting its employees and of maintaining its vehicles to avoid injury or damage to the life and limb of people on the road whether of its own passengers or pedestrians or occupants or other vehicles. It has not however, shown to the satisfaction of the Court that it has maintained proper supervision of its employees, especially drivers while in the actual operation of its buses. While it has a list of procedures and testing when it comes to recruitment and another list of what should be done with its buses before they are allowed to run on the road, it has no list of procedures and duties to be followed by a driver while he is operating a vehicle to prevent injury to persons and damage to property. Neither has it proved to the Court that there are people employed by it to supervise its drivers so that it can be seen to it that all the safety procedures to prevent accident or damage to property or injury to people on the road have been in place. It is in this aspect of supervising its employees where this Court has found the defendant PRBL deficient.” (Decision p. 29, Rollo)*19+ In our view, no reversible error was committed by the Court of Appeals when it sustained what the trial court found after trial that PRBL had failed to rebut the presumption of negligence on its part. Said finding binds us now in this review on certiorari. Hence, the only remaining issue relevant for our resolution concerns the award to herein respondents for damages as well as the loss of earning capacity of the victim, Ricardo Lomboy. Petitioners argue that the award of loss of earning capacity to respondents is devoid of legal basis. They fault the appellate court for pegging the monthly living expenses at 50% of gross earnings since, they claim, this runs contrary to Villa Rey Transit, Inc. v. Court of Appeals,*20+ which held that “the amount recoverable is not loss of the entire earning, but rather the loss of that portion of the earnings which the beneficiary would have received.” Petitioners also point out that respondents failed to prove the gross income of the deceased Ricardo Lomboy, thus, making the computations of the appellate court doubtful, to say the least. Respondents counter that the deduction of 50% of the gross income as reasonable and necessary living expenses by the appellate court is in accord with established jurisprudence, pointing to our decision in Negros Navigation Co., Inc. v. Court of Appeals.[21] Petitioners, in our view, misread the Villa Rey Transit case, where we emphasized that: “Thus, it has been consistently held that earning capacity, as an element of damages to one’s estate for his death by wrongful act is necessarily his net earning capacity or his capacity to acquire money, “less the necessary expense for his own living”. Stated otherwise, the amount recoverable is not loss of the entire earning, but rather the loss of that portion of the earnings which the beneficiary would have received. In other words, only net earnings, not gross earning, are to be considered that is, the total of the earnings less expenses necessary in the creation of such earnings or income and less living and other incidental expenses.”*22] In considering the earning capacity of the victim as an element of damages, the net earnings, which is computed by deducting necessary expenses from the gross earnings, and not the gross earnings, is to be utilized in the computation. Note that in the

present case, both the Court of Appeals and the trial court used net earnings, not gross earnings in computing loss of earning capacity. The amount of net earnings was arrived at after deducting the necessary expenses (pegged at 50% of gross income) from the gross annual income. This computation is in accord with settled jurisprudence, including the Villa Rey case. Petitioners’ claim that no substantial proof was presented to prove Ricardo Lomboy’s gross income lacks merit. Failure to present documentary evidence to support a claim for loss of earning capacity of the deceased need not be fatal to its cause. Testimonial evidence suffices to establish a basis for which the court can make a fair and reasonable estimate of the loss of earning capacity.[23] Hence, the testimony of respondent Maria Lomboy, Ricardo’s widow, that her husband was earning a monthly income of P8,000 is sufficient to establish a basis for an estimate of damages for loss of earning capacity. It is well-settled in jurisprudence that the factors that should be taken into account in determining the compensable amount of lost earnings are: (1) the number of years for which the victim would otherwise have lived; and (2) the rate of loss sustained by the heirs of the deceased. Jurisprudence provides that the first factor, i.e., life expectancy, is computed by applying the formula (2/3 x [80 - age at death]) adopted in the American Expectancy Table of Mortality or the Actuarial Combined Experience Table of Mortality. As to the second factor, it is computed by multiplying the life expectancy by the net earnings of the deceased, i.e., the total earnings less expenses necessary in the creation of such earnings or income and less living and other incidental expenses. The net earning is ordinarily computed at fifty percent (50%) of the gross earnings.[24] Thus, the formula used by this Court in computing loss of earning capacity is: Net Earning Capacity = [2/3 x (80 – age at time of death) x (gross annual income – reasonable and necessary living expenses)].[25] It was established that Ricardo Lomboy was 44 years old at the time of his death and is earning a monthly income of P8,000 or a gross annual income (GAI) of P96,000.[26] Using the cited formula, the Court of Appeals correctly computed the Loss of Net Earning Capacity as P1,152,000, net of and after considering a reasonable and necessary living expenses of 50% of the gross annual income or P48,000. A detailed computation is as follows: NET EARNING CAPACITY (X) X =

= LIFE EXPECTANCY x GROSS – LIVING [2/3 (80-age at the time ANNUAL EXPENSES of death) INCOME (GAI) (50% OF GAI) [2/3 (80-44)] x [P96,000 – (50% x P96,000)

X

=

[2/3 (36)]

X

=

24

X

=

x

[P96,000 – 48,000]

x

48,000

P 1,152,000.00

Thus, no reversible error may be attributed to the court a quo in fixing the loss of earning capacity at said amount. We likewise sustain the reduction of the award of actual damages from P59,550 for funeral and burial expenses of Ricardo and P52,000 for medical expenses of Carmela Lomboy to P39,550[27] and P27,000, respectively, as only these latter amounts were duly supported by receipts.[28] To justify an award of actual damages, there must be competent proof of the actual amount of loss, credence can be given only to claims which are duly supported by receipts.[29] However, while the award of P50,000 as moral damages to Carmela Lomboy is sustained, the award for moral damages of P500,000 to the heirs of Ricardo Lomboy should be reduced for being excessive. Under Article 2206 of the Civil Code, the spouse, legitimate children and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased.[30] However, we must stress that moral damages, though incapable of pecuniary estimation, are in the category of an award designed to compensate the claimant for actual injury and are not meant to enrich complainant at the expense of defendant.[31] Moral damages are awarded to enable the injured party to obtain means, diversions or amusements that will serve to alleviate the moral suffering he/she has undergone, by reason of the defendant’s culpable action. Its award is aimed at restoration, as much as possible, of the spiritual status quo ante; thus it must be proportionate to the suffering inflicted.[32] Under the circumstances of this case, an award of P100,000 to the heirs of Ricardo Lomboy would be justified and in keeping with the purpose of the law and jurisprudence in allowing moral damages.[33] The indemnification award of P50,000 is also sustained.

WHEREFORE, the assailed Decision of the Court of Appeals in CA-G.R. CV No. 61300 is AFFIRMED, with the sole MODIFICATION that the award of moral damages to the heirs of Ricardo Lomboy is reduced from P500,000.00 to P100,000.00. No pronouncement as to costs. SO ORDERED. Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

YHT REALTY CORPORATION, ERLINDA LAINEZ and ANICIA PAYAM v. CA and MAURICE McLOUGHLIN 2005 / Tinga Foreigner rented an SDB and placed valuables there, some of which he lost. He wanted to hold the hotel liable but it cited theUndertaking that the foreigner signed or executed, which said that the hotel shall not be held liable for such losses. Now, the foreigner is contesting these provisions of the Undertaking. He won, since the provisions violated NCC 2003. END! McLoughlin is an Australian businessman-philanthropist who usually visits PH. His contact here is Brunhilda Tan .Lopez was the hotel manager, while Lainez and Payam had custody of the keys of the safety deposit boxes [SDB]. SDB procedure —The SDB could only be opened using two keys —one given to the registered guest, and the other in the possession of hotel management. When the guest wants to open the SDB, only he can personally request the management, and an employee would accompany the guest to assist in opening the SDB with the two keys. When McLoughlin arrived from Australia, he registered with Tropicana and rented an SDB . He allegedly had 3 envelopes (US$10k; US $5k; AUS $10k), 2 envelopes containing letters and credit cards, 2 bank books, and a checkbook in his SDB. Before leaving for a brief trip, he opened his SDB to get some items. He found that one envelope contained only USD $3k . He checked out of Tropicana upon returning to Manila, and he eventually discovered that an envelope was short of $5k. Some jewelry he bought went missing. When he inquired about this, he did not receive a favorable response. He registered again in Tropicana, and placed in the SDB three envelopes (US $15k; AUS $10k; documents). Twelve days later, he noticed that the USD envelope lacked $2k, while the AUSD envelope lacked AUS $4.5k . When he confrontedLainez and Payam, they admitted that it was Tan who opened the SDB, who admitted stealing his key. Lopez wrote a promissory note — I promise to pay Mr. Maurice McLoughlin the amount of AUS$4k and US$2k or its equivalent in Philippine currency on or before May 5, 1988. Lopez requested Tan to sign the promissory note and Lopez also signed as a witness. Despite the execution of promissory note by Tan, McLoughlin insisted that it must be the hotel who must assume responsibility for the loss he suffered. However, Lopez refused to accept the responsibility relying on the conditions for renting the SDB (Undertaking For The Use of Safety Deposit Box): -To release and hold free and blameless the hotel from any liability arising from any loss in the contents and/or use of the SDB for any cause whatsoever, including but not limited to the presentation or use thereof by any other person should the key be lost - To return the key and execute the release in favor of the hotel upon giving up the use of the SDB McLoughlin consulted his lawyers in Australia , and they said that the stipulations are void for being violative of universal hotel practices and customs . His lawyers prepared a letter, and sent it to President Corazon Aquino. The matter was eventually referred to the Western Police District. Eventually, a complaint for damages was filed against YHT Realty Corporation, Lopez, Lainez, Payam and Tan for the loss of money, but trial proceeded without Lopez and Tan. During the trial, McLoughlin had been in and out of the country to attend to urgent business in Australia, and while staying in the Philippines to attend the hearing, he incurred various expenses; hence, the SC award .The RTC rendered judgment in favor of McLoughlin. It found that defendants acted with gross negligence in the performance and exercise of their duties and obligations as innkeepers and were therefore liable to answer for the losses incurred by McLoughlin. It ruled that the aforementioned provisions of the Undertaking are not valid for being contrary to the express mandate of NCC 2003 and against public policy . Thus, there being fraud or wanton conduct on the part of defendants, theyshould be responsible for all damages which may be attributed to the non-performance of their contractual obligations. CA affirmed RTC, except as to the amount of damages awarded ( see last part of digest ; SC affirmed CA award ISSUE :WON the Undertaking for the Use of Safety Deposit Box executed by McLoughlin is null and void. YES RATIO [I placed the provisions here, as this is the only hotel case.] NCC 1998-2003 of NCC READ: APPLICABLE IN THIS CASE

NCC 2003 was incorporated as an expression of public policy. The hotel business like the common carrier’s business is imbued with public interest . The twin duty constitutes the essence of the business: hotelkeepers are bound to provide not only lodging for hotel guests and security to their persons and belongings. The law does not allow such duty to the public to benegated or diluted by any contrary stipulation in so-called “undertakings” that ordinarily appear in prepared forms imposed by hotel keepers on guests for their signature.In an early case, it was held that it is not necessary that the guests’ effects be actually delivered to the innkeepers ortheir employees, as it is enough that such effects are within the hotel. With greater reason should the liability of the hotelkeeper be enforced when the items are taken without the guest’s knowledge and consent from an SDB provided by thehotel itself. Paragraphs (2) and (4) of the “undertaking” manifestly contravene NCC 2003 . The undertaking was intended to bar any claim against Tropicana for any loss of the contents of the SDB, WON negligence was incurred by Tropicana or its employees. The NCC is explicit that the responsibility of the hotelkeeper shall extend to loss of, or injury to, the personal property of the guests even if caused by servants or employees of the keepers of hotels or inns as well as by strangers, Except as it may proceed from any force majeure . In this case, the thief (Tan) employed no use of arms or an irresistible force toqualify as force majeure , so the hotel is not exempted from liability. Petitioners likewise anchor their defense on NCC 2002, to which SC says NO WAY! The justification would render nugatory the public interest sought to be protected. What if the negligence of the employer orits employees facilitated the consummation of a crime committed by the registered guest’s relatives or visitor? Should the lawexculpate the hotel from liability since the loss was due to the act of the visitor of the registered guest of the hotel? Hence, thisprovision presupposes that the hotelkeeper is not guilty of concurrent negligence or has not contributed in any degree to theoccurrence of the loss. A depositary is not responsible for the loss of goods by theft, unless his actionable negligencecontributes to the loss. Tropicana was guilty of concurrent negligence. To rule otherwise would result in undermining the safety of the SDBsin hotels, for the management will be given imprimatur to allow any person, under the pretense of being a family member or avisitor of the guest, to have access without fear of any liability that will attach in case such person turns out to be a complete stranger. Torts part of the case Given the established SDB procedure, is inevitable to conclude that the management had at least a hand in the consummation of the taking. The employees even admitted that they assisted Tan on three (!) separate occasions in opening McLo ughlin’s SDB. The management failed to notify McLoughlin of the incident and waited for him to discover the taking before it disclosed the matter to him. Therefore, Tropicana should be held responsible for the damage suffered by McLoughlin by reason of the negligence of its employees. FAIL DEFENSE OF HOTEL: We thought Ms. Tan was your wife, Mr. McLoughlin! To which SC says: Mere close companionship and intimacy are not enough to warrant such conclusion considering that what is involved in the instant case is the very safety of McLoughlin’s deposit. (haha) If only petitioners exercised due diligence, they should have confronted him as to his relationship with Tan considering that the latter had been observed opening McLoughlin’s SDB a number of times at the early hours of the morning .NCC 1170- Those who, in the performance of their obligations , are guilty of negligence , are liable for damages. NCC 2180 (4)- provides that the owners and managers 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 the occasion of their functions MERCURY DRUG v. HUANG 525 SCRA 427 (2007) On appeal are the Decision[1] and Resolution[2] of the Court of Appeals in CA-G.R. CV No. 83981, dated February 16, 2006 and March 30, 2006, respectively which affirmed with modification the Decision[3] of the Regional Trial Court (RTC) of Makati City, dated September 29, 2004. The trial court found petitioners jointly and severally liable to pay respondents damages for the injuries sustained by respondent Stephen Huang, son of respondent spouses Richard and Carmen Huang. First, the facts: Petitioner Mercury Drug Corporation (Mercury Drug) is the registered owner of a six-wheeler 1990 Mitsubishi Truck with plate number PRE 641 (truck). It has in its employ petitioner Rolando J. del Rosario as driver. Respondent spouses Richard and Carmen Huang are the parents of respondent Stephen Huang and own the red 1991 Toyota Corolla GLI Sedan with plate number PTT 775 (car).

These two vehicles figured in a road accident on December 20, 1996 at around 10:30 p.m. within the municipality of Taguig, Metro Manila. Respondent Stephen Huang was driving the car, weighing 1,450 kg., while petitioner Del Rosario was driving the truck, weighing 14,058 kg. Both were traversing the C-5 Highway, north bound, coming from the general direction of Alabang going to Pasig City. The car was on the left innermost lane while the truck was on the next lane to its right, when the truck suddenly swerved to its left and slammed into the front right side of the car. The collision hurled the car over the island where it hit a lamppost, spun around and landed on the opposite lane. The truck also hit a lamppost, ran over the car and zigzagged towards, and finally stopped in front of Buellah Land Church. At the time of the accident, petitioner Del Rosario only had a Traffic Violation Receipt (TVR). His driver’s license had been confiscated because he had been previously apprehended for reckless driving. The car, valued at P300,000.00, was a total wreck. Respondent Stephen Huang sustained massive injuries to his spinal cord, head, face, and lung. Despite a series of operations, respondent Stephen Huang is paralyzed for life from his chest down and requires continuous medical and rehabilitation treatment. Respondents fault petitioner Del Rosario for committing gross negligence and reckless imprudence while driving, and petitioner Mercury Drug for failing to exercise the diligence of a good father of a family in the selection and supervision of its driver. In contrast, petitioners allege that the immediate and proximate cause of the accident was respondent Stephen Huang’s recklessness. According to petitioner Del Rosario, he was driving on the left innermost lane when the car bumped the truck’s front right tire. The truck then swerved to the left, smashed into an electric post, crossed the center island, and stopped on the other side of the highway. The car likewise crossed over the center island and landed on the same portion of C-5. Further, petitioner Mercury Drug claims that it exercised due diligence of a good father of a family in the selection and supervision of all its employees. The trial court, in its Decision dated September 29, 2004, found petitioners Mercury Drug and Del Rosario jointly and severally liable to pay respondents actual, compensatory, moral and exemplary damages, attorney’s fees, and litigation expenses. The dispositive portion reads: WHEREFORE, judgment is rendered finding defendants Mercury Drug Corporation, Inc. and Rolando del Rosario, jointly and severally liable to pay plaintiffs Spouses Richard Y. Huang and Carmen G. Huang, and Stephen Huang the following amounts: 1. Two Million Nine Hundred Seventy Three Thousand Pesos (P2,973,000.00) actual damages; 2. As compensatory damages: a. Twenty Three Million Four Hundred Sixty One Thousand, and Sixty-Two Pesos (P23,461,062.00) for life care cost of Stephen; b. Ten Million Pesos (P10,000,000.00) as and for lost or impaired earning capacity of Stephen; 3. Four Million Pesos (P4,000,000.00) as moral damages; 4. Two Million Pesos (P2,000,000.00) as exemplary damages; and 5. One Million Pesos (P1,000,000.00) as attorneys fees and litigation expense.[4] On February 16, 2006, the Court of Appeals affirmed the decision of the trial court but reduced the award of moral damages to P1,000,000.00. The appellate court also denied the motion for reconsideration filed by petitioners. Hence, this appeal. Petitioners cite the following grounds for their appeal: 1. That the subject Decision which dismissed the appeal of petitioners herein but AFFIRMED WITH MODIFICATION the decision of the Regional Trial Court, Branch 64, Makati City, in that the award of moral damages was reduced to P1,000,000.00 and its Resolution dated March 30, 2006, which dismissed outright the Motion for Reconsideration must be set aside because the Honorable Court of Appeals committed reversible error: A. IN DENYING OUTRIGHTLY THE MOTION FOR RECONSIDERATION ON ALLEGEDLY BEING FILED OUT OF TIME FOR ONE DAY; B. IN ACCORDING GREATER WEIGHT TO THE EVIDENCE ADDUCED BY THE RESPONDENTS HEREIN AND COMPLETELY DISREGARDING THE DEFENSE INTERPOSED BY THE PETITIONERS HEREIN; C. IN DISREGARDING COMPLETELY ALL EVIDENCES PRESENTED BY THE PETITIONERS HEREIN AND PROCEEDED TO RENDER ITS DECISION BASED ON PRESUMPTIONS AND PERSONAL OPINIONS OF PEOPLE WHO ARE NOT WITNESSES TO THE ACCIDENT; D. IN AWARDING DAMAGES IN FAVOR OF RESPONDENTS HEREIN; E. IN FINDING THAT MERCURY DRUG CORPORATION FAILED TO EXERCISE THE DILIGENCE REQUIRED IN SUPERVISING ITS EMPLOYEES DESPITE OVERWHELMING EVIDENCE PRESENTED BY PETITIONER COMPANY; F. IN FINDING THAT PETITIONER ROLANDO DEL ROSARIO WAS NEGLIGENT IN DRIVING THE TRUCK AT THE TIME OF ACCIDENT AND TOTALLY DISREGARDING THE EVIDENCES PRESENTED DURING THE TRIAL OF THE CASE. G. IN PRESENTING ONLY IN THE DECISION TESTIMONIES FAVORABLE TO THE RESPONDENTS HEREIN AND COMPLETELY DISREGARDING THE EVIDENCES PRESENTED BY THE PETITIONERS HEREIN WHICH CONTRADICTED SUCH TESTIMONIES NOT ONLY THROUGH ORAL TESTIMONIES BUT AS WELL AS DOCUMENTARY EVIDENCES.[5] We affirm the findings of the trial court and the appellate court that petitioner Del Rosario was negligent. The evidence does not support petitioners’ claim that at the time of the accident, the truck was at the left inner lane and that it was respondent Stephen Huang’s car, at its right, which bumped the right front side of the truck. Firstly, petitioner Del Rosario could not precisely tell which part of the truck was hit by the car,[6] despite the fact that the truck was snub-nosed and a lot higher than the car. Petitioner Del Rosario could not also explain why the car landed on the opposite lane of C-5 which was on its left side. He said that “the car did not pass in front of him after it hit him or under him or over him or behind him.”*7+ If the truck were really at the left lane and the car

were at its right, and the car hit the truck at its front right side, the car would not have landed on the opposite side, but would have been thrown to the right side of the C-5 Highway. Noteworthy on this issue is the testimony of Dr. Marlon Rosendo H. Daza, an expert in the field of physics. He conducted a study based on the following assumptions provided by respondents: 1. Two vehicles collided; 2. One vehicle is ten times heavier, more massive than the other; 3. Both vehicles were moving in the same direction and at the same speed of about 85 to 90 kilometers per hour; 4. The heavier vehicle was driving at the innermost left lane, while the lighter vehicle was at its right. Dr. Daza testified that given the foregoing assumptions, if the lighter vehicle hits the right front portion of the heavier vehicle, the general direction of the light vehicle after the impact would be to the right side of the heavy vehicle, not the other way around. The truck, he opined, is more difficult to move as it is heavier. It is the car, the lighter vehicle, which would move to the right of, and away from the truck. Thus, there is very little chance that the car will move towards the opposite side, i.e., to the left of the truck. Dr. Daza also gave a further study on the basis of the same assumptions except that the car is on the left side of the truck, in accordance with the testimony of respondent Stephen Huang. Dr. Daza concluded that the general direction of the car after impact would be to the left of the truck. In this situation, the middle island against which the car was pinned would slow down the car, and enable the truck to catch up and hit the car again, before running over it.[8] To support their thesis, petitioners tried to show the damages that the truck sustained at its front right side. The attempt does not impress. The photographs presented were taken a month after the accident, and Rogelio Pantua, the automechanic who repaired the truck and authenticated the photographs, admitted that there were damages also on the left side of the truck.[9] Worse still, petitioner Del Rosario further admitted that after the impact, he lost control of the truck and failed to apply his brakes. Considering that the car was smaller and lighter than the six-wheeler truck, the impact allegedly caused by the car when it hit the truck could not possibly be so great to cause petitioner to lose all control that he failed to even step on the brakes. He testified, as follows: ATTY. DIAZ: May I proceed, Your Honor. You were able to apply the brakes, were you sir? WITNESS: No more, sir, because I went over the island. ATTY. DIAZ: Because as you said you lost control, correct sir? WITNESS: Yes, sir. ATTY. DIAZ: In other words, sir from the time your truck was hit according to you up to the time you rested on the shoulder, you traveled fifty meters? WITNESS: Yes, sir, about that distance. ATTY. DIAZ: And this was despite the fact that you were only traveling at the speed of seventy five kilometers per hour, jumped over the island, hit the lamppost, and traveled the three lanes of the opposite lane of C-5 highway, is that what you want to impress upon this court? WITNESS: Yes, sir.[10] We therefore find no cogent reason to disturb the findings of the RTC and the Court of Appeals. The evidence proves petitioner Del Rosario’s negligence as the direct and proximate cause of the injuries suffered by respondent Stephen Huang. Petitioner Del Rosario failed to do what a reasonable and prudent man would have done under the circumstances. We now come to the liability of petitioner Mercury Drug as employer of Del Rosario. Articles 2176 and 2180 of the Civil Code provide: Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. Art. 2180. The obligation imposed by article 2176 is demandable not only for one’s own acts or omissions, but also for those of persons for whom one is responsible. xxx The owners and managers 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 the occasion of their functions. xxx The liability of the employer under Art. 2180 of the Civil Code is direct or immediate. It is not conditioned on a prior recourse against the negligent employee, or a prior showing of insolvency of such employee. It is also joint and solidary with the employee.[11]

To be relieved of liability, petitioner Mercury Drug should show that it exercised the diligence of a good father of a family, both in the selection of the employee and in the supervision of the performance of his duties. Thus, in the selection of its prospective employees, the employer is required to examine them as to their qualifications, experience, and service records.[12] With respect to the supervision of its employees, the employer should formulate standard operating procedures, monitor their implementation, and impose disciplinary measures for their breach. To establish compliance with these requirements, employers must submit concrete proof, including documentary evidence.[13] In the instant case, petitioner Mercury Drug presented testimonial evidence on its hiring procedure. According to Mrs. Merlie Caamic, the Recruitment and Training Manager of petitioner Mercury Drug, applicants are required to take theoretical and actual driving tests, and psychological examination. In the case of petitioner Del Rosario, however, Mrs. Caamic admitted that he took the driving tests and psychological examination when he applied for the position of Delivery Man, but not when he applied for the position of Truck Man. Mrs. Caamic also admitted that petitioner Del Rosario used a Galant which is a light vehicle, instead of a truck during the driving tests. Further, no tests were conducted on the motor skills development, perceptual speed, visual attention, depth visualization, eye and hand coordination and steadiness of petitioner Del Rosario. No NBI and police clearances were also presented. Lastly, petitioner Del Rosario attended only three driving seminars – on June 30, 2001, February 5, 2000 and July 7, 1984. In effect, the only seminar he attended before the accident which occurred in 1996 was held twelve years ago in 1984. It also appears that petitioner Mercury Drug does not provide for a back-up driver for long trips. At the time of the accident, petitioner Del Rosario has been out on the road for more than thirteen hours, without any alternate. Mrs. Caamic testified that she does not know of any company policy requiring back-up drivers for long trips.[14] Petitioner Mercury Drug likewise failed to show that it exercised due diligence on the supervision and discipline over its employees. In fact, on the day of the accident, petitioner Del Rosario was driving without a license. He was holding a TVR for reckless driving. He testified that he reported the incident to his superior, but nothing was done about it. He was not suspended or reprimanded.[15] No disciplinary action whatsoever was taken against petitioner Del Rosario. We therefore affirm the finding that petitioner Mercury Drug has failed to discharge its burden of proving that it exercised due diligence in the selection and supervision of its employee, petitioner Del Rosario. We now consider the damages which respondents should recover from the petitioners. The trial court awarded the following amounts: 1. Two Million Nine Hundred Seventy-Three Thousand Pesos (P2,973,000.00) actual damages; 2. As compensatory damages: a. Twenty-Three Million Four Hundred Sixty One Thousand, and Sixty-Two Pesos (P23,461,062.00) for life care cost of Stephen; b. Ten Million Pesos (P10,000,000.00) as and for lost or impaired earning capacity of Stephen; 3. Four Million Pesos (P4,000,000.00) as moral damages; 4. Two Million Pesos (P2,000,000.00) as exemplary damages; and 5. One Million Pesos (P1,000,000.00) as attorney’s fees and litigation expense. The Court of Appeals affirmed the decision of the trial court but reduced the award of moral damages to P1,000,000.00. With regard to actual damages, Art. 2199 of the Civil Code provides that “*E+xcept as provided by law or by stipulation one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved x x x.” In the instant case, we uphold the finding that the actual damages claimed by respondents were supported by receipts. The amount of P2,973,000.00 represented cost of hospital expenses, medicines, medical services and supplies, and nursing care services provided respondent Stephen from December 20, 1996, the day of the accident, until December 1998. Petitioners are also liable for all damages which are the natural and probable consequences of the act or omission complained of.[16] The doctors who attended to respondent Stephen are one in their prognosis that his chances of walking again and performing basic body functions are nil. For the rest of his life, he will need continuous rehabilitation and therapy to prevent further complications such as pneumonia, bladder and rectum infection, renal failure, sepsis and severe bed sores, osteoporosis and fractures, and other spinal cord injury-related conditions. He will be completely dependent on the care and support of his family. We thus affirm the award of P23,461,062.00 for the life care cost of respondent Stephen Huang, based on his average monthly expense and the actuarial computation of the remaining years that he is expected to live; and the conservative amount of P10,000,000.00, as reduced by the trial court, for the loss or impairment of his earning capacity,[17] considering his age, probable life expectancy, the state of his health, and his mental and physical condition before the accident. He was only seventeen years old, nearly six feet tall and weighed 175 pounds. He was in fourth year high school, and a member of the school varsity basketball team. He was also class president and editor-in-chief of the school annual. He had shown very good leadership qualities. He was looking forward to his college life, having just passed the entrance examinations of the University of the Philippines, De La Salle University, and the University of Asia and the Pacific. The University of Sto. Tomas even offered him a chance to obtain an athletic scholarship, but the accident prevented him from attending the basketball try-outs. Without doubt, he was an exceptional student. He excelled both in his academics and extracurricular undertakings. He is intelligent and motivated, a go-getter, as testified by Francisco Lopez, respondent Stephen Huang’s godfather and a bank executive.[18] Had the accident not happened, he had a rosy future ahead of him. He wanted to embark on a banking career, get married and raise children. Taking into account his outstanding abilities, he would have enjoyed a successful professional

career in banking. But, as Mr. Lopez stated, it is highly unlikely for someone like respondent to ever secure a job in a bank. To his knowledge, no bank has ever hired a person suffering with the kind of disability as Stephen Huang’s.*19+ We likewise uphold the award of moral and exemplary damages and attorney’s fees. “The award of moral damages is aimed at a restoration, within the limits of the possible, of the spiritual status quo ante.”*20+ Moral damages are designed to compensate and alleviate in some way the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury unjustly caused a person. Although incapable of pecuniary computation, they must be proportionate to the suffering inflicted.[21] The amount of the award bears no relation whatsoever with the wealth or means of the offender. In the instant case, respondent Stephen Huang and respondent spouses Richard and Carmen Huang testified to the intense suffering they continue to experience as a result of the accident. Stephen recounted the nightmares and traumas he suffers almost every night when he relives the accident. He also gets depression when he thinks of his bleak future. He feels frustration and embarrassment in needing to be helped with almost everything and in his inability to do simple things he used to do. Similarly, respondent spouses and the rest of the family undergo their own private suffering. They live with the day-to-day uncertainty of respondent Stephen Huang’s condition. They know that the chance of full recovery is nil. Moreover, respondent Stephen Huang’s paralysis has made him prone to many other illnesses. His family, especially respondent spouses, have to make themselves available for Stephen twenty-four hours a day. They have patterned their daily life around taking care of him, ministering to his daily needs, altering the lifestyle to which they had been accustomed. Respondent Carmen Huang’s brother testified on the insensitivity of petitioner Mercury Drug towards the plight of respondent. Stephen, viz.: Maybe words cannot describe the anger that we feel towards the defendants. All the time that we were going through the crisis, there was none (sic) a single sign of nor offer of help, any consolation or anything whatsoever. It is funny because, you know, I have many colleagues, business associates, people even as far as United States, Japan, that I probably met only once, when they found out, they make a call, they sent card, they write small notes, but from the defendant, absolute silence. They didn’t care, and worst, you know, this is a company that have (sic) all the resources to help us. They were (sic) on our part, it was doubly painful because we have no choice but to go back to them and buy the medicines that we need for Stephen. So, I don’t know how someone will really have no sense of decency at all to at least find out what happened to my son, what is his condition, or if there is anything that they can do to help us.[22] On the matter of exemplary damages, Art. 2231 of the Civil Code provides that in cases of quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence. The records show that at the time of the accident, petitioner Del Rosario was driving without a license because he was previously ticketed for reckless driving. The evidence also shows that he failed to step on his brakes immediately after the impact. Had petitioner Del Rosario done so, the injuries which respondent Stephen sustained could have been greatly reduced. Wanton acts such as that committed by petitioner Del Rosario need be suppressed; and employers like petitioner Mercury Drug should be more circumspect in the observance of due diligence in the selection and supervision of their employees. The award of exemplary damages in favor of the respondents is therefore justified. With the award of exemplary damages, we also affirm the grant of attorney’s fees to respondents.*23+ In addition, attorney’s fees may be granted when a party is compelled to litigate or incur expenses to protect his interest by reason of an unjustified act of the other party.[24] Cost against petitioners. IN VIEW THEREOF, the petition is DENIED. The Decision and Resolution of the Court of Appeals dated February 16, 2006 and March 30, 2006, respectively, in CA-G.R. CV No. 83981, are AFFIRMED. OSCAR DEL CARMEN v. GERONIMO BACOY ET AL April 25, 2012 DECISION DEL CASTILLO, J.: In this Petition for Review on Certiorari,[1] the registered owner of a motor vehicle challenges the Decision[2] dated July 11, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 67764 which held him liable for damages to the heirs of the victims who were run over by the said vehicle. Factual Antecedents At dawn on New Year’s Day of 1993, Emilia Bacoy Monsalud (Emilia), along with her spouse Leonardo Monsalud, Sr. and their daughter Glenda Monsalud, were on their way home from a Christmas party they attended in Poblacion, Sominot, Zamboanga Del Sur. Upon reaching Purok Paglaom in Sominot, they were run over by a Fuso passenger jeep bearing plate number UV-PEK-600 that was being driven by Allan Maglasang (Allan). The jeep was registered in the name of petitioner Oscar del Carmen, Jr. (Oscar Jr.) and used as a public utility vehicle plying the Molave, Zamboanga del Sur to Sominot, Zamboanga del Sur and vice versa route.

Because of the unfortunate incident, Criminal Case No. 93-10347[3] for Reckless Imprudence Resulting in Multiple Homicide was filed against Allan before the Regional Trial Court of Molave, Zamboanga del Sur, Branch 23. In a Decision dated March 13, 1997, said court declared Allan guilty beyond reasonable doubt of the crime charged.[4] During the pendency of said criminal case, Emilia’s father, Geronimo Bacoy (Geronimo), in behalf of the six minor children*5+ of the Monsaluds, filed Civil Case No. 96-20219,[6] an independent civil action for damages based on culpa aquiliana. Aside from Allan, also impleaded therein were his alleged employers, namely, the spouses Oscar del Carmen, Sr. (Oscar Sr.) and Norma del Carmen (Spouses del Carmen) and the registered owner of the jeep, their son Oscar Jr. Geronimo prayed for the reimbursement of funeral and burial expenses, as well as the award of attorney’s fees, moral and exemplary damages resulting from the death of the three victims, and loss of net income earnings of Emilia who was employed as a public school teacher at the time of her death.[7] Defendants refused to assume civil liability for the victims’ deaths. Oscar Sr. averred that the Monsaluds have no cause of action against them because he and his wife do not own the jeep and that they were never the employers of Allan.[8] For his part, Oscar Jr. claimed to be a victim himself. He alleged that Allan and his friends*9+ stole his jeep while it was parked beside his driver’s rented house to take it for a joyride. Both he and a vehicle mechanic testified that the subject jeep can easily be started by mere pushing sans the ignition key. The vehicle’s engine shall then run but without any headlights on.*10+ And implying that this was the manner by which the vehicle was illegally taken, Oscar Jr. submitted as part of his documentary evidence the statements[11] of Jemar Alarcon (Jemar) and Benjamin Andujar (Benjamin). The two, who were with Allan in the jeep at the time of the accident, declared before the investigating officer that during said time, the vehicle’s headlights were off. Because of this allegation, Oscar Jr. even filed before the same trial court a carnapping case against Allan and his companions docketed as Criminal Case No. 93-10380.[12] The case was, however, dismissed for insufficiency of evidence.[13] Oscar Jr. clarified that Allan was his jeep conductor and that it was the latter’s brother, Rodrigo Maglasang (Rodrigo), who was employed as the driver.*14+ In any event, Allan’s employment as conductor was already severed before the mishap occurred on January 1, 1993 since he served as such conductor only from the first week of December until December 14, 1992.[15] In support of this, Oscar Jr. presented as witnesses Faustino Sismundo (Faustino) and Cresencio “Junior” Baobao (Cresencio). Faustino, a resident of Molave, testified that when he boarded the jeep heading to Sominot on December 31, 1992, it was Cresencio who was the conductor. He also believed that Crecencio started to work as such at around December 15 or 16, 1992.[16] Cresencio, for his part, testified that he worked as Oscar Jr.’s conductor from December 15, 1992 to January 1, 1993 and that Rodrigo was his driver.[17] He stated that upon learning that the jeep figured in an accident, he never bothered to verify the news. Instead, he went to Midsalip to work there as a conductor for his brother’s vehicle, thereby terminating his employment with Oscar Jr.*18+ Oscar Jr. likewise testified that it was routinary that after a day’s trip, the jeep would be parked beside Rodrigo’s rented house[19] for the next early-morning operation. Geronimo, on the other hand, averred that Allan was still Oscar Jr.’s employee subsequent to December 14, 1992. To prove this, he presented as witnesses Saturnino Jumawan (Saturnino) and Jose Navarro (Jose). Saturnino testified that he would pay his fare to Allan every time he would board the jeep in going to Molave and that the last time he rode the subject vehicle was on December 23, 1992. He also claimed that immediately before January 1, 1993, Rodrigo and Allan used to park the jeep at the yard of his house.[20] Jose likewise attested that Allan was still the jeep conductor during the said period as he had ridden the jeep many times in mid-December of 1992.[21] Ruling of the Regional Trial Court In its Decision[22] dated April 17, 2000, the RTC exculpated the spouses del Carmen from civil liability for insufficiency of evidence. However, their son Oscar Jr. was held civilly liable in a subsidiary capacity. The RTC anchored its ruling primarily on the principle of res ipsa loquitur, i.e., that a presumption of negligence on the part of a defendant may be inferred if the thing that caused an injury is shown to be under his management and that in the ordinary course of things, the accident would not have happened had there been an exercise of care. Said court ratiocinated that Oscar Jr., as the registered owner of the jeep, managed and controlled the same through his driver Rodrigo, in whose house the jeep was usually parked. Since both Oscar Jr. and Rodrigo were well aware that the jeep could easily be started by a mere push even without the ignition key, they should have taken the necessary precaution to prevent the vehicle from being used by unauthorized persons like Allan. The RTC thus concluded that such lack of proper precaution, due care and foresight constitute negligence making the registered owner of the vehicle civilly liable for the damage caused by the same. The RTC disposed of the case as follows:

Wherefore, judgment is hereby entered in favor of the plaintiffs and against the defendants Allan Maglasang and Oscar del Carmen, Jr. ordering – 1. Defendant ALLAN MAGLASANG to pay the plaintiffs, and in case of insolvency, for defendant OSCAR DEL CARMEN, JR., to pay the plaintiffs, the following sums: a. b. c. d. e. f. g.

P73,112.00 for their funeral and burial expenses; P1,000,000.00 moral damages for the death of the late Emilia Monsalud; P250,000.00 moral damages for the death of the late Leonardo Monsalud, Sr.; P250,000.00 moral damages for the death of the late Glenda Monsalud; P40, 000.00, for exemplary damages; P20,000.00 attorney’s fees; and The cost of this proceedings.

2. The dismissal of the complaint as against the spouses OSCAR DEL CARMEN SR. and NORMA DEL CARMEN. Oscar Jr. moved for reconsideration[24] contending that the provision on vicarious liability of the employer under Article 2180 of the Civil Code[25] requires the existence of employer-employee relationship and that the employee was acting within the scope of his employment when the tort occurred. He stressed that even assuming that Allan was his employee, he was hired not as a driver but as a conductor. Hence, Allan acted beyond the scope of his employment when he drove the jeep. Oscar Jr. also stressed that the fact that the jeep was running without its headlights on at the time of the accident indubitably shows that the same was stolen. He further alleged that the jeep could not have been taken by only one person. As Rodrigo declared in Criminal Case No. 93-10380 (carnapping case), based on his experience, the jeep cannot be pushed by only one person but by at least five people in order for it to start. This was due to the vehicle’s mass and the deep canal which separates the parking area from the curved road that was obstructed by a house.[26] Setting aside its earlier decision, the lower court in its Order[27] dated June 21, 2000 granted the Motion for Reconsideration and absolved Oscar Jr. from civil liability. It cited Article 103 of the Revised Penal Code which provides that for an employer to be subsidiarily liable for the criminal acts of his employee, the latter should have committed the same in the discharge of his duties. The court agreed with Oscar Jr. that this condition is wanting in Allan’s case as he was not acting in the discharge of his duties as a conductor when he drove the jeep. The court also declared the doctrine of res ipsa loquitur inapplicable since the property owner cannot be made responsible for the damages caused by his property by reason of the criminal acts of another. It then adjudged that only Allan should bear the consequences of his criminal acts. Thus: WHEREFORE, premises considered, the MOTION FOR RECONSIDERATION is granted, and defendant OSCAR DEL CARMEN JR. is hereby absolved from all civil liability arising from the felonious acts of convicted accused ALLAN MAGLASANG. IT IS SO ORDERED.[28] Geronimo appealed. Ruling of the Court of Appeals In its July 11, 2006 Decision,[29] the CA granted the appeal. In resolving the case, the CA first determined the preliminary issue of whether there was an employer-employee relationship between Oscar Jr. and Allan at the time of the accident. It ruled in the affirmative and gave more credence to the testimonies of Geronimo’s witnesses than to those of Oscar Jr.’s witnesses, Faustino and Cresencio. The CA ratiocinated that unlike the witness presented by Geronimo, Faustino never resided in Poblacion and thus has limited knowledge of the place. His testimony was also unreliable considering that he only rode the subject jeep twice[30] during the last two weeks of December 1992. As regards Cresencio’s testimony, the appellate court found it puzzling why he appeared to have acted uninterested upon learning that the jeep was the subject of an accident when it was his bread and butter. Said court likewise considered questionable Oscar Jr.’s asseveration that Cresencio replaced Allan as conductor when Cresencio testified that he replaced a certain Sumagang Jr.[31] With regard to the main issue, the CA adjudged Oscar Jr. liable to the heirs of the victims based on the principle that the registered owner of a vehicle is directly and primarily responsible for the injuries or death of third parties caused by the operation of such vehicle. It disbelieved Oscar Jr.’s defense that the jeep was stolen not only because the carnapping case filed against Allan and his companions was dismissed but also because, given the circumstances, Oscar Jr. is deemed to have given Allan the implied permission to use the subject vehicle. To support its conclusion, the CA cited the following circumstances: siblings Rodrigo and Allan were both employees assigned to the said jeep; after a day’s work, said vehicle would be parked just beside Rodrigo’s house where Allan also lived; the jeep could easily be started even without the use of an ignition key; the said parking area was not fenced or secured to prevent the unauthorized use of the vehicle which can be started even without the ignition key.

The dispositive portion of the CA Decision reads: WHEREFORE, premises considered, the instant appeal is GRANTED. The assailed Order dated 21 June 2000 of the Regional Trial Court (Branch 23), Molave, Zamboanga del Sur, in Civil Case No. 96-20,219 is SET ASIDE and a new one is hereby entered. OSCAR DEL CARMEN, Jr. and ALLAN MAGLASANG are held primarily liable, jointly and severally, to pay plaintiffs-appellants: 1. Civil indemnity for the death of Emilia Bacoy Monsalud, Leonardo Monsalud Sr., and Glenda Monsalud in the amount of Fifty thousand pesos (P50,000.00) each or for the total amount of One hundred fifty thousand pesos (P150,000.00); 2. Temperate damages in the amount of Twenty-five Thousand Pesos (P25,000.00) each for the death of Emilia Monsalud, Leonardo Monsalud Sr., and Glenda Monsalud (collectively the Monsaluds) or for the total amount of Seventy-five thousand pesos (P75,000.00); 3. Moral damages in the amount of Fifty Thousand Pesos (P50,000.00) each for the death of the Monsaluds or for a total amount of One Hundred Fifty Thousand Pesos (P150,000.00); 4.

Exemplary damages of Forty Thousand Pesos (P40,000.00).

Issues As a result of the adverse judgment, Oscar Jr. filed this Petition for Review on Certiorari alleging that the CA erred in: 1. x x x basing its conclusions and findings on speculations, surmises and conjectures; misapprehension of facts which are in conflict with the findings of the trial court; 2.

x x x declaring a question of substance not in accord with law and with the applicable decisions of the Supreme Court;

3. x x x departing from the regular course of the judicial proceedings in the disposition of the appeal and [in going] beyond the issues of the case.[33]

Oscar Jr. points out that the CA failed to consider the RTC’s ruling in its June 21, 2000 Order which was in accord with Article 2180 of the Civil Code, i.e., that the tort committed by an employee should have been done ‘within the scope of his assigned tasks’ for an employer to be held liable under culpa aquiliana. However, the CA never touched upon this matter even if it was glaring that Allan’s driving the subject vehicle was not within the scope of his previous employment as conductor. Moreover, Oscar Jr. insists that his jeep was stolen and stresses that the liability of a registered owner of a vehicle as to third persons, as well as the doctrine of res ipsa loquitur, should not apply to him. He asserts that although Allan and his companions were not found to have committed the crime of carnapping beyond reasonable doubt, it was nevertheless established that the jeep was illicitly taken by them from a well secured area. This is considering that the vehicle was running without its headlights on at the time of the accident, a proof that it was started without the ignition key. Our Ruling Petitioner’s own evidence casts doubt on his claim that his jeep was stolen by Allan and his alleged cohorts. Negligence is presumed under the doctrine of res ipsa loquitur. Oscar Jr.’s core defense to release him from responsibility for the death of the Monsaluds is that his jeep was stolen. He highlights that the unauthorized taking of the jeep from the parking area was indeed carried out by the clandestine and concerted efforts of Allan and his five companions, notwithstanding the obstacles surrounding the parking area and the weight of the jeep. Notably, the carnapping case filed against Allan and his group was already dismissed by the RTC for insufficiency of evidence. But even in this civil case and as correctly concluded by the CA, the evidentiary standard of preponderance of evidence required was likewise not met to support Oscar Jr.’s claim that his jeep was unlawfully taken. Two of Allan’s co-accused in the carnapping case, Jemar and Benjamin, declared before the police that when Allan invited them to ride with him, he was already driving the jeep: 04. Q- On that night, on or about 11:30 o’clock on December 31, 1992, where were you? A- I went to the disco near [the] Public Market[,] Sominot, Zamboanga del Sur. 05. Q- While you were in disco place, do you know if there was an incident [that] happened?

A- No sir but when I was in the disco place, at about 3:30 at dawn more or less[,] January 1, 1993, Allan Maglasang arrived driving the jeep and he invited me to ride together with Benjamin Andujar, Dioscoro Sol, Arniel Rezada and Joven Orot.[34] xxxx 04. Q- On that night, on or about 9:00 o’clock in the evening more or less on December 31, 1992, where were you? A- I went to the disco at [the] Public Market[,] Sominot, Zamboanga del Sur. 05. Q- While you were in the disco place, do you know if there was an incident [that] happened? A- No, sir, but when I was in the disco place, at about 3:30 at dawn more or less[,] January 1, 1993, Allan Maglasang arrive[d] driving the jeep and he invited me to ride together with Jemar Alarcon, Dioscoro Sol, Arniel Rizada and Joven Orot.[35]

There were six accused in the carnapping case. If Jemar and Benjamin were fetched by Allan who was driving the jeep, this would mean that only three men pushed the jeep contrary to Rodrigo’s testimony in Criminal Case No. 93-10380 that it has to be pushed by at least five people so that it could start without the ignition key. On direct examination,[36] Oscar Jr. was asked as to what Rodrigo, his driver who had informed him about the accident on January 1, 1993 at around 7:00 a.m., turned over to him after the incident, viz: Q: When Rodrigo Maglasang, your driver informed you about the accident, what did he carry with him if any and turned over to you? A: The OR (Official Receipt) and the CR (Certificate of Registration) Sir. Q: A:

How about the key of the vehicle? It was not turned over, Sir.[37]

Assuming arguendo that Allan stole the jeep by having the same pushed by a group, the ignition key should then be with Rodrigo as he was entrusted with the jeep’s possession. Thus, at the time Rodrigo faced his employer hours after the incident, it is reasonable to expect that the driver should have also returned the key to the operator together with the Official Receipt and Certificate of Registration. Notably, Rodrigo did not do so and instead, the key was allegedly handed over to the police for reasons unexplained and not available from the records. Interestingly, Oscar Jr. never presented Rodrigo as his witness. Neither was he able to attest on cross-examination that Allan really stole the jeep by pushing or that the key was handed over to him by Rodrigo: Q: On December 31, 1992, you did not know that it was Rodrigo Maglasang who gave the key to Allan Maglasang. Is that correct? A: I was not there. So, I do not know but he had an affidavit to show that he turned it over to the police. Q: What I was asking you is that, [o]n the night of December 31, 1992, when it was driven by Allan Maglasang, you did not know that the key was voluntarily given by Rodrigo Maglasang to Allan Maglasang? A: I was not there. Q: A:

So, you could not testify on that, is that correct? Yes Sir, I was not there.[38]

Furthermore, Oscar Jr. acknowledged the dismissal of the carnapping case, thus: Q: Now, there was a case filed against Allan Maglasang and [his] x x x co-accused x x x [n]amely: Benjamin Andojar, Dioscoro Sol, Joven Orot, [Jemar Azarcon] and [Arniel] Rizada, for carnapping. Is that correct? A: Yes Sir. Q: That case was filed by you because you alleged that on December 31, 1992, your jeep was carnapped by Allan Maglasang and his co-accused, the said mentioned, is that correct? A: Yes Sir. Q: A:

You testified on the case in Aurora, is that correct? Yes, Sir.

Q: A:

And you could well remember that this representation is the counsel of the co-accused of Allan Maglasang, is that correct? Yes Sir.

Q: A:

And that case for carnapping was dismissed, is that correct? Yes Sir.

Q: A:

Even the case of Allan Maglasang, was also dismissed, is that correct Yes Sir.

Q: A:

Because there was no sufficient evidence to establish that the jeep was carnapped, is that correct? Yes Sir.[39]

While Oscar Jr. highlights that the headlights were not on to support his claim that his jeep was stolen, this circumstance by itself will not prove that it really was stolen. The reason why the headlights were not on at the time of the accident was not sufficiently established during the trial. Besides, the fact that the headlights were not on cannot be exclusively attributed to the lack of ignition key in starting the jeep as there may be other possibilities such as electrical problems, broken headlights, or that they were simply turned off. Hence, sans the testimony of witnesses and other relevant evidence to support the defense of unauthorized taking, we cannot subscribe to Oscar Jr.’s claim that his jeep was stolen. The evidence on record brings forth more questions than clear-cut answers. Oscar Jr. alleges that the presumption of negligence under the doctrine of res ipsa loquitur (literally, the thing speaks for itself) should not have been applied because he was vigilant in securing his vehicle. He claims that the jeep was parked in a well secured area not remote to the watchful senses of its driver Rodrigo. Under the doctrine of res ipsa loquitur, “*w+here the thing that caused the injury complained of is shown to be under the management of the defendant or his servants; and the accident, in the ordinary course of things, would not happen if those who had management or control used proper care, it affords reasonable evidence – in the absence of a sufficient, reasonable and logical explanation by defendant – that the accident arose from or was caused by the defendant’s want of care.”*40+ Res ipsa loquitur is “merely evidentiary, a mode of proof, or a mere procedural convenience, since it furnishes a substitute for, and relieves a plaintiff of, the burden of producing a specific proof of negligence.”*41+ It “recognizes that parties may establish prima facie negligence without direct proof, thus, it allows the principle to substitute for specific proof of negligence. It permits the plaintiff to present along with proof of the accident, enough of the attending circumstances to invoke the doctrine, create an inference or presumption of negligence and thereby place on the defendant the burden of proving that there was no negligence on his part.”*42+ The doctrine is based partly on “the theory that the defendant in charge of the instrumentality which causes the injury either knows the cause of the accident or has the best opportunity of ascertaining it while the plaintiff has no such knowledge, and is therefore compelled to allege negligence in general terms.”*43+ The requisites of the doctrine of res ipsa loquitur as established by jurisprudence are as follows: 1) the accident is of a kind which does not ordinarily occur unless someone is negligent; 2) the cause of the injury was under the exclusive control of the person in charge and 3) the injury suffered must not have been due to any voluntary action or contribution on the part of the person injured.[44] The above requisites are all present in this case. First, no person just walking along the road would suddenly be sideswiped and run over by an on-rushing vehicle unless the one in charge of the said vehicle had been negligent. Second, the jeep which caused the injury was under the exclusive control of Oscar Jr. as its owner. When Oscar Jr. entrusted the ignition key to Rodrigo, he had the power to instruct him with regard to the specific restrictions of the jeep’s use, including who or who may not drive it. As he is aware that the jeep may run without the ignition key, he also has the responsibility to park it safely and securely and to instruct his driver Rodrigo to observe the same precaution. Lastly, there was no showing that the death of the victims was due to any voluntary action or contribution on their part. The aforementioned requisites having been met, there now arises a presumption of negligence against Oscar Jr. which he could have overcome by evidence that he exercised due care and diligence in preventing strangers from using his jeep. Unfortunately, he failed to do so.

What this Court instead finds worthy of credence is the CA’s conclusion that Oscar Jr. gave his implied permission for Allan to use the jeep. This is in view of Oscar Jr.’s failure to provide solid proof that he ensured that the parking area is well secured and that he had expressly imposed restrictions as to the use of the jeep when he entrusted the same to his driver Rodrigo. As fittingly inferred by the CA, the jeep could have been endorsed to Allan by his brother Rodrigo since as already mentioned, Oscar Jr. did not give Rodrigo any specific and strict instructions on matters regarding its use. Rodrigo therefore is deemed to have been given the absolute discretion as to the vehicle’s operation, including the discretion to allow his brother Allan to use it. The operator on record of a vehicle is primarily responsible to third persons for the deaths or injuries consequent to its operation, regardless of whether the employee drove the registered owner’s vehicle in connection with his employment.

Without disputing the factual finding of the CA that Allan was still his employee at the time of the accident, a finding which we see no reason to disturb, Oscar Jr. contends that Allan drove the jeep in his private capacity and thus, an employer’s vicarious liability for the employee’s fault under Article 2180 of the Civil Code cannot apply to him. The contention is no longer novel. In Aguilar Sr. v. Commercial Savings Bank,[45] the car of therein respondent bank caused the death of Conrado Aguilar, Jr. while being driven by its assistant vice president. Despite Article 2180, we still held the bank liable for damages for the accident as said provision should defer to the settled doctrine concerning accidents involving registered motor vehicles, i.e., that the registered owner of any vehicle, even if not used for public service, would primarily be responsible to the public or to third persons for injuries caused the latter while the vehicle was being driven on the highways or streets.[46] We have already ratiocinated that: The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or that any damage or injury is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite individual, the registered owner. Instances are numerous where vehicles running on public highways caused accidents or injuries to pedestrians or other vehicles without positive identification of the owner or drivers, or with very scant means of identification. It is to forestall these circumstances, so inconvenient or prejudicial to the public, that the motor vehicle registration is primarily ordained, in the interest of the determination of persons responsible for damages or injuries caused on public highways.[47]

Absent the circumstance of unauthorized use[48] or that the subject vehicle was stolen[49] which are valid defenses available to a registered owner, Oscar Jr. cannot escape liability for quasi-delict resulting from his jeep’s use. All told and considering that the amounts of damages awarded are in accordance with prevailing jurisprudence, the Court concurs with the findings of the CA and sustains the awards made. In addition, pursuant to Eastern Shipping Lines, Inc. v. Court of Appeals,[50] an interest of six percent (6%) per annum on the amounts awarded shall be imposed, computed from the time the judgment of the RTC is rendered on April 17, 2000 and twelve percent (12%) per annum on such amount upon finality of this Decision until the payment thereof. WHEREFORE, premises considered, the instant petition is DENIED. The Decision dated July 11, 2006 of the Court of Appeals in CAG.R. CV No. 67764 is hereby AFFIRMED with further MODIFICATION that an interest of six percent (6%) per annum on the amounts awarded shall be imposed, computed from the time the judgment of the Regional Trial Court, Branch 23, Molave, Zamboanga del Sur is rendered on April 17, 2000 and twelve percent (12%) per annum on such amount upon finality of this Decision until the payment thereof. MERITT v. GOVERNMENT FACTS: The facts of the case took place in the 1910’s. E. Merritt was a constructor who was excellent at his work. One day, while he was riding his motorcycle along Calle Padre Faura, he was bumped by a government ambulance. The driver of the ambulance was proven to have been negligent. Because of the incident, Merritt was hospitalized and he was severely injured beyond rehabilitation so much so that he could never perform his job the way he used to and that he cannot even earn at least half of what he used to earn. In order for Merritt to recover damages, he sought to sue the government which later authorized Merritt to sue the government by virtue of Act 2457 enacted by the legislature (An Act authorizing E. Merritt to bring suit against the Government of the Philippine Islands and authorizing the Attorney-General of said Islands to appear in said suit). The lower court then determined the amount of damages and ordered the government to pay the same. ISSUE: Whether or not the government is liable for the negligent act of the driver of the ambulance.

HELD: No. By consenting to be sued a state simply waives its immunity from suit. It does not thereby concede its liability to plaintiff, or create any cause of action in his favor, or extend its liability to any cause not previously recognized. It merely gives a remedy to enforce a preexisting liability and submits itself to the jurisdiction of the court, subject to its right to interpose any lawful defense. It follows therefrom that the state, by virtue of such provisions of law, is not responsible for the damages suffered by private individuals in consequence of acts performed by its employees in the discharge of the functions pertaining to their office, because neither fault nor even negligence can be presumed on the part of the state in the organization of branches of public service and in the appointment of its agents. The State can only be liable if it acts through a special agent (and a special agent, in the sense in which these words are employed, is one who receives a definite and fixed order or commission, foreign to the exercise of the duties of his office if he is a special official) so that in representation of the state and being bound to act as an agent thereof, he executes the trust confided to him. In the case at bar, the ambulance driver was not a special agent nor was a government officer acting as a special agent hence, there can be no liability from the government. “The Government does not undertake to guarantee to any person the fidelity of the officers or agents whom it employs, since that would involve it in all its operations in endless embarrassments, difficulties and losses, which would be subversive of the public interest.” REPUBLIC V. PALACIOS FACTS: In April 1960, a certain Ildefenso Ortiz sued the Irrigation Service Unit (ISU) which was under the Department of Public Works because ISU, without the consent of Ortiz, encroached upon his land by allegedly inducing the Handong Irrigation Assoc. to do so. The basis of the suit was that ISU, though created by the government, is engaged in private business (selling of irrigation pumps/construction materials in installment) and being such has opened itself to suit thereby waiving immunity from suit. Judge Palacio of CFI Camarines Sur ruled in favor of Ortiz so did the Court of Appeals. The CA also ordered the issuance of the order of garnishment against the deposit/trust funds in ISU’s account in the PNB (such fund were generated from the installment payments ISU received). ISSUE: Whether or not such deposits may be garnished. HELD: No. ISU’s activity of selling irrigation pumps is not intended to earn profit or financial gain. It is actually just to replenish the funds used in purchasing said irrigation pumps (the original funds were from FTA from US). The CA ruled that ISU, by selling irrigation pumps is engaged in private business, hence it waived its immunity from suit and had also ordered the garnishment of ISU’s deposits in PNB. But then again, as based in Merritt vs Insular Government, the waiver of said immunity does not make the government liable. This would only lead to a disbursement of fund without any proper appropriation as required by law. There is also no showing that the ISU’s alleged inducement of Handong is authorized by the State hence the government cannot be liable under Article 2180 of the Civil Code. FONTANILLA v. MALIAMA; NATIONAL IRRIGATION ADMI v. FONTANILLA PARAS, J.: In G.R. No. L-55963, the petition for review on certiorari seeks the affirmance of the decision dated March 20, 1980 of the then Court of First Instance of Nueva Ecija, Branch VIII, at San Jose City and its modification with respect to the denial of petitioner's claim for moral and exemplary damages and attorneys fees. In G.R. No. 61045, respondent National Irrigation Administration seeks the reversal of the aforesaid decision of the lower court. The original appeal of this case before the Court of Appeals was certified to this Court and in the resolution of July 7, 1982, it was docketed with the aforecited number. And in the resolution of April 3, this case was consolidated with G.R. No. 55963. It appears that on August 21, 1976 at about 6:30 P.M., a pickup owned and operated by respondent National Irrigation Administration, a government agency bearing Plate No. IN-651, then driven officially by Hugo Garcia, an employee of said agency as its regular driver, bumped a bicycle ridden by Francisco Fontanilla, son of herein petitioners, and Restituto Deligo, at Maasin, San Jose City along the Maharlika Highway. As a result of the impact, Francisco Fontanilla and Restituto Deligo were injured and brought to the San Jose City Emergency Hospital for treatment. Fontanilla was later transferred to the Cabanatuan Provincial Hospital where he died. Garcia was then a regular driver of respondent National Irrigation Administration who, at the time of the accident, was a licensed professional driver and who qualified for employment as such regular driver of respondent after having passed the written and oral examinations on traffic rules and maintenance of vehicles given by National Irrigation Administration authorities. The within petition is thus an off-shot of the action (Civil Case No. SJC-56) instituted by petitioners-spouses on April 17, 1978 against respondent NIA before the then Court of First Instance of Nueva Ecija, Branch VIII at San Jose City, for damages in connection with the death of their son resulting from the aforestated accident.

After trial, the trial court rendered judgment on March 20, 1980 which directed respondent National Irrigation Administration to pay damages (death benefits) and actual expenses to petitioners. The dispositive portion of the decision reads thus: . . . . . Judgment is here rendered ordering the defendant National Irrigation Administration to pay to the heirs of the deceased P12,000.00 for the death of Francisco Fontanilla; P3,389.00 which the parents of the deceased had spent for the hospitalization and burial of the deceased Francisco Fontanilla; and to pay the costs. (Brief for the petitioners spouses Fontanilla, p. 4; Rollo, p. 132) Respondent National Irrigation Administration filed on April 21, 1980, its motion for reconsideration of the aforesaid decision which respondent trial court denied in its Order of June 13, 1980. Respondent National Irrigation Administration thus appealed said decision to the Court of Appeals (C.A.-G.R. No. 67237- R) where it filed its brief for appellant in support of its position. Instead of filing the required brief in the aforecited Court of Appeals case, petitioners filed the instant petition with this Court. The sole issue for the resolution of the Court is: Whether or not the award of moral damages, exemplary damages and attorney's fees is legally proper in a complaint for damages based on quasi-delict which resulted in the death of the son of herein petitioners. Petitioners allege: 1. The award of moral damages is specifically allowable. under paragraph 3 of Article 2206 of the New Civil Code which provides that the spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased. Should moral damages be granted, the award should be made to each of petitioners-spouses individually and in varying amounts depending upon proof of mental and depth of intensity of the same, which should not be less than P50,000.00 for each of them. 2. The decision of the trial court had made an impression that respondent National Irrigation Administration acted with gross negligence because of the accident and the subsequent failure of the National Irrigation Administration personnel including the driver to stop in order to give assistance to the, victims. Thus, by reason of the gross negligence of respondent, petitioners become entitled to exemplary damages under Arts. 2231 and 2229 of the New Civil Code. 3. Petitioners are entitled to an award of attorney's fees, the amount of which (20%) had been sufficiently established in the hearing of May 23, 1979. 4. This petition has been filed only for the purpose of reviewing the findings of the lower court upon which the disallowance of moral damages, exemplary damages and attorney's fees was based and not for the purpose of disturbing the other findings of fact and conclusions of law. The Solicitor General, taking up the cudgels for public respondent National Irrigation Administration, contends thus: 1. The filing of the instant petition is rot proper in view of the appeal taken by respondent National Irrigation Administration to the Court of Appeals against the judgment sought to be reviewed. The focal issue raised in respondent's appeal to the Court of Appeals involves the question as to whether or not the driver of the vehicle that bumped the victims was negligent in his operation of said vehicle. It thus becomes necessary that before petitioners' claim for moral and exemplary damages could be resolved, there should first be a finding of negligence on the part of respondent's employee-driver. In this regard, the Solicitor General alleges that the trial court decision does not categorically contain such finding. 2. The filing of the "Appearance and Urgent Motion For Leave to File Plaintiff-Appellee's Brief" dated December 28, 1981 by petitioners in the appeal (CA-G.R. No. 67237-R; and G. R. No.61045) of the respondent National Irrigation Administration before the Court of Appeals, is an explicit admission of said petitioners that the herein petition, is not proper. Inconsistent procedures are manifest because while petitioners question the findings of fact in the Court of Appeals, they present only the questions of law before this Court which posture confirms their admission of the facts. 3. The fact that the parties failed to agree on whether or not negligence caused the vehicular accident involves a question of fact which petitioners should have brought to the Court of Appeals within the reglementary period. Hence, the decision of the trial court has become final as to the petitioners and for this reason alone, the petition should be dismissed. 4.

Respondent Judge acted within his jurisdiction, sound discretion and in conformity with the law.

5. Respondents do not assail petitioners' claim to moral and exemplary damages by reason of the shock and subsequent illness they suffered because of the death of their son. Respondent National Irrigation Administration, however, avers that it cannot be held liable for the damages because it is an agency of the State performing governmental functions and driver Hugo Garcia was a regular driver of the vehicle, not a special agent who was performing a job or act foreign to his usual duties. Hence, the liability for the tortious act should. not be borne by respondent government agency but by driver Garcia who should answer for the consequences of his act.

6. Even as the trial court touched on the failure or laxity of respondent National Irrigation Administration in exercising due diligence in the selection and supervision of its employee, the matter of due diligence is not an issue in this case since driver Garcia was not its special agent but a regular driver of the vehicle. The sole legal question on whether or not petitioners may be entitled to an award of moral and exemplary damages and attorney's fees can very well be answered with the application of Arts. 2176 and 2180 of theNew Civil Code. Art. 2176 thus provides: Whoever by act omission causes damage to another, there being fault or negligence, is obliged to pay for damage done. Such fault or negligence, if there is no pre-existing cotractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter Paragraphs 5 and 6 of Art. 21 80 read as follows: Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even the though the former are not engaged in any business or industry. The State is responsible in like manner when it acts through a special agent.; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in Art. 2176 shall be applicable. The liability of the State has two aspects. namely: 1.

Its public or governmental aspects where it is liable for the tortious acts of special agents only.

2. Its private or business aspects (as when it engages in private enterprises) where it becomes liable as an ordinary employer. (p. 961, Civil Code of the Philippines; Annotated, Paras; 1986 Ed. ). In this jurisdiction, the State assumes a limited liability for the damage caused by the tortious acts or conduct of its special agent. Under the aforequoted paragrah 6 of Art. 2180, the State has voluntarily assumed liability for acts done through special agents. The State's agent, if a public official, must not only be specially commissioned to do a particular task but that such task must be foreign to said official's usual governmental functions. If the State's agent is not a public official, and is commissioned to perform nongovernmental functions, then the State assumes the role of an ordinary employer and will be held liable as such for its agent's tort. Where the government commissions a private individual for a special governmental task, it is acting through a special agent within the meaning of the provision. (Torts and Damages, Sangco, p. 347, 1984 Ed.) Certain functions and activities, which can be performed only by the government, are more or less generally agreed to be "governmental" in character, and so the State is immune from tort liability. On the other hand, a service which might as well be provided by a private corporation, and particularly when it collects revenues from it, the function is considered a "proprietary" one, as to which there may be liability for the torts of agents within the scope of their employment. The National Irrigation Administration is an agency of the government exercising proprietary functions, by express provision of Rep. Act No. 3601. Section 1 of said Act provides: Section 1. Name and domicile.-A body corporate is hereby created which shall be known as the National Irrigation Administration, hereinafter called the NIA for short, which shall be organized immediately after the approval of this Act. It shall have its principal seat of business in the City of Manila and shall have representatives in all provinces for the proper conduct of its business. Section 2 of said law spells out some of the NIA's proprietary functions. Thus- Sec. 2. Powers and objectives.-The NIA shall have the following powers and objectives: (c) To collect from the users of each irrigation system constructed by it such fees as may be necessary to finance the continuous operation of the system and reimburse within a certain period not less than twenty-five years cost of construction thereof; and (d) To do all such other tthings and to transact all such business as are directly or indirectly necessary, incidental or conducive to the attainment of the above objectives. Indubitably, the NIA is a government corporation with juridical personality and not a mere agency of the government. Since it is a corporate body performing non-governmental functions, it now becomes liable for the damage caused by the accident resulting from the tortious act of its driver-employee. In this particular case, the NIA assumes the responsibility of an ordinary employer and as such, it becomes answerable for damages. This assumption of liability, however, is predicated upon the existence of negligence on the part of respondent NIA. The negligence referred to here is the negligence of supervision.

At this juncture, the matter of due diligence on the part of respondent NIA becomes a crucial issue in determining its liability since it has been established that respondent is a government agency performing proprietary functions and as such, it assumes the posture of an ordinary employer which, under Par. 5 of Art. 2180, is responsible for the damages caused by its employees provided that it has failed to observe or exercise due diligence in the selection and supervision of the driver. It will be noted from the assailed decision of the trial court that "as a result of the impact, Francisco Fontanilla was thrown to a distance 50 meters away from the point of impact while Restituto Deligo was thrown a little bit further away. The impact took place almost at the edge of the cemented portion of the road." (Emphasis supplied,) [page 26, Rollo] The lower court further declared that "a speeding vehicle coming in contact with a person causes force and impact upon the vehicle that anyone in the vehicle cannot fail to notice. As a matter of fact, the impact was so strong as shown by the fact that the vehicle suffered dents on the right side of the radiator guard, the hood, the fender and a crack on the radiator as shown by the investigation report (Exhibit "E"). (Emphasis supplied) [page 29, Rollo] It should be emphasized that the accident happened along the Maharlika National Road within the city limits of San Jose City, an urban area. Considering the fact that the victim was thrown 50 meters away from the point of impact, there is a strong indication that driver Garcia was driving at a high speed. This is confirmed by the fact that the pick-up suffered substantial and heavy damage as above-described and the fact that the NIA group was then "in a hurry to reach the campsite as early as possible", as shown by their not stopping to find out what they bumped as would have been their normal and initial reaction. Evidently, there was negligence in the supervision of the driver for the reason that they were travelling at a high speed within the city limits and yet the supervisor of the group, Ely Salonga, failed to caution and make the driver observe the proper and allowed speed limit within the city. Under the situation, such negligence is further aggravated by their desire to reach their destination without even checking whether or not the vehicle suffered damage from the object it bumped, thus showing imprudence and reckelessness on the part of both the driver and the supervisor in the group. Significantly, this Court has ruled that even if the employer can prove the diligence in the selection and supervision (the latter aspect has not been established herein) of the employee, still if he ratifies the wrongful acts, or take no step to avert further damage, the employer would still be liable. (Maxion vs. Manila Railroad Co., 44 Phil. 597). Thus, too, in the case of Vda. de Bonifacio vs. B.L.T. Bus Co. (L-26810, August 31, 1970, 34 SCRA 618), this Court held that a driver should be especially watchful in anticipation of others who may be using the highway, and his failure to keep a proper look out for reasons and objects in the line to be traversed constitutes negligence. Considering the foregoing, respondent NIA is hereby directed to pay herein petitioners-spouses the amounts of P12,000.00 for the death of Francisco Fontanilla; P3,389.00 for hospitalization and burial expenses of the aforenamed deceased; P30,000.00 as moral damages; P8,000.00 as exemplary damages and attorney's fees of 20% of the total award. SO ORDERED. Padilla, Sarmiento and Regalado, JJ., concur. QUEZON CITY v. DACARA The Facts The CA summarized the facts in this manner: “Sometime on February 28, 1988 at about 1:00 A.M., Fulgencio Dacara, Jr., son of Fulgencio P. Dacara, Sr. and owner of ’87 Toyota Corolla 4-door Sedan with Plate No. 877 (sic), while driving the said vehicle, rammed into a pile of earth/street diggings found at Matahimik St., Quezon City, which was then being repaired by the Quezon City government. As a result, Dacarra (sic), Jr. allegedly sustained bodily injuries and the vehicle suffered extensive damage for it turned turtle when it hit the pile of earth. “Indemnification was sought from the city government (Record, p. 22), which however, yielded negative results. Consequently, Fulgencio P. Dacara (hereinafter referred to as FULGENCIO), for and in behalf of his minor son, Jr., filed a Complaint (Record, p. 1) for damages against the Quezon City and Engr. Ramir Tiamzon, as defendants, before the Regional Trial Court, National Capital Judicial Region, Branch 101, Quezon City, docketed as Civil Case No. Q-88-233. FULGENCIO prayed that the amount of not less than P20,000.00 actual or compensatory damages, P150,000.00 moral damages, P30,000.00 exemplary damages, and P20,000.00 attorney’s fees and costs of the suit be awarded to him.

“In an Answer with Affirmative and/or Special Defenses (Record, p. 11), defendants admitted the occurrence of the incident but alleged that the subject diggings was provided with a moun[d] of soil and barricaded with reflectorized traffic paint with sticks placed before or after it which was visible during the incident on February 28, 1988 at 1:00 A.M. In short, defendants claimed that they exercised due care by providing the area of the diggings all necessary measures to avoid accident. Hence, the reason why Fulgencio Dacara, Jr. fell into the diggings was precisely because of the latter’s negligence and failure to exercise due care.”*5] After trial on the merits, the Regional Trial Court (RTC), Branch 101, Quezon City, rendered its Decision[6] dated June 29, 1990. The evidence proffered by the complainant (herein respondent) was found to be sufficient proof of the negligence of herein petitioners. Under Article 2189 of the Civil Code,[7] the latter were held liable as follows: “WHEREFORE, premises above considered, based on the quantum of evidence presented by the plaintiff which tilts in their favor elucidating the negligent acts of the city government together with its employees when considered in the light of Article 2189, judgment is hereby rendered ordering the defendants to indemnify the plaintiff the sum of twenty thousand pesos as actual/compensatory damages, P10,000.00 as moral damages, P5,000.00 as exemplary damages, P10,000.00 as attorney’s fees and other costs of suit.”*8+ In their appeal to the CA, petitioners maintained that they had observed due diligence and care in installing preventive warning devices, and that it was in fact the plaintiff who had failed to exercise prudence by driving too fast to avoid the diggings. Moreover, the lower court allegedly erred in using Article 2189 of the Civil Code, which supposedly applied only to liability for the death or injuries suffered by a person, not for damage to property. Ruling of the Court of Appeals The CA agreed with the RTC’s finding that petitioners’ negligence was the proximate cause of the damage suffered by respondent.[9] Noting the failure of petitioners to present evidence to support their contention that precautionary measures had indeed been observed, it ruled thus: “x x x. Sadly, the evidence indicates that *petitioners+ failed to show that they placed sufficient and adequate precautionary signs at Matahimik Street to minimize or prevent the dangers to life and limb under the circumstances. Contrary to the testimony of the witnesses for the [petitioners], namely Engr. Ramir Tiamzon, Ernesto Landrito and Eduardo Castillo, that there were signs, gasera which was buried so that its light could not be blown off by the wind and barricade, none was ever presented to stress and prove the sufficiency and adequacy of said contention.”*10+ Further upholding the trial court’s finding of negligence on the part of herein petitioners, the CA gave this opinion: “x x x. As observed by the trial court, the negligence of *petitioners+ was clear based on the investigation report of Pfc. William P. Villafranca stating to the effect ‘that the subject vehicle rammed into a pile of earth from a deep excavation thereat without any warning devi[c]e whatsoever and as a consequence thereof, Dacara, Jr. lost control of his driven car and finally turned-turtle causing substantial damage to the same.’ As a defense against liability on the basis of quasi-delict, one must have exercised the diligence of a good father of a family which *petitioners+ failed to establish in the instant case.”*11+ Whether Article 2189 is applicable to cases in which there has been no death or physical injury, the CA ruled in the affirmative: “x x x. More importantly, we find it illogical to limit the liability to death or personal injury only as argued by appellants in the case at bar applying the foregoing provisions. For, injury is an act that damages, harms or hurts and mean in common as the act or result of inflicting on a person or thing something that causes loss, pain, distress, or impairment. Injury is the most comprehensive, applying to an act or result involving an impairment or destruction of right, health, freedom, soundness, or loss of something of value.”*12+ Hence, this Petition.[13] Issues Petitioners raise the following issues for our consideration: “1. The Honorable Court of Appeals decided a question of law/substance contrary to applicable law and jurisprudence when it affirmed the award of moral damage suit (sic) the amount of P10,000.00. 2. The Honorable Court of Appeals decided a question of law/substance contrary to applicable law and jurisprudence when it affirmed the award of exemplary damage sin (sic) the amount of P5,000.00 and attorney’s fee in the *a+mount of P10,000.00. 3. The Honorable Court of Appeals gravely erred and/;or (sic) had acted with grave abuse of discretion amounting to lack and/or excess of jurisdiction when it refused to hold that respondent’s son in the person of Fulgencio Dacara, Jr. was negligent at the time of incident.”*14+ Because the issues regarding the liability of petitioners for moral and exemplary damages presuppose that their negligence caused the vehicular accident, we first resolve the question of negligence or the proximate cause of the incident.

The Court’s Ruling The Petition is partly meritorious. First Issue: Negligence Maintaining that they were not negligent, petitioners insist that they placed all the necessary precautionary signs to alert the public of a roadside construction. They argue that the driver (Fulgencio Dacara Jr.) of respondent’s car was overspeeding, and that his own negligence was therefore the sole cause of the incident. Proximate cause is defined as any cause that produces injury in a natural and continuous sequence, unbroken by any efficient intervening cause, such that the result would not have occurred otherwise.[15] Proximate cause is determined from the facts of each case, upon a combined consideration of logic, common sense, policy and precedent.[16] What really caused the subject vehicle to turn turtle is a factual issue that this Court cannot pass upon, absent any whimsical or capricious exercise of judgment by the lower courts or an ample showing that they lacked any basis for their conclusions.[17] The unanimity of the CA and the trial court in their factual ascertainment that petitioners’ negligence was the proximate cause of the accident bars us from supplanting their findings and substituting these with our own. The function of this Court is limited to the review of the appellate court’s alleged errors of law. It is not required to weigh all over again the factual evidence already considered in the proceedings below.[18] Petitioners have not shown that they are entitled to an exception to this rule.[19] They have not sufficiently demonstrated any special circumstances to justify a factual review. That the negligence of petitioners was the proximate cause of the accident was aptly discussed in the lower court’s finding, which we quote: “Facts obtaining in this case are crystal clear that the accident of February 28, 1988 which caused almost the life and limb of Fulgencio Dacara, Jr. when his car turned turtle was the existence of a pile of earth from a digging done relative to the base failure at Matahimik Street nary a lighting device or a reflectorized barricade or sign perhaps which could have served as an adequate warning to motorist especially during the thick of the night where darkness is pervasive. “Contrary to the testimony of the witnesses for the defense that there were signs, gasera which was buried so that its light could not be blown off by the wind and barricade, none was ever presented to stress the point that sufficient and adequate precautionary signs were placed at Matahimik Street. If indeed signs were placed thereat, how then could it be explained that according to the report even of the policeman which for clarity is quoted again, none was found at the scene of the accident. “Negligence of a person whether natural or juridical over a particular set of events is transfixed by the attending circumstances so that the greater the danger known or reasonably anticipated, the greater is the degree of care required to be observed. “The provisions of Article 2189 of the New Civil Code capsulizes the responsibility of the city government relative to the maintenance of roads and bridges since it exercises the control and supervision over the same. Failure of the defendant to comply with the statutory provision found in the subject-article is tantamount to negligence per se which renders the City government liable. Harsh application of the law ensues as a result thereof but the state assumed the responsibility for the maintenance and repair of the roads and bridges and neither exception nor exculpation from liability would deem just and equitable.”*20+ (Emphasis supplied) Petitioners belatedly point out that Fulgencio Jr. was driving at the speed of 60 kilometers per hour (kph) when he met the accident. This speed was allegedly well above the maximum limit of 30 kph allowed on “city streets with light traffic, when not designated ‘through streets,’” as provided under the Land Transportation and Traffic Code (Republic Act 4136). Thus, petitioners assert that Fulgencio Jr., having violated a traffic regulation, should be presumed negligent pursuant to Article 2185[21] of the Civil Code.[22] These matters were, however, not raised by petitioners at any time during the trial. It is evident from the records that they brought up for the first time the matter of violation of RA 4136 in their Motion for Reconsideration[23] of the CA Decision dated February 21, 2001. It is too late in the day for them to raise this new issue. It is well-settled that points of law, theories or arguments not brought out in the original proceedings cannot be considered on review or appeal.[24] To consider their belatedly raised arguments at this stage of the proceedings would trample on the basic principles of fair play, justice, and due process.[25] Indeed, both the trial and the appellate courts’ findings, which are amply substantiated by the evidence on record, clearly point to petitioners’ negligence as the proximate cause of the damages suffered by respondent’s car. No adequate reason has been given to overturn this factual conclusion.

Second Issue: Moral Damages

Petitioners argue that moral damages are recoverable only in the instances specified in Article 2219[26] of the Civil Code. Although the instant case is an action for quasi-delict, petitioners contend that moral damages are not recoverable, because no evidence of physical injury were presented before the trial court.[27] To award moral damages, a court must be satisfied with proof of the following requisites: (1) an injury -- whether physical, mental, or psychological -- clearly sustained by the claimant; (2) a culpable act or omission factually established; (3) a wrongful act or omission of the defendant as the proximate cause of the injury sustained by the claimant; and (4) the award of damages predicated on any of the cases stated in Article 2219.[28] Article 2219(2) specifically allows moral damages to be recovered for quasi-delicts, provided that the act or omission caused physical injuries. There can be no recovery of moral damages unless the quasi-delict resulted in physical injury.[29] This rule was enunciated in Malonzo v. Galang[30] as follows: “x x x. Besides, Article 2219 specifically mentions ‘quasi-delicts causing physical injuries,’ as an instance when moral damages may be allowed, thereby implying that all other quasi-delicts not resulting in physical injuries are excluded, excepting of course, the special torts referred to in Art. 309 (par. 9, Art. 2219) and in Arts. 21, 26, 27, 28, 29, 30, 32, 34 and 35 on the chapter on human relations (par. 10, Art. 2219).” In the present case, the Complaint alleged that respondent’s son Fulgencio Jr. sustained physical injuries. The son testified that he suffered a deep cut on his left arm when the car overturned after hitting a pile of earth that had been left in the open without any warning device whatsoever. It is apparent from the Decisions of the trial and the appellate courts, however, that no other evidence (such as a medical certificate or proof of medical expenses) was presented to prove Fulgencio Jr.’s bare assertion of physical injury. Thus, there was no credible proof that would justify an award of moral damages based on Article 2219(2) of the Civil Code. Moreover, the Decisions are conspicuously silent with respect to the claim of respondent that his moral sufferings were due to the negligence of petitioners. The Decision of the trial court, which summarizes the testimony of respondent’s four witnesses, makes no mention of any statement regarding moral suffering, such as mental anguish, besmirched reputation, wounded feelings, social humiliation and the like. Moral damages are not punitive in nature, but are designed to compensate and alleviate in some way the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury unjustly inflicted on a person.[31] Intended for the restoration of the psychological or emotional status quo ante, the award of moral damages is designed to compensate emotional injury suffered, not to impose a penalty on the wrongdoer. For the court to arrive upon a judicious approximation of emotional or moral injury, competent and substantial proof of the suffering experienced must be laid before it. Essential to this approximation are definite findings as to what the supposed moral damages suffered consisted of; otherwise, such damages would become a penalty rather than a compensation for actual injury suffered.[32] Furthermore, well-settled is the rule that moral damages cannot be awarded -- whether in a civil[33] or a criminal case[34] -- in the absence of proof of physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, or similar injury.[35] The award of moral damages must be solidly anchored on a definite showing that respondent actually experienced emotional and mental sufferings. Mere allegations do not suffice; they must be substantiated by clear and convincing proof.[36] Third Issue: Exemplary Damages Petitioners argue that exemplary damages and attorney’s fees are not recoverable. Allegedly, the RTC and the CA “did not find that petitioners were guilty of gross negligence in the performance of their duty and responsibilities.”*37+ Exemplary damages cannot be recovered as a matter of right.[38] While granting them is subject to the discretion of the court, they can be awarded only after claimants have shown their entitlement to moral, temperate or compensatory damages.[39] In the case before us, respondent sufficiently proved before the courts a quo that petitioners’ negligence was the proximate cause of the incident, thereby establishing his right to actual or compensatory damages. He has adduced adequate proof to justify his claim for the damages caused his car. The question that remains, therefore, is whether exemplary damages may be awarded in addition to compensatory damages. Article 2231 of the Civil Code mandates that in cases of quasi-delicts, exemplary damages may be recovered if the defendant acted with gross negligence.[40] Gross negligence means such utter want of care as to raise a presumption that the persons at fault must have been conscious of the probable consequences of their carelessness, and that they must have nevertheless been indifferent (or worse) to the danger of injury to the person or property of others.[41] The negligence must amount to a reckless disregard for the safety of persons or property. Such a circumstance obtains in the instant case. A finding of gross negligence can be discerned from the Decisions of both the CA and the trial court. We quote from the RTC Decision: “Sad to state that the City Government through its instrumentalities have (sic) failed to show the modicum of responsibility, much less, care expected of them (sic) by the constituents of this City. It is even more deplorable that it was a case of a street digging in a side street which caused the accident in the so-called ‘premier city.’”*42+

The CA reiterated the finding of the trial court that petitioners’ negligence was clear, considering that there was no warning device whatsoever[43] at the excavation site. The facts of the case show a complete disregard by petitioners of any adverse consequence of their failure to install even a single warning device at the area under renovation. Considering further that the street was dimly lit,[44] the need for adequate precautionary measures was even greater. By carrying on the road diggings without any warning or barricade, petitioners demonstrated a wanton disregard for public safety. Indeed, the February 28, 1988 incident was bound to happen due to their gross negligence. It is clear that under the circumstances, there is sufficient factual basis for a finding of gross negligence on their part. Article 2229 of the Civil Code provides that exemplary damages may be imposed by way of example or correction for the public good. The award of these damages is meant to be a deterrent to socially deleterious actions.[45] Public policy requires such imposition to suppress wanton acts of an offender.[46] It must be emphasized that local governments and their employees should be responsible not only for the maintenance of roads and streets, but also for the safety of the public. Thus, they must secure construction areas with adequate precautionary measures. Not only is the work of petitioners impressed with public interest; their very existence is justified only by public service. Hence, local governments have the paramount responsibility of keeping the interests of the public foremost in their agenda. For these reasons, it is most disturbing to note that the present petitioners are the very parties responsible for endangering the public through such a rash and reckless act. WHEREFORE, the Petition is hereby PARTLY GRANTED. The Decision of the Court of Appeals is AFFIRMED, with the MODIFICATION that the award of moral damages is DELETED. No costs. MUNICIPALITY OF SAN JUAN v. CA FACTS MWSS entered into a contract for water service connections with KC Waterworks Service Construction (KC).On 20 May 1988, KC was given a Job Order by the South Sector Office of MWSS to conduct and effect excavations at the corner of M. Paterno and Santolan Road, San Juan, Metro Manila, a national road, for the laying of water pipes and tapping of water to the respective houses of water concessionaires. Only ¾ of the job was finished in view of the fact that the workers were still required to re-excavate that particular portion for the tapping of pipes for the water connections to the concessionaires. Between 10 o’clock and 11 o’clock in the evening of 31 May 1988, Priscilla Chan was driving her Toyota Crown car with Plate No. PDK 991 at a speed of thirty (30) kilometers per hour on the right side of Santolan Road towards the direction of Pinaglabanan, San Juan, Metro Manila. She was with prosecutor Laura Biglang-awa. The road was flooded as it was then raining hard. Suddenly, the left front wheel of the car fell on a manhole where the workers of KC had earlier made excavations. As a result, the humerus on the right arm of Prosecutor Biglang-awa was fractured. Consequent to the foregoing incident, Biglangawa filed before the Regional Trial Court at Pasig, Metro Manila a complaint for damages against MWSS, the Municipality of San Juan and a number of San Juan municipal officials. After due proceedings, the trial court rendered judgment in favor of Biglang-awa adjudging MWSS and the Municipality of San Juan jointly and severally liable to her. CA affirmed RTC with modification. ISSUE: WON the Municipality of San Juan can be held liable HELD: YES Jurisprudence[7] teaches that for liability to arise under Article 2189[8] of the Civil Code, ownership of the roads, streets, bridges, public buildings and other public works, is not a controlling factor, it being sufficient that a province, city or municipality has control or supervision there of.At any rate, under Article 2189 of the Civil Code, it is not necessary for the liability therein established to attach that the defective roads or streets belong to the province, city or municipality from which responsibility is exacted. What said article requires is that the province, city or municipality have either "control or supervision" over said street or road We must emphasize that under paragraph [1][bb] of Section 149, of the Local Government Code, the phrases“ regulate the drilling and excavation of the ground for the laying of gas, water, sewer, and other pipes”, and “adopt measures to ensure public safety against open canals, manholes, live wires and other similar hazards to life and property”, are not modified by the term “municipal road”. And neither can it be fairly inferred from the same provision of Section 149 that petitioner’s power of regulation vis-à-vis the activities therein mentioned applies only in cases where such activities are to be performed in municipal roads. To our mind, the municipality’s liability for injuries caused by its failure to regulate the drilling and excavation of the ground for the laying of gas, water, sewer, and other pipes, attaches regardless of whether the drilling or excavation is made on a national or municipal road, for as long as the same is within its territorial jurisdiction. Neither is the [petitioner] relieved of liability based on its purported lack of knowledge of the excavation and the condition of the road during the period from May 20, 1988 up to May 30, 1988 when the accident occurred. It must be borne in mind that the obligation of the [petitioner] to maintain the safe condition of the road within its territory is a continuing one which is not suspended while a street is being repaired