TORTS & DAMAGES Digests.pdf

Torts & Damages 2013

Atty. Jess Lopez

1. Cachero v. Manila Yellow Taxicab Co., Inc., G.R. No. L-8721, May 23, 1957 (En Banc) Facts: A taxi owned by defendant driven by Mr. Mira Abinion hit a MERALCO post. As a result, the passenger thereof (Atty. Cachero) suffered physical injuries slight in nature. Said driver was prosecuted and pled guilty. Thereafter, Cachero demanded from defendant an amount totaling P79,245 as damages. Though defendant wanted to settle the claim amicably, it could not accede to Cachero‘s demand of a minimum of P72k. As a result, Cachero sued defendant. The trial court awarded P5,900 total in damages including P2,000 moral damages. Both appealed from said decision. Issue: Is he entitled to moral damages? Held: NO. Defendant does not fall under the cases where moral damages are awardable (Art. 2219). The complaint was based on an alleged breach of camontract of carriage (rather than a quasi-delict resulting in injury) due to the defendant‘s failure to bring him to his destination safely. However, the driver was not made party to the case. It was the driver who committed a criminal offense resulting in physical injuries. Also, the action was not based on the defendant‘s vicarious liability based on Art. 2180 or Art. 103 of the RPC. A.

Quasi-delict distinguished from other sources of obligations

1. Cangco v. Manila Railroad Co., 38 Phil. 768 (1918) Facts: Canco, a clerk of the defendant, was on his way home via train. As the train was about to stop in the station where Cangco usually deboards, Cangco, alighted from the train as he and other passengers always did. Unfortunately, due to the fact that it was nighttime and that the station was dimly lighted, Cangco was not able to see that there was a sack of melons on the platform. Thus, he landed on said melons and slipped. He was drawn under the train and his arm was injured so severely that it had to be amputated. Cangco sued defendant for damages due to negligence of servants & employees in placing the sack of melons which obstructed the passenger‘s egress. Held: Manila Railroad is liable under the old civil code. It is implied from the contract of carriage of the defendant the duty to carry him safely and provide him with a safe means to come in and out o the train. Being contractual, that duty was direct and immediate. Its nonperformance cannot be excused due to the fault of defandant‘s employees. Also, no contributory negligence can be attributed to Cangco because, as a public carrier, he had the right to assume that the platform was clear. Cangco was also very familiar with the place. As such, there can be no uncertainty in his mind that what he was about to do was indeed unsafe. 2. Air France v. Carrascoso, 18 SCRA 155 (1966) Facts: Respondent bought First Class tickets from petitioner‘s agent (PAL) for a trip from Manila to Lourdes. Upon confirmation of said tickets, he flew first class to the first 2 legs of the trip (HK, BKK). However, in Bangkok, after being seated, the manager of the petitioner asked him to transfer to the Tourist Class in lieu of another passenger (―white man‖). Reluctantly, he did. Respondent sued petitioner for damages on the ground of wrongful expulsion to which the Trial Court & the CA granted and awarded him moral (25k), exemplary (10k), and attorney‘s fees (10k). Petitioner appealed contending that its contract with the passenger was subject for confirmation. Held: Air France is liable. The facts and circumstances of the cases make it reasonable for respondent to be awarded said damages. Neither the captain nor any employee of the petitioner intervened. There was also no evidence presented that the white man had a prior right/reservation. Respondent is entitled to said First Class seat. The manager‘s arbitrary act made respondent suffer humiliation. Said manager acted in a manner contrary to morals, good customs, public policy (Art. 21 CC). Passengers do not contract merely for transportation. They have a right to be treated by the carrier‘s employees with respect and kindness. Petitioner‘s contract is attended by a public duty and a violation of which is considered a quasi delict wherein damages may be awarded. 3. Singson v. Bank of the Philippine Islands, 23 SCRA 1117 (1968) Facts: Singson was one of the defendants in a separate civil case along with a certain Lobregat and Villa-Abrille & Co. They were made liable to pay the sum of P105k. Singson and Lobregat appealed. However, Villa-Abrille & Co. did not and, as such, the decision became final with regard to it. Thereafter, a writ of garnishment was issued and was sent to BPI to which said Co. had an account. Upon receipt, without reading the body of the writ saying it was only intended for the accounts of other defandants, the clerk prepared a letter regarding the freezing of Singson‘s account for signature of the BPI President. Upon his signature, Singson‘s account was frozen. Meanwhile, Singson issued checks to corporations to whom he had business with but due to the freezing, the checks were dishonored to the detriment of Singson. Singson wrote the back explaining the contents of the writ. Upon realizing its mistake, BPI through its President immediately corrected it. Despite this, Singson sued for damages on the ground of illegal freezing of the said account. Unfortunately, CFI Manila denied the complaint saying that Singson cannot maintain an action for quasi delict because of the contractual nature of the relationship between the parties. Held: The existence of a contractual relationship between parties is not a bar for a commission of a tort by one against another. Even more so, it does not bar the consequent recovery for damages of the party injured. However, since BPI corrected their mistake immediately, nominal damages of P1,000 (need not be proven) + P500 attorney‘s fees would suffice. 1 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

4. Fabre v. Court of Appeals, G.R. No. 111127, July 26, 1996 Facts: Sps. Fabre owned a Mazda minibus used as a service vehicle to take children to and from school (St. Scho Manila). The sps hired Cabil after trying him out for 2 weeks. WWCF, a Christian group, hired said bus to transport their members from Mnla-La Union and back. It was Cabil‘s first trip to La Union. Upon taking a detour to avoid bridge repair, they came upon a sharp curve. It was raining, slippery, dark, and speeding at 50kp (20kph limit). As such, the driver lost control and fell on its side after hitting various objects in the vicinity. Several were injured. A certain Amy Antonio was severely injured that she became a paraplegic. She sued the Sps. as well as Cabil and the lower courts found them solidarily liable to pay plaintiff damages (CA increased compensatory damages from 500k to 600k). Fabre now challenges the award of damages claiming it to be unconscionable and speculative as well as the holding that Fabre is liable. Held: LIABLE. Cabil is liable for being negligent. Fabres are also presumed negligent in the selection and supervision of employees. Employer did not properly examine Cabil‘s qualifications, experience etc. Due diligence in supervision requires formulation of rules and regulations for guidance of employees and issuance of proper instructions as well as actual implementation and monitoring of compliance with said rules. Also, it does not matter if one is in the common carrier business principally or just a mere sideline. As such, extraordinary diligence should be exercised to safely transport passengers to their destination. Note: If a case was expressly tried and decided exclusively based on culpa contractual, a mere driver cannot be held liable for the injury caused by his negligence because the carrier and the passengers are the parties to the contract of carriage. (Phil. Rabbit v. CA) 5. Light Railway Transit Authority v. Navidad, 397 SCRA 75 (2003) Facts: Nicanor Navidad, while drunk, purchased a token to enter the EDSA LRT station. Whilst standing by the platform, security guard (Escartin) approached Navidad and a fist fight occurred wherein Navidad fell into the LRT tracks. At this time, a train operated by Roman passed by and struck Navidad. The latter‘s wife filed a complaint for damages against Escartin, Roman, Prudent Security Agency, and LRTA. Roman & LRTA presented evidence while Prudent & Escartin filed a demurrer contending that Navidad did not prove Escartin‘s negligence. Trial court held Prudent & Escartin liable. On appeal, CA held LRTA and Roman liable and exonerated Prudent and Escartin. CA held that a contract of carriage existed upon Navidad‘s purchase of the token and thus must be complied with. CA also held that Navidad failed to show that Escartin inflicted fist blows upon the victim but merely presented fact of his death as having hit by the LRT. Held: Only LRTA is liable. The duty of common carriers to provide safety to its passengers obligates it not only during the trip but for so long as they are in the premises. A common carrier is liable for death/injury to passengers (a) through the negligence or willful acts of its employees; or (b) on account of willful acts or negligence of other passengers or of strangers if the common carrier‘s employees through the exercise of due diligence could have prevented or stopped the act or omission. In such cases, a carrier is presumed to have been at fault or negligent. By simple proof of injury, the passenger is relieved of the duty to establish the fault or negligence of the carrier or its employees. The burden shifts upon the carrier to prove that the injury is due to an unforeseen event or force majeure. LRTA was presumed negligent. Also, Roman is not part of the contractual tie between LRTA (carrier) and Navidad (passenger). Roman can only be made liable for his own fault or negligence. -

Quasi-delict v. Delicts o

Revised Penal Code  Articles 100 and 365

1. Barredo v. Garcia, 73 Phil. 607 (1942) Facts: A head on collision between a Malate Taxicab driven by Fontanilla (owned by Barredo) and a carretela occurred. The driver was speeding on the wrong side of the road. The passenger of the carratela, Faustino Garcia (16 y.o) was injured and died 2 days later. The driver was convicted while the right to file a separate civil action was reserved. Thereafter, parents of Garcia filed an action under Art. 1903 (old CC, quasi delict) against Barredo as the proprietor and employer of Fontanilla. It was contended that he did not exercise the diligence of a good father when he employed Fontanilla who had previously violated traffic laws. As such, the same court awarded damages in favor of plaintiffs. In Barredo‘s defense, he contended that his liability should only be subsidiary pursuant to the RPC. Also, he claims that 1903 only applies to obligations arising from wrongful or negligent acts/omissions not punishable by law. Hence, since RPC punishes said acts, 1903 no longer applies. Issue: Whether plaintiffs may bring a separate civil action against Barredo, thus making him primarily and directly liable under 1903 as Fontanilla‘s employer. Held: Yes. Counsel for defendant failed to recognize the distinction between civil liability arising from crime (Penal Code) and responsibility for quasi-delict (CC). A quasi delict/culpa aquiliana is a separate and distinct legal institution, 2

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

independent from the civil responsibility arising from criminal liability. The same negligent act may produce either a civil liability arising from a crime or a separate responsibility for fault/negligence. Under 1903, an employer is primarily and directly responsible for the employee‘s negligent acts. Culpa Aquiliana Private concerns Indemnification Broad

What it affects Consequence Extent

Delito Public interest Punish/correct the criminal act Not broad (punishable only by law)

2. Elcano v. Hill, G.R. No. L-24803, May 26, 1977 Facts: Sps. Elcano filed a complaint for damages against Reginald Hill for the death of their son Agapito. However, CFI of QC acquitted Hill on the ground that the act was not criminal because of ―lack of intent to kill, coupled with mistake.‖ Sps. Elcano wish to continue to hold Hill civilly liable for culpa aquiliana. Issue: Is the civil action for quasi delict barred by the acquittal of Hill in the criminal case? Held: Civil action for quasi delict can proceed. The concept of culpa aquiliana includes acts which are criminal in character, whether voluntary or negligent. Acquittal from an accusation of criminal negligence, whether on reasonable doubt not, shall not be a bar to a subsequent civil action, not for civil liability arising from the crime, but for damages due to quasi delict. Double recovery, however, is prohibited. I.

QUASI-DELICT A.

Elements

1. Andamo v. Intermediate Appellate Court, G.R. No. 74761, November 6, 1990 Facts: Emmanuel & Natividad Andamo are the owners of a parcel of land in Silang Cavite. Adjacent to that is Missionaries of Our Lady of La Salette (Missionaries), a religious corporation. Within the land of respondent, waterpaths and contrivances, including an artificial lake, were constructed, which allegedly inundated and eroded Andamos‘ land which caused a young man to drown, damaged crops and plants, washed away costly fences, endangered the lives of Andamos and their laborers during rainy and stormy seasons, and exposed plants and other improvements to destruction. In 1982, the Andamos filed a criminal case against respondent for destruction by means of inundation under Article 324 of the RPC. Subsequently, they also filed a civil case for damages with prayer for writ of preliminary injunction with the same court. Missionaries countered the civil case by filing a motion to dismiss, which was eventually granted by the Court. The Court ratiocinated that it had no jurisdiction over the subsequent civil case, as the criminal case which was instituted ahead of the civil case was still unresolved. Issue: Whether or not the dismissal was proper. Held: NO. (1) On the elements of Quasi delict: A careful examination of the aforequoted complaint shows that the civil action is one under Articles 2176 and 2177 of the Civil Code on quasi-delicts. All the elements of a quasi-delict are present, to wit: (a) damages suffered by the plaintiff, (b) fault or negligence of the defendant, or some other person for whose acts he must respond; and (c) the connection of cause and effect between the fault or negligence of the defendant and the damages incurred by the plaintiff. Clearly, from the complaint, the waterpaths and contrivances built by respondent corporation are alleged to have inundated the land of petitioners. There is, therefore, an assertion of a causal connection between the act of building these waterpaths and the damage sustained by petitioners. Such action if proven constitutes fault or negligence which may be the basis for the recovery of damages. (2) On the propriety of the motion to dismiss: Article 2176 of the Civil Code imposes a civil liability on a person for damage caused by his act or omission constituting fault or negligence. Whenever it refers to "fault or negligence," covers not only acts "not punishable by law" but also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a separate civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. Thus, the civil action for quasi delict may proceed independently. 2. Lucas v. Tuaño, G.R. No. 178763, April 21, 2009 Facts: Peter Lucas contracted ―sore eyes‖ in his right eye. He was referred to Dr. Tuaño, an ophthalmologist at St. Luke‘s. Upon consultation with Dr . Tuaño (9 days since the problems began), he was already taking Maxitrol to address the problem. Upon examination, Tuano diagnosed Peter with conjunctivitis or ―sore eyes.‖ He prescribed Spersacet -C6 eye drops for Peter and told the latter to return for follow -up after a week. A week later , Tuaño told Peter that the ―sore eyes‖ 3

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

in the latter‘s right eye had already cleared up and he could discontinue the Spersacet-C. However, The same eye developed Epidemic Kerato Conjunctivitis (EKC) so Tuaño prescribed to the former a steroid -based eye drop called Maxitrol. On a later check -up, Tuaño instructed the former to taper down the dosage of Maxitrol , because the EKC in his right eye had already resolved . Dr. Tuaño specifically cautioned Peter that , being a steroid, Maxitrol had to be withdrawn gradually; otherwise, the EKC might recur. Peter would go back and forth to Tuano‘s clinic to complain about the worsening condition of his right eye. In these instances, Tuano would prescribe different meds to counter the recurring EKC. On Dec. 1998, Peter had no vision in his right eye; right eye appeared to be bloody and swollen. Tuano ordered the immediate discontinuation of Maxitrol and prescribed other meds. Peter went to see another ophthalmologist , Dr. Batungbacal. Dr. Batungbacal‘s diagnosis was Glaucoma and recommended Laser Trabeculoplasty . Dr. Tuaño was at a loss as to how to balance the treatment of Peter‘s EKC vis -à-vis the presence of glaucoma thus he referred Peter to Dr. Agulto who concurred on Peter‘s condition and recommended the same medication. Also, Peter was prodded by his friends to seek a second medical opinion. Thus he consulted Dr. Mario V. Aquino who specializes in the treatment of glaucoma. He informed Peter that his eyes were relatively normal except for the tubular vision in Peter‘s right eye. Petitioners claimed that Dr. Aquino essentially told Peter that the latter‘s condition would require lifetime medication and follow-ups. Thus, he underwent 2 procedures of the laser trabeculoplasty. Claiming to have steroid -induced glaucoma and blaming Tuaño for the same , Peter filed a complaint for damages against Tuaño. He averred that as the direct consequence of hisprolonged use of Maxitrol, he suffered from steroid induced glaucoma as well as incurable impairment of vision which may lead to permanent blindness . They prayed that prayed that Tuaño be adjudged liable for compensation for his impaired vision , actual, moral and exemplary damages plus attorney‘s fees. In his defense, Tuano asserted that the drug-induced glaucoma is temporary and curable and that Steroids are prescribed to treat EKC. Contrary to Peter‘s fallacious claim, he did NOT continually prescribe the drug Maxitrol because it was discontinued as soon as EKC disappeared and was resumed only when EKC reappeared. He stressed that Peter‘s glaucoma can only be due to other causes not attributable to steroids — long standing glaucoma; and that in fact steroids were in fact beneficial as they provoked the latest glaucoma to be revealed earlier. RTC dismissed the complaint for insufficient evidence. Upon appeal, CA also dismissed it. Issue: Did Lucas fail to prove that Tuano ignored the standard medical procedure for ophthalmologists as well as administered medication with recklessness and exhibited an absence of competence and skills expected of him? Held: YES. The case at bar is a medical negligence case against a physician based on the latter‘s professional negligence. In order to prevail, the petitioner is required to prove by preponderance of evidence that the physician failed to exercise that degree of skill, care, and learning possessed by other persons in the same profession; and that as a proximate result of such failure, the patient or his heirs suffered damages. Such claim for damages is almost always anchored on the alleged violation of Article 2176 of the Civil Code. In medical negligence/malpractice cases, there exists a physician-patient relationship. To hold the physician liable for damages, 4 elements must be shown to co-exist: (1) duty (2) breach; (3) injury; and (4) proximate causation. There is breach of duty of care, skill and diligence, or the improper performance of such duty when the patient is injured in body or in health. Proof rests upon the testimony of an expert witness that the treatment accorded to the patient failed to meet the standard level of care, skill and diligence which physicians in the same general line of practice ordinarily possess and exercise in like cases. Proof of breach of duty on the part of the attending physician is insufficient; there must be a causal connection between said breach and the resulting injury - injury for which recovery is sought must be the legitimate consequence of the wrong done. In other words, negligence must be the proximate cause of the injury — or that cause, which, in the natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred. To establish the proximate cause, one must similarly use expert testimony to present to the court a realistic assessment of the likelihood that the physician‘s alleged negligence caused the patient‘s injury. No question that a physician-patient relationship developed between Dr. Tuaño and Peter . The onus probandi was on the patient to establish before the trial court that the physicians ignored standard medical procedure. Howecer, there was absolute failure on the part of petitioners to present any expert testimony to establish: ( 1) the standard of care to be implemented by competent physicians 2) that, in his treatment of Peter , Dr. Tuaño failed in his duty to exercise said standard of care that any other competent physician would use, 3) that the injury or his glaucoma was the result of his use of Maxitrol, as prescribed by Dr .Tuaño. Failure to prove the first element alone is already fatal . Petitioners maintain that Dr. Tuaño failed to follow in Peter‘s case the required procedure for the prolonged use of Maxitrol .

4

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Absent a definitive standard of care or diligence required of Dr . Tuaño under the circumstances , we have no means to determine whether he was able to comply with the same. The Court has no yardstick upon which to evaluate or weigh the attendant facts to state with confidence that the acts complained of, indeed, constituted negligence. Critical and clinching factor in a medical negligence case is proof of the causal connection between the negligence which the evidence established and the plaintiff‘s injuries. It is necessary to prove not only that he has been injured and defendant has been at fault, but also that the defendant‘s fault caused the injury. Causation must be proven within a reasonable medical probability based upon competent expert testimony - proof that Peter‘s glaucoma would not have occurred but for Dr. Tuaño‘s supposed negligent conduct . What constitutes proper medical treatment is a medical question that should have been presented to experts. If no standard is established the courts have no standard by which to gauge the basic issue of breach. Absent expert medical opinion, the courts would be dangerously engaging in speculations. 3. Huang v. Philippine Hoteliers Inc., G.R. No. 180440, December 5, 2012 Facts: On June 1995, Delia Goldberg (Delia), a registered guest of Dusit Hotel, invited her friend, Dr. Genevieve L. Huang, for a swim at the hotel‘s pool. At around 7:00 p.m., the hotel‘s pool attendant informed them that the swimming pool area was about to be closed. The 2 went to the shower room adjacent to the swimming pool to take a shower and dress up. When they came out of the bathroom, the entire swimming pool area was already pitch black and there were the only ones there. The doors were also locked. After some time, Huang saw a phone behind the lifeguard‘s counter. As she went inside, the wooden countertop fell on her head and knocked her down almost unconscious. Delia immediately notified the hotel phone operator of the incident. Not long after, the hotel staff arrived at the main entrance door of the swimming pool area and gave her an icepack. Huang demanded the services of the hotel physician. Hotel physician, Dr. Dalumpines, instead of immediately providing the needed medical assistance, presented a ―Waiver‖ and demanded that it be signed by Huang, otherwise, the hotel management will not render her any assistance. Huang refused to do so and left the hotel. Thereupon, Huang consulted several doctors (7 neuro, 1 optha) because she began experiencing ―on‖ and ―off‖ severe headaches that caused her three sleepless nights. They all said she had a serious brain injury. In defense, PHI and Dusit denied all the material allegations. According to them, a sufficient notice on the glass door of the hotel leading to the swimming pool area to apprise the people, especially the hotel guests, that the swimming pool area is open only from 7am to 7pm. Nevertheless, the lights thereon are kept on until 10:00 p.m. for, (1) security reasons; (2) housekeeping personnel to do the cleaning of the swimming pool surroundings; and (3) people doing their exercise routine at the Slimmer‘s World Gym, which was open until 10pm. Even granting that the lights in the hotel‘s swimming pool area were turned off, it would not render the area completely dark as the Slimmer‘s World Gym near it was well- illuminated. Around 7:40pm, Ms. Pearlie (hotel nurse) was informed that there was a guest requiring medical assistance. She hurriedly went to the pool area. Although Huang looked normal as there was no indication of any blood or bruise on her head, Ms. Pearlie still asked her if she needed any medical attention to which she replied that she is a doctor, she was fine and she did not need any medical attention. Instead, requested for a hirudoid cream to which Ms. Pearlie acceded. Dr. Dalumpines came to check Huang‘s condition. Huang insisted that she was fine and that the hirudoid cream was enough. Dr. Dalumpines requested Huang to execute a handwritten certification regarding the incident that occurred that night. An XRay test was also suggested to Huang but she replied that it was not necessary. She also refused further medical attention. On Aug 1996, Huang filed a complaint for damages against respondents. The trial court dismissed the Complaint for lack of merit. On appeal, Huang belatedly raises the defense on breach of contract. She maintains that that an implied contract existed between them in view of the fact that the hotel guest status extends to all those who avail of its services — its patrons and invitees. The CA affirmed the TC‘s decision. MR denied. Hence, this Petition for certiorari under Rule 45. She also avows that the doctrines of res ipsa loquitur and respondeat superior are applicable in this case. It was an accident caused by the fact that the hotel staff was not present to lift the heavy counter top for Huang as is normally expected of them because they negligently locked the main entrance door of the hotel‘s swimming pool area. Issue: Whether respondents PHI and Dusit are liable to Dr. Huang. Held: NO. Initially, Huang sued respondents mainly on account of their negligence but not on any breach of contract. Presently, she claims that her cause of action can be based both on quasi-delict and breach of contract. A perusal of the complaint evidently shows that her cause of action was based solely on quasi-delict (negligence). It is evident from the complaint and from her open court testimony that the reliance was on the alleged tortious acts committed against her by respondents, through their management and staff. In quasi-delict, there is no presumption of negligence and it is incumbent upon the injured party to prove the negligence of the defendant, otherwise, the former‘s complaint will be dismissed. In a breach of contract, negligence is presumed so 5 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

long as it can be proved that there was breach of the contract and the burden is on the defendant to prove that there was no negligence in the carrying out of the terms of the contract; the rule of respondeat superior is followed. It is now too late to raise the said argument for the first time before the SC without causing injustice. As Huang‘s cause of action is based on quasi­delict, it is incumbent upon her to prove the presence of the following requisites before respondents PHI and Dusit can be held liable, to wit: (a) damages suffered by the plaintiff; (b) fault or negligence of the defendant, or some other person for whose acts he must respond; and (c) the connection of cause and effect between the fault or negligence of the defendant and the damages incurred by the plaintiff. Further, since her case is for quasi-delict, the negligence or fault should be clearly established as it is the basis of her action. The burden of proof is upon her. Second element Absent: In this case, Huang utterly failed to prove the alleged negligence of respondents. Other than her self-serving testimony that all the lights in the hotel‘s swimming pool area were shut off and the door was locked, which allegedly prompted her to find a way out and in doing so a folding wooden counter top fell on her head causing her injury, no other evidence was presented to substantiate the same. Even her own companion during the night of the accident inside the hotel‘s swimming pool area was never presented to corroborate her allegations. On the other hand, the witnesses presented by the respondents positively declared that it has been a normal practice of the hotel management not to put off the lights until 10pm. to allow the housekeepers to do the cleaning of the swimming pool surroundings, including the toilets and counters. There is a remote possibility that the hotel‘s swimming pool area was in complete darkness as the aforesaid gym was then open until 10pm, and the lights radiate to the hotel‘s swimming pool area. Ergo, she cannot fault the Hotel for the injury she allegedly suffered because she herself did not heed the warning at the pool to the effect that it was only open from 7:00 to 7:00 P.M. Thus, when the her own negligence was the immediate and proximate cause of his injury, she then cannot recover damages. Even Huang‘s assertion of negligence on the part of respondents in not rendering medical assistance to her is preposterous. Her own Complaint affirmed that respondents afforded medical assistance to her after she met the unfortunate accident inside the hotel‘s swimming pool facility. Moreover, the Hotel shouldered the expenses for the MRI services at the Makati Med. Res Ipsa Loquitur & Respondeat Superior: With regard to Huang‘s contention that the principles of res ipsa loquitur and respondeat superior are applicable in this case, this Court holds otherwise. Res ipsa loquitur is a Latin phrase which literally means ―the thing or the transaction speaks for itself.‖ It relates to the fact of an injury that sets out an inference to the cause thereof or establishes the plaintiff‘s prima facie case. The doctrine finds no application if there is direct proof of absence or presence of negligence. In the case at bench, even granting that respondents‘ staff negligently turned off the lights and locked the door, the folding wooden counter top would still not fall on Huang‘s head had she not lifted the same. Records showed that she lifted the said folding wooden counter top that eventually fell and hit her head. Doctrine of respondeat superior finds no application in the absence of any showing that the employees of respondents were negligent. Since in this case, the trial court and the CA found no negligence on the part of the employees of respondents, thus, the latter cannot also be held liable for negligence. With the foregoing, the following were clearly established, to wit: (1) petitioner stayed in the hotel‘s swimming pool facility beyond its closing hours; (2) she lifted the folding wooden counter top that eventually hit her head; and (3) respondents extended medical assistance to her. As such, no negligence can be attributed either to or to their staff and/or management. Third element: On the issue on whether Huang‘s debilitating and permanent injuries were the result of the accident she suffered at the hotel‘s swimming pool area, the Court holds that there is no cogent reason to depart from the lower courts‘ findings. (1) Huang had a past medical history which might have been the cause of her recurring brain injury. (2) The findings of Dr. Perez did not prove a causal relation between the 11 June 1995 accident and the brain damage suffered by Huang. Dr. Perez himself testified that the symptoms being experienced might have been due to factors other than the head trauma she allegedly suffered. (3) Dr. Sanchez‘s testimony was hearsay. (4) Medical reports/evaluations/certifications issued by myriads of doctors whom petitioner sought for examination or treatment were neither identified nor testified to by those who issued them. Being deemed as hearsay, they cannot be given probative value. All told, in the absence of negligence on the part of respondents as well as their management and staff, they cannot be made liable to pay for the millions of damages prayed for. Since respondents arc not liable, it necessarily follows that First Lepanto cannot also be made liable under the contract of Insurance. B. 6

No Double Recovery Rule Civil Code: Arts. 1161, 2176, and *2177 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

1. Joseph v. Bautista, 170 SCRA 540 (1989) Luis Joseph is the plaintiff in a Civil Case entitled Joseph v. Perez, Villa, Vargas, Sioson, Villanueva, and Pagarigan before the CFI of Bulacan; Judge Bautista presided. Perez owned a cargo truck for conveying cargo and passengers from Dagupan to Manila. In January 1973, Villa drove the truck from Valenzuela to Pangasinan. Joseph, with his livestock, boarded the truck going to Valenzuela, paying P9. On the way, Villa tried to overtake a tricycle, but at the same time, a pick-up truck owned by Sioson and Pagarigan, and driven by Villanueva, tried to overtake the cargo truck. The cargo truck was forced to veer towards the shoulder, ramming a mango tree. Joseph sustained a bone fracture in one of his legs. He then filed a complaint for damages against Perez (owner) based on a breach of contract of carriage; against Sioson and Villanueva, quasi-delict. As he could not ascertain who the real owners of the vehicles were, he amended his complaint to implead everyone, including a certain Cardeno. On 27 September 1974, Sioson, Villanueva, Pagarigan, and Cardeno, through the Insurance Corporation of the Philippines, paid Joseph‘s claim for P1,300. Petitioner executed a release of claim against them. They thus filed a motion to exclude themselves from the case. Perez opposed this, and filed a Counter Motion to Dismiss on the ground that the release inured to the favor of all respondents, as their liability was solidary. The judge agreed, and dismissed the case; a Motion for Reconsideration was denied. Issue: Whether or not the release of claim inured to the benefit of Perez. Held: YES. A Cause of Action is the delict or wrongful act or omission violating the rights of a party. It is true that a single act or omission can be violative of various rights at the same time, as when the act constitutes juridically a violation of several separate and distinct legal obligations. However, where there is only one wrong, there is only one cause of action, regardless of the number of the rights violated. Here, there was only one injury sustained by the Joseph, vesting him with only one cause of action, though with different remedies against different persons. A recovery under one remedy necessarily bars recovery under the other; the rationale against this is the rule against unjust enrichment. Also, being solidarily liable, full payment by one or some, as well as their subsequent release, resulted in the extinguishment and release from liability all other solidary debtors. 2. Atlantic Gulf and Pacific Company of Manila, Inc., v. CA, G.R. No. 114841-42, October 20, 1995 Facts: Sometime in 1982, petitioner commenced the construction of a steel fabrication plant in the Batangas, necessitating dredging operations in an area adjacent to the real property of private respondents Castillo. An action for damages against herein petitioner was filed by the Castillos alleging that: During the on-going construction of its steel and fabrication yard, petitioner‘s personnel and heavy equipment trespassed into the adjacent parcels of land belonging to them without their consent. Petitioner‘s heavy equipment damaged big portions of their property which were further used by petitioner as a depot or parking lots without paying any rent therefor. As a result of the dredging operation of petitioner, the sea silt and water overflowed and were deposited upon their land. Said property which used to be agricultural lands principally devoted to rice production could no longer be planted with palay as the soil became infertile, salty, unproductive and unsuitable for agriculture. Petitioner denied all the allegations. Trial court ruled in favor of the Castillos ordering defendant to pay for damages. On appeal, the CA modified the decision and increased the award for damages. On appeal by certiorari, the SC ruled that CA erred in increasing the award for damages considering that the Castillos did not appeal but affirmed the decision of the trial court in all respects. Petitioner filed a Motion for Reconsideration contending that the Court of Appeals violated Article 2177 of the Civil Code on double recovery which states that: ‗the plaintiff cannot recover damages twice for the same act or omission of the defendant‘ when it condemned the petitioner as a result of its dredging operations, to pay private respondents not only the expected total amount of profits the latter would have derived from the expected sale of their palay harvest for 135 months or over 11 years, from the half hectare agricultural land, but also rentals on the basis of P5.00 per square meter of their said entire landholdings. Issue: Whether or not the provision against double recovery was violated. Held: NO. The Castillos specifically alleged in their complaint that as a result of petitioner‘s dredging operations, the soil of the former‘s property ―became infertile, salty, unproductive and unsuitable for agriculture.‖ They further averred that 7 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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petitioner‘s heavy equipment ―used to utilize (private respondents‘) land as a depot or parking lot of these equipment(s) without paying any rent therefor.‖ Clearly, petitioner was guilty of two culpable transgressions on the property rights of private respondents: (1) for the ruination of the agricultural fertility or utility of the soil of their property and (2) for the unauthorized use of said property as a dump site or depot for petitioner‘s heavy equipment and trucks. Consequently, there is no merit in said objection of petitioner. 3. Padua v. Robles, G.R. No. L-40486, August 29, 1975 In the early morning of New Year‘s Day of 1969, a taxicab (driven by Punzalan and operated by the Bay Taxi Cab owned by Robles) struck 10 year old Normandy Padua on the national road in barrio Barretto, Olongapo City. The impact hurled Padua about 40 meters away from the point where the taxicab struck him, as a result of which he died. Normandy‘s parents (Paulino and Lucena Bebin Padua) filed with the CFI Zambales (civil case 427-O) and sought damages from Punzalan and the Bay Taxi Cab. The city fiscal filed with the same court (criminal case 1158-O), charged Punzalan with homicide through reckless imprudence. On October 27, 1969 the court a quo, in civil case 427-O, adjudged for the Paduas but dismissed the complaint against Bay Taxi Cab. Almost a year later, on October 5, 1970, the court a quo, in criminal case 1158-O, convicted Punzalan of homicide through reckless imprudence under Art. 365. The same decision also said: ―The civil liability of the accused has already been determined and assessed in Civil Case No. 427-O, entitled ‗Paulino Padua, et al. vs. Romeo Punzalan, et al. ‖ After the judgment in civil case 427-O became final, the Paduas sought execution thereof. This proved futile and the corresponding court officer returned the writ of execution unsatisfied. Unable to collect the amount of P27,000 awarded in their favor, the Paduas instituted action in the same court against Gregorio N. Robles to enforce the latter‘s subsidiary responsibility under the provisions of article 103 of the Revised Penal Code. Robles filed a motion to dismiss based on (1) bar of the cause of action by a prior judgment and (2) failure of the complaint to state a cause of action. The court a quo granted Robles‘ motion to dismiss on the ground that the Paduas‘ complaint states no cause of action. Paduas elevated the case to CA and CA certified case to SC. Issue: (1) W/N the judgment in criminal case 1158-O includes a determination and adjudication of Punzalan‘s civil liability arising from his criminal act upon which Robles‘ subsidiary civil responsibility may be based. (2) If in the positive, is there double recovery? Held: Yes. There was an intention to adjudicate Punzalan‘s civil liability from the criminal case. However, there is no double recovery. Hence, Paduas are entitled to the civil liability, which stems from the subsidiary civil responsibility of Robles. It would appear that a plain reading of the judgment in criminal case 1158-O easily results in the conclusion that the said judgment assessed no civil liability arising from the offense charged against Punzalan. However, a careful study of the judgment in question, the situation to which it applies, and the attendant circumstances, would yield the conclusion that the court a quo, on the contrary, recognized the enforceable right of the Paduas to the civil liability arising from the offense committed by Punzalan and awarded the corresponding indemnity therefor. The same judge tried, heard, and determined both civil case 427-O and criminal case 1158-O. Knowledge of and familiarity with all the facts and circumstances relevant and relative to the civil liability of Punzalan may thus be readily attributed to the judge when he rendered judgment in the criminal action. Therefore, it cannot reasonably be contended that it was the intention, in its judgment in criminal case 1158-O, to omit recognition of the right of the Paduas to the civil liability arising from the offense of which Punzalan was adjudged guilty and the corollary award of the corresponding indemnity therefor. Clearly, it was the intention of the court to accord affirmation to the Paduas‘ right to the civil liability arising from the judgment against Punzalan in criminal case 1158- O. Indeed, by including such statement in the dispositive portion of the said judgment, the court intended to adopt the same adjudication and award it made in civil case 427-O as Punzalan‘s civil liability in criminal case 1158-O. In negligence cases, the offended party (or his heirs) has the option between an action for enforcement of civil liability based on culpa criminal under article 100 and an action for recovery of damages based on culpa aquiliana under article 2177. Article 2177 of the Civil Code, however, precludes recovery of damages twice for the same negligent act or omission. The Court finds it immaterial that the Paduas chose, in the first instance, an action for recovery of damages based on culpa aquiliana under articles 2176, 2177, and 2180, which action proved ineffectual. (as proven by the unsatisfied writ of execution from the civil case) There is no inconsistency between the aforementioned action previously availed of by the Paduas and their subsequent application for enforcement of civil liability arising from the offense committed by Punzalan and, consequently, for exaction of Robles‘ subsidiary responsibility. Allowance of the latter application involves no violation of the proscription against double recovery of damages for the same negligent act or omission. For, as hereinbefore stated, the corresponding officer of the court a quo returned unsatisfied the writ of execution issued against Punzalan to satisfy the amount of indemnity awarded to the Paduas in civil case 427-O. 8

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4. Equitable Leasing Corporation v. Suyom, G.R. No. 143360, September 5, 2002 A Fuso Road Tractor driven by Raul Tutor rammed into house/store of Tamayo in Tondo. The house was destroyed and pinned under the engine of the tractor was the son of respondent Tamayo (Reniel) and the daughter of respondent Oledan (Felmarie). Oledan, Enano and the two sons of respondent Suyom were injured as well. Tutor was convicted of reckless imprudence resulting in multiple homicide and multiple physical injuries. However, respondents failed to recover anything in the criminal case. It was later found out through the LTO that the registered owner of the tractor was petitioner (Equitable Leasing Corporation) leased to Edwin Lim. Respondents filed against Equitable, Ecatine Corp. (employer of Tutor), and Lim a Complaint for damages. The complaint was dropped with respect to Ecatine and Lim. Equitable alleged that the vehicle had already been sold to Ecatine and it was no longer in possession and control of it at the time of the incident. After trial, the court ordered Equitable to pay actual and moral damages to respondent, holding that since the Deed of Sale between petitioner and Ecatine had not been registered with the LTO, the legal owner was still Equitable. The CA sustained the trial court. Issue: Whether or not Equitable is liable for the negligent acts of Tutor despite the fact that he was not its employee. Held: YES. In negligence cases, the aggrieved party may sue the negligent party under (1) Article 100 of the RPC, for civil liability ex delicto; or (2) under Article 2176 of the Civil Code, for civil liability ex quasi delicto. Employees may also be held subsidiarily liable for felonies committed by their employees in the discharge of the latter‘s duties under Article 103 of the RPC. This applies when the employee/s convicted of the crime are found to be insolvent. Under Article 2176 in relation to Article 2180, an action may be instituted against the employer for an employee‘s act or omission, in which case the liability of the employee is direct and primary subject to the defense of due diligence. It does not require that the employee is insolvent in this case. These two causes of action (ex delicto or ex quasi delicto) may be availed of, subject to the caveat that the offended party cannot ―recover damages twice for the same act or omission‖ or under both causes. Since these two civil liabilities are distinct and independent of each other, the failure to recover in one will not necessarily preclude recovery in the other. Since respondents failed to recover anything in the criminal case, they elected to file a separate civil action for damages based on quasi delict under Article 2176 of the Civil Code. It is clear that the damages caused were due to the fault of the driver of the tractor. Equitable is liable since the deed of sale evidencing the sale of the tractor was not registered with the LTO. The court has held that regardless of sales made of a motor vehicle, the registered owner is the lawful operator insofar as the public and third persons are concerned; consequently, it is directly and primarily responsible for the consequences of its operation. Since Equitable remained the registered owner of the tractor, it could not escape primary liability for the deaths and the injuries arising from the negligence of the driver. In the instant case, the registered owner is considered under the law to be the employer of the driver while the actual operator is deemed to be its agent. The same goes for purposes of the law on quasi-delict. Additionally since respondents have proved the factual bases of the their right to their claim and that the present case falls under Article 2219 (2) which provides for the payment of moral damages in cases of quasi-delict, petitioners are thus entitled to the same 5. Lim v. Ping, G.R. No. 175256, August 23, 2012 Facts: FR Cement Corp (FRCC) owned/operates a cement manufacturing plant. It issued several Withdrawal Authorities (WA) (imagine Warehouse Receipts) for the accounts Fil-Cement and Tigerbilt, cement dealers/traders. The WAs state the quantity of bags the dealer/trader paid for and can withdraw from the cement plant. Said WAs are valid for 6 mos. from issuance unless revoked. Abovementioned traders/dealers sold their WAs covering 50,000 bags to Co Ping. for P63/bag (3.15M). In turn, Co sold the same WAs to Lily Lim at P64/bag (3.2M). Lim was able to withdraw 2,800 bags. Also, she WAs covering 10,000 bags back to Co. In April 1999, FRCC did not allow Lim to withdraw the remaining 37,200 remaining bags. Upon her inquiry, FRCC and Co explained that the plant implemented a price increase and would only release the bags once Lim pays for the price difference or agrees to receive lesser quantity of cement. Thereafter, she demanded Co to resolve her problem with FRCC or for the return of her money. Unsuccessful, a case for Estafa through Misrepresentation/Conversion was filed in RTC Pasig with prayer for damages. Co was later acquitted when his demurrer for insufficient evidence was granted. He was also relieved from civil liability in the same case. Thus, Lim sought refuge before the CA. Pending her appeal, Lim filed a complaint for Specific Performance and Damages in RTC Manila against Co and other parties indicated in the WAs. She asserted 2 causes of actions: (1) Breach of Contract; and (2) Abuse of Rights & Unjust Enrichment. She also prayed for moral & exemplary damages. Co filed a Motion to Dismiss based on lis pendens and forum shopping. Denying the Motion, the RTC said there was no forum shopping because the case pending in the Estafa case and this Civil case are different. 9 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Issue: Did Lim commit forum shopping in filing the civil case for specific performance and damages while her appeal on the civil aspect for estafa was pending? Held: NO. The first action is clearly a civil action ex delicto, it having been instituted together with the criminal action. The second action is a civil action arising from a contractual obligation and for tortuous conduct (abuse of rights). A single act or omission that causes damage to an offended party may give rise to two separate civil liabilities namely: civil liability arising from the crime (ex delicto) and an independent civil liability. The civil liability arising from the offense or ex delicto is based on the acts or omissions that constitute the criminal offense; hence, its trial is inherently intertwined with the criminal action. If the action for the civil liability ex delicto is instituted prior to or subsequent to the filing of the criminal action, its proceedings are suspended until the final outcome of the criminal action. On the other hand, the independent civil liabilities are separate from the criminal action and may be pursued independently, as provided in Articles 31 and 33 of the Civil Code. Because of the distinct and independent nature of the two kinds of civil liabilities, jurisprudence holds that the offended party may pursue the two types of civil liabilities simultaneously or cumulatively, without offending the rules on forum shopping, litis pendentia, or res judicata. (3) Person/s liable; nature of liability -

Civil Code o Article 2194 (Memorize)

1. Light Railway Transit Authority v. Navidad, 397 SCRA 75 (2003) See above 2. Philippine National Construction Corporation v. Court of Appeals, G.R. No. 159270, August 22, 2005 Facts: Pampanga Sugar (PASUDECO) is in the business of transporting sugar cane from Pampanga. Many roads became impassable due to the Pinatubo eruption. As such, Toll Regulatory Board (TRB) and PASUDECO entered into a MOA wherein the latter was allowed to enter and pass through NLEX provided it should comply with its safety measures such as putting a sign saying ―Caution: Convoy Ahead.‖ Also, it was stipulated that accidents and damages to toll facilities shall be PASUDECO‘s responsibility. Said MOA was approved by PNCC At 2:30am, a PNCC security supervisor were patrolling KM 72 when they saw a pile of sugarcane in the middle of the road. To warn motorists, they placed lit cans with diesel oil on the road and lane dividers. They contacted PASUDECO to clean up the mess. Later, 5 PASUDECO men arrived to clear up the highway. They, however, left a few flattened sugarcanes scattered on the road. Since most of the sugarcane had been cleared, the PNCC security supervisor thought there was no longer a need to man the traffic. As such, they removed the warning devices. At about 6:30 a.m, Arnaiz, with Latagan & Generalao, was driving along the NLEX at about 65 kilometers per hour with on their way to Baguio to attend their grandmother‘s first death anniversary. Their vehicle ran over the scattered sugarcane and flew out of control and turned turtle several times. Consequently, a complaint for damages was filed against PNCC and PASUDECO on the ground of negligence to which the RTC granted. PNCC‘s appeal was also denied by the CA. CA held that PASUDECO and PNCC are solidarily liable. Issue: Is PNCC liable? Held: YES. PNCC & PASUDECO are SOLIDARILY LIABLE. The test by which to determine the existence of negligence in a particular case may be stated as follows: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of negligence. PNCC failed to exercise the requisite diligence in maintaining the NLEX safe for motorists. The lighted cans and lane dividers on the highway were removed even as flattened sugarcanes lay scattered on the ground. Moreover, they cannot escape liability under the MOA between PASUDECO and TRB, since Latagan was not a party thereto. Both defendants, PASUDECO and PNCC, should be held liable. PNCC was in charge of the maintenance of the expressway and its obligation cannot be destroyed by virtue of a private agreement, to other parties. Moreover, the MOA refers to accidents or damages to the toll facilities. It does not cover damages to property or injuries caused to motorists on the NLEX who are not privies to the MOA.

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PASUDECO‘s negligence in transporting sugarcanes without proper harness/straps, and that of PNCC in removing the emergency warning devices, were two successive negligent acts which were the direct and proximate cause of Latagan‘s injuries. Where the concurrent or successive negligent acts or omission of two or more persons, although acting independently of each other, are, in combination, the direct and proximate cause of a single injury to a third person and it is impossible to determine in what proportion each contributed to the injury, either is responsible for the whole injury, even though his act alone might not have caused the entire injury, or the same damage might have resulted from the acts of the other tortfeasor. Negligence in order to render a person liable need not be the sole cause of an injury. It is sufficient that his negligence, concurring with one or more efficient causes other than plaintiff's, is the proximate cause of the injury. It is no defense to one of the concurrent tortfeasors that the injury would not have resulted from his negligence alone. Where several causes producing an injury are concurrent and each is an efficient cause without which the injury would not have happened, the injury may be attributed to all or any of the causes and recovery may be had against any or all of the responsible persons although under the circumstances of the case, it may appear that one of them was more culpable, and that the duty owed by them to the injured person was not the same. Each wrongdoer is responsible for the entire result. They are each liable as though his acts were the sole cause of the injury. With PASUDECO‘s and the petitioner‘s successive negligent acts, they are joint tortfeasors who are solidarily liable under Article 2194. Anent respondent Arnaiz‘s negligence in driving his car, such was only contributory, and considered the same in mitigating the award of damages. Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is required to conform for his own protection. 3. Chan, Jr., v. Iglesia Ni Cristo, Inc., G.R. No. 160283, October 14, 2005 Facts: Chan owns Aringay Shell Gasoline Station in La Union. It is bounded on the south by a chapel of the INC. The gas station supposedly needed additional sewerage and septic tanks for its washrooms, so the services of retired army general Ely Yoro was procured by Chan as the former was allegedly a construction contractor in the locality. Chan and Yoro entered a MOA, pertinent portions of which are as follows: 4. Any damage within or outside the property of the CHAN incurred during the digging shall be borne by the YORO 6. In the event that valuable objects are found outside the property line during the said digging, the same shall be divided among the parties (35% for Chan, 65% for Yoro) Diggings thereafter commenced. Chan was informed by the members of the INC that the digging traversed and penetrated a portion of the land belonging to the latter. The foundation of the chapel was affected as a tunnel was dug directly under it to the damage and prejudice of the INC. A complaint against Chan and a certain Teofilo Oller (engineer) was filed by the INC in RTC La Union. Chan and Oller filed an Answer and impleaded Yoro as third party defendant. The trial court absolved Oller and adjudged Chan and Yoro solidarily liable holding that the diggings were not intended for the construction of sewerage and septic tanks but were made to construct tunnels to find hidden treasure. Chan and Yoro appealed separately. The trial court disallowed Yoro‘s appeal for failure to pay the docket and other lawful fees. Chan appeal was given due course but was denied by the CA. Then, Chan instituted the this case. He argues that the MOA executed between him and Yoro is the law between them and must be given weight by the courts. Since nothing in the MOA goes against the law, morals, good customs and public policy, it must govern to absolve him from any liability. Issue: Whether or not the MOA entered into by the Chan and Yoro has the effect of making the latter solely responsible for damages to the respondent. Held: NO. The findings of the trial court and the CA on this point are in complete unison. Chan and Yoro were in quest for hidden treasure and, undoubtedly, they were partners in this endeavor. Based on Art. 2176 the requisites of quasi-delict are the following: (1) There must be an act or omission; (2) Such act or omission causes damage to another; (3) Such act or commission is caused by fault or negligence; and (4) There is no pre-existing contractual relation between the parties. All the requisites are attendant in the instant case. The tortious act was the excavation which caused damage to INC because it was done surreptitiously within its premises and it may have affected the foundation of the chapel. The excavation on INC‘s premises was caused by fault. Finally, there was no pre-existing contractual relation between the Chan and Yoro on the one hand, and the INC on the other. 11

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For the damage caused to INC, Chan and Yoro are jointly liable as they are joint tortfeasors. Verily, the responsibility of two or more persons who are liable for a quasidelict is solidary. Chan and Yoro cooperated in committing the tort. They even had provisions in their MOA as to how they would divide the treasure if any is found within or outside Chan‘s property line. Thus, the MOA, instead of exculpating Chan from liability, is the very noose that insures that he be so declared as liable. While it is settled that a party who did not appeal from the decision cannot seek any relief other than what is provided in the judgment appealed from, nevertheless, when the rights and liability of the defendants are so interwoven and dependent as to be inseparable, in which case, the modification of the appealed judgment in favor of appellant operates as a modification to Yoro who did not appeal. In this case, the liabilities of Yoro and Chan being solidary, the above exception applies. *Torts-related but not under the topic assigned: Exemplary or corrective damages are imposed by way of example or correction for the public good. In quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence. By gross negligence is meant such entire want of care as to raise a presumption that the person in fault is conscious of the probable consequences of carelessness, and is indifferent, or worse, to the danger of injury to person or property of others. Surreptitiously digging under the respondent‘s chapel which may weaken the foundation thereof, thereby endangering the lives and limbs of the people in worship, unquestionably amounts to gross negligence. Not to mention the damage that may be caused to the structure itself. The exemplary damages must correspondingly be increased to P100,000.00. 4. Fabre v. Court of Appeals, G.R. No. 111127, July 26, 1996 See above 5. Cerezo v. Tuazon, G.R. No. 141538, March 23, 2004 Facts: Country Bus Lines passenger bus collided with a tricycle in Pampanga. Trike driver Tuazon filed a complaint as pauper litigant for damages against Mrs. Cerezo, as owner of the bus line, her husband Atty. Juan Cerezo and driver Danilo Foronda. Tuazon alleged that he was in the proper lane when Foranda, without due regard to traffic rules and regulations, there being a ―Slow Down‖ sign, drove in a negligent manner which caused severe damage to the tricycle and serious physical injuries to plaintiff (unable to walk, became disabled, thumb and middle finger on the left hand cut) Trial court issued summons against Atty. Cerezo and Mrs. Cerezo. Sps. Cerezo failed to file their answer so the trial court issued an order declaring the Cerezos in default. It also ruled in Tuazon‘s favor. It made no pronouncement on Foronda‘s liability because there was no service of summons on him. It was held that Mrs. Cerezo was solely liable for the damages sustained by Tuazon arising from the negligence of Mrs. Cerezo‘s employee, pursuant to Article 2180 of the CC. Cerezos utilized various remedies (relief from judgment, certiorari under 45, annulment of judgment under 47, and certiorari under 65 with CA) to overturn the ruling but were all denied. Hence, the present petition for review on certiorari contending that the CA ignored the allegation that driver Foronda whose negligence is the main issue is an indispensable party whose presence is compulsory but whom the lower court did not summon. Issue: Whether or not Foronda (driver) is an indispensable party. Held/Ratio: NO. Mrs. Cerezo‘s contention that the trial court could not validly render judgment since it failed to acquire jurisdiction over Foronda proceeds from the point of view of criminal law and not of civil law. The basis of the present action of Tuazon is quasi-delict under the Civil Code, not delict under the Revised Penal Code. The same negligent act may produce civil liability arising from a delict under Article 103 of the Revised Penal Code, or may give rise to an action for a quasi-delict under Article 2180 of the Civil Code. An aggrieved party may choose between the two remedies. An action based on a quasi-delict may proceed independently from the criminal action. There is, however, a distinction between civil liability arising from a delict and civil liability arising from a quasi-delict. The choice of remedy, whether to sue for a delict or a quasi-delict, affects the procedural and jurisdictional issues of the action. Tuazon chose to file an action for damages based on a quasi-delict. In his complaint, Tuazon alleged that Mrs. Cerezo, ―without exercising due care and diligence in the supervision and management of her employees and buses,‖ hired Foronda as her driver. Tuazon became disabled because of Foronda‘s ―recklessness, gross negligence and imprudence,‖ aggravated by Mrs. Cerezo‘s ―lack of due care and diligence in the selection and supervision of her employees, particularly Foronda.‖ Article 2180 states in part: 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. Contrary to Mrs. Cerezo‘s assertion, Foronda is not an indispensable party to the case. An indispensable party is one whose interest is affected by the court‘s action in the litigation, and without whom no final resolution of the case is possible. However, Mrs. Cerezo‘s liability as an employer in an action for a quasi­delict is not only solidary, it is 12 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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also primary and direct. Foronda is not an indispensable party to the final resolution of Tuazon‘s action for damages against Mrs. Cerezo. According to Article 2194 of the Civil Code, the responsibility of two or more persons who are liable for a quasi-delict is solidary. Where there is a solidary obligation on the part of debtors, as in this case, each debtor is liable for the entire obligation. Hence, each debtor is liable to pay for the entire obligation in full. There is no merger or renunciation of rights, but only mutual representation. Where the obligation of the parties is solidary, either of the parties is indispensable, and the other is not even a necessary party because complete relief is available from either. Therefore, jurisdiction over Foronda is not even necessary as Tuazon may collect damages from Mrs. Cerezo alone. Moreover, an employer‘s liability based on a quasi­delict is primary and direct, while the employer‘s liability based on a delict is merely subsidiary. Although liability under Article 2180 originates from the negligent act of the employee, the aggrieved party may sue the employer directly. When an employee causes damage, the law presumes that the employer has himself committed an act of negligence in not preventing or avoiding the damage. This is the fault that the law condemns. While the employer is civilly liable in a subsidiary capacity for the employee‘s criminal negligence, the employer is also civilly liable directly and separately for his own civil negligence in failing to exercise due diligence in selecting and supervising his employee. To hold the employer liable in a subsidiary capacity under a delict, the aggrieved party must initiate a criminal action where the employee‘s delict and corresponding primary liability are established. If the present action proceeds from a delict, then the trial court‘s jurisdiction over Foronda is necessary. However, the present action is clearly for the quasi-delict of Mrs. Cerezo and not for the delict of Foronda. II.

NEGLIGENCE A.

Concept

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Civil Code o Articles 2178, 1172, 1173, and 1733  Memorize: Articles 1172 to 1174

1. United States v. Bonifacio, G.R. No. 10563, March 2, 1916 On October 1913, Eligio Castillo, a deaf-mute, was run down and killed, while attempting to cross the railroad track in the barrio of Santa Rita, Batangas, by an engine on which the Bonifacio was employed as engineer. The deaf-mute stepped out on the track from an adjoining field shortly before the accident, walked along one side of the track for some little distance and was killed as he attempted, for some unknown reason, to cross over to the other side. When the Bonifacio first saw the Castillo, he was walking near the track, in the same direction as that in which the train was running. The train, a heavy freight train, had just rounded a curve, and the man in front was about 175 meters ahead of the engine. The Bonifacio immediately blew his whistle twice, and noticing, a few moments afterwards, that the man in front did not respond to the warning by stepping aside from the track, he tried to slow down the engine, but did not succeed in stopping in time to avoid running down the pedestrian. He did not attempt to stop his engine when he first saw the man walking along the side of the track; but he claims that he did all in his power to slow down a few moments afterwards, that is to say after he had blown his whistle without apparently attracting the attention of the pedestrian, who, about that time, turned and attempted to cross the track. The only evidence as to the rate of speed at which the train was running at the time of the accident was the testimony of the accused himself, who said that his indicator showed that he was travelling at the rate of 35 km/hour, the maximum speed permitted under the railroad regulations. The undisputed evidence discloses that a heavy freight train running at the rate of 35 miles an hour could not be brought to a stop on that decline in much less than one 150 meters. Issue: Whether or not Bonifacio is guilty of homicide committed with simple negligence. Held: ACQUITTED. The mere statement of facts, as disclosed by the undisputed evidence of record, sufficiently and conclusively demonstrates that the death of the deaf-mute was the result of a regrettable accident, which was unavoidable so far as this accused was concerned. It has been suggested that, had the accused applied his brakes when he first saw the man walking near the track, after his engine rounded the curve, he might have stopped the train in time to have avoided the accident, as it is admitted that the distance from the curve to the point where the accident occurred was about 175 meters. But there is no obligation on an engine driver to stop. or even to slow down his engine, when he sees an adult pedestrian standing or walking on or near the track, unless there is something in the appearance or conduct of the person on foot which would cause a prudent man to anticipate the possibility that such person could not, or would not avoid the possibility of danger by stepping aside. Ordinarily, all that may properly be required of an engine driver under such circumstances is that he 13

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give warning of his approach, by blowing his whistle or ringing his bell until he is assured that the attention of the pedestrian has been attracted to the oncoming train. An engine driver may fairly assume that all persons walking or standing on or near the railroad track, except children of tender years, are aware of the danger to which they are exposed; and that they will take reasonable precautions to avoid accident, by looking and listening for the approach of trains, and stepping out of the way of danger when their attention is directed to an oncoming train. Any other rule would render it impracticable to operate railroads so as to secure the expeditious transportation of passengers and freight, which the public interest demands. There was nothing in the appearance or conduct of the victim which would have warned the accused that the man walking along the side of the track was a deaf-mute. It was only when the pedestrian attempted to cross the track, just in front of the train, that the accused had any reason to believe that his warning signals had not been heard, and by that time it was too late to avoid the accident. The accused was without fault; and the accident must be attributed wholly to the reckless negligence of the deaf-mute, in walking on the track without taking the necessary precautions to avoid danger from a train approaching him from behind. Even if it were true that the train was running at a speed slightly in excess of the limit prescribed by regulations, just before the accident took place, that fact would not justify or require the imposition of the penalty prescribed in article 568 of the Criminal Code, it affirmatively appearing that the slight excess of speed had no possible causal relation to the accident. Under all the circumstances, the accident must have taken place whether the speed had been slightly under rather than slightly over the limit prescribed by regulation, and that it was due wholly to the negligent conduct of the deceased. This does NOT mean that in every case in which one accidentally injures or kills another he is criminally liable therefor, if at the moment he happens to be guilty of a violation of some petty regulation. Injury or death must have resulted from some "imprudence or negligence" on his part. It is true that it only needs to be slight negligence, if accompanied by a violation of the regulations, but the relation of cause and effect must exist between the negligence or imprudence of the accused and the injury inflicted. If it appears that the injury in no wise resulted from the violation of the regulations, or the negligent conduct of the accused, he incurs no criminal liability under the provisions of this article. Conviction thereunder cannot be maintained, unless there was culpable negligence in the violation of a duly prescribed regulation; and unless, further, the latter was the proximate and immediate cause of the injury inflicted 2. Picart v. Smith, 37 Phil. 809 (1918) Facts: Picart was riding his pony over the Carlatan bridge in La Union (75 m x 4.8m). However, he was on the wrong side. Before he had gotten half way across, the Smith approached from the opposite direction in an automobile, going at the rate of about 10-12 MPH. As Smith approached the bridge, he blew his horn when he saw Picart. Observing that Picart was not observing the rules of the road, Smith gave 2 more successive blasts. Perturbed by the novelty of the apparition or rapidity of the approach, Picart moved his horse closer to the railing instead of going to the correct side of the road (which is the left side). Picart did this as he thought he had no more time to reach the left side. Smith also guided his car toward the same side where Picart‘s horse was. At this point, Smith and Picart are in a direct collision course. In so doing, Smith assumed that the horseman would move to the other side. However, since the Pony had not exhibited fright and the fact that Picart made no motion to stop, instead of veering away, Smith continued to approach directly towards Picart without diminution of speed. As he got closer, the possibility of the horse moving to the other side also grew slim. As a result, Smith guided his car to the right to avoid hitting the horse. However, as the car passed, the pony became frightened and turned its body. Consequently, the car struck the left hind leg of the horse. As the horse fell, the rider was thrown off. The horse died as a result and Picart suffered some contusions and temporary unconsciousness. It was seen that the space between the horse and the car at the time of the incident was less than 1.5 meters. Issue: Whether or not Smith (driver) is guilty of negligence. Held: YES. While Smith had the right to assume that Picart would pass over the proper side of the bridge, when this eventuality had become an impossibility, it became Smith‘s duty to either bring his car to an immediate stop or, seeing there were no other people on the bridge, take the other side and pass sufficiently far away from the horseman. Instead, Smith ran straight on until he was almost upon the horse. He did not take into consideration the fact that there was an appreciable risk with regard to the fact that the pony might get excited and/or frightened. The test by which to determine the existence of negligence: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, he is guilty of negligence.

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Atty. Jess Lopez

The question as to what would constitute the conduct of a prudent man in a given situation must of course be always determined in the light of human experience and in view of the facts involved in the particular case. Reasonable men govern their conduct by the circumstances which are before them or known to them. They are not, and are not supposed to be, omniscient of the future. Hence they can be expected to take care only when there is something before them to suggest or warn of danger. Reasonable foresight of harm, followed by the ignoring of the suggestion born of this prevision, is always necessary before negligence can be held to exist. In the present case, having recognized that the course he was pursuing was fraught with risk and would, therefore, have foreseen harm to Picart as a reasonable consequence of that course. Under said circumstances, the imposed on Smith the duty to guard against the threatened harm. While Picart was also not free from fault for being on the wrong side of the road, the negligent acts of the two parties were not contemporaneous, since the negligence of the Smith succeeded the negligence of the Picart by an appreciable interval. Under these circumstances, the law is that the person who has the last fair chance to avoid the impending harm and fails to do so is chargeable with the consequences, without reference to the prior negligence of the other party. 3. Corliss v. Manila Railroad Co., G.R. No. L-21291, March 28, 1969 Facts: In December 1956, Ralph Corliss, a 21 year old air police stationed at Clark Air Base, and a PC soldier was returning to said base. Ralph was driving the jeep. When they crossed the railroad tracks to reach the entrance of the base, it collided with a train operated by respondent. The PC soldier suffered burns and serious physical injuries while Corliss died of his burns at the hospital days later. Preciolita Corliss, wife of deceased, filed a complaint for recovery of damages against respondent for negligence. The lower court, however ruled that based on the evidence presented, Corliss‘ became a victim of his own miscalculation when he took a risk in his eagerness to beat the oncoming train. Hence, an appeal was filed to the Court. Issue: Whether or not Manila Railroad is liable for negligence? Held: NO. The lower court judgment has in its favor the presumption of correctness. It is entitled to great respect. After all, the lower court had the opportunity of weighing carefully what was testified to and apparently did not neglect it. This action is predicated on negligence, the Civil Code making clear that whoever by act or omission causes damage to another, there being negligence, is under obligation to pay for the damage done. Unless it could be satisfactorily shown, therefore, that Manila Railroad was guilty of negligence then it could not be held liable. Without damage or prejudice there can be no liability, and although this element is present no indemnity can be awarded unless arising from some person‘s fault or negligence. Negligence is want of the care required by the circumstances. It is a relative or comparative, not an absolute, term and its application depends upon the situation of the parties and the degree of care and vigilance which the circumstances reasonably require. Where the danger is great, a high degree of care is necessary, and the failure to observe it is a want of ordinary care under the circumstances. Every case must be dependent on its facts. The circumstances indicative of lack of due care must be judged in the light of what could reasonably be expected of the parties. If the objective standard of prudence be met, then negligence is ruled out. During the trial all 3 witnesses, one of which was the train operator, had warned the oncoming traffic that it was approaching by blowing its whistle repeatedly in accordance with regulations. Despite this, one witness observed that, seeing that the train was coming, Corliss slowed down his jeep but this was due to the fact that he put the jeep on first gear in an attempt to give his jeep a boost so it could beat the train. In fact, the train operator testified that the train was only running between 20-25 KPH and, despite applying he breaks, the jeep was still caught in its tracks. Despite the allegation that the crossing bars were not put down and the fact that there was no guard at the gate-house, there still was a duty on the part of Corliss to stop his jeep to avoid a collision. Authorities have many times said that the railroad track is in itself a warning of danger. Those who ignore such warning do so at their own risk and responsibility. It is incumbent upon one approaching a railroad crossing to use all of his faculties of seeing and hearing. He should approach a railroad crossing cautiously and carefully. He should look and listen and do everything that a reasonably prudent man would do before he attempts to cross the track. On the knowledge of Corliss and his familiarity with the setup of the checkpoint, the existence of the tracks; and on the further fact that the locomotive had blown its siren or whistle, which was heard by said witnesses, it is clear that Corliss, Jr. was so sufficiently warned in advance of the oncoming train that it was incumbent upon him to avoid a possible accident. A prudent man under similar circumstances would have simply stopped his vehicle before crossing and allow the train to move on. 4. Cusi v. Philippine National Railways, G.R. No. L-29889, May 31, 1979 15

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Facts: On the night of October 5, 1963, Victorino Cusi and his wife Pilar attended a birthday party inside a subdivision in Paranaque. After the party, at around 11pm, the Sps Cusi proceeded home in their Vauxhall car with Victorino at the wheel. Upon reaching the railroad tracks, finding that the level crossing bar was raised and seeing that there was no flashing red light, and hearing no whistle from any coming train, Cusi merely slackened his speed and proceeded to cross the tracks. At the same time, a train bound for Lucena traversed the crossing, resulting in a collision between the two. The impact threw the Sps out of their car which was smashed. Mrs Cusi suffered many fractures and underwent a total of four surgical operations . As a result of the fracture on her right arm, there was a shortening of about 1 cm. of that arm. She lost the flexibility of her wrist, elbow and shoulder. She was forced to quit her profession of teaching music and piano. She also bore ugly scars on several parts of her body, and she suffered anxiety of a possible miscarriage being then 5 months pregnant at the time of the accident. Similarly, Victorino suffered a number of injuries, including brain injuries which affected his speech, memory, sense of hearing and neck movement. As a result of his injuries, Victorino was unable to properly attend to his various business undertakings after the accident. Defendant PNR raises the defense that there was contributory negligence on the part of Cusi, and that had he made a full stop before traversing the crossing as required by section 56(a) of Act 3992 (Motor Vehicle Law), he could have seen and heard the approach of the train, and thus, there would have been no collision. Issue: Whether or not PNR is guilty of negligence. Held: YES.(1) The question of negligence is a question of fact: The question of negligence being one of fact, the lower court's finding of negligence on the part of the PNR deserves serious consideration by the Court. Thus, it has been the standing practice of appellate courts to accord lower court's judgments the presumption of correctness. And unless it can be shown that error or errors, substantial in character, be shown in the conclusion arrived at, or that there was abuse in judicial scrutiny, the SC is bound by their judgments. (2) Definition of negligence: Negligence has been defined by as the failure to observe for the protection of the interests of another person that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury. By such a test, it can readily be seen that there is no hard and fast rule whereby such degree of care and vigilance is measured, it is dependent upon the circumstances in which a person finds himself so situated. All that the law requires is that it is always incumbent upon a person to use that care and diligence expected of reasonable men under similar circumstances. The gross negligence of PNR was the proximate cause of the collision. Undisputedly, the warning devices installed at the railroad crossing were manually operated. On the night of the accident, the train for Lucena was on an unscheduled trip after 11:00 P.M. During that precise hour, the warning devices were not operating for no one attended to them. Also, the locomotive driver did not blow his whistle. He simply sped on without taking an extra precaution of blowing his whistle. That the train was running at full speed is attested to by the fact that notwithstanding the application of the emergency brakes, the train did not stop until it reached a distance of around 100 meters. These facts assessed together show the the absence of precautions taken by the PNR to warn the travelling public of the impending danger. Jurisprudence recognizes that if warning devices are installed in railroad crossings, the travelling public has the right to rely on such warning devices to put them on their guard and take the necessary precautions before crossing the tracks. A need, therefore, exists for the railroad company to use reasonable care to keep such devices in good condition and in working order, or to give notice that they are not operating, since if such a signal is misunderstood it is a menace. Thus, it has been held that if a railroad company maintains a signalling device at a crossing to give warning of the approach of a train, the failure of the device to operate is generally held to be evidence of negligence, which may be considered with all the circumstances of the case in determining whether the railroad company was negligent as a matter of fact. As to the defense of Contributory negligence: PNR rests its defense mainly on Section 56(a) of the Motor Vehicle Law. It states that vehicles moving on public highways shall be brought to a full stop before traversing any railroad crossing. The defense presupposes that the failure of Cusi to stop before proceeding to traverse the crossing constitutes contributory negligence, thereby precluding them from recovering indemnity for their injuries and damages. However, the same law states in its proviso that instead of coming to a full stop, it may slow down to not more than 10 kph when it is apparent that no hazard exists. 5. Wright v. Manila Electric R.R. & Light Co., G.R. No. 7760, October 1, 1914 Facts: The E.M. Wright‘s Caloocan residence fronts on the street along which defendant's tracks run. To enter his premises from the street, Wright is has to cross defendant's tracks. On the night of 9 Aug. 1909, Wright drove home in a calesa and in crossing the tracks to enter his premises the horse stumbled, leaped forward, and fell, causing the vehicle to 16

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strike one of the rails with great force such that one wheel broke. This caused Wright to be thrown off the calesa thereby incurring injuries. It was undisputed that at the night in question, the rails were above-ground. Moreover, the ties upon which the rails rested projected out of the ground. All in all, the upper part of the rails was some 5-6 inches above street level. Wright brought an action to recover damages for injuries sustained due to defendant‘s negligence. Defendant admitted it was negligence in maintaining its tracks but it further averred that Wright was likewise negligent for being intoxicated at the time of the accident. This was gathered from Dr. Kneedler, the physician who attended to him hours after the accident. Such state made him unable to properly take care of himself and it was the primary source of the accident. In other words, had he not been intoxicated, he would not have fallen off. The trial court ruled that both were negligent and apportioned the damages that was awarded to Wright. Both appealed. Issue: Accepting the findings that both were negligent, whether Wright‘s negligence contributed to the accident OR only to Wright‘s own injuries. Held: DEFENDANT‘s NEGLIGENCE WAS THE MAIN CAUSE. That there is nothing in the opinion of the lower court which sustains the conclusion that the Wright was negligent with reference to the accident. Mere intoxication is not negligence, nor does the mere fact of intoxication establish a want of ordinary care. It is but a circumstance to be considered with the other evidence tending to prove negligence. It is the general rule that it is immaterial whether a man is drunk or sober if no want of ordinary care or prudence can be imputed to him. If one's conduct is characterized by a proper degree of care and prudence, it is immaterial whether he is drunk or sober. Defendant‘s conclusion that, had he been sober, he wouldn‘t have been injured is not warranted by the facts as found because it is impossible to say that a sober man would not have fallen from the calesa under the same circumstances. *NOTE: In the trial, there were 2 hearing dates. However, only the evidence from the first reached the Court. Thus, the Court refused to consider the evidence present and decided based on the facts stated in the opinion of the lower court and pleadings filed. 6. People v. De Los Santos, G.R. No. 131588, March 27, 2001 Facts: The last phase of the Special Counter Insurgency Operation Unit training was the ―endurance run.‖ Since the jogging trainees were occupying the right lane of the highway, 2 rear security guards were assigned to each rear column (there were 3 columns of joggers). Their duty was to jog backwards facing the oncoming vehicles and give hand signals for other vehicles to take the left lane. They saw an Isuzu Elf truck coming at high speed towards them. The vehicle lights were in the high beam. At a distance of 100 meters, the rear security guards started waving their hands for the vehicle to take the other side of the road, but the vehicle just kept its speed, apparently ignoring their signals and coming closer and closer to them. Realizing that the vehicle would hit them, the rear guards told their co- trainees to ―retract.‖ The guards forthwith jumped in different directions. Some were thrown, and others were overrun by the vehicle. The driver did not reduce his speed even after hitting the first and second columns. Immediately after receiving the report, policemen proceeded to the traffic scene to conduct an ocular inspection. They did not see any brake marks on the highway, which led him to conclude that the brakes of the vehicle had not been applied. Accused Glenn‘s version: At about 10:30 p.m. of 4 October 1995, he was asked by his friend Enting Galindez and the latter‘s fellow band members to provide them with transpo that would bring their band instruments, band utilities and band members from CDO to Balingoan. They were supposed to be taken to Camiguin, to participate in the Lanzones Festival. As the Elf was negotiating a left curve going slightly downward, GLENN saw a very bright and glaring light coming from the opposite direction of the highway. GLENN blinked his headlights as a signal for the other driver. GLENN switched his own lights from bright to dim and reduced his speed from 80 to 60 KPH. It was only when the vehicles were at a distance of 10-15 m from each other that the other car‘s headlights were dimmed. As a result, GLENN found it extremely hard to adjust from high brightness to sudden darkness. This happened while the truck was still cruising at a speed of 60 kph and immediately after passing the oncoming vehicle, that GLENN suddenly heard and felt bumping thuds. At the sound of the first bumping thuds, GLENN put his right foot on the brake pedal. But the impact was so sudden that he was astonished and afraid. He was trembling and could not see what were being bumped. At the succeeding bumping thuds, he was not able to pump the brake, nor did he notice that his foot was pushing the pedal. Due to its momentum, the Elf continued on its track and was able to stop only when it was already very near the next curve. GLENN could not distinguish in the darkness what he had hit, especially since the right headlights of the truck had 17 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

been busted upon the first bumping thuds. In his confusion and fear, he immediately proceeded home. GLENN did not report the incident to the Puerto Police Station because he was not aware of what exactly he had hit. It was only when he reached his house that he noticed that the grill of the truck was broken; the side mirror and round mirror, missing; and the windshield, splintered. 2 hours later, he heard that an accident had occurred, and he realized that it was the PNP group that he had hit. GLENN surrendered that same day to Governor Emano. RTC convicted GLENN of the complex crime of multiple murder, multiple frustrated murder, and multiple attempted murder, with the use of motor vehicle as the qualifying circumstance. (12 dead, 11 seriously injured, 10 minor) Issue: Was there intent to kill or was he guilty of reckless imprudence? Held: NO INTENT TO KILL. The tragic event was more a product of reckless imprudence than of a malicious intent on GLENN‘s part. Glenn should be held guilty of the complex crime of reckless imprudence resulting in multiple homicide with serious physical injuries and less serious physical injuries. The incident was an accident and not an intentional felony. There is no shred of evidence that GLENN had an axe to grind against the police trainees that would drive him into deliberately hitting them with intent to kill. The existence of a motive on the part of the accused becomes decisive in determining the probability or credibility of his version that the incident was purely accidental. GLENN‘s offense is in failing to apply the brakes, or to swerve his vehicle to the left or to a safe place the moment he heard and felt the first bumping thuds. Had he done so, many trainees would have been spared. The test for determining whether a person is negligent in doing an act whereby injury or damage results to the person or property of another is this: Could a prudent man, in the position of the person to whom negligence is attributed, foresee harm to the person injured as a reasonable consequence of the course actually pursued? If so, the law imposes a duty on the actor to refrain from that course or to take precautions to guard against its mischievous results, and the failure to do so constitutes negligence. Reasonable foresight of harm, followed by the ignoring of the admonition born of this prevision, is always necessary before negligence can be held to exist. GLENN showed an inexcusable lack of precaution. Article 365 of the Revised Penal Code states that reckless imprudence consists in voluntarily, but without malice, doing or failing to do an act from which material damage results by reason of inexcusable lack of precaution on the part of the person performing or failing to perform such act, taking into consideration (1) his employment or occupation; (2) his degree of intelligence; (4) his physical condition; and (3) other circumstances regarding persons, time and place. GLENN, being then a young college graduate and an experienced driver, should have known to apply the brakes or swerve to a safe place immediately upon hearing the first bumping thuds to avoid further hitting the other trainees. By his own testimony, it was established that the road was slippery and slightly going downward; and, worse, the place of the incident was foggy and dark. He should have observed due care in accordance with the conduct of a reasonably prudent man, such as by slackening his speed, applying his brakes, or turning to the left side even if it would mean entering the opposite lane (there being no evidence that a vehicle was coming from the opposite direction). Even if he was driving within the speed limits, this did not mean that he was exercising due care under the existing circumstances and conditions at the time. Furthermore, his failure to render assistance to the victim, therefore, constitutes a qualifying circumstance because the presence thereof raises the penalty by one degree. 7. Jarco Marketing Corporation v. Court of Appeals, 321 SCRA 375 (1999) Jarco Marketing owns Syvel‘s Department Store in Makati. Petitioners Kong, Tiope, and Panelo are its branch manger, operations manager, and supervisor, respectively. Respondent Sps. Conrado and Criselda are parents of Zhieneth Aguilar. On May 1983, Criselda and Zhieneth were at the 2F of the store. She was signing her credit card slip when she felt a suddent gust of wind and a loud thud. She looked behind to see her daughter on the floor, pinned by the store‘s giftwrapping counter. She was rushed the Makati Med where she was operated on. She lost her speech, communicating through a magic slate. She died 14 days later, at the age of 6. Sps. Aguilar demanded reimbursement of all expenses, which was refused. A complaint for damages was filed alleging lack of diligence in the supervision of its employees. Jarco denied liability claiming that Criselda was negligent in allowing her daughter to roam freely in a store filled with glassware and appliances and eventually climbing on the counter that had never collapsed in 15 years. The RTC dismissed the complaint. The CA, however, reversed, finding that the counter was dangerous, with a top wider than its base — downward pressure could cause it to fall. Two employees brought up the concern, but this was ignored; the incident could have been avoided if it was repaired. Hence, the present appeal. Issues: Whether the death of Zieneth was accidental or attributable to negligence. Held: It is due to negligence. Accident is an unforeseen event in which no fault or negligence attaches. It is fortuitous, with no human agency, or if there were, it is unusual or unexpected. Negligence is the omission to do something which a reasonable man would do, or the doing of something which a prudent or reasonable man would not do. It is the failure to 18 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Atty. Jess Lopez

observe, for the protection of the interest of another person, that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury. They are intrinsically contradictory; one cannot exist with the other. Accident occurs when the person is exercising ordinary care. The test in determining negligence is found in Picart — Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? The Court found Jarco negligent, giving credence to the testimonies of its former employees. They stated that the counter was shaky and not nailed; it could collapse at any time. This was never done – they only nailed it after the accident. The mangers were personally informed, yet did not do anything to ensure the safety of employees and patrons. They failed to discharge the diligence of a good father of a family. Zhieneth herself stated at the ER that ―I did not come near the counter and the counter just fell on me. 8. Sarmiento v. Cabrido, 401 SCRA 122 (2003) Facts: Tomasa Sarmiento states that, a friend, Dra. Virginia Lao, requested her to find somebody to reset a pair of diamond earrings into two gold rings. Sarmiento sent a certain Tita Payag with the pair of earrings to Dingding‘s Jewelry Shop, owned and managed by Sps. Luis and Rose Cabrido, which accepted the job order. Sarmiento provided 12 grams of gold to be used in crafting the pair of ring settings. Tita Payag delivered to the jewelry shop one of Lao‘s diamond earrings. Respondent Marilou Sun went on to dismount the diamond from its original setting. Unsuccessful, she asked their goldsmith, Zenon Santos, to do it. Santos removed the diamond by twisting the setting with a pair of pliers, breaking the gem in the process. Sarmiento required the respondents to replace the diamond with the same size and quality. When they refused, the Sarmiento was forced to buy a replacement in the amount of P30,000. Cabrido, manager of Dingding‘s Jewelry Shop, denied having entered into any transaction with Tita Payag whom she met only after the latter came to the jewelry shop to seek compensation from Santos for the broken piece of jewelry. Sarmiento filed a complaint for damages to which the MTCC of Tagbilaran City granted. It held the Cabridos jointly and severally liable for damages. On appeal, the RTC reversed. The CA affirmed. Hence, the present petition. Essentially, petitioner claims that the dismounting of the diamond from its original setting was part of the obligation assumed by the private respondents under the contract of service. Thus, they should be held liable for damages arising from its breakage. Issue: Whether or not Cabridos are liable for damages. Held: YES. Marilou expressed no reservation regarding the dismounting of the diamonds which, after all, was an integral part of petitioner‘s job order. She should have instructed Payag to have them dismounted first if Marilou had actually intended to spare the jewelry shop of the task but she did not. Instead, Sarmiento was charged P400 for the job order which was readily accepted. Thus, a perfected contract to reset the pair of diamond earrings arose. After the new settings were completed, she asked the petitioner to bring the diamond earrings to be reset. Having initially examined one of them, Marilou went on to dismount the diamond from its original setting. Unsuccessful, she then delegated the task to their goldsmith, Zenon Santos. Having acted the way she did, Marilou cannot now deny the shop‘s obligation to reset the pair of earrings. Obligations arising from contracts have the force of law between the contracting parties. Corollarily, those who in the performance of their obligations are guilty of fraud, negligence or delay and those who in any manner contravene the tenor thereof, are liable for damages. The fault or negligence of the obligor consists in the ‗omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place. In the case at bar, Santos acted negligently in dismounting the diamond from its original setting. It appears to be the practice of the trade to use a miniature wire saw in dismounting precious gems, such as diamonds, from their original settings. However, Santos employed a pair of pliers in clipping the original setting, thus resulting in breakage of the diamond. The jewelry shop failed to perform its obligation with the ordinary diligence required by the circumstances. Cabridos seek to avoid liability by passing the buck to Santos who claimed to be an independent worker. They also claim, that Marilou simply happened to drop by at Dingding‘s Jewelry Shop when Payag arrived to place her job order. However, the preponderance of evidence supports the view that Marilou and Zenon Santos were employed at Dingding‘s Jewelry Shop in order to perform activities which were usually necessary or desirable in its business. Therefore, an obligation to pay actual damages arose in favor of the Sarmiento against the Cabridos who admittedly owned and managed Dingding‘s Jewelry Shop. 19

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Atty. Jess Lopez

Moral damages may be awarded in a breach of contract only when there is proof that defendant acted in bad faith, or was guilty of gross negligence amounting to bad faith, or in wanton disregard of his contractual obligation. Santos was a goldsmith for more than 40 years. Given his long experience in the trade, he should have known that using a pair of pliers instead of a miniature wire saw in dismounting a precious stone like a diamond would have entailed an unnecessary risk of breakage. He went on with it anyway. Hence, Cabridos are liable moral damages due to the gross negligence of their employee. Actual damages are also awarded. 9. The Consolidated Bank and Trust Corporation v. Court of Appeals, G.R. No. 138569, September 11, 2003 L.C. Diaz, a professional partnership engaged in practice of accounting, opened a savings account with Solidbank. On August 1991, L.C. Diaz cashier, Macaraya instructed their messenger, Calapre, to deposit money with Solidbank. Calapre went to Solidbank and presented to Teller No. 6 the 2 deposit slips and the passbook. Since the transaction took time and Calapre had to make another deposit for L.C. Diaz with Allied Bank, he left the passbook with Solidbank. When Calapre returned to Solidbank to retrieve the passbook, Teller No. 6 informed him that ―somebody got the passbook.‖ Calapre went back to L.C. Diaz and reported the incident to Macaraya. Macaraya and Calapre went to Solidbank. When Macaraya asked for the passbook, Teller No. 6 told Macaraya that someone got the passbook but she could not remember to whom she gave the passbook. Teller No. 6 handed to Macaraya a deposit slip dated 14 August 1991 (the same day the passbook was lost) for the deposit of a check for P90,000 drawn on Philippine Banking Corporation (PBC). It turns out that this PBC check of L.C. Diaz was a check that it had ―long closed.‖ PBC subsequently dishonored the check because of insufficient funds and because the signature in the check differed from PBC‘s specimen signature. (It was later found out that an impostor deposited with Teller No. 6 the P90,000 PBC check, which later bounced. The impostor apparently deposited a large amount of money to deflect suspicion from the subsequent withdrawal of a much bigger amount of money.) Failing to get back the passbook, Macaraya reported the matter to the Personnel Manager of L.C. Diaz. The following day, L.C. Diaz CEO called up Solidbank to stop any transaction using the same passbook until L.C. Diaz could open a new account. L.C. Diaz also learned of the unauthorized withdrawal the day before, 14 August 1991, of P300,000 from its savings account. The withdrawal slip for the P300,000 bore the signatures of the authorized signatories of L.C. Diaz. Signatories, however, denied signing the withdrawal slip. It was later found out that a certain Noel Tamayo received the P300,000. L.C. Diaz charged its messenger, Ilagan and one Verdazola with Estafa. This was eventually dismissed. L.C. Diaz demanded from Solidbank the return of its money. Solidbank refused so L.C. Diaz filed a Complaint for Recovery of a Sum of Money against Solidbank. for the unauthorized withdrawal of the 300K. The RTC held LC Diaz negligent and caused the unauthorized withdrawal. Solidbank acted with care and observed the rules o savings account when it withdrew 300K in favor of the holder of the passbook prior to its receipt of a notice of loss thereof. Upon appeal, CA ruled against bank and held it guilty of simple negligence which was the proximate cause for the injury. CA stated that the teller, who was not presented by Solidbank during trial, should have called up the depositor because the money to be withdrawn was a significant amount. Teller did not even verify the identity of the impostor who made the withdrawal. Thus, the CA found Solidbank liable for its negligence in the selection and supervision of its employees. CA ruled that while L.C. Diaz was also negligent in entrusting its deposits to its messenger and its messenger in leaving the passbook with the teller, Solidbank could not escape liability because of the doctrine of last clear chance. Issue: Whether or not the bank was negligent. Held: YES. The contract between the bank and its depositor is governed by CC on simple loan. The bank is the debtor and the depositor is the creditor. Solidbank is liable for breach of contract due to negligence or culpa contractual. The law imposes on banks high standards in view of the fiduciary nature of banking. This means that the bank‘s obligation to observe ―high standards of integrity and performance‖ is deemed written into every deposit agreement between a bank and its depositor and that this requires banks to assume a degree of diligence higher than that of a good father of a family. Article 1172 of the CC provides that ―responsibility arising from negligence in the performance of every kind of obligation is demandable.‖ For breach of the savings deposit agreement due to negligence, or culpa contractual, the bank is liable to its depositor. When the passbook is in the possession of Solidbank‘s tellers during withdrawals, the law imposes on Solidbank and its tellers an even higher degree of diligence in safeguarding the passbook. For failing to return the passbook to Calapre, Solidbank and Teller No. 6 presumptively failed to observe such high degree of diligence in safeguarding the passbook, and in insuring its return to the party authorized to receive the same. In culpa contractual, once plaintiff proves a breach of contract, there is a presumption that the defendant was at fault or negligent. The burden is on the defendant to prove that he was not at fault or negligent. In culpa aquiliana the plaintiff has the burden of proving that the defendant was negligent. 20 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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In the present case, there is thus a presumption that Solidbank was at fault and its teller was negligent in not returning the passbook to Calapre. The burden was on Solidbank to prove that there was no negligence on its part or its employees. Solidbank failed to discharge its burden. Solidbank did not present to the trial court Teller No. 6, the teller with whom Calapre left the passbook and who was supposed to return the passbook to him. Solidbank is bound by the negligence of its employees under the principle of respondeat superior or command responsibility. The defense of exercising the required diligence in the selection and supervision of employees is NOT a complete defense in culpa contractual, unlike in culpa aquiliana. Proximate cause is that cause which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury and without which the result would not have occurred. After completion of the transaction, Solidbank had the contractual obligation to return the passbook only to Calapre. Solidbank‘s failure to return the passbook to Calapre made possible the withdrawal of the P300,000 by the impostor who took possession of the passbook. It was the negligent act of Solidbank‘s Teller No. 6 that gave the impostor presumptive ownership of the passbook. Had the passbook not fallen into the hands of the impostor, the loss of P300,000 would not have happened. The Doctrine of last clear chance is NOT applicable in this case. Doctrine of last clear chance states that where both parties are negligent but the negligent act of one is appreciably later than that of the other, or where it is impossible to determine whose fault or negligence caused the loss, the one who had the last clear opportunity to avoid the loss but failed to do so, is chargeable with the loss. It is apparent that L.C. Diaz was guilty of contributory negligence in allowing a withdrawal slip signed by its authorized signatories to fall into the hands of an impostor (NBI report on authenticity of signatures not presented in evidence). However, this is a case of culpa contractual, where neither the contributory negligence of the plaintiff nor his last clear chance to avoid the loss, would exonerate the defendant from liability. Such contributory negligence or last clear chance by the plaintiff merely serves to reduce the recovery of damages by the plaintiff but does not exculpate the defendant from his breach of contract. The liability of Solidbank should be reduced. L.C. Diaz must shoulder 40% of the actual damages awarded by the CA. Solidbank must pay the other 60% 10. Garcia-Rueda v. Pascasio, G.R. No. 118141, September 5, 1997 Florencio Rueda, husband of herein petitioner Garcia-Rueda underwent surgical operation at the UST hospital for the removal of a stone blocking his ureter. He was attended by Dr. Antonio Jr. (surgeon) and Dr. Balatbat Reyes (anaestheosiologist). Six hours after the surgery, Florencio died of complications due to unknown causes according to the officials of the UST Hospital. Petitioner requested the NBI to conduct an autopsy which it ruled that it was due to lack of care by the attending physician in administering anaesthesia. Because of that, the NBI recommended that the doctors be charged accordingly. Issue: Whether the the anaesthesiologist is liable. Held: There are four elements involved in medical negligence cases: duty, breach, injury and proximate causation. When the victim employed Dr. Antionio and Dr. Reyes, a physician-patient relationship was created. When they accepted the case, the doctors in effect represented that they possessed the required training and skill required and that they will employ such training, care and skill in the treatment of their patients. They have a duty to use at least the same level of care that any other reasonably competent doctor would use to treat a condition under the same circumstances. The breach of these duties constitute actionable malpractice. Consequently, in the event that any injury results to the patient from want of due care or skill during the operation, the surgeons may be held answerable in damages for negligence. Additionally, in malpractice or negligence cases involving the administration of anaesthesia, the necessity of expert testimony and the availability of res ipsa loquitur have been held to be applicable. Essentially it required two-pronged evidence: evidence as to the recognized standards of medical community in the particular case and a showing that the physician negligently departed from this standard in his treatment. Another element that must be established is causation which can be answered in two inquiries: whether the doctor‘s actions in fact caused the harm to the patient and whether these were the proximate cause of the patient‘s injury. In the instant case, there is indeed a causal connection between the death of the victim and the negligent act of the doctor, which if confirmed would warrant the filing of the charges. It was also found out that the surgeons did not conduct the proper interview of the patient and that the proper drugs were not applied to cope with the symptoms that arose 11. Li v. Soliman, G.R. No. 165279, June 7, 2011 Facts: Angelica, Sps Soliman‘s 11 year old daughter, underwent a biopsy of a mass in her knee at St. Luke‘s. Results revealed that she suffered from osteosarcoma — a high-grade and aggressive cancer of the bone usually affecting teens. As a result, Angelica‘s right leg had to be amputated by Dr. Tamayo to remove the tumor. As adjuvant treatment to 21 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Atty. Jess Lopez

eliminate the remaining cancer cells thereby minimizing the chance of the cancer spreading to other body parts, chemo was suggested. Dr. Tamayo referred Angelica to Dr. Li, an oncologist. Weeks after recuperating from the amputation, Angelica was admitted to St. Luke‘s on 18 Aug. 1993 for the chemo. The first cycle of chemo drugs were administered to her intravenously. Side effects showed discoloration of different parts of her body. She also suffered LBM, bleeding, and shedding of skin throughout the process. Her blood platelet count also decreased severely and thus she had to undergo several transfusions. Sps. Soliman regularly consulted with Li regarding the side effects. In turn, Li explained to them that it was the result of the treatment. Unfortunately, on 1 Sept. 1993 or 11 days after the first chemo drugs were administered, Angelica died. Solimans brought the cadaver to PNP crime lab for post-mortem examination because St. Luke‘s refused to release a death certificate without full payment of their hospital bill. In PNP‘s Medico-Legal report, it said the cause of death was ―Hypovolemic shock secondary to multiple organ hemorrhages and Disseminated Intravascular Coagulation.‖ On the other hand, when St. Luke‘s finally issued the death certificate, the immediate cause of her death was the osteosarcoma. In Feb. 1994, complaint for damages was filed by Solimans against Li and other doctors involved in Angelica‘s treatment. They were charged with negligence and disregard of the safety, health, and welfare of Angelica by their careless administration of the chemo drugs which caused all the complications leading to her death. Solimans claim that Li assured them of 95% chance of healing and told them that the side effects were merely slight vomiting, hair loss, and weakness. Denying negligence, Li asserted that she fully explained how the chemo will affect not only the cancer cells but also the patient‘s normal body parts including the lowering of white blood cells and platelets. Since the medical records were not produced in court, testimonial evidence was relied upon. Solimans presented MedicoLegal Dr. Vergara and Dr. Balmaceda who was employed at DOH. Dr. Vergara admitted she was not an pathologist but her statements supporting the Solimans were based on the opinion of an oncologist whom she interviewed. The trial court dismissed the complaint upon finding that Li was not negligent since she observed the best known procedures and employed her highest skill and knowledge in the administration of chemo drugs. When the case was appealed, CA affirmed the finding that there was no negligence in the administration of the chemo drugs. However, the CA found petitioner liable for her failure to inform the respondents on all possible side effects of chemotherapy before securing their consent to the said treatment. Hence, Li appealed. Issue: Whether Dr. Rubi Li can be held liable for failure to fully disclose serious side effects to the parents of the child patient who died while undergoing chemotherapy, despite the absence of finding that petitioner was negligent in administering the said treatment. Held: NO. A claim under medical negligence/malpractice is that which a victim has available to him to redress a wrong committed by a medical professional who has caused bodily harm. To successfully pursue such a claim, a patient must prove that a health care provider, in most cases a physician, either failed to do something which a reasonably prudent health care provider would have done, or that he or she did something that a reasonably prudent provider would not have done; and that that failure or action caused injury to the patient. Every human being of adult years and sound mind has a right to determine what shall be done with his own body; and a surgeon who performs an operation without his patient‘s consent, commits an assault for which he is liable in damages. The Doctrine of Informed Consent mandates that a physician has a duty to disclose what a reasonably prudent physician in the medical community in the exercise of reasonable care would disclose to his patient as to whatever grave risks of injury might be incurred from a proposed course of treatment, so that a patient, exercising ordinary care for his own welfare, and faced with a choice of undergoing the proposed treatment, or alternative treatment, or none at all, may intelligently exercise his judgment by reasonably balancing the probable risks against the probable benefits. The physician is not expected to give the patient a short medical education, the disclosure rule only requires of him a reasonable explanation, which means generally informing the patient in nontechnical terms as to what is at stake; the therapy alternatives open to him, the goals expectably to be achieved, and the risks that may ensue from particular treatment or no treatment. For liability of the physician for failure to inform patient, there must be causal relationship between physician‘s failure to inform and the injury to patient and such connection arises only if it is established that, had revelation been made, consent to treatment would not have been given. The essential elements a plaintiff must prove in a malpractice action based upon the doctrine of informed consent are as follows: (1) the physician had a duty to disclose material risks; (2) he failed to disclose or inadequately disclosed those risks; (3) as a direct and proximate result of the failure to disclose, the patient consented to treatment she otherwise would not have consented to; and (4) plaintiff was injured by the proposed treatment. Examining the evidence on record, the Court holds that there was adequate disclosure of material risks inherent in the chemotherapy procedure performed with the consent of Angelica‘s parents. When Li informed the Solimans beforehand 22 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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of the side effects of chemotherapy which includes lowered counts of white and red blood cells, decrease in blood platelets, possible kidney or heart damage and skin darkening, there is reasonable expectation on the part of the doctor that the respondents understood very well that the severity of these side effects will not be the same for all patients undergoing the procedure. In other words, by the nature of the disease itself, each patient‘s reaction to the chemical agents even with pretreatment laboratory tests cannot be precisely determined by the physician. Li can reasonably expect the respondents to have considered the variables in the recommended treatment for their daughter afflicted with a life-threatening illness. It is difficult to give credence to respondents‘ claim that petitioner told them of 95% chance of recovery for their daughter, as it was unlikely for doctors who were dealing with grave conditions such as cancer to have falsely assured patients of chemo‘s success rate. Besides, informed consent laws in other countries generally require only a reasonable explanation of potential harms, so specific disclosures such as statistical data, may not be legally necessary. In a medical malpractice action based on lack of informed consent, the plaintiff must prove both the duty and the breach of that duty through expert testimony. Here, the testimony of Dr. Balmaceda who is not an oncologist but a Medical Specialist of the DOH‘s Operational and Management Services charged with receiving complaints against hospitals, does not qualify as expert testimony to establish the standard of care in obtaining consent for chemotherapy treatment. The same goes for the testimony of Dr. Vergara, a PNP Medico-Legal Officer. In the absence of expert testimony in this regard, the Court feels hesitant in defining the scope of mandatory disclosure in cases of malpractice based on lack of informed consent, much less set a standard of disclosure that, even in foreign jurisdictions, has been noted to be an evolving one. 12. Adarne v. Aldaba, A.C. No. 801, June 27, 1978 Facts: A forcible entry case was filed against Cesario Adarne (herein complainant). In the said case, Adarne had changed his counsel 3 times through the course of the case. At the hearing of the case, Adarne, noting that his attorney had not yet arrived, chanced upon Atty. Aldaba (the respondent in this case), who was his third cousin, and requested that he enter a special appearance in the case as his attorney is nowhere to be found. Atty Aldaba And again at a later hearing, respondent Aldaba was again prevailed upon by complainant Adarne to appear in his behalf. The respondent entered a "special appeara\nce" for the complainant and thereafter argued that the interest of justice would best be served if the Adearne were allowed to file an action for quieting of. However, on June 17, 1965, the court declared the Adarne in default for his failure to appeal at the hearing set for that day. Because of this, he filed the present complaint against Atty. Damian V. Aldaba for gross negligence and misconduct, for failure to give his entire devotion to the interest of his client, warm zeal in the maintenance and defense of his rights, and for not taking steps to protect the interests of his client in the face of an adverse decision. Issue: Whether or not Atty. Aldaba is guilty of gross negligence? Held: NO. The judgment by default rendered against the Adarne cannot be attributed to the Atty. Aldaba. The blame lies with the complainant for having engaged the services of several lawyers to handle his case without formally withdrawing the authority he had given to them to appear in his behalf as to place the responsibility upon the respondent. To add to the confusion, the complainant had also requested the clerk of court of the Court of First Instance of Leyte that Adarne be furnished with summons and subpoena accorded to him. He also filed a motion by himself, thus implying that he was handling his case personally. It appears that there have been 3 changes made of the attorneys. However, no formalities whatever were observed in those changes such that the respondent entered a "special appearance" for the complainant in order that he could ask for the dismissal of the case for the failure of the adverse party to prosecute. The rule followed on matters of substitution of attorneys as laid down by this Court is that no substitution of attorneys will be allowed unless there be filed: (1) a written application for such substitution; (2) the written consent of the client; (3) the written consent of the attorney substituted; and (4) in case such written consent cannot be secured, there must be filed with the application proof of service of notice of such motion upon the attorney to be substituted, in the manner prescribed by the rules. Besides, the Aldaba honestly believed that he had appeared for the complainant only for a special purpose and that the complainant had agreed to contact his attorney of record to handle his case after the hearing of October 23, 1964, so that he did nothing more about it. It was neither gross negligence nor omission to have entertained such belief. An attorney is not bound to exercise extraordinary diligence, but only a reasonable degree of care and skill, having reference to the character of the business he undertakes to do. Prone to err like any other human being, he is not answerable for every error or mistake, and will be protected as long as he acts honestly and in good faith to the best of his skill and knowledge. It is well settled that in disbarment proceedings, the burden of proof rests upon the complainant and for the Court to exercise its disciplinary powers, the case against the respondent attorney must be established by convincing proof. In the instant case, there is no sufficient proof to warrant the disbarment of the respondent attorney. Neither is there culpable malpractice to justify his suspension. 23

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Torts & Damages 2013

Atty. Jess Lopez

13. Isaac v. A.L. Ammen Transportation Co., Inc., G.R. No. L-9671, August 23, 1957 Facts: Cesar Isaac, boarded Bus No. 31, a common carrier, operated by respondents as a passenger paying the fare from Albay to Camarines Sur. Upon entering, he seated himself on the left side of the bus and rested his arm on the window with his elbow protruding outside the window. Before reaching its destination, the bus collided with a pickup coming from the opposite direction. As a result, his left arm was completely severed. He was the only person in the bus to obtain any injury. Isaac underwent the necessary treatment which amounted to P623.40 and was shouldered by defendant. Thereafer, Isaac brought an action for damages against defendant alleging that the collision resulting to his injury was mainly due to the gross incompetence and recklessness of the bus‘ driver. He also claimed that defendant breach the contract of carriage due to its non-compliance with its obligation to transport him safely to his destination. In its defense, defendant denied any liability and imputed it on the negligence of the pickup driver as well as Isaac‘s contributory negligence. It also alleged that the accident was due to a fortuitous event (could not be foreseen or, though foreseen, was inevitable). The court found no negligence on the part of defendant and that it did everything it could to avoid the accident. Issue: is: Has the common carrier observed extraordinary diligence or the utmost diligence of every cautious person, having due regard for all circumstances, in avoiding the collision which resulted in the injury caused to Isaac? Held: YES. The law concerning the liability of a common carrier has now suffered a substantial modification in view of the innovations introduced by the new Civil Code. Said innovations are found in Arts. 1733, 1755, and 1756 thereof. These provisions basically state that common carriers are bound to observe extraordinary diligence due to the nature of their business and public policy. In case of death or injury to passengers, it is presumed to be at fault or negligence, UNLESS they prove that they observed extraordinary diligence. A restatement of the principles governing common carrier liability are as follows: (1) the liability of a carrier is contractual and arises upon breach of its obligation. There is breach if it fails to exert extraordinary diligence according to all the circumstances of each case; (2) a carrier is obliged to carry its passenger with the utmost diligence of a very cautious person, having due regard for all the circumstances; (3) a carrier is presumed to be at fault or to have acted negligently in case of death of, or injury to, passengers, it being its duty to prove that it exercised extraordinary diligence; and (4) the carrier is not an insurer against all risks of travel. Evidence shows that the bus, immediately before the collision was running at moderate speed as it just stopped at a school zone. On the other hand, the pickup was at full speed and running outside the proper lane. Upon seeing this, the bus driver swerved the bus to the right as far as it could without endangering the life of his passengers. Unfortunately, the pickup still hit the rear left side of the bus. Where a common carrier is faced with a sudden emergency, the fact that he is obliged to act quickly and without a chance for deliberation must be taken into account. He is not held to the same degree of care that he would otherwise be required in the absence of such emergency but must only exercise only such care as any ordinary prudent person would under like circumstances. In this case, the driver of the bus has done what a prudent man could have done to avoid the collision and, thus, is relieved from liability under our law. 14. Calvo v. UCPB General Insurance Co., Inc., G.R. No. 148496, March 19, 2002 Virgines Calvo is the owner of Transorient Container Terminal Services, Inc. (TCTSI), a customs broker. TCTSI entered into a contract with San Miguel Corporation (SMC) for the transfer of 114 reels of semi-chemical fluting paper and 124 reels of kraft liner board from the Port Area in Manila to SMC‘s warehouse. The cargo was insured by UCPB General Insurance Co., Inc. It arrived Manila via ―M/V Hayakawa Maru‖ and, after 24 hours, were unloaded from the vessel to the custody of the arrastre operator, Manila Port Services, Inc. TCTSI, pursuant to the contract with SMC, withdrew the cargo from the arrastre operator and delivered it to SMC‘s warehouse in Ermita. The goods were inspected by Marine Cargo Surveyors, who found that 15 reels of the semichemical fluting paper were ―wet/stained/torn‖ and 3 reels of kraft liner board were likewise torn amounting to 93K. SMC collected payment from its insurer (UCBP). In turn, UCPB, as subrogee of SMC, brought suit against Calvo. Calvo denies liability for the damage to the cargo. TCTSI claims that the damage took place while the goods were in the custody of either the carrying vessel ―M/V Hayakawa Maru‖ or the arrastre operator, to whom the goods were unloaded and who allegedly kept them in open air for nine days from July 14 to July 23, 1998 notwithstanding the fact that some of the containers were deformed, cracked, or otherwise damaged, as noted in the Marine Survey Report. RTC held that evidence such as the Warehouse Entry Slip, the Damage Report coupled with the Marine Cargo Survey Report confirms the fact of the damaged condition of the subject cargoes. Also, the court attributed it against the broker‘s improper handling. CA affirms. Issue: Whether TCTSI is liable.

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Atty. Jess Lopez

Held: YES. Pursuant to Art.1735, TCTSI is presumed negligent. Under said article, ―Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the public. TCTSI contends that it is not a common carrier but a private carrier because, as a customs broker and warehouseman, she does not indiscriminately hold her services out to the public but only offers the same to select parties with whom she may contract in the conduct of her business. Art. 1732 makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity. Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to the ―general public,‖ i.e., the general community or population, and one who offers services or solicits business only from a narrow segment of the general population. There is greater reason for holding TCTSI to be a common carrier because the transportation of goods is an integral part of her business. Art. 1733 of the Civil Code provides: Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. Extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to, or destruction of the goods entrusted to it for sale, carriage and delivery. It requires common carriers to render service with the greatest skill and foresight and ―to use all reasonable means to ascertain the nature and characteristic of goods tendered for shipment, and to exercise due care in the handling and stowage, including such methods as their nature requires.‖ TCTSI claims that after withdrawing the container vans from the arrastre operator, their driver, Ricardo Nazarro, immediately delivered the cargo to SMC‘s warehouse in Ermita, Manila, which is a mere 30 drive from the Port Area where the cargo came from. Thus, the damage to the cargo could not have taken place while these were in her custody. However, from the Survey Report, it is clear that the shipment was discharged from the vessel to the arrastre in good order and condition as evidenced by clean Equipment Interchange Reports (EIRs). (slight dents, paint scratches on roof panels) The cargoes were withdrawn by the TCTSI from the arrastre still in good order and condition as the same were received by the former without exception, that is, without any report of damage or loss. Whenever the thing is lost (or damaged) in the possession of the debtor (or obligor), it shall be presumed that the loss (or damage) was due to his fault, unless there is proof to the contrary. No proof was proffered to rebut this legal presumption. To prove the exercise of extraordinary diligence, petitioner must do more than merely show the possibility that some other party could be responsible for the damage. It must prove that it used ―all reasonable means to ascertain the nature and characteristic of goods tendered for [transport] and that [it] exercise[d] due care in the handling [thereof].‖ TCTSI did not present any evidence on what precaution was performed to prevent the said incident. The rule is that if the improper packing or, in this case, the defect/s in the container, is/are known to the carrier or his employees or apparent upon ordinary observation, but he nevertheless accepts the same without protest or exception notwithstanding such condition, he is not relieved of liability for damage resulting therefrom. TCTSI accepted the cargo without exception despite the apparent defects in some of the container vans. For failure of TCTSI to prove that they exercised extraordinary diligence in the carriage of goods or that they are exempt from liability, the presumption of negligence as provided under Art. 1735 holds. 15. Ridjo Tape & Chemical Corp., v. Court of Appeals, G.R. No. 126074, February 24, 1998 Facts:Two cases are involved here. In Civil Case Q-92-13845 (Nov. 1990) Ridjo applied for and were granted electric service by MERALCO. 10 months later, they received a demand letter for P415,317.66 worth of unregistered consumption; MERALCO justified its demand on the ground that the electric meter of the petitioners was defective. Petitioners refused to pay, and filed for a preliminary injunction to prevent disconnection with the RTC of QC. This was granted. In Civil Case 13879 (July 1992) another demand letter was received for P89,701.58 on the same grounds. Ridjo filed another case to enjoin MERALCO from suspending its services; the two cases were thereafter consolidated, and the preliminary injunction granted. The injunction was later made permanent. On appeal, the CA reversed this, and ordered petitioners to pay the amounts. Issues: Whether or not Ridjo is liable to pay the unregistered electrical service in the absence of evidence of tampering Held: NO. The Service Contract provides that, ―In the event of stoppage or the failure by any meter to register the full amount of energy consumed, the Customer shall be billed for such period on an estimated consumption based upon his use of energy in a similar period of like use.‖ 25

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Ridjo disclaim liability by stating that stoppage or failures refer only to tampering on the part of the customer, and not mechanical failure or defects. However, it is unbelievable that they were not aware that stoppages or failures can result from inherent defects or flaws. The stipulation was intended to cover these situations, as there is no intent on its part to donate electricity. Corollarily, MERALCO has the duty to make a reasonable and proper inspection of the apparatus to ensure that they do not malfunction, and due diligence to discover and repair defects therein.. Failure constitutes negligence. The 2 unpaid periods covered 3 month (Nov-Feb) and 9 month (July-April)duration, respectively, and records show that MERALCO examined the meters regularly. By virtue of the length of time that the conspicuous defect existed, MERALCO is deemed to have constructive notice of the same. MERALCO‘s failure to discover the defect, considering this, amounts to inexcusable negligence. Its failure to make the necessary repairs and replacement was the proximate cause of the dispute. Ridjo‘s liability is thus limited by reason of MERALCO‘s negligence; it is only to pay the estimated consumption on a three-month average prior to the dispute. B.

Negligence as proximate causes

1. Quezon City Government v. Dacara, G.R. No. 150304, June 15, 2005 Facts: At about 1:00 A.M., Fulgencio Dacara, Jr., son of Fulgencio P. Dacara, Sr. and owner of ‘87 Toyota Corolla 4-door Sedan. While driving the said vehicle, JR rammed into a pile of earth/street diggings found at Matahimik St., Quezon City, which was then being repaired by the QC government. As a result, Dacarra Jr. allegedly sustained bodily injuries and the vehicle suffered extensive damage for it turned turtle when it hit the pile of earth. Dacara sued the city for damages on the ground of negligence. In its defense, QC insists that they placed all the necessary precautionary signs to alert the public of a roadside construction. They argue that the driver was over-speeding, and that his own negligence was therefore the sole cause of the incident. Issue: Whether or not the QC government was negligent. Held: YES. That the negligence of Dacara was the proximate cause of the accident was aptly discussed in the lower court‘s finding, which we quote: ―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.‖ Petitioners belatedly point out that Dacara. was driving at the speed of 60 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. Thus, petitioners assert that Dacara, having violated a traffic regulation, should be presumed negligent pursuant to Article 2185 of the Civil Code. 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 violation in their MR of the CA Decision. It is too late in the day for them to raise this new issue. 2. Taylor v. Manila Electric Railroad and Light Co., 16 Phil. 8 (1910) Facts: The power plant of Manila Electric Railroad (MER) is situated at the eastern end of a small island in Pasig River known as Isla del Provisor. Said power plant may be accessed by boat or by crossing a footbridge. On one Sunday afternoon, David Taylor, 15 year old son of an MER engineer, who was more mature than the average boy of his age, having considerable aptitude and training in mechanics, with 12 year old Manuel Claparols crossed said footbridge to visit an employee of MER. Finding that said employee was not available, the boys, impelled by youthful curiosity, spent time wandering about MER‘s premises. While walking across the premises, they found some 20-30 brass fulminating caps (detonators for dynamite). They picked up all they could find and hung them on a stick and carried them home. They met 9 year old girl named Jessie Adrian along the way. They made a series of experiments with said caps (thrust the ends of the wires into electric sockets, tried to break it with a stone, etc). They then opened one of them with a knife and saw yellowish substance inside. As David held the cap, Manuel applied a lighted match to the contents. An explosion followed causing injuries to all 3 of them. Jessie, who started to run away as they were about to put a match on it received a cut in the neck. Manuel‘s hand was burned. David was struck in the face with several metal particles one of which injured his right eye which had to be removed. David‘s father sued MER for damages resulting from negligence. 26 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Issue: Whether MER can be held liable? Held: NO. When the immediate cause of an accident resulting in an injury is the plaintiff's own act, which contributed to the principal occurrence as one of its determining factors, he cannot recover damages for the injury. Plaintiff, in an action for damages due to negligence, must establish by competent evidence the ff: (1) damage incurred; (2) negligence by act or omission of which defendant or some person for whose acts it must respond, was guilty; and (3) the connection of cause and effect between the negligence and the damage. It is clear that the accident could not have happened had not the fulminating caps been left exposed at the point where they were found, or if their owner had exercised due care in keeping them in an appropriate place; but it is equally clear that plaintiff would not have been injured had he not, for his own pleasure and convenience, entered upon MER‘s premises, and strolled around thereon without the express permission of the MER, and had he not picked up and carried away the property of the defendant which he found on its premises, and had he not thereafter deliberately cut open one of the caps and applied a match to its contents. The caps when found appeared to the boys who picked them up to have been lying there for a considerable time, and from the place where they were found would seem to have been discarded as defective or worthless and fit only to be thrown upon the rubbish heap. No measures seem to have been adopted by the defendant company to prohibit or prevent visitors from entering and walking about its premises unattended even if they were aware that children in their play crossed the footbridge to the island. Fulminating caps or detonators for the discharge by electricity of blasting charges by dynamite are not articles in common use by the average citizen, and under all the circumstances, and in the absence of all evidence to the contrary, we think that the discovery of 20-30 of these caps at the place where they were found by the plaintiff on MER‘s premises fairly justifies the inference that MER was either the owner of the caps in question or had these caps under its possession and control. Children, wherever they go, must be expected to act upon childlike instincts and impulses; and others who are chargeable with a duty of care and caution toward them must calculate upon this, and take precautions accordingly. If they leave exposed to the observation of children anything which would be tempting to them, and which they in their immature judgment might naturally suppose they were at liberty to handle or play with, they should expect that liberty to be taken. The owners of premises, therefore, whereon things attractive to children are exposed, or upon which the public are expressly or impliedly permitted to enter or upon which the owner knows or ought to know children are likely to roam about for pastime and in play, must calculate upon this, and take precautions accordingly. But while we hold that the entry of the plaintiff upon MER‘s property without the latter‘s express invitation or permission would not have relieved defendant from responsibility for injuries incurred there by plaintiff, without other fault on his part, if such injury were attributable to the negligence of MER, we are of opinion that under all the circumstances of this case the negligence of the MER in leaving the caps exposed on its premises was not the proximate cause of the injury received by the plaintiff, which therefore was not attributable to the negligence of the defendant, and, on the other hand, we are satisfied that plaintiff's action in cutting open the detonating cap and putting a match to its contents was the proximate cause of the explosion and of the resultant injuries inflicted upon the plaintiff, and that the MER, therefore, is not civilly responsible for the injuries thus incurred. In the case at bar, plaintiff at the time of the accident was a well-grown youth of 15, more mature both mentally and physically than the average boy of his age; he had been to sea as a cabin boy; was able to earn P2.50 a day as a mechanical draftsman 30 days after the injury was incurred; and the record discloses throughout that he was exceptionally well qualified to take care of himself. The evidence of record leaves no room for doubt that, despite his denials on the witness stand, he well knew the explosive character of the cap with which he was amusing himself. The series of experiments made by him in his attempt to produce an explosion, as described by the little girl who was present, admit of no other explanation. His attempt to discharge the cap by the use of electricity, followed by his efforts to explode it with a stone or a hammer, and the final success of his endeavors brought about by the application of a match to the contents of the cap, show clearly that he knew what he was about. Nor can there be any reasonable doubt that he had reason to anticipate that the explosion might be dangerous, in view of the fact that the little girl, 9 years of age, who was with him at the time when he put the match to the contents of the cap, became frightened and ran away. Difficulty seems to be apprehended in deciding which acts of the injured party shall be considered immediate causes of the accident. The test is simple. Distinction must be made between the accident and the injury, between the event itself, without which there could have been no accident, and those acts of the victim not entering into it, independent of it, but contributing to his own proper hurt. Where he contributes to the principal occurrence, as one of its determining factors, he cannot recover. Where, in conjunction with the occurrence, he contributes only to his own injury, he may recover the amount that the defendant responsible for the event should pay for such injury, less a sum deemed a suitable equivalent for his own imprudence. 27

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Atty. Jess Lopez

3. Bataclan v. Medina, 102 Phil. 181 (1957) Facts: A bus of the Medina Transportation operated by Mariano Medina left the town of Amadeo Cavite on its way to Pasay City and driven by Saylon. Among the passengers were Bataclan et al. At 2:00AM while it was running in Imus Cavite, one of the front tires burst and the vehicle began to zig-zag until it fell into a canal or ditch in the side of the road and turned turtle. Some passengers were able to leave the bus but the driver and 3 passengers (Bataclan included) were unable to get out. Calls and shouts were made to the houses in the neighborhood. After some time, some men came to help, carrying a lighted torch. However, almost immediately after approaching the bus, a fierce fire started. Apparently gas leaked out and permeated the ground, and the lighted torch brought by one of the men who answered the call for help set it on fire. Bataclan died as a result. As a result, his widow filed the present suit to recover damages. The trial court held defendant carrier liable for breach of contract of transportation for hire. They also held that there was negligence on the part of the defendant through his agent driver Saylon. Apparently the bus was speeding at the time of the tire blowout. Issue: While there is no question that Medina is liable, the issue is to what degree is his liability since the trial court found that the proximate cause of Bataclan‘s death is not the overturning of the bus but the fire that burned it. Held: PROXIMATE CAUSE WAS THE OVERTURNING OF THE BUS. In the present case under the circumstances given, the court held that the overturning of the bus as the proximate cause of the death. This is for the reason that when the vehicle turned not only on its side but completely on its back, the leaking of the gasoline from the tank was not unnatural or unexpected. The coming of the men with a lighted torch was in response to the call for help, made not only by the passengers, but most probably, by the driver and the conductor themselves, and that because it was dark the rescuers had to carry a light with them, and coming as they did from a rural area it is natural that they would only be carrying a torch. It would also be natural that the said rescuers should innocently approach the vehicle to extend the aid and effect the rescue requested from them. In other words, the coming of the men with a torch was to be expected and was a natural sequence of the overturning of the bus, the trapping of some of its passengers and the call for outside help. The driver and the conductor are also guilty of negligence. According to the witnesses, they were merely on the road walking back and forth. They, or at least, the driver should and must have known that in the position in which the overturned bus was, gasoline could and must have leaked from the gasoline tank and soaked the area in and around the bus, this aside from the fact that gasoline when spilled, specially over a large area, can be smelt and directed even from a distance, and yet neither the driver nor the conductor would appear to have cautioned or taken steps to warn the rescuers not to bring the lighted torch too near the bus. To add further, one of the passengers who, because of the injuries suffered by her, was hospitalized, and while in the hospital, she was visited by the defendant Mariano Medina, and in the course of his visit, she overheard him speaking to one of his bus inspectors, telling said inspector to have the tires of the bus changed immediately because they were already old, but did not do so. If this be true, it goes to prove that the driver had not been diligent and had not taken the necessary precautions to insure the safety of his passengers. Had he changed the tires, especially those in front, with new ones, as he had been instructed to do, probably, despite his speeding, as we have already stated, the blow out would not have occurred. 4. Fernando v. Court of Appeals, 208 SCRA 714 (1992) Facts: The septic tank to the toilet in the Agdao Public Market, Davao has not been cleaned for 19 years. So, the Market Master initiated a request for the re-emptying of said septic tank in the Davao City Treasurer‘s Office. An invitation to bid was issued to 5 people. However, it was Feliciano Bascon who won. Before Bascon could start re-emptying the septic tank, another bidder Aurelio Bertulano and 4 others were found dead inside the said septic tank was now almost empty. Upon investigation, it was found that the victims entered said septic tank without clearance from the City government nor with the knowledge and consent of the Market Master. An autopsy was performed and it was found that the cause of death was asphyxia due to diminution of oxygen in the body caused by intake of toxic gas. The heirs of the deceased brought an action against Davao City for damage on the ground of negligence. They claim that the city‘s negligence in maintaining the septic tank was the proximate cause of their heirs‘ death. Trial court dismissed. CA reversed and awarded damages. Upon MR, the CA reversed itself and dismissed the complaint. Issue: Whether Davao city‘s negligence in maintaining the septic tank was the proximate cause of the injury suffered. Held: NO. To be entitled to damages for an injury resulting from the negligence of another, a claimant must establish the relation between the omission and the damage. He must prove under Art. 2179 that the defendant‘s negligence was the immediate and proximate cause of his injury. 28

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Proximate cause has been defined as that cause, which, in natural and continuous sequence unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred. Proof of such relation of cause and effect is not an arduous one if the claimant did not in any way contribute to the negligence of the defendant. However, where the resulting injury was the product of the negligence of both parties, there exists a difficulty to discern which acts shall be considered the proximate cause of the accident. While it may be true that Davao has been remiss in its duty to re-empty the septic tank annually, such negligence was not a continuing one. Upon learning from the report of the market master about the need to clean the septic tank of the public toilet in Agdao Public Market, the city immediately responded by issuing invitations to bid for such service. Thereafter, it awarded the bid to the lowest bidder. Also, despite the city‘s failure to re-empty the septic tank since 1956, people in the market have been using the public toilet for their personal necessities but have remained unscathed (said tank was covered by 3 airtight lids, no report of an gas poisoning). It was also found that warning signs regarding the existence of noxious gases in addition to the ―Men‖ & ―Women‖ signs in the toilets were needed. Thus, an accident of this sort would only happen if someone removes one of the lids. In this case, the accident occurred because the victims on their own conduct and without authority from the city opened the septic tank. An ordinarily prudent person should have been aware of the attendant risks particularly since it was one of the bidders, one used to this kind of work, who fell victim to the toxic gas. As such, their failure to take precautionary measures for their safety was the proximate cause of the accident. When a person holds himself out as being competent to do things requiring professional skill, he will be held liable for negligence if he fails to exhibit the care and skill of one ordinarily skilled in the particular work which he attempts to do. 5. Urbano v. Intermediate Appellate Court, 157 SCRA 1 (1988) Facts: On October 1980, Filomeno Urbano was on his way to his rice field. He found the place where he stored palay flooded with water coming from the irrigation canal. Urbano went to the elevated portion to see what happened and there he saw Marcelino Javier and Emilio Erfe cutting grass. Javier admitted that he was the one who opened the canal A quarrel ensued and Urbano hit Javier on the right palm with his bolo causing an incised wound and again on the leg. When Urbano tried to hack and inflict further injury, his daughter embraced and prevented him from hacking Javier. On Oct 27, Urbano and Javier had an amicable settlement. Urbano paid P700 for medical expenses of Javier. On Nov. 1980, Javier was rushed to the hospital where he had lockjaw and convulsions. The doctor found the condition to be caused by tetanus toxin which infected the healing wound in his palm. He died the following day. Urbano was charged with homicide and was found guilty both by the trial court and the CA. Under these circumstances, the lower courts ruled that Javier's death was the natural and logical consequence of Urbano's unlawful act. Hence, he was declared responsible for Javier's death. Later, however, Urbano filed a motion for new trial based on the affidavit of the Brgy Captain who stated that he saw the deceased catching fish in the shallow irrigation canals on Nov. 5. The motion was denied. Hence, this petition. The Urbano reiterates his position that the proximate cause of the death of Marcelo Javier was due to his own negligence, that Dr. Mario Meneses found no tetanus in the injury, and that Javier got infected with tetanus when after 2 weeks he returned to his farm and tended his tobacco plants with his bare hands exposing the wound to harmful elements like tetanus germs. Issue: Whether or not there was an efficient intervening cause from the time Javier was wounded until his death which would exculpate Urbano from any liability for Javier's death. Held: YES. ACQUITTED. The case involves the application of Article 4 RPC which provides that "Criminal liability shall be incurred: (1) By any person committing a felony (delito) although the wrongful act done be different from that which he intended ..." Pursuant to this provision "an accused is criminally responsible for acts committed by him in violation of law and for all the natural and logical consequences resulting therefrom." The evidence on record does not clearly show that the wound inflicted by Urbano was infected with tetanus at the time of the infliction of the wound. The evidence merely confirms that the wound, which was already healing at the time Javier suffered the symptoms of the fatal ailment, somehow got infected with tetanus. However, as to when the wound was infected is not clear from the record. Proximate cause is that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred." And more comprehensively, "the proximate legal cause is that acting first and producing the injury, either immediately or by setting other events in motion, all constituting a natural and continuous chain of events, each having a close causal connection with its immediate predecessor, the final event in the chain immediately effecting the injury as a natural and probable result of the 29

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cause which first acted, under such circumstances that the person responsible for the first event should, as an ordinarily prudent and intelligent person, have reasonable ground to expect at the moment of his act or default that an injury to some person might probably result therefrom." The incubation period of tetanus or the time between injury and the appearance of unmistakable symptoms, ranges from 2 to 56 days. However, over 80% of patients become symptomatic within 14 days. A short incubation period indicates severe disease, and when symptoms occur within 2 or 3 days of injury the mortality rate approaches 100%. Reflex spasms usually occur within 24 to 72 hours of the first symptom, an interval referred to as the onset time. Mild tetanus is characterized by an incubation period of at least 14 days and an onset time of more than 6 days. As such, medically speaking, the reaction to tetanus found inside a man's body depends on the incubation period of the disease. Skimming through the facts, the Court found that based on the nature of the tetanus vis-à-vis the facts of the case, Urbano‘s hacking was not probably the proximate cause of the death. Here, Javier suffered a 2-inch incised wound on his right palm when he parried the bolo which Urbano used in hacking him. This incident took place on October 23, 1980. After 22 days, he suffered the symptoms of tetanus, like lockjaw and muscle spasms. The following day, November 15, 1980, he died. If, therefore, the wound of Javier inflicted by the Urbano was already infected by tetanus germs at the time, it is more medically probable that Javier should have been infected with only a mild cause of tetanus because the symptoms of tetanus appeared on the 22nd day after the hacking incident or more than 14 days after the infliction of the wound. Therefore, the onset time should have been more than 6 days. Javier, however, died on the second day from the onset time. The more credible conclusion is that at the time Javier's wound was inflicted by the Urbano, the severe form of tetanus that killed him was not yet present. Consequently, Javier's wound could have been infected with tetanus after the hacking incident. Considering the circumstance surrounding Javier's death, his wound could have been infected by tetanus 2 or 3 or a few but not 20 to 22 days before he died. The rule is that the death of the victim must be the direct, natural, and logical consequence of the wounds inflicted upon him by the accused. And since we are dealing with a criminal conviction, the proof that the accused caused the victim's death must convince a rational mind beyond reasonable doubt. The medical findings, however, lead us to a distinct possibility that the infection of the wound by tetanus was an efficient intervening cause later or between the time Javier was wounded to the time of his death. The infection was, therefore, distinct and foreign to the crime. Doubts are present. There is a likelihood that the wound was but the remote cause and its subsequent infection, for failure to take necessary precautions, with tetanus may have been the proximate cause of Javier's death with which the petitioner had nothing to do. A prior and remote cause cannot be made the basis of an action if such remote cause did nothing more than furnish the condition or give rise to the occasion by which the injury was made possible, if there intervened between such prior or remote cause and the injury a distinct, successive, unrelated, and efficient cause of the injury, even though such injury would not have happened but for such condition or occasion. If no danger existed in the condition except because of the independent cause, such condition was not the proximate cause. And if an independent negligent act or defective condition sets into operation the instances which result in injury because of the prior defective condition, such subsequent act or condition is the proximate cause. We must stress, however, that our discussion of proximate cause and remote cause is limited to the criminal aspects of this rather unusual case. It does not necessarily follow that the Urbano is also free of civil liability. The wellsettled doctrine is that a person, while not criminally liable, may still be civilly liable. While the guilt of the accused in a criminal prosecution must be established beyond reasonable doubt, only a preponderance of evidence is required in a civil action for damages. The judgment of acquittal extinguishes the civil liability of the accused only when it includes a declaration that the facts from which the civil liability might arise did not exist. 6. Bernal v. House and Tacloban Electric & Ice Plant, Ltd., 54 Phil. 327 (1930) Facts: The procession of Holy Friday was held in Tacloban, Leyte. Fortunata Enverso with her daughter Purificacion Bernal came from another municipality to attend the religious celebration. After the procession was over, the woman and her daughter, accompanied by 2 other persons by the names of Fausto and Elias, passed along a public street. The little girl was allowed to get a short distance in advance of her mother and her friends. When in front of the offices of the Tacloban Electric & Ice Plant, Ltd., an automobile appeared from the opposite direction which so frightened the child that she turned to run, with the result that she fell into the street gutter. At that time there was hot water in this gutter or ditch coming from the Electric & Ice Plant of J. V. House. She was found with her face downward in the hot water. Child died that same night. Dr. Benitez certified that the cause of death was ―Burns, 3rd Degree, Whole Body,‖ and contributory causes were ―Congestion of the Brain and visceras of the chest & abdomen.‖ As such, Tacloban Electric was sued for damages on the ground of negligence. 30

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Atty. Jess Lopez

Defense was that the hot water was permitted to flow down the side of the street with the knowledge and consent of the authorities; that the cause of death was other than the hot water; and that in the death the plaintiffs contributed by their own fault and negligence. Trial judge ordered the dismissal of the action because of the contributory negligence of the plaintiffs. Issue: Whether Tacloban Electric is liable for the death of Purificacion. Held: YES. The death of the child was the result of fault and negligence in permitting hot water to flow through the public streets, there to endanger the lives of passers-by who were unfortunate enough to fall into it. Mother and her child had a perfect right to be on the principal street. There was nothing abnormal in allowing the child to run along a few paces in advance of the mother. No one could foresee the coincidence of an automobile appearing and of a frightened child running and falling into a ditch filled with hot water. The contributory negligence of the child and her mother, if any, does not operate as a bar to recovery, but in its strictest sense could only result in reduction of the damages. The plaintiffs are Tomas Bernal and Fortunata Enverso. The latter was the mother of Purificacion Bernal and the former was the natural father, who had never legally recognized his child. The daughter lived with the mother, and presumably was supported by her. Thus, recovery should be permitted the mother but not the father. As to the defendants, they are J. V. House and the Tacloban Electric. J. V. House was granted a franchise by Act and only transferred this franchise formally to the Tacloban Electric & Ice Plant, Ltd. nearly a year after the death of the child Purificacion Bernal. Under these facts, J. V. House is solely responsible. Counsel for appellees point out that there is no satisfactory proof to establish the pecuniary loss. While such is true, in cases of this character the law presumes a loss because of the impossibility of exact computation. There is not enough money in the entire world to compensate a mother for the death of her child. 7. Gabeto v. Araneta, 42 Phil. 252 (1921) Facts: In Iloilo City, Basilio llano and Proceso Gayetano took a carromata to go to a cockpit. When the driver of the carromata had turned his horse and started in the direction indicated, Agaton Araneta stepped out into the street, and laying his hands on the reins, stopped the horse, at the same time protesting to the driver that he himself had called this carromata first. The driver (Pagnaya) replied to the effect that he had not heard or seen the call of Araneta, and that he had taken up the 2 passengers then in the carromata as the first who had offered employment. At or about the same time Pagnaya pulled on the reins of the bridle to free the horse from the control of Agaton Araneta, in order that the vehicle might pass on. Owing, however, to the looseness of the bridle on the horse's head or to the rottenness of the material of which it was made, the bit came out of the horse's mouth; and it became necessary for the driver to get out, which he did, in order to fix the bridle. The horse was then pulled over to near the curb, by one or the other — it makes no difference which — and Pagnaya tried to fix the bridle. While he was thus engaged, the horse, being free from the control of the bit, became disturbed and moved forward, in doing which he pulled one of the wheels of the carromata up on the sidewalk and pushed Julio Pagnaya over. After going a few yards further the side of the carromata struck a police telephone box which was fixed to a post on the sidewalk, upon which the box came down with a crash and frightened the horse to such an extent that he set out at full speed up the street. Basilio llano, had alighted while the carromata was as yet alongside the sidewalk; but the other, Proceso Gayetano, had unfortunately retained his seat, and after the runaway horse had proceeded up the street to a point in front of the Mission Hospital, the said Gayetano jumped or fell from the rig, and in so doing received injuries from which he soon died. Gayetano‘s widow (Gabeto) sued Araneta for damages on the ground of negligence. Issue: Whether Araneta is liable for Gayetano‘s death. Held: NO. The evidence for the plaintiff on this point consists chiefly of the testimony of Julio Pagnaya and of Basilio llano. They both say that while yet in the middle of the street, the Araneta jerked the bridle, which caused the bit to come out of the horse's mouth, and Julio says that at that juncture the throatlatch of the bridle was broken. Be that as it may, the mere fact that the Araneta interfered with the carromata by stopping the horse in the manner stated would not make him liable for the death of Gayetano because it is admitted by Pagnaya that he afterwards got out of the carromata and went to the horse's head to fix the bridle. After Pagnaya alighted, the horse was conducted to the curb and that an appreciable interval of time elapsed — same witnesses say several minutes — before the horse started on his career up the street. The stopping of the rig by Araneta in the middle of the street was too remote from the accident that presently ensued to be considered the legal or proximate cause thereof. 31

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By getting out and taking his post at the head of the horse, the driver was the person primarily responsible for the control of the animal, and Araneta cannot be charged with liability for the accident resulting from the action of the horse thereafter. According to the witnesses for Araneta, it was Pagnaya who jerked the rein, thereby causing the bit to come out of the horse's mouth; and they say that Pagnaya, after alighting, led the horse over to the curb, and proceeded to fix the bridle; and that in so doing the bridle was slipped entirely off, when the horse, feeling himself free from control, started to go away as previously stated. 8. McKee v. Intermediate Appellate Court, 211 SCRA 517 (1992) Facts: Between 9 and 10 a.m., a head-on collision took place on Pulong Pulo Bridge between an International cargo truck, Loadstar, owned by Tayag and driven by Galang, and a Ford Escort driven by Jose Koh. 3 people were killed (Jose Koh, Kim Koh McKee, Loida Bondoc), with injuries to 3 others (George Koh McKee, Christopher Koh McKee, Araceli Koh McKee), all passengers of the Ford Escort. When the Escort (Koh) was 10 meters from the bridge, 2 boys suddenly darted into the car‘s lane. Koh swerved to the left, and entered the truck‘s lane. He turned on his headlights, applied brakes, and attempted to return to his lane, but it was too late. Galang admitted that he was driving at 48 kph. Two civil cases were filed in consequence against the employers of Galang. The first prayed for damages for Jose Koh‘s death; the second, for Kim, Araceli, and George. Further, Galang was charged with Reckless Imprudence resulting to multiple homicide, physical injuries, and damage to property. In the civil cases, respondents alleged that Jose Koh was at fault for being on the wrong lane, while Galang was in the right, traveling at moderate speed and obeying all traffic rules and regulations. In the criminal case, Galang was held guilty, while the 2 civil cases were dismissed. All the said cases were appealed. The criminal case was affirmed, (still guilty) whereas the civil cases were reversed. (employers civilly liable) The criminal case was affirmed by the Supreme Court. The decision in the civil cases was anchored on the finding that it was Galang‘s inattentiveness which caused the accident; that the law presumes negligence on the part of the employers in the selection and supervision of Galang; that they never asserted the defense of the exercise of the diligence of a good father of a family. Araceli McKee testified that the truck did not slow down even when their headlights were switched on. Also, Tanhueco, an impartial eyewitness, who was one of the first to be at the scene, said that the truck stopped only after the collision. Galang testified that he stopped when the car was just about 10 meters away. A police investigator found that there were no skid marks behind the truck. No credence was given to the testimony of Soliman, the truck‘s passenger, nor to Dayrit, who supposedly lived across the street. The former would be predisposed to be associated with Galang, while the latter did not assist the injured persons. He tried to call the police but his phone line was allegedly dead, which conditions degraded their credibility. The IAC held that the inattentiveness or negligence of Galang was the proximate cause of the mishap. On reconsideration, however, this was reversed. Hence, this petition. Issue: Whether or not the owners of the cargo truck are liable. Held: YES. In reversing its decision, the IAC held that Jose Koh was presumed to be negligent in invading the lane of the truck. On the basis of this presumed negligence, it was concluded that the same was the proximate cause of the collision. This is unwarranted, since this happened only because two boys darted across the road. Jose Koh's entry into the lane of the truck was necessary in order to avoid what was, in his mind at that time, a greater peril — death or injury to the 2 boys. Such act can hardly be classified as negligent. In Picart vs. Smith, decided more than 70 years ago but still a sound rule, We held: ―The test by which to determine the existence of negligence in a particular case may be stated as follows: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of negligence. ― Considering the sudden intrusion of the 2 boys into the lane of the car, We find that Jose Koh adopted the best means possible in the given situation to avoid hitting them. Applying the above test, therefore, it is clear that he was not guilty of negligence. In any case, assuming arguendo that Jose Koh is negligent, it cannot be said that his negligence was the proximate cause of the collision. Proximate cause has been defined as ―that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred. And more comprehensively, the proximate legal cause is that acting first and producing the injury, either immediately or by setting other events in motion, all constituting a natural and continuous chain of events, each having a close causal connection with its immediate predecessor, the final event in the chain immediately effecting the injury as a natural and probable result of the cause which first acted, under such circumstances that the person responsible for the first event should, as an ordinary prudent and intelligent person, have reasonable ground to expect at the moment of his act or default that an injury to some person might probably result therefrom.‖ 32

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Applying the above definition, although it may be said that the act of Jose Koh, if at all negligent, was the initial act in the chain of events, it cannot be said that the same caused the eventual injuries and deaths because of the occurrence of a sufficient intervening event, the negligent act of the truck driver, which was the actual cause of the tragedy. The entry of the car into the lane of the truck would not have resulted in the collision had the latter heeded the EMERGENCY SIGNALS given by the former to slow down and give the car an opportunity to go back into its proper lane. Instead of slowing down and swerving to the far right of the road, which was the proper precautionary measure under the given circumstances, the truck driver continued at full speed towards the car. The truck driver's negligence becomes more apparent in view of the fact that the road is 7.50 meters wide while the car measures 1.598 meters and the truck, 2.286 meters, in width. This would mean that both car and truck could pass side by side with a clearance of 3.661 meters to spare. Furthermore, the bridge has a level sidewalk which could have partially accommodated the truck. Any reasonable man finding himself in the given situation would have tried to avoid the car instead of meeting it head-on. The truck driver's negligence is apparent in the records. He himself said that his truck was running at 48 kph along the bridge while the maximum speed allowed by law on a bridge is only 30 kph. Under Article 2185 of the Civil Code, a person driving a vehicle is presumed negligent if at the time of the mishap, he was violating any traffic regulation. Again, witnesses testified that the truck was moving at around 50-60 kph and only stopped after the collision. Clearly, therefore, it was the truck driver's subsequent negligence in failing to take the proper measures and degree of care necessary to avoid the collision which was the proximate cause of the resulting accident. Even if Jose Koh was indeed negligent, the doctrine of last clear chance finds application here. Last clear chance is a doctrine in the law of torts which states that the contributory negligence of the party injured will not defeat the claim for damages if it is shown that the defendant might, by the exercise of reasonable care and prudence, have avoided the consequences of the negligence of the injured party. In such cases, the person who had the last clear chance to avoid the mishap is considered in law solely responsible for the consequences thereof. Applying the foregoing doctrine, it is not difficult to rule, as We now rule, that it was the truck driver's negligence in failing to exert ordinary care to avoid the collision which was, in law, the proximate cause of the collision. As employers of the truck driver, the private respondents are, under Article 2180 of the Civil Code, directly and primarily liable for the resulting damages. The presumption that they are negligent flows from the negligence of their employee. That presumption, however, is only juris tantum, not juris et de jure. Their only possible defense is that they exercised all the diligence of a good father of a family to prevent the damage. The diligence of a good father referred to means the diligence in the selection and supervision of employees. The answers of the private respondents in Civil Cases Nos. 4477 and 4478 did not interpose this defense. Neither did they attempt to prove it. 9. Phoenix Construction, Inc., v. Intermediate Appellate Court, G.R. No. 65295, March 10, 1987 (WTF) Facts: At about 1:30 a.m., private respondent Leonardo Dionisio was on his way home from a cocktails-and-dinner meeting with his boss where Dionisio had taken ―a shot or two‖ of liquor. Dionisio was driving his Volkswagen car and proceeding down General Lacuna Street, when his car headlights suddenly failed. He switched his headlights on ―bright‖ and thereupon he saw a Ford dump truck looming some 2.5 meters away from his car. The dump truck, owned and registered in the name of Phoenix Construction, was parked on the right hand side of General Lacuna Street (i.e., on the right hand side of a person facing in the same direction toward which Dionisio's car was proceeding), facing the oncoming traffic. The dump truck was parked askew in such a manner as to stick out onto the street, partly blocking the way of oncoming traffic. There were neither lights nor reflector devices set anywhere near the dump truck. The dump truck had earlier that evening been driven home by Carbonel, its regular driver, with the permission of his employer Phoenix, in view of work scheduled to be carried out early the following morning. Dionisio claimed that he tried to avoid a collision by swerving his car to the left but it was too late and his car smashed into the dump truck. As a result of the collision, Dionisio suffered some physical injuries including some permanent facial scars, a ―nervous breakdown‖ and loss of 2 gold bridge dentures. Dionisio commenced an action for damages in the CFI Pampanga basically claiming that the legal and proximate cause of his injuries was the negligent manner in which Carbonel had parked the dump truck. Phoenix and Carbonel countered that the proximate cause of Dionisio's injuries was his own recklessness in driving fast at the time of the accident, while under the influence of liquor, without his headlights on and without a curfew pass. Phoenix also sought to establish that it had exercised due care in the selection and supervision of the dump truck driver. Issue: Whether the proximate cause was truck‘s parking position. Held: YES. DIONISIO‘S WAS ONLY CONTRIBUTORY. Before resolving such, there are four factual issues that need to be looked into: (a) whether or not private respondent Dionisio had a curfew pass valid and effective for that eventful 33

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night; (b) whether Dionisio was driving fast or speeding just before the collision with the dump truck; (c) whether Dionisio had purposely turned off his car's headlights before contact with the dump truck or whether those headlights accidentally malfunctioned moments before the collision; and (d) whether Dionisio was intoxicated at the time of the accident. First: No curfew pass was found on the person of Dionisio immediately after the accident nor was any found in his car according to the patrol man who took the unconscious Dionisio to Makati Med, and to the nurse who took off Dionisio's clothes and examined them along with the contents of pockets together with the patrolman. Dionisio was not able to produce any curfew pass during the trial. Instead, he offered the explanation that his family may have misplaced his curfew pass. He also offered a certification issued by one Major Libarnes who was said to have authority to issue curfew passes for Pampanga and Metro Manila. This certification was to the effect that Dionisio had a valid curfew pass. This certification did not, however, specify any pass serial number or date or period of effectivity of the supposed curfew pass. Second: Patrolman Cuyno testified that people who had gathered at the scene of the accident told him that Dionisio's car was "moving fast" and did not have its headlights on. Dionisio, on the other hand, claimed that he was travelling at a moderate speed at 30 KPH and had just crossed the intersection of General Santos and General Lacuna Streets and had started to accelerate when his headlights failed just before the collision took place. An automobile speeding down a street and suddenly smashing into a stationary object in the dead of night is a sufficiently startling event as to evoke spontaneous, rather than reflective, reactions from observers who happened to be around at that time. The testimony of Cuyno was therefore admissible. Third: Dionisio purposely shut off his headlights even before he reached the intersection so as not to be detected by the police in the police precinct which he (being a resident in the area) knew was not far away from the intersection. Fourth: There is the testimony of Patrolman Cuyno to the effect that Dionisio smelled of liquor at the time he was taken from his smashed car and brought to the Makati Medical Center in an unconscious condition. This testimony has to be taken in conjunction with the admission of Dionisio that he had taken "a shot or two" of liquor before dinner with his boss that night. We do not believe that this evidence is sufficient to show that Dionisio was so heavily under the influence of liquor as to constitute his driving a motor vehicle per se an act of reckless imprudence. In summary: Dionisio was negligent the night of the accident. He was hurrying home that night and driving faster than he should have been. Worse, he extinguished his headlights at or near the intersection of General Lacuna and General Santos Streets and thus did not see the dump truck that was parked askew and sticking out onto the road lane. HOWEVER the legal and proximate cause of the accident and of Dionisio's injuries was the wrongful or negligent manner in which the dump truck was parked — in other words, the negligence of Carbonel. The collision of Dionisio's car with the dump truck was a natural and foreseeable consequence of the truck driver's negligence. The truck driver's negligence far from being a "passive and static condition" was rather an indispensable and efficient cause. The collision between the dump truck and the Dionisio‘s car would in all probability not have occurred had the dump truck not been parked askew without any warning lights or reflector devices. The improper parking of the dump truck created an unreasonable risk of injury for anyone driving down General Lacuna Street and for having so created this risk, the truck driver must be held responsible. Dionisio's negligence, although later in point of time than the truck driver's negligence and therefore closer to the accident, was not an efficient intervening or independent cause. Dionisio's negligence was not of an independent and overpowering nature as to cut, as it were, the chain of causation in fact between the improper parking of the dump truck and the accident, nor to sever the juris vinculum of liability. Foreseeable Intervening Causes. If the intervening cause is one which in ordinary human experience is reasonably to be anticipated, or one which the defendant has reason to anticipate under the particular circumstances, the defendant may be negligent, among other reasons, because of failure to guard against it; or the defendant may be negligent only for that reason. We hold that Dionisio's negligence was ―only contributory,‖ that the ―immediate and proximate cause‖ of the injury remained the truck driver's ―lack of due care‖ and that consequently Dionisio may recover damages though such damages are subject to mitigation by the courts. Last Clear Chance Doctrine: The theory here of petitioners is that while the truck driver was negligent, Dionisio had the "last clear chance" of avoiding the accident and hence his injuries, and that Dionisio having failed to take that last clear chance must bear his own injuries alone.

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The historical function of that doctrine in the common law was to mitigate the harshness of another common law doctrine or rule — that of contributory negligence. The common law rule of contributory negligence prevented any recovery at all by a plaintiff who was also negligent, even if the plaintiff‘s negligence was relatively minor as compared with the wrongful act or omission of the defendant. The common law notion of last clear chance permitted courts to grant recovery to a plaintiff who had also been negligent provided that the defendant had the last clear chance to avoid the casualty and failed to do so. It is difficult to see what role, if any, the common law last clear chance doctrine has to play in a jurisdiction where the common law concept of contributory negligence as an absolute bar to recovery by the plaintiff, has itself been rejected, as it has been in Article 2179 of the CC. Is there perhaps a general concept of "last clear chance" that may be extracted from its common law matrix and utilized as a general rule in negligence cases in a civil law jurisdiction like ours? We do not believe so. Under Article 2179, the task of a court, in technical terms, is to determine whose negligence — the plaintiff s or the defendant's — was the legal or proximate cause of the injury. That task is not simply or even primarily an exercise in chronology or physics, as the petitioners seem to imply by the use of terms like "last" or "intervening" or "immediate." The relative location in the continuum of time of the plaintiff‘s and the defendant's negligent acts or omissions, is only one of the relevant factors that may be taken into account. Of more fundamental importance is the nature of the negligent act or omission of each party and the character and gravity of the risks created by such act or omission for the rest of the community. Carbonel's proven negligence creates a presumption of negligence on the part of his employer Phoenix in supervising its employees properly and adequately. The circumstance that Phoenix had allowed its truck driver to bring the dump truck to his home whenever there was work to be done early the following morning, when coupled with the failure to show any effort on the part of Phoenix to supervise the manner in which the dump truck is parked when away from company premises, is an affirmative showing of culpa in vigilando on the part of Phoenix. 10. Austria v. Court of Appeals, G.R. No. 133323, March 9, 2000 Facts: At around 7:00 P.M., the Austria was driving his Ford Fiera with 10 passengers. One of the vehicle‘s tires suddenly hit a stone lying in the road, while thus cruising, which caused the Austria to lose control and collide with the rear of an improperly parked cargo truck trailer driven by accused Rolando M. Flores. As a result of the collision, 5 passengers suffered varying degrees of injuries. The trial court, finding accused Alberto Austria guilty beyond reasonable doubt of the crime of Reckless Imprudence Resulting in Serious Physical Injuries. There was no pronouncement as to the civil liability of the accused to private complainant Armin Manalansan considering that the latter filed a separate civil action against accused Alberto Austria. Issue: Whether Austria should be civilly liable Held: YES. Austria asserts that the other driver‘s negligence in parking his vehicle caused the collision and that said truck driver (Flores) negligently parked his trailer truck with the rear end protruding onto road, without any warning device. This being so, he should not be held responsible for Flores‘ negligence. However, Austria admitted that he saw the trailer at a distance of about 6 meters but at the same time stated that the distance of the focus of the vehicle‘s headlight in dim position was 20 meters. These inconsistent statements, taken together with his claim on cross-examination that he saw the trailer only when he bumped it, only show that he was driving much faster than 30KPH. Assuming that he was driving his vehicle at that speed of 30 kph, Austria would have not lost control of the vehicle after it hit the stone before the collision. Under these circumstances, the Austria did not exercise the necessary precaution required of him and is therefore considered negligent. While we note similarities of the factual milieu of Phoenix to that of the present case, we are unable to agree with Austria that the truck driver should be held solely liable while the petitioner should be exempted from liability. In Phoenix, we ruled that the driver of the improperly parked vehicle was liable and the driver of the colliding car contributorily liable. We agree with the respondent court in its observation on the petitioner‘s culpability: ―That he had no opportunity to avoid the collision is of his own making and [this] should not relieve him of liability.‖ The negligence of Austria as driver of the Ford Fiera is the immediate and proximate cause of the collision. 11. Umali v. Bacani, G.R. No. L-40570, January 30, 1976 Facts: A storm with a strong rain hit the Municipality of Alcala Pangasinan, during which several banana plants near the transmission line of Alcala Electric Plant were blown down and fell on the electric wire. As a result, the live wire was cut, one end of which was dangling on the electric post and the other on the ground under the fallen banana plants.

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The barrio captain, Bueno saw the wire and warned people not to go near the wire in order to avoid injury. He also saw Baldomero, a laborer of the Alcala Electric Plant and notified him of the broken line. Baldomero told Bueno that he could not do it but he will look for the lineman to fix it. However, after the two left the place, a small boy named Saynes who lived across the road and who was only 3 years and 8 months old, wandered in the place, got in contact with the broken line wire, got electrocuted and died. It was only after the electrocution that the wire got fixed. The father of the child filed a complaint. Issue: Whether Umali, as owner and manager of Alcala Electric Plant, is liable for negligence. Held: YES. A series of negligence on the part of the Alcala Electric Plant‘s employees were determinative of their responsibility for the damage caused. First, it was apparent that there were tall banana plants that could have posed a serious threat to the lines constructed by the plant. They did not undertake the necessary precautions to have them removed. Second, realizing the danger that the storm could have brought on the lines, the employees of the plant did not cut off the power pending inspection of the lines to see if they were cut or damaged. Third, Baldomero, realizing the danger that the broken line posed, did not take the necessary precautions to prevent anyone from entering the area. Instead he left the premises because what was foremost in his mind was the repair of the line. The court cannot also ascribe to Umali‘s that it was the parent‘s negligence of allowing their child to wander around that constituted the proximate cause of the victim‘s death. However the court finds that the real proximate cause was the fallen live wire which posed a threat to life and property on that morning due to the series of negligence adverted to above committed by defendants' employees and which could have killed any other person who might by accident get into contact with it. Stated otherwise, even if the child was allowed to leave the house unattended due to the parents' negligence, he would not have died that morning where it not for the cut live wire he accidentally touched. Art. 2179 of the Civil Code provides that if the negligence of the plaintiff (parents of the victim in this case) was only contributory, the immediate and proximate cause of the injury being the defendants' lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded. This law may be availed of by the petitioner but does not exempt him from liability. Petitioner‘s liability for injury caused by his employees is defined in Article 2180. 12. Lucas v. Tuaño, G.R. No. 178763, April 21, 2009  See above Doctrine: Tuano‘s position, in sum, is that his glaucoma is the direct result of Dr. Tuaño‘s negligence in his improper administration of the drug Maxitrol. Clearly, the present controversy is a classic illustration of a medical negligence case against a physician based on the latter‘s professional negligence. In this type of suit, the patient or his heirs, in order to prevail, is required to prove by preponderance of evidence that the physician failed to exercise that degree of skill, care, and learning possessed by other persons in the same profession; and that as a proximate result of such failure, the patient or his heirs suffered damages. Just as with the elements of duty and breach of the same, in order to establish the proximate cause [of the injury] by a preponderance of the evidence in a medical malpractice action, the patient must similarly use expert testimony, because the question of whether the alleged professional negligence caused the patient‘s injury is generally one for specialized expert knowledge beyond the ken of the average layperson; using the specialized knowledge and training of his field, the expert‘s role is to present to the court a realistic assessment of the likelihood that the physician‘s alleged negligence caused the patient‘s injury. The deference of courts to the expert opinion of qualified physicians or surgeons stems from the former‘s realization that the latter possess unusual technical skills which laymen in most instances are incapable of intelligently evaluating; hence, the indispensability of expert testimonies. 13. Calalas v. Court of Appeals, G.R. No. 122039, May 31, 2000 Facts: At 10AM of August 23, 1989, private respondent Eliza Jujeurche G. Sunga, then a college freshman majoring in Physical Education at the Siliman University, took a passenger jeepney owned and operated by Vicente Calalas. As the jeepney was filled to capacity of about 24 passengers, Sunga was given by the conductor an "extension seat," a wooden stool at the back of the door at the rear end of the vehicle. On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a passenger off. As she was seated at the rear of the vehicle, Sunga gave way to the outgoing passenger. Just as she was doing so, an Isuzu truck driven by Iglecerio Verena and owned by Francisco Salva bumped the left rear portion of the jeepney. As a result, Sunga was injured (fracture, confinement, had to wear a cast for 3 months). On October 1989, Sunga filed a complaint for damages against Calalas, alleging violation of the contract of carriage by the former in failing to exercise the diligence required of him as a common carrier. Calalas, on the other hand, filed a third-party complaint against Francisco Salva, the owner of the Isuzu truck. Meanwhile, Calalas filed another civil case against Salva and Verana for quasi delict. In this case, the court held Salva and Verana jointly liable to Calalas. The lower court rendered judgment against Salva as third-party defendant and absolved 36

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Calalas of liability, holding that it was the driver of the Isuzu truck who was responsible for the accident. It took cognizance of Civil Case No. 3490 in absolving Calalas from liability. On appeal to the Court of Appeals, the CA reversed. Petitioner contends that the ruling in Civil Case No. 3490 that the negligence of Verena was the proximate cause of the accident negates his liability and that to rule otherwise would be to make the common carrier an insurer of the safety of its passengers. He contends that the bumping of the jeepney by the Isuzu truck was a caso fortuito. Petitioner further assails the award of moral damages to Sunga on the ground that it is not supported by evidence. Issue: Whether Calalas is liable to Sunga for breach of contract of carriage despite the ruling in the separate civil case or is the separate civil case (2176) binding on the present case (breach of contract of carriage) Held: CALALAS IS LIABLE. The argument that Sunga is bound by the ruling in Civil Case No. 3490 finding the driver and the owner of the truck liable for quasi-delict ignores the fact that she was never a party to that case and, therefore, the principle of res judicata does not apply. Nor are the issues in Civil Case No. 3490 and in the present case the same. The issue in Civil Case No. 3490 was whether Salva and his driver Verena were liable for quasi-delict for the damage caused to Calalas‘ jeepney. On the other hand, the issue in this case is whether Calalas is liable on his contract of carriage. The first, quasi-delict, also known as culpa aquiliana or culpa extra contractual, has as its source the negligence of the tortfeasor. The second, breach of contract or culpa contractual, is premised upon the negligence in the performance of a contractual obligation. Consequently, in quasi-delict, the negligence or fault should be clearly established because it is the basis of the action, whereas in breach of contract, the action can be prosecuted merely by proving the existence of the contract and the fact that the obligor failed to transport his passenger safely to his destination. In case of death or injuries to passengers, Art. 1756 CC provides that common carriers are presumed to have been at fault or to have acted negligently unless they prove that they observed extraordinary diligence as defined in Arts. 1733 and 1755 of the Code. This provision necessarily shifts to the common carrier the burden of proof. There is, thus, no basis for the contention that the ruling in Civil Case No. 3490, finding Salva and his driver Verena liable for the damage to petitioner‘s jeepney, should be binding on Sunga. It is immaterial that the proximate cause of the collision between the jeepney and the truck was the negligence of the truck driver. The doctrine of proximate cause is applicable only in actions for quasi-delict, not in actions involving breach of contract. The doctrine is a device for imputing liability to a person where there is no relation between him and another party. In such a case, the obligation is created by law itself. But, where there is a pre-existing contractual relation between the parties, it is the parties themselves who create the obligation, and the function of the law is merely to regulate the relation thus created. Insofar as contracts of carriage are concerned, some aspects regulated by the Civil Code are those respecting the diligence required of common carriers with regard to the safety of passengers as well as the presumption of negligence in cases of death or injury to passengers. In the case at bar, upon the happening of the accident, the presumption of negligence at once arose, and it became the duty of Calalas to prove that he had to observe extraordinary diligence in the care of his passengers. Now, did the driver of jeepney carry Sunga "safely as far as human care and foresight could provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances" as required by Art. 1755? We do not think so. Several factors militate against petitioner‘s contention. First, the jeepney was not properly parked, its rear portion being exposed about two meters from the broad shoulders of the highway, and facing the middle of the highway in a diagonal angle. This is a violation of the R.A. No. 4136, as amended, or the Land Transportation and Traffic Code, which provides: ―No person shall drive his motor vehicle in such a manner as to obstruct or impede the passage of any vehicle, nor, while discharging or taking on passengers or loading or unloading freight, obstruct the free passage of other vehicles on the highway.‖ Second, it is undisputed that the driver took in more passengers than the allowed seating capacity of the jeepney, a violation of §32(a) of the same law. It provides: ―No person operating any motor vehicle shall allow more passengers or more freight or cargo in his vehicle than its registered capacity.‖ The fact that Sunga was seated in an "extension seat" placed her in a peril greater than that to which the other passengers were exposed. Therefore, not only was petitioner unable to overcome the presumption of negligence imposed on him for the injury sustained by Sunga, but also, the evidence shows he was actually negligent in transporting passengers. We find it hard to give serious thought to Calalas‘ contention that Sunga‘s taking an "extension seat" amounted to an implied assumption of risk. It is akin to arguing that the injuries to the many victims of the tragedies in our seas should not be compensated merely because those passengers assumed a greater risk of drowning by boarding an overloaded ferry. As to the contention that the jeepney being bumped while it was improperly parked constitutes caso fortuito, the Court holds that it was not. A caso fortuito is an event which could not be foreseen, or which, though foreseen, was inevitable. This requires that the following requirements be present: (a) the cause of the breach is independent of the debtor‘s will; (b) the event is unforeseeable or unavoidable; (c) the event is such as to render it impossible for the debtor to fulfill his 37 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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obligation in a normal manner, and (d) the debtor did not take part in causing the injury to the creditor. Calalas should have foreseen the danger of parking his jeepney with its body protruding two meters into the highway. C.

Proof of Negligence

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Rules of Court o Rule 131, Sections 1, 2 and 3(d)

1. Ong v. Metropolitan Water District, 104 Phil. 397 (1958) Facts: Defendant owns and operates 3 recreational swimming pools to which people are invited and for which a fee of P0.50 for adults and P0.20 for children is charged. The main pool is between two small pools of oval shape known as the "Wading pool" and the "Beginners Pool." There are diving boards in the big pools and the depths of the water at different parts are indicated by appropriate marks. The care and supervision of the pools are entrusted to Simeon Chongco as chief, Armando Rule, a male nurse, and 6 lifeguards who had taken the life-saving course given by the Philippine Red Cross. Defendant has provided the pools with a ring buoy, toy roof, towing line, saving kit and a resuscitator. There is also a sanitary inspector who is in charge of a clinic. Defendant has also on display in a conspicuous place certain rules and regulations governing the use of the pools, one of which prohibits the swimming in the pool alone or without any attendant. Although defendant does not maintain a full-time physician in the swimming pool compound, it has however a nurse and a sanitary inspector ready to administer injections or operate the oxygen resuscitator if the need should arise. At about 1pm Dominador Ong, a 14-year old boy, and his brothers Ruben and Eusebio, went to defendant's swimming pools. This was not the first time that the 3 brothers had gone to said natatorium. After paying the requisite admission fee, they immediately went to one of the small pools where the water was shallow. At about 4:35 p.m., Dominador told his brothers that he was going to the locker room in an adjoining building to drink a bottle of coke. Upon hearing this, Ruben and Eusebio went to the bigger pool leaving Dominador in the small pool and so they did not see the latter when he left the pool to get a bottle of coke. There were 2 lifeguards on duty in the pool compound. Between 4:40 to 4:45 p.m., some boys who were in the pool area informed a bathe that somebody was swimming under water for quite a long time. Another boy informed lifeguard Manuel Abaño of the same happening and Abaño immediately jumped into the big swimming pool and retrieved the apparently lifeless body of Dominador from the bottom . Abaño immediately applied manual artificial respiration . The male nurse Armando Rule came to render assistance, followed by sanitary inspector who after being called by boarded a jeep carrying with him the resuscitator and a medicine kit, and upon arriving he injected the boy with camphorated oil. After the injection, Vicente left on a jeep in order to fetch Dr . Ayuyao from the University of the Philippines . Abaño continued the artificial manual respiration, and when this failed to revive him, they applied the resuscitator until the two oxygen tanks were exhausted. Dr. Ayuyao arrived with another resuscitator, but the same became of no use because he found the boy already dead. The doctor ordered that the body be taken to the clinic. Upon autopsy, it was found that the death was due to asphyxia by submersion in water. Issue: Whether the death of minor Dominador can be attributed to the negligence of defendant and/or its employees so as to entitle plaintiffs to recover damages. Held: NO. Owners of resorts to which people generally are expressly or by implication invited are legally bound to exercise ordinary care and prudence in the management and maintenance of such resorts, to the end of making them reasonably safe for visitors. Although the proprietor of a natatorium is liable for injuries to a patron, resulting from lack of ordinary care in providing for his safety, without the fault of the patron, he is not, however, in any sense deemed to be the insurer of the safety of patrons. The death of a patron within his premises does not cast upon him the burden of excusing himself from any presumption of negligence. The present action is one for damages founded on culpable negligence. The person claiming damages has the burden of proving that the damage is caused by the fault or negligence of the person from whom the damage is claimed, or of one of his employees. Appellants had striven to prove that appellee failed to take the necessary precaution to protect the lives of its patrons by not placing at the swimming pools efficient and competent employees who may render help at a moment's notice. They ascribed such negligence to appellee because the lifeguard it had on the occasion minor Ong was drowning was not available or was attending to something else with the result that his help came late. Appellants tried to prove through the testimony of Andres Hagad , Jr. and Ruben Ong that when Eusebio Ong and Hagad , Jr. detected that there was a drowning person in the bottom of the big swimming pool and shouted to the lifeguard for help , lifeguard Manuel Abaño did not immediately respond to the alarm and it was only upon the third call that he threw away the magazine he was reading and allowed three or four minutes to elapse before retrieving the body from the water . This negligence of Abaño , they contend, is attributable to appellee. 38

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Torts & Damages 2013

Atty. Jess Lopez

The claim of these two witnesses was vehemently denied by lifeguard Abaño . The 2 witnesses admitted in the investigation that they narrated in their statements everything they knew of the accident, but, as found by the trial, nowhere in said statements do they state that the lifeguard was chatting with the security guard at the gate of the swimming pool or was reading a comic magazine when the alarm was given for which reason he failed to immediately respond to the alarm. What Ruben Ong particularly emphasized therein was that after the lifeguard heard the shouts for help, the latter immediately dived into the pool to retrieve the person under water . The testimony of Ruben Ong and Andres Hagad , Jr. as to the alleged failure of the lifeguard Abaño to immediately respond to their call may therefore be disregarded because they are belied by their written statements. There is sufficient evidence to show that appellee has taken all necessary precautions to avoid danger to the lives of its patrons or prevent accident which may cause their death. The swimming pools of appellee are provided with a ring buoy, toy roof, towing line, oxygen resuscitator and a first aid medicine kit. There is on display in a conspicuous place within the area certain rules and regulations governing the use of the pools. The bottom of the pools is painted with black colors so as to insure clear visibility. Appellee employs six lifeguards who are all trained as they had taken a course for that purpose and were issued certificates of proficiency. There is a male nurse and a sanitary inspector with a clinic provided with oxygen resuscitator. And there are security guards who are available always in case of emergency. There are two guards at a time on duty to look after the safety of the bathers. When the body of Ong was retrieved from the bottom of the pool, the employees of appellee did everything possible to bring him back to life. Appellants now switch to the theory that even if it be assumed that the deceased is partly to be blamed for the unfortunate incident, still appellee may be held liable under the doctrine of "last clear chance" for the reason that, having the last opportunity to save the victim, it failed to do so. We do not see how this doctrine may apply considering that the record does not show how minor Ong came into the big swimming pool. The only thing the record discloses is that Ong informed his elder brothers that he was going to the locker room to drink a bottle of coke but that from that time on nobody knew what happened. The doctrine of last clear chance simply means a person who has the last clear chance or opportunity of avoiding an accident, notwithstanding the negligent acts of his opponent or the negligence of a third person which is imputed to his opponent, is considered in law solely responsible for the consequences of the accident. Since it is not known how minor Ong came into the big swimming pool and it being apparent that he went there without any companion in violation of one of the regulations of appellee and it appearing that lifeguard responded to the call for help as soon as his attention was called to it and immediately after retrieving the body all efforts at the disposal of appellee had been put into play in order to bring him back to life, there is no room for the application of the doctrine now invoked by appellants to impute liability to appellee. The last clear chance doctrine can NEVER apply where the party charged is required to act instantaneously, and if the injury cannot be avoided by the application of all means at hand after the peril is or should have been discovered; at least in cases in which any previous negligence of the party charged cannot be said to have contributed to the injury. Further, expert evidence showed that Dominador Ong might have dived where the water was only 5.5 feet deep, and in so doing he might have hit or bumped his forehead against the bottom of the pool, as a consequence of which he was stunned, and which to his drowning. As a boy scout he must have received instructions in swimming. He knew, or should have known that it was dangerous for him to dive in that part of the pool. D.

Presumption of Negligence (i)

Res ipsa loquitur This applies where, (1) the accident was of such character as to warrant an inference that it would not have happened except for the defendant‘s negligence; (2) the accident must have been caused by an agency or instrumentality within the exclusive management or control of the person charged with the negligence complained of; and (3) the accident must not have been due to any voluntary action or contribution on the part of the person injured.

1. Africa v. Caltex, 16 SCRA 448 (1966) Facts: In the afternoon of March 18, 1948 a fire broke out at the Caltex service station. It started while gasoline was being hosed from a tank truck (driven by Flores) into the underground storage, right at the opening of the receiving tank where the nozzle of the hose was inserted. The fire spread to and burned several neighboring houses, including the personal properties and effects inside them. Their owners, among them petitioners here, sued Caltex Philippines and Mateo Boquiren, the first as alleged owner of the station and the second as its agent in charge of operation. Issue: Whether or not, without proof as to the cause and origin of the fire, the doctrine of res ipsa loquitur should apply so as to presume negligence on the part of Caltex.

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Torts & Damages 2013

Atty. Jess Lopez

Held: YES. In the case of Espiritu vs. Philippine Power and Development Co., the defendant therein disclaimed liability on the ground that the plaintiff had failed to show any specific act of negligence. The CA overruled the defense under the doctrine of res ipsa loquitur. The court said: In case of noncontractual negligence, or culpa aquiliana, the burden of proof is on the plaintiff to establish that the proximate cause of his injury was the negligence of the defendant. It is also a recognized principle that ‗where the thing which caused injury, without fault of the injured person, is under the exclusive control of the defendant and the injury is such as in the ordinary course of things does not occur if he having such control use proper care, it affords reasonable evidence, in the absence of the explanation, that the injury arose from defendant‘s want of care.‘ And the burden of evidence is shifted to him to establish that he has observed due care and diligence. This rule is known by the name of res ipsa loquitur (the transaction speaks for itself). Gasoline is a highly combustible material, in the storage and sale of which extreme care must be taken. On the other hand, fire is not considered a fortuitous event, as it arises almost invariably from some act of man. The gasoline station, with all its appliances, equipment and employees, was under the control of appellees. A fire occurred therein and spread to and burned the neighboring houses. The persons who knew or could have known how the fire started were appellees and their employees, but they gave no explanation thereof whatsoever. It is a fair and reasonable inference that the incident happened because of want of care. In the report submitted by Captain Mariano of the Manila Police: ―The location is within a very busy business district near the Obrero Market, a railroad crossing and very thickly populated neighborhood where a great number of people mill around throughout the day until late at night. The passersby, those waiting for buses or transportation, those waiting to cross the streets and others loafing around have to occupy not only the sidewalks but also portion of the gasoline station itself. Whatever be the activities of these people smoking or lighting a cigarette cannot be excluded and this constitute a secondary hazard to its operation which in turn endangers the entire neighborhood to conflagration. This gasoline service station is also used by its operator as a garage and repair shop for his fleet of taxicabs numbering ten or more, adding another risk to the possible outbreak of fire at this already small but crowded gasoline station.‖ The foregoing report, having been submitted by a police officer in the performance of his duties on the basis of his own personal observation of the facts reported, may properly be considered as an exception to the hearsay rule. These facts, descriptive of the location and objective circumstances surrounding the operation of the gasoline station in question, strengthen the presumption of negligence under the doctrine of res ipsa loquitur, since on their face they called for more stringent measures of caution than those which would satisfy the standard of due diligence under ordinary circumstances. Flores was the driver of the gasoline tank wagon who, alone and without assistance, was transferring the contents thereof into the underground storage when the fire broke out. He said: ―Before loading the underground tank there were no people, but while the loading was going on, there were people who went to drink coca-cola at the coca-cola stand which is about a meter from the underground tank.‖ He added that when the tank was almost filled he went to the tank truck to close the valve, and while he had his back turned to the ―manhole‖ he heard someone shout ―fire.‖ Even then the fire possibly would not have spread to the neighboring houses were it not for another negligent omission on the part of defendants, namely, their failure to provide a concrete wall high enough to prevent the flames from leaping over it. 2. FF Cruz and Co., Inc., v. Court of Appeals, G.R. No. 52732, August 29, 1988 Facts: FF Cruz owned a furniture manufacturing shop in Caloocan city, adjacent to the residence of the Mable Family. Sometime in 1971, Gregorio Mable approached Eric Cruz, FF Cruz plant manager, to request for the construction of a firewall. This was repeated several times, but was left unheeded. In 1974, fire broke out in FF Cruz‘s shop. Efforts to put it out were futile, and both the shop and house were razed. The cause of the fire was never discovered. The Mables collected insurance, and then instituted an action against petitioner. The CFI held in the Mable‘s favor. The CA affirmed. A petition for review to the Supreme Court was denied; hence, this motion for reconsideration. Issue: Whether or not res ipsa loquitur is applicable to hold FF Cruz liable. Held: YES. The doctrine of res ipsa loquitur, whose application to the instant case petitioner objects to, may be stated as follows: ―Where the thing which caused the injury complained of is shown to be under the management of the defendant or his servants and the accident is such as in the ordinary course of things does not happen if those who 40 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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have its management or control use proper care, it affords reasonable evidence, in the absence of explanation by the defendant, that the accident arose from want of care.‖ The facts of the case likewise call for the application of the doctrine, considering that in the normal course of operations of a furniture manufacturing shop, combustible material such as wood chips, sawdust, paint, varnish and fuel and lubricants for machinery may be found thereon. It must also be noted that negligence or want of care on the part of FF Cruz or its employees was not merely presumed. The CA found that FF Cruz failed to construct a firewall between its shop and the Mable residence as required by a city ordinance; that the fire could have been caused by a heated motor or a lit cigarette; that gasoline and alcohol were used and stored in the shop; and that workers sometimes smoked inside the shop. Even without applying the doctrine of res ipsa loquitur, FF Cruz‘s failure to construct a firewall in accordance with city ordinances would suffice to support a finding of negligence. In the instant case, with more reason should FF Cruz be found guilty of negligence since it had failed to construct a firewall between its property and the Mable‘s residence which sufficiently complies with the pertinent city ordinances. The failure to comply with an ordinance providing for safety regulations had been ruled by the Court as an act of negligence. The CA, therefore, had more than adequate basis to find FF Cruz liable for the loss sustained by the Mable Family. While this Court finds that FF Cruz is liable for damages as found by the Court of Appeals, the fact that the Mable Family have been indemnified by their insurer in the amount of P35,000.00 for the damage caused to their house and its contents has not escaped the attention of the Court. Hence, the Court holds that in accordance with Article 2207 of the Civil Code the amount of P35,000.00 should be deducted from the amount awarded as damages. 3. Cebu Shipyard and Engineering Works, Inc., v. William Lines, Inc., 306 SCRA 762 (1999) Facts: William Lines is the owner of M/V Manila City, a luxury passenger-cargo vessel insured with Prudential for P45M for hull and machinery. The Hull Policy included an Additional Perils Clause covering loss of or damage to the vessel through the negligence of, among others, ship repairmen. On February 5, 1991, William Lines brought M/V Manila City to the Cebu Shipyard for annual dry-docking and repair. An arrival conference was held between representatives of William Lines and CSEW to discuss the work to be undertaken on the vessel. The contracts were denominated as ―Work Orders.‖ Pertinent stipulations therein are as follows: 10. Contractor shall replace at its own work and at its own cost any work or material which can be shown to be defective and which is communicated in writing within one (1) month of redelivery of the vessel 11. Save as provided in Clause 10, the Contractor shall not be under any liability to the Customer either in contract or for delict or quasi-delict or otherwise except for negligence and such liability shall itself be subject to the following overriding limitations and exceptions, namely to the sum of P1M only. 20. The insurance on the vessel should be maintained by the customer and/or owner of the vessel during the period the contract is in effect. On February 16, 1991, after subject vessel was transferred to the docking quay, it caught fire and sank the following day, resulting to its eventual total loss. William Lines filed a complaint for damages against CSEW, alleging that the fire which broke out in M/V Manila City was caused by CSEW‘s negligence and lack of care. The Complaint was amended impleading Prudential as co-plaintiff, after the latter had paid William Lines the value of the hull and machinery insurance on the M/V Manila City. Prudential was subrogated to the claim of P45M representing the value of the said insurance it paid. Trial court ruled in favor of William Lines, and ordered CSEW to pay Prudential and William Lines. During the pendency of the appeal, CSEW and William Lines had an amicable settlement. On the basis of which, the CA ordered a partial dismissal of the case insofar as CSEW and William Lines are concerned. CA affirmed the appealed decision. MR was denied, hence this petition. According to CSEW, while in the process of repairing the steel plate, smoke was just noticed gathering on the ceiling of the passageway along the crew cabins but did not see any fire as the crew cabins on either side of the passageway were locked. When M/V Manila City capsized, steel and angle bars were noticed to have been newly welded along the port side of the hull of the vessel, at the level of the crew cabins. According to CSEW, William Lines did not previously apply for a permit to do hotworks on the said portion of the ship as it should have done pursuant to its work order with CSEW. Insurer Prudential on the other hand, asserts that the fire was due to the negligence of the CSEW workers who were cropping out steel plates on Tank Top No. 12 using acetylene, oxygen and welding torch as seen by the Chief Mate 41 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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of M/V Manila City. The rubber insulation wire coming out of the air-conditioning unit was already burning, prompting him to scold the workers. Witnesses also saw smoke coming from Tank No. 12. Crew members were assembled to put out the fire. When it was too hot for them to stay on board and seeing that the fire cannot be controlled, the vessel‘s crew members were forced to withdraw. CSEW claims that contrary to what the CA found, CSEW maintains that it did not have exclusive control over the M/V Manila City and the trial court and the Court of Appeals erred in applying the doctrine of res ipsa loquitur. They claim that they did not have management and control over M/V Manila City. William Lines retained control over the vessel as the ship captain remained in command and the ship‘s crew were still present. Also, while it imposed certain rules and regulations on William Lines, it was in the exercise of due diligence and not an indication of CSEW‘s exclusive control over subject vessel. Issue: Whether or not CSEW was correctly held liable under the res ipsa loquitur. Held: YES. The finding that M/V Manila City caught fire and sank by reason of the negligence of the workers of CSEW, when the said vessel was under the exclusive custody and control of CSEW is accordingly upheld. Under the circumstances of the case, the doctrine of res ipsa loquitur applies. For the doctrine to apply to a given situation, the following conditions must concur: (1) the accident was of a kind which does not ordinarily occur unless someone is negligent; and (2) that the instrumentality or agency which caused the injury was under the exclusive control of the person charged with negligence. The facts and evidence on record reveal the concurrence of said conditions in the case under scrutiny. First, the fire that occurred and consumed M/V Manila City would not have happened in the ordinary course of things if reasonable care and diligence had been exercised. In other words, some negligence must have occurred. Second, the agency charged with negligence is CSEW which had control over subject vessel when it was docked for annual repairs. Even without applying res ipsa loquitur, in light of the direct evidence on record, the ineluctable conclusion is that CSEW was negligent and consequently liable for damages to the Williams Lines. The trial court found direct evidence to prove that the workers and/or employees of CSEW were remiss in their duty of exercising due diligence in the care of subject vessel. The direct evidence substantiates the conclusion that CSEW was really negligent. Neither is there tenability in the contention of CSEW that the CA erroneously ruled on the inadmissibility of the fire experts‘ testimonies CSEW introduced on the probable cause and origin of the fire. Courts are not bound by the testimonies of expert witnesses. Although they may have probative value, reception in evidence of expert testimonies is within the discretion of the court. If from the facts and evidence on record, a conclusion is readily ascertainable, there is no need for the judge to resort to expert opinion evidence. In the case under consideration, the testimonies of the fire experts were not the only available evidence on the probable cause and origin of the fire. There were witnesses who were actually on board the vessel when the fire occurred. Between the testimonies of the fire experts who merely based their findings and opinions on interviews and the testimonies of those present during the fire, the latter are of more probative value. Note: CSEW claims that their Work Order contains Clause 11 which limits their liability to P1M only. However, the Court did not uphold the validity of such provision because to allow CSEW to limit its liability to P1M notwithstanding the fact that the total loss suffered by the assured and paid for by Prudential amounted to P45M would sanction the exercise of a degree of diligence short of what is ordinarily required. 4. DM Consunji v. Court of Appeals, G.R. No. 137873, April 20, 2001 Facts: Jose Juego, construction worker of D.M. Consunji, Inc., fell 14 floors from the Renaissance Tower, Pasig City to his death. He pronounced DOA by the attending physician of Rizal Medical Center. Juego was crushed to death when the platform they were standing/sitting on fell. Investigation disclosed that ―at the given time, date ,and place, while Juego with 2 other workers were doing their work as carpenters at the elevator core of the 14th floor on board a platform made of channel beam (steel) with pinulid plywood flooring and cable wires attached to its 4 corners and hooked at the 5 ton chain block, when suddenly, the bolt or pin which was merely inserted to connect the chain block with the platform, got loose x x x causing the whole platform assembly and the victim to fall thereby crushing the victim to death, save his two (2) companions who luckily jumped out for safety.‖ According to the report, the falling of the platform was due to the removal or loosening of the pin, which was merely inserted, to the connecting points of the chain block and platform but without a safety lock. His widow, Maria, filed complaint for damages against the employer, D.M. Consunji. RTC rendered a decision in favor of the widow. CA affirmed. Issue: Whether or not res ipsa loquitur is applicable to hold DM Consunji liable for negligence.

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Atty. Jess Lopez

Held: YES. What DM Consunji takes exception to is PO3 Villanueva‘s testimony that the cause of the fall of the platform was the loosening of the bolt from the chain block. It is claimed that such portion of the testimony is mere opinion. Subject to certain exceptions, the opinion of a witness is generally not admissible. The company‘s contention, however, loses relevance in the face of the application of res ipsa loquitur. The effect of the doctrine is to warrant a presumption or inference that the mere fall of the elevator was a result of the person having charge of the instrumentality was negligent. As a rule of evidence, the doctrine is peculiar to the law of negligence which recognizes that prima facie negligence may be established without direct proof and furnishes a substitute for specific proof of negligence. While negligence is not ordinarily inferred or presumed, and while the mere happening of an accident or injury will not generally give rise to an inference or presumption that it was due to negligence on defendant‘s part, under res ipsa loquitur, which means, literally, the thing or transaction speaks for itself, the facts or circumstances accompanying an injury may be such as to raise a presumption, or at least permit an inference of negligence on the part of the defendant, or some other person who is charged with negligence. Where it is shown that the thing or instrumentality which caused the injury complained of was under the control or management of the defendant, and that the occurrence resulting in the injury was such as in the ordinary course of things would not happen if those who had its control or management used proper care, there is sufficient evidence, or, as sometimes stated, reasonable evidence, in the absence of explanation by the defendant, that the injury arose from or was caused by the defendant‘s want of care. One of the theoretical bases for the doctrine is its necessity, i.e., that necessary evidence is absent or not available. The doctrine is based in part upon 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 and that the plaintiff has no such knowledge, and therefore is compelled to allege negligence in general terms and to rely upon the proof of the happening of the accident in order to establish negligence. The inference which the doctrine permits is grounded upon the fact that the chief evidence of the true cause, whether culpable or innocent, is practically accessible to the defendant but inaccessible to the injured person. It has been said that the doctrine furnishes a bridge by which a plaintiff, without knowledge of the cause, reaches over to defendant who knows or should know the cause, for any explanation of care exercised by the defendant in respect of the matter of which the plaintiff complains. The doctrine, another court has said, is a rule of necessity, in that it proceeds on the theory that under the peculiar circumstances in which the doctrine is applicable, it is within the power of the defendant to show that there was no negligence on his part, and direct proof of defendant‘s negligence is beyond plaintiffs power. Another requirement for the res ipsa loquitur doctrine to apply is that it must appear that the injured party had no knowledge or means of knowledge as to the cause of the accident, or that the party to be charged with negligence had superior knowledge or opportunity for explanation of the accident. Res ipsa loquitur is a rule of necessity and it applies where evidence is absent or not readily available, provided the following requisites are present: (1) the accident was of a kind which does not ordinarily occur unless someone is negligent; (2) the instrumentality or agency which caused the injury was under the exclusive control of the person charged with negligence; and (3) the injury suffered must not have been due to any voluntary action or contribution on the part of the person injured. All the requisites are present in the case at bar. No worker is going to fall from the floor of a building to the basement while performing work in a construction site unless someone is negligent. Thus, the first requisite for the application of the rule is present. As explained earlier, the construction site with all its paraphernalia and human resources that likely caused the injury is under the exclusive control and management of appellant. Thus, the second requisite is also present. No contributory negligence was attributed to the appellee‘s deceased husband. Thus, the last requisite is also present. DM Consunji does not dispute the existence of the requisites for the application of res ipsa loquitur, but argues that the presumption or inference that it was negligent did not arise since it ―proved that it exercised due care to avoid the accident which befell respondent‘s husband. The company apparently misapprehends the procedural effect of the doctrine. Defendant‘s negligence is presumed or inferred when the plaintiff establishes the requisites for the application of res ipsa loquitur. Once the plaintiff makes out a prima facie case of all the elements, the burden then shifts to defendant to explain. The presumption or inference may be rebutted or overcome by other evidence and, under appropriate circumstances a disputable presumption, such as that of due care or innocence, may outweigh the inference. DM Consunji cites the sworn statement of its leadman Ferdinand Fabro executed before the police investigator as evidence of its due care. According to Fabro‘s sworn statement, the company enacted rules and regulations for the safety and security of its workers. Moreover, the leadman and the bodegero inspect the chain block before allowing its use.

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Atty. Jess Lopez

It is ironic that the company relies on Fabro‘s sworn statement as proof of its due care but, in arguing that private respondent failed to prove negligence on the part of DM Consunji‘s employees, also assails the same statement for being hearsay. Fabro‘s sworn statement is hearsay and inadmissible. Affidavits are inadmissible as evidence under the hearsay rule, unless the affiant is placed on the witness stand to testify thereon. The inadmissibility of this sort of evidence is based not only on the lack of opportunity on the part of the adverse party to cross-examine the affiant, but also on the commonly known fact that, generally, an affidavit is not prepared by the affiant himself but by another who uses his own language in writing the affiant‘s statements which may either be omitted or misunderstood by the one writing them. DM Consunji, therefore, cannot use said statement as proof of its due care. The company does not cite any other evidence to rebut the inference or presumption of negligence. 5. National Power Corporation v. Court of Appeals, G.R. No. 124378, March 8, 2005 Facts: The Office of the President issued a memorandum entitled ―Prescribing Measures to Preserve the Lake Lanao Watershed, To Enforce the Reservation of Areas Around the Lake Below Seven Hundred And Two Meters Elevation, and for Other Purposes.‖ It instructed the NPC to build the Agus Regulation Dam at the mouth of Agus River in Lanao del Sur, at a normal maximum water level of Lake Lanao at 702 meters elevation. Petitioners constructed the said dam in 1978. The Abdullahs (respondents) were owners of fishponds sitting along the Lake Lanao shore. They spent substantial amounts to construct, maintain and stock their respective fishponds with fish fingerlings. However in 1986, all these were washed away when the water level of the lake escalated and the lake shore was flooded. They blamed the inundation on the Agus Regulation Dam, alleging that NPC failed to increase the outflow of water even as the water level of the lake rose past 702 meters due to heavy rains. They wrote letters to the NPC which was ignored, alleging that the water never rose beyond 702 meters. They were thus constrained to file a complaint for damages, alleging that the negligence and inexperience of NPC‘s employees assigned to operate the Agus Regulation Dam were the proximate causes of the damage caused to their properties and livelihood. The trial court and the CA ruled in favor of the Abdullahs. Hence this appeal by NPC. Issue: Whether or not NPC is liable for the damages endured by the Abdullahs Held: YES. In the case at bar, both the CA and the trial court uniformly found that it was such negligence on the part of NPC which directly caused the damage to the fishponds of private respondents. The fishponds of the Abdullahs were inundated and damaged when the water level escalated in October 1986. When the water level rises due to the rainy season, the NPC ought to release more water to the Agus River to avoid flooding and prevent the water from going over the maximum level. And yet, NPC failed to do so, resulting in the inundation of the nearby estates. The trial court and the CA held that the data contained in NPC‘s records collapse in the face of the actual state of the affected areas. During the ocular inspection conducted by the lower court where representatives of both parties were present, it was established that in the subject areas, the benchmarks as pointed out by the NPC representative, could not be seen nor reached because they were totally covered with water. This fact, by itself, constitutes an unyielding proof that the water level did rise above the benchmarks and inundated the properties in the area. In the absence of any clear explanation on what other factors could have explained the flooding in the neighboring properties of the dam, it is fair to reasonably infer that the incident happened because of want of care on the part of NPC to maintain the water level of the dam within the benchmarks at the maximum normal lake elevation of 702 meters. An application of the doctrine of res ipsa loquitur, the thing speaks for itself, comes to fore. Where the thing which causes injury is shown to be under the management of the defendant, and the accident is such as in the ordinary course of things does not happen if those who have the management use proper care, it affords reasonable evidence, in the absence of an explanation by the defendant, that the accident arose from want of care. Additionally, despite the clear mandate of Memorandum Order No. 398, it was only after many years from the time the dam was built that NPC installed said benchmarks. At that time, many farms and houses were already swamped and many fishponds, including those of the Abdullahs, damaged. 6. Perla Compania de Seguros, Inc., v. Spouses Sarangaya, G.R. No. 147746, October 25, 2005 Facts: Sps Sarangaya constructed and own a building in Isabela known as the ―Super A Building.‖ It was a 1-storey commercial building subdivided into 3 doors. Each of which was leased out. The 2-storey residence of the Spouses was behind said building. In 1988, Perla Inc., through its branch manager Pascual, leased the first door of the Super A Building. Perla further subdivided the space into 2 wherein one part was used as an office while the other side was used as a garage for a company-provided vehicle (Ford Cortina, 14 years old) used in covering different towns within his area of supervision. 44 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Pascual left for Pampanga without bringing the car. Three days later, he returned. Upon checking his schedule, he decided to ―warm-up‖ the car. When he switched on the ignition key, the engine made an odd sound and did not start. He did it again but to no avail. He then saw a small flame coming out of the engine. Startled, he turned it off, alighted, and started to push it out of the garage. Suddenly, fire spewed out of its rear compartment and engulfed the whole garage. Pascual was trapped inside and suffered burns on his face, legs, and arms. Meanwhile, the Spouses were watching TV when they heard 2 explosions. The smell of gasoline permeated the air and, in no time, fire spread inside their house, destroying all their belongings. According to the city fire marshall, the incident was accidental. His report also disclosed that Perla had no fire permit as required by law. Based on this report, Spouses filed a criminal complaint for Reckless Imprudence Resulting to Damage to Property against Pascual but was eventually withdrawn by the prosecutor. Thereafter, complaint for damages based on quasi-delict was filed against Perla alleging that Pascual acted with gross negligence while Perla lacked the diligence in the selection and supervision of its employee. During trial Spouses presented a witness testifying that Pascual was seen buying gasoline and placed the container in the rear compartment of the car. In his defense, Pascual claims fortuitous event. Trial court declared Perla solidarily liable with Pascual and that despite the failure to prove the precise cause of the fire, Pascual was deemed negligent via res ipsa loquitur. CA affirmed. Issue: Whether Perla is liable for the alleged negligence of its employee (Pascual) based on res ipsa loquitur. Held: YES. Res ipsa loquitur is a Latin phrase which literally means ―the thing or the transaction speaks for itself.‖ It relates to the fact of an injury that sets out an inference to the cause thereof or establishes the plaintiff‘s prima facie case. The doctrine rests on inference and not on presumption. The facts of the occurrence warrant the supposition of negligence and they furnish circumstantial evidence of negligence when direct evidence is lacking. The doctrine is based on the theory that the defendant either knows the cause of the accident or has the best opportunity of ascertaining it and the plaintiff, having no knowledge thereof, is compelled to allege negligence in general terms. In such instance, the plaintiff relies on proof of the happening of the accident alone to establish negligence. It provides a means by which a plaintiff can pin liability on a defendant who, if innocent, should be able to explain the care he exercised to prevent the incident complained of. Thus, it is the defendant‘s responsibility to show that there was no negligence on his part. To sustain the allegation of negligence based on the doctrine of res ipsa loquitur, the following requisites must concur: (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. Under the FIRST, ―ordinary‖ refers to the usual course of events. Flames spewing out of a car engine, when it is switched on, is obviously not a normal event. Neither does an explosion usually occur when a car engine is revved. Hence, in this case, without any direct evidence as to the cause of the accident, the doctrine of res ipsa loquitur comes into play and, from it, we draw the inference that based on the evidence at hand, someone was in fact negligent and responsible for the accident. The fact that Pascual, as the caretaker of the car, failed to submit any proof that he had it periodically checked revealed his negligence. A prudent man should have known that a 14-year-old car, constantly used in provincial trips, was definitely prone to damage and other defects. Under the SECOND, where the circumstances which caused the accident are shown to have been under the management or control of a certain person and, in the normal course of events, the incident would not have happened had that person used proper care, the inference is that it occurred because of lack of such care. The car where the fire originated was under the control of Pascual. Being its caretaker, he alone had the responsibility to maintain it and ensure its proper functioning. No other person, not even the respondents, was charged with that obligation except him. He failed to overcome the burden to prove that he observed all that was necessary to prevent the accident from happening. Under the THIRD, there is nothing in the records to show that respondents contributed to the incident. They had no access to the car and had no responsibility regarding its maintenance even if it was parked in a building they owned. The exempting circumstance of caso fortuito may be availed only when: (a) the cause of the unforeseen and unexpected occurrence was independent of the human will; (b) it was impossible to foresee the event which constituted the caso fortuito or, if it could be foreseen, it was impossible to avoid; (c) the occurrence must be such as to render it impossible to perform an obligation in a normal manner and (d) the person tasked to perform the obligation must not have participated in any course of conduct that aggravated the accident. While the Perla does not appear to have erred in considering Pascual for his position, its lack of supervision over him made it jointly and solidarily liable for the fire.

45

7. Child Learning Center, Inc., v. Tagorio, G.R. No. 150920, November 25, 2005 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Facts: During the school year 1990-91, Timothy was a Grade 4 student at Marymount School, an academic institution operated and maintained by Child Learning Center, Inc. (CLC). In the afternoon of March 5, 1991, Timothy entered the boy‘s comfort room at the 3F of the Marymount building to answer the call of nature. He, however, found himself locked inside and unable to get out. Timothy started to panic and so he banged and kicked the door and yelled several times for help. When no help arrived he decided to open the window to call for help. In the process of opening the window, Timothy went right through and fell down 3 stories. Timothy was hospitalized and given medical treatment for serious multiple physical injuries. A tort case under Article 2176 was filed by the parents against the CLC, the members of its Board of Directors (Spouses Edgardo and Sylvia Limon, et al). Tagario contends that CLC failed to provide precautionary measures to avoid harm and injury to its students in two instances: (1) failure to fix a defective door knob despite having been notified of the problem; and (2) failure to install safety grills on the window where Timothy fell from. In its defense, CLC claimed that: (1) the door was not defective, (2) the fall was due to the kid‘s own negligence and (3) it exercised the diligence of a good father of a family. The RTC and CA held CLC liable solidarily with the Limon spouses (since they were the ones managing the school). Issue: Whether CLC and Spouses Limon should be held liable for Tagorio‘s injuries. Held: YES to CLC but NOT TO LIMON. CLC claims that no direct evidence was presented to prove that the door knob was indeed defective on the date in question. However, first, both the RTC and the CA had a factual finding that the lock of the door was defective. Second, the fact, however, that Timothy fell out through the window shows that the door could not be opened from the inside. That sufficiently points to the fact that something was wrong with the door, if not the door knob, under the principle of res ipsa loquitor. The doctrine applies where (1) the accident was of such character as to warrant an inference that it would not have happened except for the defendant‘s negligence; (2) the accident must have been caused by an agency or instrumentality within the exclusive management or control of the person charged with the negligence complained of; and (3) the accident must not have been due to any voluntary action or contribution on the part of the person injured. CLC is clearly answerable for failure to see to it that the doors of their school toilets are at all times in working condition. The fact that a student had to go through the window, instead of the door, shows that something was wrong with the door. As to the absence of grills on the window, CLC contended that there was no such requirement under the Building Code. Nevertheless, the fact is that such window, as CLC themselves point out, was approximately 1.5 meters from the floor, so that it was within reach of a student who finds the regular exit, the door, not functioning. CLC, with the due diligence of a good father of the family, should have anticipated that a student, locked in the toilet by a nonworking door, would attempt to use the window to call for help or even to get out. Considering all the circumstances, therefore, there is sufficient basis to sustain a finding of liability on CLC‘s part. Our pronouncement that Timothy climbed out of the window because he could not get out using the door, negates CLC‘s other contention that the proximate cause of the accident was Timothy‘s own negligence. The injuries he sustained from the fall were the product of a natural and continuous sequence, unbroken by any intervening cause, that originated from CLC‘s own negligence. CLC‘s argument that it exercised the due diligence of a good father of a family in the selection and supervision of its employees is not decisive. Due diligence in the selection and supervision of employees is applicable where the employer is being held responsible for the acts or omissions of others under Article 2180. In this case, CLC‘s liability is under Art. 2176, premised on the fact of its own negligence in not ensuring that all its doors are properly maintained.

8. Capili v. Spouses Cardaña, G.R. No. 157906, November 2, 2006 Facts: Cardaña, a grade 6 student, was walking along the perimeter fence of the San Roque Elementary School when a branch of a caimito tree located within the school premises fell on her, causing her instantaneous death. Her parents filed a case for damages. Cardana allege that as early as December 15, 1992, a resident of the barangay, Lerios, reported on the possible danger the tree posed to passersby. Also, because of Capili‘s (principal) gross negligence and lack of foresight caused the death of their daughter. Capili denied the accusation and said that at that time Lerios had only offered to buy the tree. Also, she denied knowing that the tree was dead and rotting. She presented witnesses who attested that she had brought up the offer of Lerios to the other teachers during a meeting and assigned Remedios Palaña to negotiate the sale. Issue: Whether , as principal, Capili was negligent and liable for the death of Jasmin Cardaña . Held: YES. Capili asserts that she was not negligent about the disposal of the tree since she had assigned her next-in-rank, Palaña, to see to its disposal. Despite her physical inspection of the school grounds, she did not observe any indication that the tree was already rotten nor did any of her 15 teachers inform her that the tree was already rotten. 46 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Respondents insist that petitioner knew that the tree was dead and rotting, yet, she did not exercise reasonable care and caution which an ordinary prudent person would have done in the same situation. A negligent act is one from which an ordinary prudent person in the actor‘s position, in the same or similar circumstances, would foresee such an appreciable risk of harm to others as to cause him not to do the act or to do it in a more careful manner. The probability that the branches of a dead and rotting tree could fall and harm someone is clearly a danger that is foreseeable. As the school principal, Capili was tasked to see to the maintenance of the school grounds and safety of the children within the school and its premises. That she was unaware of the rotten state of a tree whose falling branch had caused the death of a child speaks ill of her discharge of the responsibility of her position. Under Article 2176 plaintiff has to prove by a preponderance of evidence: (1) the damages suffered by the plaintiff; (2) the fault or negligence of the defendant or some other person for whose act he must respond; and (3) the connection of cause and effect between the fault or negligence and the damages incurred. That respondents‘ daughter, Jasmin, died as a result of the dead and rotting tree within the school‘s premises shows that the tree was indeed an obvious danger to anyone passing by and calls for application of the principle of res ipsa loquitur. The doctrine of res ipsa loquitur applies where (1) the accident was of such character as to warrant an inference that it would not have happened except for the defendant‘s negligence; (2) the accident must have been caused by an agency or instrumentality within the exclusive management or control of the person charged with the negligence complained of; and (3) the accident must not have been due to any voluntary action or contribution on the part of the person injured. The effect of the doctrine of res ipsa loquitur is to warrant a presumption or inference that the mere falling of the branch of the dead and rotting tree which caused the death of respondents‘ daughter was a result of petitioner‘s negligence, being in charge of the school. It is peculiar to the law of negligence which recognizes that prima facie negligence may be established without direct proof and furnishes a substitute for specific proof of negligence. While negligence is not ordinarily inferred or presumed, under the doctrine of res ipsa loquitur, which means, literally, the thing or transaction speaks for itself, the facts or circumstances accompanying an injury may be such as to raise a presumption, or at least permit an inference of negligence on the part of the defendant, or some other person who is charged with negligence. Where it is shown that the thing or instrumentality which caused the injury complained of was under the control or management of the defendant, and that the occurrence resulting in the injury was such as in the ordinary course of things would not happen if those who had its control or management used proper care, there is sufficient evidence, or, as sometimes stated, reasonable evidence, in the absence of explanation by the defendant, that the injury arose from or was caused by the defendant‘s want of care. The procedural effect of the doctrine of res ipsa loquitur is that petitioner‘s negligence is presumed once respondents established the requisites for the doctrine to apply. Once respondents made out a prima facie case of all requisites, the burden shifts to petitioner to explain. The presumption or inference may be rebutted. As school principal, Capili is expected to oversee the safety of the school‘s premises. The fact that she failed to see the immediate danger posed by the dead and rotting tree shows she failed to exercise the responsibility demanded by her position. Even if Capili had assigned disposal of the tree to another teacher , she exercises supervision over her assignee . More than a month had lapsed from the time petitioner gave instruction to her assistant Palaña on December 15, 1992, to the time the incident occurred. Clearly, she failed to check seasonably if the danger posed by the rotting tree had been removed. Thus, we cannot accept her defense of lack of negligence. 9. Huang v. Philippine Hoteliers Inc., G.R. No. 180440, December 5, 2012  See previous Doctrine: Res Ipsa Loquitur is not applicable in this case. Res ipsa loquitur is a Latin phrase which literally means ―the thing or the transaction speaks for itself.‖ It relates to the fact of an injury that sets out an inference to the cause thereof or establishes the plaintiff‘s prima facie case. The doctrine rests on inference and not on presumption. The facts of the occurrence warrant the supposition of negligence and they furnish circumstantial evidence of negligence when direct evidence is lacking. Simply stated, this doctrine finds no application if there is direct proof of absence or presence of negligence. If there is sufficient proof showing the conditions and circumstances under which the injury occurred, then the creative reason for the said doctrine disappears. Further, the doctrine applies where: (1) the accident was of such character as to warrant an inference that it would not have happened except for the defendant‘s negligence; (2) the accident must have been caused by an agency or instrumentality within the exclusive management or control of the person charged with the negligence complained of; and (3) the accident must not have been due to any voluntary action or contribution on the part of the person injured. 47

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

In this case, even granting that respondents PHI and DTPCI‘s staff negligently turned off the lights and locked the door, the folding wooden counter top would still not fall on Huang‘s head had she not lifted the same. Although the folding wooden counter top is within the exclusive management or control of respondents PHI and DTPCI, the falling of the same and hitting the head of Huang was not due to the negligence of the former. As found by both lower courts, the folding wooden counter top did not fall on Huang‘s head without any human intervention. Records showed that she lifted the said folding wooden counter top that eventually fell and hit her head. This Court is not unaware that in Huang‘s Complaint and in her open court testimony, her assertion was, ―while she was passing through the counter door, she was suddenly knocked out by a hard and heavy object, which turned out to be the folding wooden counter top.‖ However, in her open court testimony, particularly during cross-examination, she confirmed that she made such statement that ―she lifted the hinge massive wooden section of the counter near the swimming pool.‖ In view thereof, this Court cannot acquiesce to her theory that her case is one of res ipsa loquitur as it was sufficiently established how she obtained that ―bukol‖ or ―hematoma.‖ 10. Batiquin v. Court of Appeals, 258 SCRA 334 (1996) Facts: Dr. Batiquin was a Resident Physician at the Negros Oriental Provincial Hospital from 1978 to 1989. She was likewise the Accounting Head from 1987 to 1989. Respondent Mrs. Villegas is a married woman who was under Dr. Batiquin‘s prenatal care. Batiquin, with the assistance of Dr. Sy, Nurse Diones, and other student nurses performed a caesarian section on her, delivering her 1st child. A week later, she checked out of the hospital, paying Batiquin P1,5000 ―professional fee.‖ Soon after leaving, she began suffering abdominal pains coupled with fever. She gradually lost her appetite. On consultation with Batiquin, she took medications. In the meantime, she was issued a Medical Certificate, certifying her fitness to return to work at the Rural Bank of Ayungon. However, the pains and fever kept recurring and she rapidly lost weight. She then consulted Dr. Kho at the Holy Child‘s Hospital in Dumaguete City. On examination, a mass in her abdomen was discovered, and a blood count showed an infection in her abdominal cavity. She agreed to surgery. When Dr. Kho opened her abdomen, she found whitish-yellow discharge inside, an ovarian cyst on each of the left and right ovaries which gave out pus, dirt and pus behind the uterus, and a piece of rubber materials on the right side of the uterus embedded on the ovarian cyst, 2 inches by 3/4 inch in size. This piece of rubber material which Dr. Kho described as a "foreign body" looked like a piece of a rubber glove and which was also ―rubber-drain like.‖ It could have been a torn section of a surgeon's gloves or could have come from other sources. And this foreign body was the cause of the infection of the ovaries and consequently of all the discomfort suffered by Villegas after her delivery. Aside from Dr. Kho's testimony, the evidence which mentioned the piece of rubber were the Medical Certificate, a Progress Record, an Anesthesia Record, a Nurse's Record, and a Physician's Discharge Summary. The trial court, however, regarded these documentary evidence as mere hearsay. Except for the Medical Certificate, all the above documents were allegedly prepared by persons other than Dr. Kho, and she merely affixed her signature on some of them to express her agreement thereto . The piece of rubber allegedly found near Villegas' uterus was not presented in court, and although Dr. Kho testified that she sent it to a pathologist in Cebu City for examination, it was not mentioned in the pathologist's Surgical Pathology Report. On the other hand, Dr. Kho stated that ―I have heard somebody that [sic] says [sic] there is [sic] a foreign body that goes with the tissues but unluckily I don't know where the rubber was.‖ The trial court deemed vital Batiquin's testimony that when she confronted Dr. Kho regarding the piece of rubber, "Dr. Kho answered that there was rubber indeed but that she threw it away." This statement, the trial court noted, was never denied nor disputed by Dr. Kho, leading it to conclude: ―There are now two different versions on the whereabouts of that offending rubber — (1) that it was sent to the Pathologist in Cebu as testified to in Court by Dr. Kho and (2) that Dr. Kho threw it away as told by her to Defendant.‖ The trial court ruled for Batiquin. The CA reviewed the entirety of Dr. Kho's testimony and, even without admitting the Villegas‘ documentary evidence, deemed Dr. Kho's positive testimony to definitely establish that a piece of rubber was found near Villegas' uterus. Thus, the CA reversed the decision of the trial court. Issue: Whether or not Batiquin can be held liable for negligence Held: YES. The phrase relied upon by the trial court does not negate the fact that Dr. Kho saw a piece of rubber in private Villegas' abdomen, and that she sent it to a laboratory and then to Cebu City for examination by a pathologist. Not even the Pathologist's Report, although devoid of any mention of a piece of rubber, could alter what Dr. Kho saw. Furthermore, Dr. Kho's knowledge of the piece of rubber could not be based on other than first hand knowledge for, as she asserted before the trial court: Q 48

But you are sure you have seen [the piece of rubber]? Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013 A

Atty. Jess Lopez

Oh yes. I was not the only one who saw it.

Batiquin emphasized that the Villegas never reconciled Dr. Kho's testimony with Dr. Batiquin's claim on the witness stand that when Dr. Batiquin confronted Dr. Kho about the foreign body, the latter said that there was a piece of rubber but that she threw it away. Although hearsay, Dr. Batiquin's claim was not objected to, and hence, the same is admissible but it carries no probative value. Nevertheless, assuming otherwise, Dr. Batiquin's statement cannot belie the fact that Dr. Kho found a piece of rubber near Villegas' uterus. And even if we were to doubt Dr. Kho as to what she did to the piece of rubber, i.e., whether she threw it away or sent it to Cebu City, we are not justified in distrusting her as to her recovery of a piece of rubber from Villegas' abdomen. While the Batiquin claims that contradictions and falsities punctured Dr. Kho's testimony, a reading of the said testimony reveals no such infirmity and establishes Dr. Kho as a credible witness. Dr. Kho was frank throughout her turn on the witness stand. Furthermore, no motive to state any untruth was ever imputed against Dr. Kho, leaving her trustworthiness unimpaired. The trial court's following declaration shows that while it was critical of the lack of care with which Dr. Kho handled the piece of rubber, it was not prepared to doubt Dr. Kho's credibility, thus only supporting out appraisal of Dr. Kho's trustworthiness. As such, the rule of res ipsa loquitur comes to fore. The doctrine of [r]es ipsa loquitur as a rule of evidence is peculiar to the law of negligence which recognizes that prima facie negligence may be established without direct proof and furnishes a substitute for specific proof of negligence. The doctrine is not a rule of substantive law, but merely a mode of proof or a mere procedural convenience. The rule, when applicable to the facts and circumstances of a particular case, is not intended to and does not dispense with the requirement of proof of culpable negligence on the party charged. It merely determines and regulates what shall be prima facie evidence thereof and facilitates the burden of plaintiff of proving a breach of the duty of due care. The doctrine can be invoked when and only when, under the circumstances involved, direct evidence is absent and not readily available. In the instant case, all the requisites for recourse to the doctrine are present. First, the entire proceedings of the cesarean section were under the exclusive control of Dr. Batiquin. In this light, the Villegas were bereft of direct evidence as to the actual culprit or the exact cause of the foreign object finding its way into Villegas' body, which, needless to say, does not occur unless through the intervention of negligence. Second, since aside from the cesarean section, Villegas underwent no other operation which could have caused the offending piece of rubber to appear in her uterus, it stands to reason that such could only have been a by-product of the cesarean section performed by Dr. Batiquin. Batiquin, in this regard, failed to overcome the presumption of negligence arising from resort to the doctrine of res ipsa loquitur. Dr. Batiquin is therefore liable for negligently leaving behind a piece of rubber in Villegas' abdomen and for all the adverse effects thereof. 11. Garcia-Rueda v. Pascasio, G.R. No. 118141, September 5, 1997  See previous Facts: Florencio V. Rueda, husband of petitioner Leonila Garcia-Rueda, underwent surgical operation at the UST hospital for the removal of a stone blocking his ureter. He was attended by Dr. Domingo Antonio, Jr. who was the surgeon while Dr. Erlinda Balatbat-Reyes was the anaesthesiologist. 6 hours after the surgery, however, Florencio died of complications of ―unknown cause.‖ Not satisfied with the findings of the hospital, Leonila requested the NBI to conduct an autopsy. The NBI ruled that Florencio‘s death was due to lack of care by the attending physician in administering anaesthesia. The NBI recommended that Dr. Antonio and Dr. Balatbat-Reyes be charged for Homicide through Reckless Imprudence. During the preliminary investigation, an ―investigative pingpong‖ thereafter transpired where the case was reassigned or transferred several times. Aggrieved, Leonila filed graft charges against the involved prosecutors. The Ombudsman issued the assailed resolution dismissing the complaint. Petitioner now faults the Ombudsman for grave abuse of discretion as the successive transfers from one prosecutor to another were not sufficiently explained in the Resolution of the Ombudsman. Issue: NOT RELATED TO TORTS. But see discussion below. Medical Malpractice with Res Ipsa Loquitur Discussion In order to successfully pursue such a claim, a patient must prove that a health care provider, in most cases a physician, either failed to do something which a reasonably prudent health care provider would have done, or that he or she did something that a reasonably prudent provider would not have done; and that that failure or action caused injury to the patient. Four elements involved in medical negligence cases: duty, breach, injury and proximate causation. In accepting the case, Dr. Antonio and Dr. Reyes in effect represented that, having the needed training and skill possessed by physicians and surgeons practicing in the same field, they will employ such training, care and skill in the treatment of their patients. They have a duty to use at least the same level of care that any other reasonably competent doctor would use to treat a condition under the same circumstances. The breach of these professional duties of skill and care, or their improper performance, by a physician surgeon whereby the patient is injured in body or in health, constitutes actionable 49

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Atty. Jess Lopez

malpractice. Consequently, in the event that any injury results to the patient from want of due care or skill during the operation, the surgeons may be held answerable in damages for negligence. Moreover, in malpractice or negligence cases involving the administration of anaesthesia, the necessity of expert testimony and the availability of the charge of res ipsa loquitur to the plaintiff, have been applied in actions against anaesthesiologists to hold the defendant liable for the death or injury of a patient under excessive or improper anaesthesia. Essentially, it requires two-pronged evidence: (1) evidence as to the recognized standards of the medical community in the particular kind of case; and (2) a showing that the physician in question negligently departed from this standard in his treatment. Another element in medical negligence cases is causation which is divided into two inquiries: (1) whether the doctor‘s actions in fact caused the harm to the patient; and (2) whether these were the proximate cause of the patient‘s injury. Indeed here, a causal connection is discernible from the occurrence of the victim‘s death after the negligent act of the anaesthesiologist in administering the anaesthesia, a fact which, if confirmed, should warrant the filing of the appropriate criminal case. To be sure, the allegation of negligence is not entirely baseless. Moreover, the NBI deduced that the attending surgeons did not conduct the necessary interview of the patient prior to the operation. It appears that the cause of the death of the victim could have been averted had the proper drug been applied to cope with the symptoms of malignant hyperthermia. Also, we cannot ignore the fact that an antidote was readily available to counteract whatever deleterious effect the anaesthesia might produce. Why these precautionary measures were disregarded must be sufficiently explained. 12. Cruz v. Court of Appeals, 282 SCRA 188 (1997) Facts: Lydia was examined by the Dra. Cruz who found a ―myoma‖ in her uterus, and scheduled her for a hysterectomy operation on March 1991. Rowena Umali De Ocampo, accompanied her mother to the Perpetual Help Clinic and General Hospital. According to Rowena, she noticed that the clinic was untidy and the window and the floor were very dusty prompting her to ask the attendant for a rag to wipe the window and the floor with. Because of the untidy state of the clinic, Rowena tried to persuade her mother not to proceed with the operation. The following day, before her mother was wheeled into the operating room, Rowena asked Cruz if the operation could be postponed. Lydia informed Rowena that the doctor told her that she must be operated on as scheduled. Rowena and her husband, her sister and 2 aunts waited outside the operating room while Lydia underwent operation. While they were waiting, Dra. Ercillo went out of the operating room and instructed them to buy tagamet ampules which Rowena‘s sister immediately bought. Dra. Ercillo came out again this time to ask them to buy blood for Lydia. They bought type ―A‖ blood from the St. Gerald Blood Bank and the same was brought by the attendant into the operating room. After the lapse of a few hours, Cruz informed them that the operation was finished. The operating staff then went inside the doctor‘s clinic to take their snacks. Some 30 minutes after, Lydia was brought out of the operating room in a stretcher and Dr. Cruz asked Rowena and the other relatives to buy additional blood for Lydia. Rowena then noticed her mother, who was attached to an oxygen tank, gasping for breath. The oxygen supply had run out and Rowena‘s husband together with the driver of Cruz had to go to the San Pablo District Hospital to get oxygen. Lydia was given the fresh supply of oxygen as soon as it arrived. But at around 10:00 P.M. she went into shock and her blood pressure dropped to 60/50. Her unstable condition necessitated her transfer to the San Pablo District Hospital so she could be connected to a respirator and further examined. However, the transfer to the San Pablo District Hospital was without the prior consent neither of Rowena nor of the other relatives present who found out about the intended transfer only when an ambulance arrived to take Lydia to the San Pablo District Hospital. Rowena and her other relatives then boarded a tricycle and followed the ambulance. Upon Lydia‘s arrival at the San Pablo District Hospital, she was wheeled into the operating room and Dra. Cruz and Dra. Ercillo reoperated on her because there was blood oozing from the abdominal incision. The attending physicians summoned Dra. Bartolome Angeles, head of the OB-GYNE Department of San Pablo District Hospital. However, when Dra. Angeles arrived, Lydia was already in shock and possibly dead as her blood pressure was already o/o. While Dra. Cruz was closing the abdominal wall, the patient died. The death certificate states ―shock‖ as the immediate cause of death and ―Disseminated Intravascular Coagulation (DIC)‖ as the antecedent cause. Cruz was sued for negligence. MTCC found the ff circumstances as sufficient basis to conclude that she was indeed negligent: (1) clinic was untidy, lack of provision like blood and oxygen to prepare for any contingency that might happen during the operation; (2) the manner and the fact that the patient was brought to the San Pablo District Hospital for reoperation indicates that there was something wrong in the manner in which Dra. Cruz conducted the operation. There was no showing that before the operation, accused Dra. Cruz had conducted a cardio pulmonary clearance or any typing of the blood of the patient; (3) the patient‘s chart which is a public document was not presented because it is only there that we could determine the condition of the patient before the surgery; (4) sister of the deceased wished to postpone the operation but the patient was prevailed upon by Dra. Cruz to proceed with the surgery; (5) with respect to Dra. Lina 50 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Ercillo, the anaesthesiologist, there is no evidence to indicate that she should be held jointly liable with Dra. Cruz who actually did the operation. RTC reiterated the abovementioned findings. CA echoed similar observations. CA ruled: ―While we may grant that the untidiness and filthiness of the clinic may not by itself indicate negligence, it nevertheless shows the absence of due care and supervision over her subordinate employees. Did this unsanitary condition permeate the operating room? Were the surgical instruments properly sterilized? Could the conditions in the OR have contributed to the infection of the patient? Only the Cru could answer these, but she opted not to testify. This could only give rise to the presumption that she has nothing good to testify on her defense. The alleged ‗unverified statement of the prosecution witness‘ remains unchallenged and unrebutted.‖ Likewise undisputed were the ff: (1) that the accused asked the patient‘s relatives to buy Tagamet capsules while the operation was already in progress; (2) that after an hour, they were also asked to buy type ―A‖ blood for the patient; that after surgery, they were again asked to procure more type ―A‖ blood, but such was not anymore available from the source; (3) that the oxygen given to the patient was empty; and (4) that the son- in-law of the patient, together with a driver of Cruz, had to rush to the San Pablo City District Hospital to get the much-needed oxygen. All these conclusively show that the petitioner had not prepared for any unforeseen circumstances before going into the first surgery, which was not emergency in nature, but was elective or pre-scheduled; she had no ready antibiotics, no prepared blood, properly typed and cross-matched, and no sufficient oxygen supply.‖ Issue: Whether or not Cruz‘s conviction of the crime of reckless imprudence resulting in homicide, arising from an alleged medical malpractice is supported by the evidence on record. Held: NO. Elements of reckless imprudence are: (1) that the offender does or fails to do an act; (2) that the doing or the failure to do that act is voluntary; (3) that it be without malice; (4) that material damage results from the reckless imprudence; and (5) that there is inexcusable lack of precaution on the part of the offender, taking into consideration his employment or occupation, degree of intelligence, physical condition, and other circumstances regarding persons, time and place. Whether or not a physician has committed an ―inexcusable lack of precaution‖ in the treatment of his patient is to be determined according to the standard of care observed by other members of the profession in good standing under similar circumstances bearing in mind the advanced state of the profession at the time of treatment or the present state of medical science. In accepting a case, a doctor has a duty to use at least the same level of care that any other reasonably competent doctor would use to treat a condition under the same circumstances. It is in this aspect of medical malpractice that expert testimony is essential to establish not only the standard of care of the profession but also that the physician‘s conduct in the treatment and care falls below such standard. Expert testimony is usually necessary to support the conclusion as to causation. The Court noted the absence of any expert testimony of the matter of the standard of care employed by other physicians of good standing in the conduct of similar operations. The prosecution‘s expert witnesses in the persons of Dr. Floresto Arizala and Dr. Nieto Salvador, Jr. of the NBI only testified as to the possible cause of death but did not venture to illuminate the court on the matter of the standard of care that Cruz should have exercised. While it may be true that the circumstances pointed out by the courts below seemed beyond cavil to constitute reckless imprudence on the part of the surgeon, this conclusion is still best arrived at not through the educated surmises nor conjectures of laymen, including judges, but by the unquestionable knowledge of expert witnesses. For whether a physician or surgeon has exercised the requisite degree of skill and care in the treatment of his patient is, in the generality of cases, a matter of expert opinion. When the qualifications of a physician are admitted, as in the instant case, there is an inevitable presumption that in proper cases he takes the necessary precaution and employs the best of his knowledge and skill in attending to his clients, unless the contrary is sufficiently established. This presumption is rebuttable by expert opinion, which is sadly lacking in the case at bench. Even granting arguendo that the inadequacy of the facilities and untidiness of the clinic; the lack of provisions; the failure to conduct pre-operation tests on the patient; and the subsequent transfer of Lydia to the San Pablo Hospital and the reoperation performed on her by Cruz do indicate, even without expert testimony, that Cruz was recklessly imprudent in the exercise of her duties as a surgeon, no cogent proof exists that any of these circumstances caused Lydia‘s death. The fourth element of reckless imprudence: that the injury to the person or property was a consequence of the reckless imprudence is lacking. In litigations involving medical negligence, the plaintiff has the burden of establishing physician‘s negligence and for a reasonable conclusion of negligence, there must be proof of breach of duty on the part of the surgeon as well as a causal connection of such breach and the resulting death of his patient. In order that there may be a recovery for an injury the 51 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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negligence must be the proximate cause of the injury. For, ‗negligence, no matter in what it consists, cannot create a right of action unless it is the proximate cause of the injury complained of.‘ Proximate cause of an injury is that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred. The testimonies of both witness doctors establish hemorrhage or hemorrhagic shock as the cause of death. However, as likewise testified to by the expert witnesses in open court, hemorrhage or hemorrhagic shock during surgery may be caused by several different factors. On the other hand, defense witness, Dr. Bu C. Castro said hemorrhage due to DIC ―cannot be prevented, it will happen to anyone, anytime.‖ He testified further that the cause of death was dissimulated Intra Vascular Coagulation or the DIC, which resulted to hemorrhage or bleedings and that there is no fault on the part of the surgeon. In totality, the findings of all 3 doctors do not preclude the probability that DIC caused the hemorrhage and consequently, Lydia‘s death. DIC which is a clotting defect creates a serious bleeding tendency and when massive DIC occurs as a complication of surgery leaving raw surface, major hemorrhage occurs. Expert testimonies rendered by both prosecution and defense witnesses substantiate rather than contradict petitioner‘s allegation that the cause of Lydia‘s death was DIC, which as attested to by an expert witness, cannot be attributed to the petitioner‘s fault or negligence. The probability that Lydia‘s death was caused by DIC was unrebutted during trial and has engendered in the mind of this Court a reasonable doubt as to the petitioner‘s guilt. Nevertheless, this Court finds Cruz civilly liable for the death of Lydia Umali, for while a conviction of a crime requires proof beyond reasonable doubt, only a preponderance of evidence is required to establish civil liability. For insufficiency of evidence this Court was not able to render a sentence of conviction but it is not blind to the reckless and imprudent manner in which the petitioner carried out her duties. Dra. Cruz was acquitted of the crime of reckless imprudence resulting in homicide but was ordered to pay the heirs of Umali 50,000 as civil liability + moral and exemplary damages. 13. Ramos v. Court of Appeals, 321 SCRA 584 (1999) Facts: Erlinda Ramos was experiencing discomfort due to pains allegedly caused by the presence of a stone in her gall bladder. She sought professional advice which recommended that she undergo an operation for the removal of a stone in her gall bladder. She underwent a series of tests and was found fit for surgery. They eventually met with Dr. Hozaka, wherein they agreed on the date of operation at the Delos Santos Medical Center. At the day of the operation, Erlinda was being prepared for the operation. Along with her is her sister-in-law, Herminda Cruz for moral support. When Erlinda was taken to the operating room, several nurses and Dr. Gutierrez attended to her. Herminda was allowed to stay in the operating room. Dr. Gutierrez reached a phone to look for Dr. Hosaka who was not yet in. Erlinda became irritable due to the delay. After 2-3 hours, Dr. Hosaka finally arrived. Eventually the operation started. According to Hermina (who was in the operating room), she saw Dr. Gutierrez intubating the hapless patient (Erlinda). She heard Erlinda say ―ang hirap ma-intubate nito, mali yata ang pagkakapasok. O lumalaki ang tiyan.‖ Because of that, Hermina focused on what Dr. Gutierrez was doing. She eventually noticed bluish discoloration of the nailbeds on the left hand of Erlinda. Dr. Hosaka approached Erlinda and called for Dr. Calderon, another anaesthiologist. Thereafter, the patient was placed in a trendelenburg position. Eventually the patient was taken to the ICU wherein Erlinda stayed there for a month. After 4 months, the patient was released from the hospital. However, she was in a comatose condition and suffered brain damage due to the lack of oxygen, and was in constant need of medical attention. Because of these, they incurred medical expenses. Petitioners filed a complaint for damages against herein respondents alleging neglicence in the management and care of Erlina Ramos. The RTC ruled in favor of herein petitioners. The CA however reversed and ruled in favor of private respondents. Petitioners appealed. Issue: (1) Whether Drs. Hosaka & Gutierrez are liable for negligence. (2) Whether res ipsa loquitur applies Held: YES. Res ipsa loquitur is a Latin phrase which literally means "the thing or the transaction speaks for itself." The phrase "res ipsa loquitur'' is a maxim for the rule that the fact of the occurrence of an injury, taken with the surrounding circumstances, may permit an inference or raise a presumption of negligence, or make out a plaintiff's prima faciecase, and present a question of fact for defendant to meet with an explanation. Where the thing which caused the injury complained of is shown to be under the management of the defendant or his servants and the accident is such as in ordinary course of things does not happen if those who have its management or control use proper care, it affords reasonable evidence, in the absence of explanation by the defendant, that the accident arose from or was caused by the defendant's want of care. It is simply a recognition of the postulate that, as a matter of common knowledge and experience, the very nature of certain types of occurrences may justify an inference of negligence on the part of the person who controls the instrumentality causing the injury in the absence of some explanation by the defendant who is charged with negligence. It is grounded in the superior logic of ordinary human experience and on the basis of such experience or 52 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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common knowledge, negligence may be deduced from the mere occurrence of the accident itself. Hence, res ipsa loquitur is applied in conjunction with the doctrine of common knowledge. However, much has been said that res ipsa loquitur is not a rule of substantive law and, as such, does not create or constitute an independent or separate ground of liability. Instead, it is considered as merely evidentiary or in the nature of a procedural rule. It is regarded as a mode of proof, or a mere procedural of convenience since it furnishes a substitute for, and relieves a plaintiff of, the burden of producing specific proof of negligence. In other words, mere invocation and application of the doctrine does not dispense with the requirement of proof of negligence. It is simply a step in the process of such proof, permitting the plaintiff to present along with the proof of the accident, enough of the attending circumstances to invoke the doctrine, creating an inference or presumption of negligence, and to thereby place on the defendant the burden of going forward with the proof. Still, before resort to the doctrine may be allowed, the following requisites must be satisfactorily shown: (1) The accident is of a kind which ordinarily does not occur in the absence of someone's negligence; (2) It is caused by an instrumentality within the exclusive control of the defendant or defendants; and (3) The possibility of contributing conduct which would make the plaintiff responsible is eliminated. In the above requisites, the fundamental element is the "control of instrumentality" which caused the damage. Such element of control must be shown to be within the dominion of the defendant. In order to have the benefit of the rule, a plaintiff, in addition to proving injury or damage, must show a situation where it is applicable, and must establish that the essential elements of the doctrine were present in a particular incident. Medical malpractice cases do not escape the application of this doctrine. Thus, res ipsa loquitur has been applied when the circumstances attendant upon the harm are themselves of such a character as to justify an inference of negligence as the cause of that harm. Nevertheless, despite the fact that the scope of res ipsa loquitur has been measurably enlarged, it does not automatically apply to all cases of medical negligence as to mechanically shift the burden of proof to the defendant to show that he is not guilty of the ascribed negligence. The doctrine is not a rigid or ordinary doctrine to be perfunctorily used but a rule to be cautiously applied, depending upon the circumstances of each case. It is generally restricted to situations in malpractice cases where a layman is able to say, as a matter of common knowledge and observation, that the consequences of professional care were not as such as would ordinarily have followed if due care had been exercised. A distinction must be made between the failure to secure results, and the occurrence of something more unusual and not ordinarily found if the service or treatment rendered followed the usual procedure of those skilled in that particular practice. It must be conceded that the doctrine of res ipsa loquitur can have no application in a suit against a physician or surgeon which involves the merits of a diagnosis or of a scientific treatment. The physician or surgeon is not required at his peril to explain why any particular diagnosis was not correct, or why any particular scientific treatment did not produce the desired result. Thus, res ipsa loquitur is not available in a malpractice suit if the only showing is that the desired result of an operation or treatment was not accomplished. During the administration of anesthesia and prior to the performance of cholecystectomy she suffered irreparable damage to her brain. Thus, without undergoing surgery, she went out of the operating room already decerebrate and totally incapacitated. Obviously, brain damage, which Erlinda sustained, is an injury which does not normally occur in the process of a gall bladder operation. In fact, this kind of situation does not in the absence of negligence of someone in the administration of anesthesia and in the use of endotracheal tube. Normally, a person being put under anesthesia is not rendered decerebrate as a consequence of administering such anesthesia if the proper procedure was followed. Furthermore, the instruments used in the administration of anesthesia, including the endotracheal tube, were all under the exclusive control of private respondents, who are the physicians-in-charge. Likewise, Erlinda could not have been guilty of contributory negligence because she was under the influence of anesthetics which rendered her unconscious. Upon these facts and under these circumstances the Court would be able to say, as a matter of common knowledge and observation, if negligence attended the management and care of the patient. Moreover, the liability of the physicians and the hospital in this case is not predicated upon an alleged failure to secure the desired results of an operation nor on an alleged lack of skill in the diagnosis or treatment as in fact no operation or treatment was ever performed on Erlinda. Thus, upon all these initial determination a case is made out for the application of the doctrine of res ipsa loquitur. The court holds that Dr. Hosaka & Gutierre were unable to disprove the presumption of negligence on their part in the care of Erlinda and their negligence was the proximate cause of her piteous condition. The court is inclined to believe Ramos' stand and after the evidence and testimony presented that it was the faulty intubation which was the proximate cause of Erlinda's comatose condition. Proximate cause has been defined as that which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces injury, and without which the result would not have occurred. An injury or damage is proximately caused by an act or a failure to act, whenever it appears from the evidence in the case, that the act or omission played a substantial part in bringing about or actually causing the injury or damage; and that the injury or damage was 53

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either a direct result or a reasonably probable consequence of the act or omission. It is the dominant, moving or producing cause. Here, due to the faulty intubation conducted, the failure to observe proper medical procedure, failure to verify and conduct an evaluation of the patient for the administration of the intubation (so as to determine the anatomic variations in patient‘s neck and oral area), the court holds Dr. Gutierrez liable. The same goes for Dr. Hozaka as the head of the surgeon team (or as the court would call it, ―the captain of the ship‖) It is the surgeon‘s responsibility to see to it that those under him perform their task in the proper manner. The same goes for the hospital. DLSMC, apart from a general denial of its responsibility over the physicians, failed to adduce evidence showing that it exercised the diligence of a good father of a family in the hiring and supervision of the latter. It failed to adduce evidence with regard to the degree of supervision which it exercised over its physicians. 14. Ramos v. Court of Appeals, 380 SCRA 467 (2002) Facts: Sometime in 1985, Erlinda Ramos, after seeking professional medical help, was advised have her gallstones removed. She was referred to Dr. Hosaka, a surgeon, who agreed to perform the operation on her. The operation was scheduled for June 17, 1985 at 9:00 AM at De Los Santos Medical Center (DLSMC). Since neither Erlinda nor her husband Rogelio, knew of any anesthesiologist, Dr. Hosaka recommended to them the services of Dr. Gutierrez. By 7:30 AM, Erlinda was already being prepared for operation. Upon the request of Erlinda, her sister-in-law, Herminda Cruz, who was then Dean of the College of Nursing at the Capitol Medical Center, was allowed to accompany her inside the operating room. Dr. Hosaka finally arrived at the hospital at around 12:10 in the afternoon, or more than 3 hours after the scheduled operation. As Dr. Gutierrez was having a hard time intubating Erlinda, Cruz noticed a bluish discoloration of Erlinda‘s nailbeds on her left hand. Cruz then heard Dr. Hosaka instruct someone to call Dr. Calderon, another anesthesiologist. When he arrived, Dr. Calderon attempted to intubate the patient. The nailbeds of the patient remained bluish, thus, she was placed in a trendelenburg position — a position where the head of the patient is placed in a position lower than her feet. She went out of the OR to inform the husband that the operation was not going well. At almost 3:00 PM, she saw Erlinda being wheeled to ICU. The doctors explained to Rogelio that his wife had bronchospasm. Erlinda stayed in the ICU for a month. She was released from the hospital only 4 months later or on November 15, 1985. Since the ill-fated operation, Erlinda remained in comatose condition until she died on August 3, 1999. Ramos filed a complaint for damages due to negligence in the RTC. RTC found the doctors and the DLSMC liable. On appeal, CA reversed. Upon petitioner for review before the SC, doctors and hospital were held liable. They now seek reconsideration. The Philippine College of Surgeons also filed a Petition-in-Intervention claiming that the SC erred in using the captain of the ship doctrine to hold Hosaka liable. On March 2001, oral arguments were heard. Also present were various doctors from public and private institutions serving as amicii curiae. Issue: (1) Was Dr. Gutierez negligent and whether it was the faulty intubation which was the proximate cause of Erlinda‘s coma? (2) Whether Dr. Hosaka can be held liable by virtue of the Captain of the Ship doctrine. (3) Whether DLSMC is solidarily responsible with the doctors. Held: (1) YES. It has been sufficiently established that she failed to exercise the standards of care in the administration of anesthesia on a patient. She did not perform a ―preoperative evaluation‖ of the patient before administering anaesthesia. Particularly, she did not check the patient‘s airway. As she herself admitted, she saw Erlinda for the first time on the day of the operation itself, one hour before the scheduled operation. The injury incurred by Erlinda does not normally happen absent any negligence in the administration of anesthesia and in the use of an endotracheal tube. Upon these facts and under these circumstances, a layman would be able to say, as a matter of common knowledge and observation, that the consequences of professional treatment were not as such as would ordinarily have followed if due care had been exercised. Thus, res ipsa loquitur is applicable. (2) YES. That there is a trend in American jurisprudence to do away with the Captain-of-the-Ship doctrine does not mean that this Court will ipso facto follow said trend. Due regard for the peculiar factual circumstances obtaining in this case justify the application of the Captain-of-the-Ship doctrine. From the facts on record it can be logically inferred that Dr. Hosaka exercised a certain degree of, at the very least, supervision over the procedure then being performed on Erlinda. (1) He recommended Gutierrez thereby representing to Ramos that she possessed the necessary competence and skills. (2) He was the attending physician of Erlinda and gave instructions to call another anaesthesiologist to help Erlinda. (3) Drs. Hosaka and Gutierrez worked as a team. Their work cannot be placed in separate watertight compartments because their duties intersect with each other. 54 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Moreover, Dr. Hosaka‘s irresponsible conduct of arriving very late for the scheduled operation of petitioner Erlinda is violative, not only of his duty as a physician ―to serve the interest of his patients with the greatest solicitude, giving them always his best talent and skill,‖ but also of Article 19 CC which requires a person, in the performance of his duties, to act with justice and give everyone his due. (3) NO. There is no employer-employee relationship (see 4 fold test in labor) between DLSMC and Drs. Gutierrez and Hosaka which would hold DLSMC solidarity liable under Art. 2180. First, a hospital does not hire or engage the services of a consultant, but rather, accredits the latter and grants him or her the privilege of maintaining a clinic and/or admitting patients in the hospital upon a showing by the consultant that he or she possesses the necessary qualifications. Second, it is not the hospital but the patient who pays the consultant‘s fee for services rendered by the latter. Third, a hospital does not dismiss a consultant; instead, the latter may lose his or her accreditation or privileges granted by the hospital. Fourth, when a doctor refers a patient for admission in a hospital, it is the doctor who prescribes the treatment to be given to said patient. The hospital‘s obligation is limited to providing the patient with the preferred room accommodation, the nutritional diet and medications prescribed by the doctor, the equipment and facilities necessary for the treatment of the patient, as well as the services of the hospital staff who perfor m the ministerial tasks of ensuring that the doctor‘s orders are carried out strictly. In line with this, no evidence was adduced to show that the injury suffered by petitioner Erlinda was due to a failure on the part of respondent DLSMC to provide for hospital facilities and staff necessary for her treatment. 15. Reyes v. Sisters of Mercy Hospital, 341 SCRA 760 (2000) Facts: Five days before Jorge Reyes‘ death on January 8, 1987, Jorge had been suffering from a recurring fever with chills. On that day, he was taken to the Mercy Community Clinic. He was attended to by respondent Dr. Marlyn Rico, who gave Jorge a physical examination and took his medical history. Believing that Jorge could be suffering from Typhoid fever, as this was then prevalent in their locality, Dr. Rico ordered a Widal Test a standard test for typhoid fever. Other tests were made. From the test results, Dr. Rico concluded that Jorge was positive for typhoid fever. As her shift was only up to 5:00 p.m., Dr. Rico indorsed Jorge to respondent Dr. Marvie Blanes. Dr. Marvie Blanes attended to Jorge at around 6PM. She also took Jorge‘s history and gave him a physical examination. Like Dr. Rico, her impression was that Jorge had typhoid fever. Antibiotics being the accepted treatment for typhoid fever, she ordered that a compatibility test with the antibiotic chloromycetin be done on Jorge. Said test was administered by nurse Josephine Pagent. As no adverse effects were observed, Dr. Blanes ordered the first 500mg of said antibiotic to be administered on Jorge at around 9:00 p.m. A second dose was administered on Jorge about three hours later just before midnight. At around 1:00 a.m the next day, Jorge Reyes‘ condition worsened as he experienced severe nausea and convulsions. When he regained consciousness, the patient was asked by Dr. Blanes whether he had a previous heart ailment or had suffered from chest pains in the past. Jorge replied he did not. A few minutes later, the convulsions came back and he died at around 2:00am. The cause of his death was ―Ventricular Arrythemia Secondary to Hyperpyrexia and typhoid fever.‖ Reyes‘ family thus filed a complaint for damages against Sisters of Mercy et al. They basically claim that Jorge did not die of typhoid fever. Rather, they claim that it was due to the wrongful administration of chloromycetin. The parties presented their own expert witnesses: for the Reyes‘, Dr. Apolinar Vacalares, while for the hospital, Dr. Gotiong and Dr. Panopio. Issue: Whether or not the hospital and its physicians are liable for medical malpractice. Held: NO. In the present case, there is no doubt that a physician-patient relationship existed between respondent doctors and Jorge Reyes. Respondents were thus duty-bound to use at least the same level of care that any reasonably competent doctor would use to treat a condition under the same circumstances. It is breach of this duty which constitutes actionable malpractice. As to this aspect of medical malpractice, the determination of the reasonable level of care and the breach thereof, expert testimony is essential. Inasmuch as the causes of the injuries involved in malpractice actions are determinable only in the light of scientific knowledge, it has been recognized that expert testimony is usually necessary to support the conclusion as to causation. However, there are some cases wherein there is no necessity for expert testimony: when Res Ipsa Loquitur applies. As held in Ramos: Although generally, expert medical testimony is relied upon in malpractice suits to prove that a physician has done a negligent act. But, when the doctrine of res ipsa loquitor is availed by the plaintiff, the need for expert medical testimony is dispensed with because the injury itself provides the proof of negligence. The reason is that the general rule on the necessity of expert testimony applies only to such matters clearly within the domain of medical science, and not to matters that are within the common knowledge of mankind which may be testified to by anyone familiar with the facts.

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Hence, in cases where the res ipsa loquitur is applicable, the court is permitted to find a physician negligent upon proper proof of injury to the patient, without the aid of expert testimony, where the court from its fund of common knowledge can determine the proper standard of care. When the doctrine is appropriate, all that the patient must do is prove a nexus between the particular act or omission complained of and the injury sustained while under the custody and management of the defendant without need to produce expert medical testimony to establish the standard of care. Resort to res ipsa loquitor is allowed because there is no other way, under usual and ordinary conditions, by which the patient can obtain redress for injury suffered by him. Nonetheless, Res Ipsa Loquitur DOES NOT APPLY in this case; thus expert witness is necessary. Petitioners asserts that the doctrine of res ipsa loquitur applies to the present case because Jorge Reyes was merely experiencing fever and chills for 5 days and was fully conscious, coherent, and ambulant when he went to the hospital. Yet, he died after only ten hours from the time of his admission. Petitioners contend that all requisites for the application of res ipsa loquitur were present. However, respondents alleged failure to observe due care was not immediately apparent to a layman so as to justify application of res ipsa loquitur. The question required expert opinion on the alleged breach by respondents of the standard of care required by the circumstances. Furthermore, on the issue of the correctness of her diagnosis, no presumption of negligence can be applied to Dr. Marlyn Rico. As held in Ramos, Res Ipsa Loquitur is generally restricted to situations in malpractice cases where a layman is able to say, as a matter of common knowledge and observation, that the consequences of professional care were not as such as would ordinarily have followed if due care had been exercised. Thus, it DOES NOT APPLY when what is at issue is BEYOND AN ORDINARY PERSON‘S COMMON KNOWLEDGE: i.e. when the issue revolves around the merits of a diagnosis or of a scientific treatment. Petitioners contend that the doctors erroneously applied the Widal test and in administering the antibiotic chloromycetin. Petitioners presented the testimony of Dr. Apolinar Vacalares, Chief Pathologist of the Northern Mindanao Training Hospital, Cagayan de Oro City, who performed an autopsy on the body of Jorge Reyes. Dr. Vacalares testified that, based on his findings during the autopsy, Jorge Reyes did not die of typhoid fever but of something undetermined, which could be due to allergic reaction or chloromycetin overdose. We are not persuaded. First. While petitioners presented Dr. Apolinar Vacalares as an expert witness, we do not find him to be so as he is not a specialist on infectious diseases like typhoid fever. Second. On the other hand, the 2 doctors presented by respondents clearly were experts on the subject. They vouched for the correctness of Dr. Marlyn Rico‘s diagnosis. Dr. Peter Gotiong is a diplomate whose specialization is infectious diseases. Also, he had already treated over a thousand cases of typhoid fever. According to him, when a case of typhoid fever is suspected, the Widal test is normally used, and if the 1:320 results of the Widal test on Jorge Reyes had been presented to him along with the patient‘s history, his impression would also be that the patient was suffering from typhoid fever. As to the treatment of the disease, he stated that chloromycetin was the drug of choice. He also explained that despite the measures taken by respondent doctors and the intravenous administration of two doses of chloromycetin, complications of the disease could not be discounted. Also, he noted that since the toxic effect of typhoid fever may lead to meningitis, Dr. Vacalares‘ autopsy should have included an examination of the brain. As regards Dr. Vacalares‘ finding during the autopsy that the deceased‘s gastro-intestinal tract was normal, Dr. Rico explained that, while hyperplasia in the payer‘s patches or layers of the small intestines is present in typhoid fever, the same may not always be grossly visible as they may be microscopic. Respondents also presented the testimony of Dr. Ibarra T. Panopio who is also a big time doctor/ pathologist. He stated that, he recognized that the Widal test is used for typhoid patients, although he did not encourage its use. Basically, he corroborated all of Dr. Gotiong‘s statements. Here, Dr. Marlyn Rico did not depart from the reasonable standard recommended by the experts as she in fact observed the due care required under the circumstances. Though the Widal test is not conclusive, it remains a standard diagnostic test for typhoid fever and, in the present case, greater accuracy through repeated testing was rendered unobtainable by the early death of the patient. The results of the Widal test and the patient‘s history of fever with chills for five days, taken with the fact that typhoid fever was then prevalent as indicated by the fact that the clinic had been getting about 15 to 20 typhoid cases a month, were sufficient to give upon any doctor of reasonable skill the impression that Jorge Reyes had typhoid fever. The burden of proving that Jorge Reyes was suffering from any other illness rested with the petitioners. As they failed to present expert opinion on this, preponderant evidence to support their contention is clearly absent. Third. Petitioners contend that respondent Dr. Marvie Blanes, who took over from Dr. Rico, was negligent in ordering the intravenous administration of two doses of 500 milligrams of chloromycetin at an interval of less than three hours. Petitioners claim that Jorge Reyes died of anaphylactic shock or possibly from overdose as the second dose should have been administered five to six hours after the first, per instruction of Dr. Marlyn Rico. However, according to medical books: The dosage likewise including the first administration of five hundred milligrams (500 mg.) at around nine o‘clock 56 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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in the evening and the second dose at around 11:30 the same night was still within medically acceptable limits, since the recommended dose of chloromycetin is one (1) gram every six (6) hours. Fourth. Petitioners correctly observe that the medical profession is one which, like the business of a common carrier, is affected with public interest. Moreover, they assert that since the law imposes upon common carriers the duty of observing extraordinary diligence in the vigilance over the goods and for the safety of the passengers, physicians and surgeons should have the same duty toward their patients. The practice of medicine is a profession engaged in only by qualified individuals. It is a right earned through years of education, training, and by first obtaining a license from the state through professional board examinations. Such license may, at any time and for cause, be revoked by the government. In addition to state regulation, the conduct of doctors is also strictly governed by the Hippocratic Oath. Given these safeguards, there is no need to expressly require of doctors the observance of ―extraordinary‖ diligence. As it is now, the practice of medicine is already conditioned upon the highest degree of diligence. And, as we have already noted, the standard contemplated for doctors is simply the reasonable average merit among ordinarily good physicians. 16. Professional Services, Inc., v. Agana, 513 SCRA 478 (2007) Facts: In April 1984, Natividad Agana was rushed to the Medical City General Hospital (Med City) because of difficulty of bowel movement and bloody anal discharge. After a series of medical examinations, Dr. Ampil, diagnosed her to be suffering from cancer of the sigmoid. Ampil, assisted by the medical staff of the Med City, surgery on Natividad. As the cancer spread to her left ovary, Dr. Fuentes was asked to perform hysterectomy on her. After Dr. Fuentes had completed the hysterectomy, Ampil took over and closed the incision. The operation appears to be flawed. The Record of Operation dated April 11, 1984, the attending nurses entered these remarks: ―sponge count lacking 2‖ and ―announced to surgeon searched (sic) done but to no avail continue for closure.‖ After a couple of days, Natividad complained of excruciating pain in her anal region. She consulted both Ampil and Fuentes about it. They told her that the pain was the natural consequence of the surgery. Ampil then recommended that she consult an oncologist to examine the cancerous nodes which were not removed during the operation. So, she went to get further treatment in the States but she was told she was free of cancer. However, she was still suffering from pains. Two weeks after her return, her daughter found a piece of gauze protruding from her vagina. Upon being informed about it, Dr. Ampil proceeded to her house where he managed to extract by hand a piece of gauze measuring 1.5 inches in width. He then assured her that the pains would soon vanish. Instead, the pains intensified, prompting Natividad to seek treatment at the Polymedic General Hospital. While confined there, Dr. Gutierrez detected the presence of another foreign object in her vagina — a foul-smelling gauze measuring 1.5 inches in width which badly infected her vaginal vault. causing stool to excrete through her vagina. On November 1984, Natividad and her husband filed with the RTC Quezon City a complaint for damages against the Professional Services, Inc. (PSI), owner of the Med Cit, Ampil, and Fuentes. They alleged that the latter are liable for negligence for leaving 2 pieces of gauze inside Natividad‘s body and malpractice for concealing their acts of negligence. Enrique Agana also filed with the PRC an administrative complaint for gross negligence and malpractice against Dr. Ampil and Dr. Fuentes. She died during the pendency of the case. In 1993, the RTC rendered its Decision in favor of the Aganas, finding PSI, Dr. Ampil and Dr. Fuentes liable for negligence and malpractice. They were held solidarily liable. On appeal, Fuentes was exonerated but Ampil was required to reimburse all payments that PSI will make to the Aganas. Meanwhile, on January 1995, the PRC Board of Medicine rendered its Decision dismissing the case against Fuentes. The Board held that the prosecution failed to show that Fuentes was the one who left the 2 pieces of gauze inside Natividad‘s body and that he concealed such fact from Natividad. Issue: (1) Whether Ampil is liable for negligence and medical malpractice. (2) Whether Fuentes is liable for the same. (3) Whether PSI is liable. Held: (1) YES. This is a clear case of medical malpractice or more appropriately, medical negligence. To successfully pursue this kind of case, a patient must only prove that a health care provider either failed to do something which a reasonably prudent health care provider would have done, or that he did something that a reasonably prudent provider would not have done; and that failure or action caused injury to the patient. Simply put, the elements are duty, breach, injury and proximate causation. Ampil, as the lead surgeon, had the duty to remove all foreign objects, such as gauzes, from Natividad‘s body before closure of the incision. When he failed to do so, it was his duty to inform Natividad about it. Ampil breached both duties. Such breach caused injury to Natividad, necessitating her further examination by American doctors and another surgery. That Ampil‘s negligence is the proximate cause of Natividad‘s injury could be traced from his act of closing the incision despite the information given by the attending nurses that two pieces of gauze were still missing. That they were later on extracted from Natividad‘s vagina established the causal link between Ampil‘s negligence and the injury. 57

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And what further aggravated such injury was his deliberate concealment of the missing gauzes from the knowledge of Natividad and her family. (2) NO. Aganas assailed the dismissal by the trial court of the case against Fuentes on the ground that it is contrary to the doctrine of res ipsa loquitur. According to them, the fact that the 2 pieces of gauze were left inside Natividad‘s body is a prima facie evidence of Dr. Fuentes‘ negligence. SC not convinced. Literally, res ipsa loquitur means "the thing speaks for itself." It is the rule that the fact of the occurrence of an injury, taken with the surrounding circumstances, may permit an inference or raise a presumption of negligence, or make out a plaintiff‘s prima facie case, and present a question of fact for defendant to meet with an explanation. Stated differently, where the thing which caused the injury, without the fault of the injured, is under the exclusive control of the defendant and the injury is such that it should not have occurred if he, having such control used proper care, it affords reasonable evidence, in the absence of explanation that the injury arose from the defendant‘s want of care, and the burden of proof is shifted to him to establish that he has observed due care and diligence. From the foregoing statements of the rule, the requisites for the applicability of the doctrine of res ipsa loquitur are: (1) the occurrence of an injury; (2) the thing which caused the injury was under the control and management of the defendant; (3) the occurrence was such that in the ordinary course of things, would not have happened if those who had control or management used proper care; and (4) the absence of explanation by the defendant. Of the foregoing requisites, the most instrumental is the ―control and management of the thing which caused the injury.‖ We find the element of ―control and management of the thing which caused the injury‖ to be wanting. Hence, the doctrine will not lie. Under the ―Captain of the Ship‖ doctrine, the operating surgeon is the person in complete charge of the surgery room and all personnel connected with the operation. Their duty is to obey his orders. As stated before, Ampil was the lead surgeon. In other words, he was the ―Captain of the Ship.‖ Ampil and not Fuentes had control. In fact, after Fuentes performed the hysterectomy, Ampil considered his work to be in order and proceeded with closing Natividad up. (3) YES. It was held that Ramos v. Court of Appeals that for purposes of apportioning responsibility in medical negligence cases, an employer-employee relationship in effect exists between hospitals and their attending and visiting physicians. Its liability is also anchored upon the agency principle of apparent authority or agency by estoppel and the doctrine of corporate negligence which have gained acceptance in the determination of a hospital‘s liability for negligent acts of health professionals. In the present case, it was duly established that PSI operates the Med City for the purpose and under the concept of providing comprehensive medical services to the public. Accordingly, it has the duty to exercise reasonable care to protect from harm all patients admitted into its facility for medical treatment. Unfortunately, PSI failed to perform such duty. 17. Cantre v. Go, G.R. No. 160889, April 27, 2007 Facts: Dr. Milagros L. Cantre is a specialist in OB-GYNE at the Dr. Jesus Delgado Memorial Hospital. She was the attending physician of Nora S. Go, who was admitted at the said hospital. At 1:30 a.m. Nora gave birth to her 4th child, a baby boy. However, at around 3:30 a.m., Nora suffered profuse bleeding inside her womb due to some parts of the placenta which were not completely expelled from her womb after delivery. Nora suffered hypovolemic shock, resulting in a drop in her blood pressure to ―40‖ over ―0.‖ Her blood pressure was frequently monitored with the use of a sphygmomanometer. While Cantre was massaging Nora‘s uterus for it to contract and stop bleeding, she ordered a droplight to warm Nora and her baby. While in the recovery room, her husband, John David Z. Go noticed a fresh gaping wound 2.5 x 3.5 inches in the inner portion of her left arm, close to the armpit. He asked the nurses what caused the injury. He was informed it was a burn. Nora‘s injury was referred to a plastic surgeon for skin grafting. However, Nora‘s arm would never be the same. Aside from the unsightly mark, the pain in her left arm remains. When sleeping, she has to cradle her wounded arm. Her movements now are also restricted. Her children cannot play with the left side of her body as they might accidentally bump the injured arm, which aches at the slightest touch. Therefore, spouses filed a complaint for damages against Cantre, Dr. Abad (medical director), and the hospital. Issue: (1) Whether additional exhibits are admissible in evidence. (2) Whether Cantre is liable for the injury suffered by Nora Go. Held: (1) YES. The questioned exhibits consist mostly of Nora‘s medical records, which were produced by the hospital during trial pursuant to a subpoena duces tecum. Cantre‘s counsel admitted the existence of the same when they were formally offered for admission by the trial court. In any case, given the particular circumstances of this case, a ruling on 58

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the negligence of Cantre may be made based on the res ipsa loquitur doctrine even in the absence of such additional exhibits. (2) YES. The doctrine of res ipsa loquitur allows the mere existence of an injury to justify a presumption of negligence on the part of the person who controls the instrument causing the injury, provided that the following requisites concur: (1) The accident is of a kind which ordinarily does not occur in the absence of someone‘s negligence; (2) It is caused by an instrumentality within the exclusive control of the defendant or defendants; and (3) The possibility of contributing conduct which would make the plaintiff responsible is eliminated. First, the gaping wound on Nora‘s arm is certainly not an ordinary occurrence in the act of delivering a baby, far removed as the arm is from the organs involved in the process of giving birth. Such injury could not have happened unless negligence had set in somewhere. Second, whether the injury was caused by the droplight or by the blood pressure cuff is of no moment. Both instruments are deemed within the exclusive control of the physician in charge under the ―captain of the ship‖ doctrine. This doctrine holds the surgeon in charge of an operation liable for the negligence of his assistants during the time when those assistants are under the surgeon‘s control. In this particular case, it can be logically inferred that Cantre, the senior consultant in charge during the delivery of Nora‘s baby, exercised control over the assistants assigned to both the use of the droplight and the taking of Nora‘s blood pressure. Hence, the use of the droplight and the blood pressure cuff is also within Cantre‘s exclusive control. Third, the gaping wound on Nora‘s left arm, by its very nature and considering her condition, could only be caused by something external to her and outside her control as she was unconscious while in hypovolemic shock. Hence, Nora could not, by any stretch of the imagination, have contributed to her own injury. Cantre‘s defense that Nora‘s wound was caused not by the droplight but by the constant taking of her blood pressure, even if the latter was necessary given her condition, does not absolve her from liability. As testified to by the medico-legal officer, Dr. Arizala, Jr., the medical practice is to deflate the blood pressure cuff immediately after each use. Otherwise, the inflated band can cause injury to the patient similar to what could have happened in this case. Thus, if Nora‘s wound was caused by the blood pressure cuff, then the taking of Nora‘s blood pressure must have been done so negligently as to have inflicted a gaping wound on her arm, for which petitioner cannot escape liability under the ―captain of the ship‖ doctrine. Further, petitioner‘s argument that the failed plastic surgery was not intended as a cosmetic procedure, but rather as a measure to prevent complication does not help her case. It does not negate negligence on her part. Based on the foregoing, the presumption that Cantre was negligent in the exercise of her profession stands unrebutted. (ii)

Respondeat superior

1. Castilex Industrial Corporation v. Vasquez, 321 SCRA 393 (1999) Facts: At around 1:30 to 2:00 am, Vasquez was driving a Hondo motorcycle around Fuente Osmena Rotunda, following the normal flow of traffic but without a helmet and goggles, and carrying only a Student‘s Permit to Drive. Abad was a manager of Castilex, the registered owner of a Toyota Hi-Lux Pickup. He drove the company car out of a parking lot, and made a shortcut against the flow of the traffic. The 2 vehicles collided, causing severe injuries to Vasquez. Abad brought him to the Southern Islands Hospital, and later to the Cebu Doctor‘s Hospital. Vasquez died. Abad signed an acknowledgement of Responsible Party, agreeing to pay hospital, professional, etc. bills. A Criminal Case (Unspecified) was filed against him, but was dismissed for failure to prosecute. This Civil Case for damages was initiated against Abad and Castilex; Cebu Doctor‘s intervened to collect unpaid balances. The RTC held them solidarily liable. The CA held that Castilex is only vicariously liable. Castilex argues that the 4th paragraph of Article 2180 should apply, and not the 5th; that even though he was using a company vehicle, Abad was not acting within the scope of his duties outside office hours; that the Castilex did not have the burden of proving that Abad was not acting within the scope of his duties. Issue: Whether or not CASTILEX is vicariously liable. Held: NO. The negligence of ABAD is not an issue at this instance. CASTILEX presumes said negligence but claims that it is not vicariously liable for the injuries and subsequent death caused by ABAD. CASTILEX contends that the 5th paragraph of Article 2180 should only apply to instances where the employer is not engaged in business or industry. Since it is engaged in the business of manufacturing and selling furniture it is therefore not covered by said provision. Instead, the 4th paragraph should apply. CASTILEX‘s interpretation of the 5th paragraph is not accurate. The phrase ―even though the former are not engaged in any business or industry‖ found in the 5th paragraph should be interpreted to mean that it is not necessary for the 59

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employer to be engaged in any business or industry to be liable for the negligence of his employee who is acting within the scope of his assigned task. A distinction must be made between the 2 provisions to determine what is applicable. Both provisions apply to employers: the 4th PAR, to owners and managers of an establishment or enterprise; and the 5th PAR, to employers in general, whether or not engaged in any business or industry. The 4th PAR. covers negligent acts of employees committed either in the service of the branches or on the occasion of their functions, while the 5th PAR encompasses negligent acts of employees acting within the scope of their assigned task. The latter is an expansion of the former in both employer coverage and acts included. Negligent acts of employees, whether or not the employer is engaged in a business or industry, are covered so long as they were acting within the scope of their assigned task, even though committed neither in the service of the branches nor on the occasion of their functions. For, admittedly, employees oftentimes wear different hats. They perform functions which are beyond their office, title or designation but which, nevertheless, are still within the call of duty. This court has applied the 5th par. to cases where the employer was engaged in a business or industry such as truck operators and banks. The CA cannot, therefore, be faulted in applying the said paragraph of Article 2180 to this case. It is undisputed that ABAD was a Production Manager of CASTILEX at the time of the tort occurrence. As to whether he was acting within the scope of his assigned task is a question of fact, which the court a quo and the CA resolved in the affirmative. It was enough for CASTILEX to deny that ABAD was acting within the scope of his duties; it was not under obligation to prove this negative averment. ABAD, who was presented as a hostile witness, testified that at the time of the incident, he was driving a companyissued vehicle, registered under the name of CASTILEX. He was then leaving the restaurant where he had some snacks and had a chat with his friends after having done overtime work for the petitioner. However, the mere fact that ABAD was using a service vehicle at the time of the injurious incident is not of itself sufficient to charge CASTILEX with liability for the negligent operation of said vehicle unless it appears that he was operating the vehicle within the course or scope of his employment. The following are principles in American Jurisprudence on the employer‘s liability for the injuries inflicted by the negligence of an employee in the use of an employer‘s motor vehicle: USE OF VEHICLE GOING TO or FROM MEALS: It has been held that an employee who uses his employer‘s vehicle in going from his work to a place where he intends to eat or in returning to work from a meal is not ordinarily acting within the scope of his employment in the absence of evidence of some special business benefit to the employer. Evidence that by using the employer‘s vehicle to go to and from meals, an employee is enabled to reduce his time-off and so devote more time to the performance of his duties supports the finding that an employee is acting within the scope of his employment while so driving the vehicle. USE OF VEHICLE GOING TO or FROM WORK: In the same vein, traveling to and from the place of work is ordinarily a personal problem or concern of the employee, and not a part of his services to his employer. Hence, in the absence of some special benefit to the employer other than the mere performance of the services available at the place where he is needed, the employee is not acting within the scope of his employment even though he uses his employer‘s motor vehicle. The employer may, however, be liable where he derives some special benefit from having the employee drive home in the employer‘s vehicle as when the employer benefits from having the employee at work earlier and, presumably, spending more time at his actual duties. Where the employee‘s duties require him to circulate in a general area with no fixed place or hours of work, or to go to and from his home to various outside places of work, and his employer furnishes him with a vehicle to use in his work, the courts have frequently applied what has been called the ―special errand‖ or ―roving commission‖ rule, under which it can be found that the employee continues in the service of his employer until he actually reaches home. However, even if the employee be deemed to be acting within the scope of his employment in going to or from work in his employer‘s vehicle, the employer is not liable for his negligence where at the time of the accident, the employee has left the direct route to his work or back home and is pursuing a personal errand of his own. USE OF VEHICLE OUTSIDE REGULAR WORKING HOURS: An employer who loans his motor vehicle to an employee for the latter‘s personal use outside of regular working hours is generally not liable for the employee‘s negligent operation of the vehicle during the period of permissive use, even where the employer contemplates that a regularly assigned motor vehicle will be used by the employee for personal as well as business purposes and there is some incidental benefit to the employer. Even where the employee‘s personal purpose in using the vehicle has been accomplished and he has started the return trip to his house where the vehicle is normally kept, it has been held that he has not resumed his employment, and the employer is not liable for the employee‘s negligent operation of the vehicle during the return trip.

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The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based on the doctrine of respondeat superior, not on the principle of bonus pater familias as in ours. Whether the fault or negligence of the employee is conclusive on his employer as in American law or jurisprudence, or merely gives rise to the presumption juris tantum of negligence on the part of the employer as in ours, it is indispensable that the employee was acting in his employer‘s business or within the scope of his assigned task. In the case at bar, it is undisputed that ABAD did some overtime work at the CASTILEX‘s office, which was located in Mandaue City. Thereafter, he went to Goldie‘s Restaurant in Fuente Osmeña, Cebu City, which is about 7 km away from his place of business. A witness for the Vasquez, a sidewalk vendor, testified that Fuente Osmeña is a ―lively place‖ even at dawn because Goldie‘s Restaurant and Back Street were still open and people were drinking thereat. Moreover, prostitutes, pimps, and drug addicts littered the place. At the Goldie‘s Restaurant, ABAD took some snacks and had a chat with friends. It was when ABAD was leaving the restaurant that the incident in question occurred. That same witness for the respondents testified that at the time of the vehicular accident, ABAD was with a woman in his car, who then shouted: ―Daddy, Daddy!‖ This woman could not have been ABAD‘s daughter, for ABAD was only 29 years old at the time. To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a personal purpose line with his duties at the time he figured in a vehicular accident. It was then about 2:00 a.m. of 28 August 1988, way beyond the normal working hours. ABAD‘s working day had ended; his overtime work had already been completed. His being at a place which, as petitioner put it, was known as a ―haven for prostitutes, pimps, and drug pushers and addicts,‖ had no connection to CASTILEX‘s business; neither had it any relation to his duties as a manager. Rather, using his service vehicle even for personal purposes was a form of a fringe benefit or one of the perks attached to his position. Since there is paucity of evidence that ABAD was acting within the scope of the functions entrusted to him, CASTILEX had no duty to show that it exercised the diligence of a good father of a family in providing ABAD with a service vehicle. Thus, justice and equity require that petitioner be relieved of vicarious liability for the consequences of the negligence of ABAD in driving its vehicle. 2. Jose v. Court of Appeals, G.R. Nos. 118441-42, January 18, 2000 Facts: During the night previous to the accident of February 22, 1985 at 6:15 a.m., Rommel Abraham and John Macarubo were at a party. There was no sleep for them and the service of drinks cannot be totally discounted. After the party at 11 p.m., while both Rommel and John were on their way home to Valenzuela, the car encountered mechanical trouble and had to be repaired as its cross-joint was detached. The car started to run only after 5AM. With lack of sleep, the strains of a party still on their bodies, and the attention to the repair coupled with the wait until the car was ready to run: potentials in a driver for possible accident. Petitioner Manila Central Bus Lines Corporation (MCL) is the operator-lessee of a public utility bus (Bus 203). On February 1985, at around 6AM, Bus 203 driven by Armando Jose, collided with a red Ford Escort driven by Macarubo along MacArthur Highway in Valenzuela. As a result of the collision, the left side of the Ford Escort‘s hood was severely damaged while its driver, Macarubo, and its lone passenger, Abraham, were seriously injured. The driver and conductress of Bus 203 rushed Macarubo and Abraham to the nearby hospital where Macarubo lapsed into a coma. Despite surgery, Macarubo failed to recover and died 5 days later. Abraham survived, but he became blind on the left eye which had to be removed. In addition, he sustained a fracture on the forehead and multiple lacerations on the face, which caused him to be hospitalized for a week. The accident happened at 6:15 a.m. when the physical and mental condition of the driver Macarubo was, as expected, not too fit for the driving as he could not anymore control the car, coupled possibly with the desire to be home quick for the much needed sleep could have prompted him to overtake the preceding vehicle. There were pictures taken which clearly show that the MCL bus was at its proper lane and not in an overtaking position while the car driven by John Macarubo was positioned in a diagonal manner and crossed the line of the MCL, which is an indication of an overtaking act. If it were the bus that was overtaking at the time, the car would have been thrown farther away from the point of the impact. Abraham‘s father instituted an action for damages against MCL and Armando Jose in the RTC. While parents of Macarubofiled their own suit for damages in the same trial court against MCL alone. These cases would later be consolidated MCL filed a third-party complaint against Juanita Macarubo, registered owner of the Ford Escort on the theory that John Macarubo was negligent and that he was the ―authorized driver‖ of Juanita Macarubo. Juanita Macarubo in turn filed a counterclaim for damages against MCL for the damage to her car. The court was convinced of the close supervision and control of MCL over their drivers, and its exercise of due diligence in seeing to it that no recklessness is committed by its employees and drivers. Court noted the respective damages of the 2 vehicles especially the point of the impact. From the damages shown in the picture, it can be clearly 61

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deduced which vehicle did the bumping. It was the car driven by Macarubo that hit the MCL, which was on its right and correct lane. Trial court dismissed both civil cases against MCL and ruling favorably on its third-party complaint against Juanita Macarubo. Rommel Abraham, the Macarubo spouses, and third-party defendant Juanita Macarubo then appealed to the CA which reversed the trial court‘s ruling. Hence, this petition for review on certiorari. Issue: (1) Whether or not Jose Macarubo is liable for damages (2) Whether the parents of Jose Macarubo are liable. Held: (1) YES. Petitioners relied mainly on photographs, showing the position of the two vehicles after the collision while private respondents offered the testimony of Rommel Abraham to the effect that the collision took place because Bus 203 invaded their lane. The trial court was justified in relying on the photographs rather than on Rommel Abraham‘s testimony which was obviously biased and unsupported by any other evidence. Abraham testified that it was the bus which was on the wrong lane and thus hit their car. In People v. Vasquez, where the physical evidence on record ran counter to the testimonial evidence of the prosecution witnesses, physical evidence should prevail. In this case, the positions of the 2 vehicles, as shown in the photographs taken by MCL line inspector Jesus Custodio about an hour and fifteen minutes after the collision, disputes Abraham‘s self-serving testimony that the two vehicles collided because Bus 203 invaded the lane of the Ford Escort and clearly shows that the case is exactly the opposite of what he claimed happened. Contrary to Abraham‘s testimony, the photographs show quite clearly that Bus 203 was in its proper lane and that it was the Ford Escort which usurped a portion of the opposite lane. The 3 photographs show the Ford Escort positioned diagonally on the highway, with its 2 front wheels occupying Bus 203‘s lane. As shown by the photograph the portion of MacArthur Highway where the collision took place is marked by a groove which serves as the center line separating the right from the left lanes. The photograph shows that the left side of Bus 203 is about a few feet from the center line and that the bus is positioned parallel thereto. Indeed, Bus 203 could not have been overtaking another vehicle when the collision happened. It was filled with passengers, and it was considerably heavier and larger than the Ford Escort. If it was overtaking another vehicle, it necessarily had to accelerate. The acceleration of its speed and its heavy load would have greatly increased its momentum so that the impact of the collision would have thrown the smaller and lighter Ford Escort to a considerable distance from the point of impact. The photograph shows however that the Ford Escort‘s smashed hood was only about one or two meters from Bus 203‘s damaged left front. According to the CA, there was a traffic jam on the “bus lane” while traffic was light on the “car lane.” It is therefore inconceivable that the car, occupying the lane without any traffic, would overtake and traverse a heavy traffic lane. This is correct. However, the fact remains that when the Ford Escort finally came to a stop, it encroached on the opposite lane occupied by Bus 203. Rommel Abraham testified that on the night before the accident, he and Macarubo went to a friend‘s house in La Loma where they stayed until 11 p.m. Abraham‘s explanation as to why they did not reach Valenzuela until 6AM of the next day when the accident happened indicates that the Ford Escort slammed against Bus 203 because of a mechanical defect. As Rommel Abraham himself admitted, the Ford Escort‘s rear cross-joint was cut/detached. This mechanism controls the movement of the rear tires. Since trouble in the cross-joint affects a car‘s maneuverability, the matter should have been treated as a serious mechanical problem. In this case, when asked if they were able to repair the cross-joint, Abraham said ―Ginawaan ng paraan, ma‘am,‖ by simply welding them (instead of replacing the spare parts) just so they could reach home. His testimony indicates that the rear cross-joint was hastily repaired and that, at most, the kind of repairs made thereon were merely temporary; just enough to enable Abraham and Macarubo to reach home. Given such fact, the likelihood is that while the Ford Escort might not have been overtaking another vehicle, it actually strayed into the bus‘ lane because of the defective cross-joint, causing its driver to lose control of the vehicle. Appellate court refused to give credence to the physical evidence on the ground that the photographs were taken an hour after the collision and that within such span of time the bus could have been moved. Constancia Gerolada, Bus 203‘s conductress, however testified that, immediately after the collision, she and bus driver, Armando Jose, took the injured driver and passenger of the Ford Escort to the Fatima Hospital. This fact is not disputed by private respondents. Rommel Abraham mentioned in his appellant‟s brief in the CA a sketch of the scene of the accident allegedly prepared by one Patrolman Kalale, which shows Bus 203 to be occupying the Ford Escort‟s lane. However, the records of this case do 62 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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not show that such a sketch was ever presented in evidence in the trial court or that Patrolman Kalale was ever presented as a witness to testify on the sketch allegedly prepared by him. The CA also ruled that MCL failed to make a satisfactory showing that it exercised the diligence of a good father of a family in the selection and supervision of its bus driver, Armando Jose. Under the circumstances of this case, the Court held that proof of due diligence in the selection and supervision of employees is not required. The responsibility of employers is premised upon the presumption of negligence of their employees. It is such a firmly established principle that the negligence of the employee gives rise to the presumption of negligence on the part of the employer. This is the presumed negligence in the selection and supervision of the employee. The theory of presumed negligence, in contrast with the American doctrine of respondent superior, where the negligence of the employee is conclusively presumed to be the negligence of the employer, is clearly deducible from the last paragraph of Article 2180 which provides that the responsibility therein mentioned shall cease if the employers prove that they observed all the diligence of a good father of a family to prevent damages Therefore, before the presumption of the employer‘s negligence in the selection and supervision of its employees can arise, the negligence of the employee must first be established. While the allegations of negligence against the employee and that of an employer-employee relation in the complaint are enough to make out a case of quasi-delict under Art. 2180, the failure to prove the employee‘s negligence during the trial is fatal to proving the employer‘s vicarious liability. In this case, private respondents failed to prove their allegation of negligence against driver Armando Jose who, in fact, was acquitted in the case for criminal negligence arising from the same incident. (2) NO. Article 2180 makes the persons specified therein responsible for the quasi-delicts of others. The burden is upon MCL to prove that Juanita Macarubo is one of those specified persons who are vicariously liable for the negligence of the deceased John Macarubo. In its third-party complaint, MCL alleged that Juanita Macarubo was the registered owner of the Ford Escort car and that John Macarubo was the ―authorized driver‖ of the car. Nowhere was it alleged that John Macarubo was the son, ward, employee or pupil of Juanita Macarubo so as to make the latter vicariously liable for the negligence of John Macarubo. The allegation that John Macarubo was ―the authorized driver‖ of the Ford Escort is not equivalent to an allegation that he was an employee of Juanita Macarubo. That John Macarubo was the ―authorized driver‖ of the car simply means that he drove the Ford Escort with the permission of Juanita Macarubo. For failure to discharge its burden, MCL‘s third-party complaint should be dismissed. 3. Ramos v. Court of Appeals, 321 SCRA 584 (1999) Doctrine: As the so-called ―captain of the ship,‖ it is the Dr. Hosaka‘s responsibility to see to it that those under him perform their task in the proper manner. Dr. Hosaka failed to exercise the proper in not determining if his anesthesiologist observed proper anesthesia protocols. No evidence on record exists to show that Dr. Hosaka verified if Dra. Gutierrez properly intubated the patient. Furthermore, Dr. Hosaka had scheduled another procedure in a different hospital at the same time as Erlindas cholecystectomy, and was in fact over 3 hours late for the latter‘s operation. He had little or no time to confer with his anesthesiologist regarding the anesthesia delivery. Dr. Hosaka shares equal responsibility for the events which resulted in Erlinda‘s condition. In the responsibility of the hospital in this particular incident, the unique practice (among private hospitals) of filling up specialist staff with attending and visiting ―consultants,‖ who are allegedly not hospital employees, presents problems in apportioning responsibility for negligence in medical malpractice cases. However, the difficulty is only more apparent than real. Hospitals exercise significant control in the hiring and firing of consultants and in the conduct of work within the hospital premises. Doctors who apply for ―consultant‖ slots, visiting or attending are required to submit proof of completion of residency, their educational qualifications; generally, evidence of accreditation by the appropriate board (diplomate), evidence of fellowship in most cases, and references. These requirements are carefully scrutinized by members of the hospital administration or by a review committee set up by the hospital that either accept or reject the application. After a physician is accepted, either as a visiting or attending consultant, he is normally required to attend clinicopathological conferences, conduct bedside rounds for clerks, interns and residents, moderate grand rounds and patient audits and perform other tasks and responsibilities, for the privilege of being able to maintain a clinic in the hospital, and/or for the privilege of admitting patients into the hospital. In addition to these, the physician‘s performance as a specialist is generally evaluated by a peer review committee on the basis of mortality and morbidity statistics, and 63

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feedback from patients, nurses, interns and residents. A consultant remiss in his duties, or a consultant who regularly falls short of the minimum standards acceptable to the hospital or its peer review committee, is normally politely terminated. Private hospitals, hire, fire and exercise real control over their attending and visiting ―consultant‖ staff. While ―consultants‖ are not, technically employees, a point which respondent hospital asserts in denying all responsibility for the patient‘s condition, the control exercised, the hiring, and the right to terminate consultants all fulfill the important hallmarks of an employer-employee relationship, with the exception of the payment of wages. For the purpose of allocating responsibility in medical negligence cases, an EMPLOYER-EMPLOYEE RELATIONSHIP, in effect, exists between hospitals and their attending and visiting physicians. The basis for holding an employer solidarily responsible for the negligence of its employee is found in Article 2180 of the CC which considers a person accountable not only for his own acts but also for those of others based on the former‘s responsibility under a relationship of patria potestas. Such responsibility ceases when the persons or entity concerned prove that they have observed the diligence of a good father of the family to prevent damage. While the burden of proving negligence rests on the plaintiffs, once negligence is shown, the burden shifts to the respondents (parent, guardian, teacher or employer) who should prove that they observed the diligence of a good father of a family to prevent damage. Respondent hospital, apart from a general denial of its responsibility over respondent physicians, failed to adduce evidence showing that it exercised the diligence of a good father of a family in the hiring and supervision of the latter. It failed to adduce evidence with regard to the degree of supervision which it exercised over its physicians. In neglecting to offer such proof, or proof of a similar nature, respondent hospital thereby failed to discharge its burden under the last paragraph of Article 2180. Having failed to do this, respondent hospital is consequently solidarily responsible with its physicians for Erlinda‘s condition. 4. Ramos v. Court of Appeals, 380 SCRA 467 (2002)  See previous Facts: Unlike in the 1999 case, it was held here that there is no employer-employee relationship between DLSMC and the phycisians. The court in this case does away with its ruling in the 1999 case, holding DLSMC solidary liable. It previously ruled thus: ―Anent private respondent DLSMC‘s liability for the resulting injury to petitioner Erlinda, we held that respondent hospital is solidarily liable with respondent doctors therefor under Article 2180 of the Civil Code, since there exists an employer-employee relationship between private respondent DLSMC and Drs. Gutierrez and Hosaka: Private hospitals, hire, fire and exercise real control over their attending and visiting ―consultant‖ staff. While ―consultants‖ are not, technically employees, x x x the control exercised, the hiring and the right to terminate consultants all fulfill the important hallmarks of an employer-employee relationship, with the exception of the payment of wages. In assessing whether such a relationship in fact exists, the control test is determining.‖ Here, there are four grounds that DLSMC maintains in order to disclaim liability. FIRST, a hospital does not hire or engage the services of a consultant, but rather, accredits the latter and grants him or her the privilege of maintaining a clinic and/or admitting patients in the hospital upon a showing by the consultant that he or she possesses the necessary qualifications, such as accreditation by the appropriate board, evidence of fellowship and references. SECOND, it is not the hospital but the patient who pays the consultant‘s fee for services rendered by the latter. THIRD, a hospital does not dismiss a consultant; instead, the latter may lose his or her accreditation or privileges granted by the hospital. FOURTH, DLSMC argues that when a doctor refers a patient for admission in a hospital, it is the doctor who prescribes the treatment to be given to said patient. The hospital‘s obligation is limited to providing the patient with the preferred room accommodation, the nutritional diet and medications prescribed by the doctor, the equipment and facilities necessary for the treatment of the patient, as well as the services of the hospital staff who perform the ministerial tasks of ensuring that the doctor‘s orders are carried out strictly. The Court finds that respondent hospital‘s position on this issue is meritorious. There is no employer-employee relationship between DLSMC and Drs. Gutierrez and Hosaka which wouldhold DLSMC solidarily liable for the injury suffered by petitioner Erlinda under Article 2180.

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Torts & Damages 2013

Atty. Jess Lopez

As explained by DLSMC, that the admission of a physician to membership in DLSMC‘s medical staff as active or visiting consultant is first decided upon by the Credentials Committee thereof, which is composed of the heads of the various specialty departments such as the Department of Obstetrics and Gynecology, Pediatrics, Surgery with the department head of the particular specialty applied for as chairman. The Credentials Committee then recommends to DLSMC's Medical Director or Hospital Administrator the acceptance or rejection of the applicant physician, and said director or administrator validates the committee's recommendation. Similarly, in cases where a disciplinary action is lodged against a consultant, the same is initiated by the department to whom the consultant concerned belongs and filed with the Ethics Committee consisting of the department specialty heads. The medical director/hospital administrator merely acts as exofficio member of said committee. Neither is there any showing that it is DLSMC which pays any of its consultants for medical services rendered by the latter to their respective patients. Moreover, the contract between the consultant in respondent hospital and his patient is separate and distinct from the contract between respondent hospital and said patient. The first has for its object the rendition of medical services by the consultant to the patient, while the second concerns the provision by the hospital of facilities and services by its staff such as nurses and laboratory personnel necessary for the proper treatment of the patient. Further, no evidence was adduced to show that the injury suffered by petitioner Erlinda was due to a failure on the part of respondent DLSMC to provide for hospital facilities and staff necessary for her treatment. 5. Nogales v. Capitol Medical Center, G.R. No. 142625, December 19, 2006 Facts: Corazon Nogales, 37 years old, was pregnant with her 4th child. In her past pregnancies, she gave birth in a clinic. Because of her age, spouses Nogales decided to do it in Capital Medical Center (CMC), one of the best hospitals at that time (1976). Dr Oscar Estrada was exclusively in charge of her prenatal care since her 4 th month of pregnancy. After experiencing labor pains around midnight of May 25 1976, Corazon was immediately asked to be admitted to CMC. A ―Consent to Admission‖ and ―Admission Agreement‖ was signed by Rogelio (husband). In the labor room, Estrada refused the services of anesthesiologist (Enriquez). When the cervix was fully dilated, Estrada assisted by a Dr. Villaflor applied low forceps to extract the baby. In the process, a piece of cervical tissue was allegedly torn (yuck). When the baby finally came out, it had to be intubated and resuscitated. After giving birth, around 6AM, Corazon showed signs of vaginal bleeding which rapidly became profuse. Her blood pressure dropped considerably. Estrada then ordered a blood transfusion but it took the CMC Lab 30 minutes to match the blood type and deliver the blood. Thereafter, the Head of the OB-GYNE Dept. (Espinola) was apprised by Corazon‘s condition. Thus, Espinola ordered an immediate hysterectomy. Rogelio signed a ―Consent to Operation.‖ Despite Espinola‘s efforts, Corazon died at 9:15 AM due to hemorrhage. Rogelio sued for damages against CMC, Estrada, and other people involved in the care of Corazon. They mainly contend that the defendants were negligent in the treatment and management of Corazon. Also, CMC was charged with negligence in the selection and supervision of its physicians and staff. For failure to file an answer, Estrada was declared in default. Others were able to so the trial ensued. After 11 years of trial, Estrada was adjudged to be solely liable for damages due to his his incorrect and inadequate management and lack of treatment by misapplying the forceps in the delivery because it resulted in a large cervical tear which had caused the profuse bleeding. On appeal, CA affirmed. Nogales now appeals to further impose liability against CMC. Issue: Whether CMC is vicariously liable for Estrada‘s negligence. Held: YES. CMC disclaims liability by asserting that Estrada was a mere visiting physician and that it admitted Corazon because her physical condition then was classified an emergency obstetrics case. The employer (or the hospital) must have the right to control both the means and the details of the process by which the employee (or the physician) is to accomplish his task. After a thorough examination of the voluminous records of this case, no single evidence points to CMC‘s exercise of control over Estrada‘s treatment and management of Corazon‘s condition. Throughout the pregnancy, Corazon was under the exclusive prenatal care of Estrada. At the time of her admission at CMC and during her delivery, it was Estrada who attended to Corazon. There was no showing that CMC had a part in diagnosing her condition. While Estrada enjoyed staff privileges at CMC, such fact alone did not make him an employee of CMC. CMC merely allowed Dr. Estrada to use its facilities when she was about to give birth. The question now is whether CMC is automatically exempt from liability considering that Estrada is a mere independent contractor-physician. In general, a hospital is not liable for the negligence of an independent contractor-physician. There is, however, an exception to this principle. The hospital may be liable if the physician is the ―ostensible‖ agent of the hospital. This exception is also known as the ―doctrine of apparent authority.‖

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Torts & Damages 2013

Atty. Jess Lopez

Under said doctrine, a hospital can be held vicariously liable for the negligent acts of a physician providing care at the hospital, regardless of whether the physician is an independent contractor, unless the patient knows, or should have known, that the physician is an independent contractor. For a hospital to be liable under the doctrine of apparent authority, a plaintiff must show that: (1) the hospital, or its agent, acted in a manner that would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital; (2) where the acts of the agent create the appearance of authority, the plaintiff must also prove that the hospital had knowledge of and acquiesced in them; and (3) the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence. Said ―Holding Out‖ does not require an express representation by the hospital that the person alleged to be negligent is the employee. The doctrine essentially involves two factors to determine the liability of an independent contractor physician. HOSPITAL‘S MANIFESTATIONS It sometimes described as an inquiry whether the hospital acted in a manner which would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital. In this regard, the hospital need not make express representations to the patient that the treating physician is an employee of the hospital; rather a representation may be general and implied. Said doctrine is also a species of the doctrine of estoppel. In this case, CMC impliedly held out Estrada as a member of its medical staff thus clothing him with apparent authority leading Nogales to believe that Estrada was an employee/agent. Instances: (1) CMC granted staff privileges to Estrada; (2) Signing of Consent Forms signed did not indicate that Estrada was an independent contractor; (3) Estrada‘s referral to the Head of OB-GYNE gave the impression that Estrada was a member the CMC staff. PATIENT‘S RELIANCE It is sometimes characterized as an inquiry on whether the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence. The records show that the Spouses Nogales relied upon a perceived employment relationship with CMC in accepting Estrada‘s services. Rogelio‘s consent in Corazon‘s hysterectomy to be performed by a different physician, namely Espinola, is a clearindication of Rogelio‘s confidence in CMC‘s surgical staff. Likewise unconvincing is CMC‘s argument that petitioners are estopped from claiming damages based on the Consent on Admission and Consent to Operation. The documents do not expressly release CMC from liability for injury to Corazon due to negligence during her treatment or operation. Neither do the consent forms expressly exempt CMC from liability for Corazon‘s death due to negligence during such treatment or operation. Such release forms, being in the nature of contracts of adhesion, are construed strictly against hospitals. Besides, a blanket release in favor of hospitals ―from any and all claims,‖ which includes claims due to bad faith or gross negligence, would be contrary to public policy and thus void. When a person needing urgent medical attention rushes to a hospital, he cannot bargain on equal footing with the hospital on the terms of admission and operation. Such a person is literally at the mercy of the hospital. 6. Professional Services, Inc., v. Agana, 513 SCRA 478 (2007)  See previous 7. Professional Services, Inc., v. Agana, G.R. Nos. 126297, 126467, 127590, February 2, 2010 Facts: PSI filed a 2nd MR on the Court‘s decision holding it vicariously and directly liable for damages to Enrique Agana and the heirs of Natividad Agana (based on an employer-employee relationship). Manila Medical Services, Inc., Asian Hospital, Inc., and Private Hospital Association of the Philippines all sought to intervene on the common ground that, unless modified, the assailed decision and resolution will jeopardize the financial viability of private hospitals and jack up the cost of health care. Issue: Whether a hospital may be held liable for the negligence of physicians-consultants allowed to practice in its premises. Held: YES. PSI is liable to the Aganas, not under the principle of respondeat superior for lack of evidence of an employment relationship with Dr. Ampil but under the principle of OSTENSIBLE AGENCY for the negligence of Dr. Ampil and, pro hac vice, under the principle of CORPORATE NEGLIGENCE for its failure to perform its duties as a hospital. A hospital as a juridical entity cannot practice medicine, in reality it utilizes doctors, surgeons and medical practitioners in the conduct of its business of facilitating medical and surgical treatment. There are 3 legal relationships that crisscross: 1) hospital and the doctor; 2) hospital and the patient; 3) patient and the doctor. 66

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Atty. Jess Lopez

The exact nature of each relationship determines the basis and extent of the liability of the hospital for the negligence of the doctor. Where an employment relationship exists, the hospital may be held vicariously liable under Article 2176 in relation to Article 2180 or respondeat superior. Even when no employment relationship exists but it is shown that the hospital holds out to the patient that the doctor is its agent, the hospital may still be vicariously liable under Article 2176 in relation to Article 1431 and Article 1869 or the principle of apparent authority. Regardless of its relationship with the doctor, the hospital may be held directly liable to the patient for its own negligence or failure to follow established standard of conduct to which it should conform as a corporation. There is ample evidence that the PSI held out to the patient that Dr. Ampil was its agent. There are 2 factors that determine apparent authority: 1) hospital‘s implied manifestation to the patient which led the latter to conclude that the doctor was the hospital‘s agent; and 2) patient‘s reliance upon the conduct of the hospital and the doctor, consistent with ordinary care and prudence. Enrique testified that he consulted Dr. Ampil regarding the condition of his wife and as advised by Dr. Ampil, he ―asked [his] wife to go to Medical City to be examined by [Dr. Ampil] - indicates that it was Enrique who actually made the decision on whom Natividad should consult and where. When asked what impelled him to choose Dr. Ampil, he said ―I have known him to be a specialist on that part of the body; A staff member of the Medical City which is a prominent and known hospital; because he is a neighbor, I expect more than the usual medical service.‖ The decision made by Enrique for Natividad to consult Dr. Ampil was significantly influenced by the impression that Dr. Ampil was a staff member of Medical City. Enrique looked upon Dr. Ampil not as independent of but as integrally related to Medical City. In the ―Consent for Hospital Care‖ signed by Agana, PSI virtually reinforced the public impression that Dr. Ampil was a physician of its hospital, rather than one independently practicing in it; that the medications and treatments he prescribed were necessary and desirable; and that the hospital staff was prepared to carry them out. PSI pointed out in its memorandum that Dr. Ampil‘s hospital affiliation was not the exclusive basis – that had Dr. Ampil been affiliated with another hospital, he would still have been chosen by the Aganas as Natividad‘s surgeon. Court cannot speculate. Under the circumstances at that time, Enrique decided to consult Dr. Ampil for he believed him to be a staff member of a prominent and known hospital. PSI is vicariously liable for the negligence of Dr. Ampil as its ostensible agent. While PSI had no power to control the means or method by which Dr. Ampil conducted the surgery, PSI had the power to review or cause the review of what may have irregularly transpired within its walls. PSI defined the standards of its corporate conduct – that it had a corporate duty to Natividad even after her operation to ensure her safety as a patient. The corporate duty was not limited to having its nursing staff note or record the 2 missing gauzes but it extended to determining Dr. Ampil‘s role in it, bringing the matter to his attention, and correcting his negligence. Given the standard of conduct that PSI defined for itself, the inquiry is whether the hospital measured up to it. PSI excuses itself from fulfilling its corporate duty on the ground that Dr. Ampil assumed the personal responsibility of informing Natividad about the 2 missing gauzes. Dr. Ricardo Jocson, who was part of the group of doctors that attended to Natividad, testified that the group talked about the missing gauzes but Dr. Ampil assured them that he would personally notify the patient about it. PSI claimed no reason for it to act on the report on the 2 missing gauzes because Natividad Agana showed no signs of complications. The excuses are totally unacceptable. PSI could not simply wave off the problem and nonchalantly delegate to Dr. Ampil the duty to review what transpired during the operation. The purpose of such review would have been to pinpoint when, how and by whom two surgical gauzes were mislaid to avert any jeopardy to Natividad‘s recovery. PSI could not have expected that purpose to be achieved by merely hoping that the person likely to have mislaid the gauzes might be able to retrace his own steps. By its own standard of corporate conduct, PSI‘s duty to initiate the review was non-delegable. While Dr. Ampil may have had the primary responsibility of notifying Natividad about the missing gauzes, PSI imposed upon itself the separate and independent responsibility of initiating the inquiry into the missing gauzes. The purpose of the first would have been to apprise Natividad of what transpired during her surgery, second would have been to pinpoint any lapse in procedure to prevent a recurrence thereof and to determine corrective measures that would ensure the safety of Natividad. That Dr. Ampil negligently failed to notify Natividad did not release PSI from its self-imposed separate responsibility. PSI had the duty to take notice of medical records prepared by its own staff when these bear earmarks of a surgery gone awry. The record taken during the operation of Natividad which reported a gauze count discrepancy should have given PSI sufficient reason to initiate a review and should not have waited for Natividad to complain. PSI took no heed of the record of operation and consequently did not initiate a review of what transpired during Natividad‘s operation. Rather, it shirked its responsibility and passed it on to others — to Dr. Ampil whom it expected to inform Natividad, and to Natividad herself to complain before it took any meaningful step. By its inaction, therefore, PSI failed its own standard of hospital care.

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Atty. Jess Lopez

The corporate negligence ascribed to PSI is different from the medical negligence attributed to Dr. Ampil. The duties of the hospital are distinct from those of the doctor-consultant. The failure of PSI to fulfill its duties as a hospital corporation gave rise to a direct liability to the Aganas distinct from that of Dr. Ampil. PSI‘s hospital liability based on ostensible agency and corporate negligence applies only to this case, pro hac vice and is not intended to set a precedent and should not serve as a basis to hold hospitals liable for every form of negligence of their doctorsconsultants. The ruling is unique to this case, for the liability of PSI arose from an implied agency with Dr. Ampil and an admitted corporate duty to Natividad. The agony of Aganas has gone on for 26 long years with Natividad coming to the end of her days racked in pain and agony. Such wretchedness could have been avoided had PSI simply done what was logical: heed the report of a guaze count discrepancy, initiate a review, and take corrective measures. PSI is liable for P15 million. 8. Maranan v. Perez, G.R. No. L-22272, June 26, 1967 Facts: Rogelio Corachea was a passenger in a taxicab owned and operated by Pascual Perez when he was stabbed and killed by the driver, Simeon Valenzuela. Valenzuela was prosecuted for homicide in the CFI of Batangas. Found guilty, he was sentenced to suffer imprisonment and to indemnify the heirs of the deceased. Appeal from said conviction was taken to the CA. While appeal was pending in the CA, Antonia Maranan, Rogelio's mother, filed an action in the CFI of Batangas to recover damages from Perez and Valenzuela for the death of her son. They asserted that the deceased was killed in self-defense, since he first assaulted the driver by stabbing him from behind. Perez further claimed that the death was a caso fortuito for which the carrier was not liable. The court a quo, after trial, ruled for Maranan and awarded her P3,000 as damages against Perez. The claim against Valenzuela was dismissed. From this ruling, both Maranan and defendant Perez appealed to this Court, the former asking for more damages and the latter insisting on non-liability. Subsequently, the CA affirmed the judgment of conviction earlier mentioned, during the pendency of the herein appeal, and then final judgment was entered therein. Issue: Whether Valenzuela is liable as the employer of the taxi driver who killed Maranan. Held: YES. Valenzuela relies solely on the ruling enunciated in Gillaco v. Manila that the carrier is under no absolute liability for assaults of its employees upon the passengers. The attendant facts and controlling law of that case and the one at bar are very different, however. In Gillaco, the passenger was killed outside the scope and the course of duty of the guilty employee. When the crime took place, the guard Devesa had no duties to discharge in connection with the transportation of the deceased from Calamba to Manila. When Devesa shot and killed Gillaco, Devesa was assigned to guard the Manila-San Fernando (La Union) trains, and he was at Paco Station awaiting transportation to Tutuban, the starting point of the train that he was engaged to guard. His tour of duty was to start at 9AM., 2 hours after the commission of the crime. Devesa was therefore under no obligation to safeguard the passengers of the train, where the deceased was riding; and the killing of Gillaco was not done in line of duty. Devesa's assault cannot be deemed in law a breach of Gillaco's contract of transportation by a servant or employee of the carrier. Here, the killing was perpetrated by the driver of the very cab transporting the passenger, in whose hands the carrier had entrusted the duty of executing the contract of carriage. Unlike Gillaco, the killing of the passenger here took place in the course of duty of the guilty employee and when the employee was acting within the scope of his duties. Also, Gillaco was decided under the provisions of the CC of 1889 which, unlike the present CC, did not impose upon common carriers absolute liability for the safety of passengers against wilful assaults or negligent acts committed by their employees. The death of the passenger in Gillaco was truly a fortuitous event which exempted the carrier from liability. Art. 1105 of the old CC on fortuitous events has been substantially reproduced in Art. 1174 CC of the Philippines but both articles clearly remove from their exempting effect the case where the law expressly provides for liability in spite of the occurrence of force majeure. Unlike the old Civil Code, the new CC expressly makes the common carrier liable for intentional assaults committed by its employees upon its passengers, by the wording of Art. 1759 which states that ―Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the former's employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers.‖

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Atty. Jess Lopez

The CC provisions on the subject of Common Carriers are new and were taken from Anglo-American Law. The basis of the carrier's liability for assaults on passengers committed by its drivers rests either on (1) the doctrine of respondeat superior or (2) the principle that it is the carrier's implied duty to transport the passenger safely. Under the FIRST, which is the minority view, the carrier is liable only when the act of the employee is within the scope of his authority and duty. It is not sufficient that the act be within the course of employment only. Under the SECOND, it is enough that the assault happens within the course of the employee's duty. It is no defense for the carrier that the act was done in excess of authority or in disobedience of the carrier's orders. The carrier's liability here is absolute in the sense that it practically secures the passengers from assaults committed by its own employees. From Art. 1759, the CC evidently follows the rule based on the second view. At least 3 very cogent reasons underlie this rule. FIRST, the special undertaking of the carrier requires that it furnish its passenger that full measure of protection afforded by the exercise of the high degree of care prescribed by the law, inter alia from violence and insults at the hands of strangers and other passengers, but above all, from the acts of the carrier's own servants charged with the passenger's safety; SECOND, said liability of the carrier for the servant's violation of duty to passengers is the result of the carrier‘s confiding in the servant's hands the performance of his contract to safely transport the passenger, delegating therewith the duty of protecting the passenger with the utmost care prescribed by law; and THIRD, as between the carrier and the passenger, the carrier must bear the risk of wrongful acts or negligence of the its employees against passengers, since the carrier, and not the passengers, has power to select and remove them. It is the carrier's strict obligation to select its drivers and similar employees with due regard not only to their technical competence and physical ability, but also, no less important, to their total personality, including their patterns of behavior, moral fibers, and social attitude. Applying this stringent norm to the facts in this case, therefore, the lower court rightly adjudged the carrier liable pursuant to Art. 1759 of the Civil Code. The dismissal of the claim against the driver was also correct. Plaintiff's action was predicated on breach of contract of carriage and the cab driver was not a party thereto. His civil liability is covered in the criminal case wherein he was convicted by final judgment. 9. The Consolidated Bank and Trust Corporation v. CA, G.R. No. 138569, September 11, 2003  See previous Doctrine: Solidbank is liable for breach of contract due to negligence. The contract between the bank and its depositor is governed by the provisions of Article 1980 on simple loan. The law imposes on banks high standards in view of the fiduciary nature of banking. Article 1172 states that the degree of diligence required of an obligor is that prescribed by law or contract, and absent such stipulation then the diligence of a good father of a family. Accordingly, Section 2 of RA 8791 (The General Banking Law of 2000) prescribes the statutory diligence required from banks – that banks must observe ―high standards of integrity and performance‖ in servicing their depositors. Although RA 8791 took effect almost nine years after the unauthorized withdrawal from L.C. Diaz‘s savings account, jurisprudence at the time already imposed on banks the same high standard of diligence required under RA No. 8791. Article 1172 provides that ―responsibility arising from negligence in the performance of every kind of obligation is demandable.‖ For breach of the savings deposit agreement due to negligence, or culpa contractual, the bank is liable to its depositor. Solidbank‘s tellers must exercise a high degree of diligence in insuring that they return the passbook only to the depositor or his authorized representative. If the tellers give the passbook to the wrong person, they would be clothing that person presumptive ownership of the passbook (as provided in the savings deposit agreement), thus facilitating unauthorized withdrawals by that person. In culpa contractual, once the plaintiff proves a breach of contract, there is a presumption that the defendant was at fault or negligent. In the present case, L.C. Diaz has established that Solidbank breached its contractual obligation to return the passbook only to the authorized representative of L.C. Diaz and, thus, there is a presumption that Solidbank was at fault and its teller was negligent in not returning the passbook to Calapre. Solidbank failed to discharge its burden to rebut the presumption by failing to present to the trial court the teller and failing to prove that the teller indeed verified the identity of the person who retrieved the passbook. Solidbank is bound by the negligence of its employees under the principle of respondeat superior or command responsibility. The defense of exercising the required diligence in the selection and supervision of employees is not a complete defense in culpa contractual, unlike in culpa aquiliana. (iii)

Violation of rules and statutes a. Traffic rules (Memorize Articles 2184 and 2185)

1. United States v. Juanillo, 23 Phil. 212 (1912) 69

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Facts: Ponciano Leal was killed on the public highway while going from the town of Pavia to Santa Barbara, Iloilo by being struck by an automobile, of which the Juanillo was the chauffeur. The prosecution contends that the death of the deceased was due to the reckless driving of the Juanillo while the defense insists that the unfortunate occurrence was purely an accident. The prosecution presented 4 witnesses and the defense 6, including the Juanillo. According to the witnesses for the prosecution (Labrila, Latoja, Agraviado, and son of Leal), Labrila, Leal, and Latoja were walking along the road toward Santa Barbara that afternoon. Latoja was in the middle of Labrila (left) and Leal (right). While they were walking and having a conversation, Latoja heard a noise behind them and turning around he saw an automobile approaching. He called out immediately that an automobile was coming and jumped to the left, colliding with Labrila and knocking him into the ditch. Leal on the other hand, was seen lying on the ground, having been knocked down by the automobile. The defense introduced the testimony of the members of the party riding in the automobile, (Becker, Dean, Rimmer, Hardwood, and Miller) and that of the chauffeur. All the witnesses for the defense testified that the middle of the road was clear at that place and time and that the deceased, as well as all others, were in perfectly safe places and that the deceased would not have been killed if he had not at tempted to cross from the right to the left side of the road. According to Juanillo, he noticed up ahead about 80 or 100 brazas some men walking in the road and that when he got up to within about 40 or 50 brazas of them he closed off his gasoline and kept blowing his horn. He also placed his foot on the exhaust so he could make a noise. They were then going about 10 MPH. When they were within about 2 or 3 brazas of the men, the man on the right side started to run across the road. He put on his brakes but could not stop right on the spot. Some part of the automobile hit him. At the time they hit the man they were going about 6 or 8 MPH. They ran about 3 or 4 brazas more when the automobile stopped. Q. If you could stop going at 8 miles an hour within 2 brazas, why did you run 3 or 4? A. I don't know, sir; I was going about 8 miles an hour, I should say. Issue: Whether Juanillo is liable for reckless imprudence. Held: YES. According to the witnesses for the defense, when they were about 25 feet away from the natives, the brakes were applied with such force that he and his companions were all thrown forward, yet the machine still continued running, hitting the deceased under its own momentum for about 150 or 200 yards. In view of all the admitted facts and circumstances, and the unreasonableness of the stories told by the defendantappellant and his witnesses we are fully satisfied that the trial court was justified in accepting the testimony of Latoja, Labrila, and Agraviado as to how the collision took place. Neither Latoja nor Labrila heard the blowing of the horn or any other warning until the machine was so close that Latoja and Labrila barely had time to make their escape, while the deceased, being on the left, did not have sufficient time. It has been held, that courts will take judicial notice that an automobile makes an unusual noise; that it can be driven at a great velocity—at a speed many times greater than that of ordinary vehicles drawn by animals, and that it is highly dangerous when used on country roads. Its use as a vehicle for traveling is comparatively recent. It makes an unusual noise. It can be and usually is made to go on common roads at great velocity — at a speed many times greater than that of ordinary vehicles hauled by animals; and beyond doubt it is highly dangerous when used on country roads, putting to great hazard the safety and lives of the mass of the people who travel on such roads. It is generally held that the rights and duties of pedestrians and vehicles are equal. Each may use the highway, and each must exercise such care and prudence as the circumstances demand. Owners of automobiles have the same rights in the streets and highways that pedestrians and drivers of horses have. Automobile drivers or the drivers of animals are not to use the means of locomotion without regard to the rights of others having occasion to travel on the highway. While an automobile is a lawful means of conveyance and has equal rights upon the roads with pedestrians, horses, and carriages, its use cannot be lawfully countenanced unless accompanied with that degree of prudence in management and consideration for the rights of others which is consistent with safety. Negligence is the failure to observe for the protection of the interests of another person that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury. Negligence is want of care required by the circumstances. It is a relative or comparative, not an absolute term, and its application depends upon the situation of the parties, and the degree of care and vigilance which the circumstances reasonably impose. Where the danger is great a high degree of care is necessary, and the failure to observe it is a want of ordinary care under the circumstances. The operator of an automobile is bound to exercise care in proportion to the varying danger and risks of the highway and commensurate with the dangers naturally incident to the use of such vehicle. He is obliged to take notice of the conditions before him, and if it is apparent that by any particular method of proceeding he is liable to work an injury, it is his duty to adopt some other or safer method if within reasonable care and prudence he can do so. In determining the degree of care an operator of an automobile should use, when on the highway, it is proper to take 70 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

into consideration the place, presence or absence of other travelers, the speed of the automobile, its size, appearance, manner of movement, and the amount of noise it makes, and anything that indicates unusual or peculiar danger. The quantum of care required is to be estimated by the exigencies of the particular situation; that is, by the place, presence or absence of other vehicles and travelers; Also, the degree of care required to be exercised varies with the capacity of the person endangered to care for himself. Thus, it has been held not to be negligence per se in a boy of 6 to play on the highway, where an auto mobile came up on him under circumstances which produced fright and terror, and thus caused an error of judgment by which the boy ran in front of the automobile. The testimony of all the parties in the case at bar as to the surrounding conditions of this occurrence was to the effect that the road on which they were traveling was dotted with simple rural folk. In his brief, counsel for the Juanillo says: ―Two native farmers who all their lives have seen nothing that moves faster than a bull cart, except on the two or three occasions on which they testify they have visited Iloilo, cannot be expected to give an intelligent idea of speed of an automobile, train, or even a fast horse.‖ Under such conditions Juanillo being in charge of the powerful machine, capable of doing great damage if not skillfully manipulated, was bound to use a high degree of care to avoid injuring these native farmers, who had a common right to the highway. A driver of an automobile, under such circumstances, is required to use a greater degree of care than drivers of animals, for the reason that the machine is capable of greater destruction, and furthermore, it is absolutely under the power and control of the driver; whereas, a horse or other animal can and does to some extent aid in averting an accident. It is not pleasant to be obliged to slow down automobiles to accommodate persons riding, driving, or walking. It is probably more agreeable to send the machine along and let the horse or person get out of the way in the best manner possible; but it is well to understand, if this course is adopted and an accident occurs, that the automobile driver will be called upon to account for his acts. An automobile driver must at all times use all the care and caution which a careful and prudent driver would have exercised under the circumstances. Juanillo was aware of and is chargeable with the knowledge that the deceased and his companions were simple country people and were lacking in the capacity to appreciate and to guard against the dangers of an automobile driven at a high rate of speed, and he was bound to enlarge to a commensurate extent the degree of vigilance and care necessary to avoid injuries which the use of his machine made more imminent. The negligence of Juanillo in the case at bar consisted in his failure to recognize the great injury that would accrue to the deceased from the collision. He had no right, it seems to us, after he saw the deceased and his companions walking in the road ahead of him to continue at so great a speed, at the eminent hazard of colliding with the deceased. Great care was due from him by reason of the deadliness of the machine he was propelling along the highway. When one comes through the highways with a machine of such power as an automobile, it is incumbent upon the driver to use great care not to drive against or over pedestrians. An automobile is much more dangerous than a street car or even a railway car. These are propelled along fixed rails and all the traveling public has to do to be safe is to keep off the track. But the automobile can be turned as easily as an individual, and for this reason is far more dangerous to the traveling public than either the street car or the railway train. 2. Chapman v. Underwood, G.R. No. 9010, March 28, 1914 Facts: At the time the accident occurred, there was a single-track street-car line running along Calle Herran, with occasional switches to allow cars to meet and pass each other. One of these switches was located at the scene of the accident. Chapman had been visiting his friend, Creveling, in front of whose house the accident happened. He desired to board a certain "San Marcelino" car coming from Santa Ana and bound for Manila. Being told by Creveling that the car was approaching, he immediately, and somewhat hurriedly, passed from the gate into the street for the purpose of signaling and boarding the car. The car was a closed one, the entrance being from the front or the rear platform. Chapman attempted to board the front platform but, seeing that he could not reach it without extra exertion, stopped beside the car, facing toward the rear platform, and waited for it to come abreast of him in order to board. While in this position he was struck from behind and run over by the Underwood‘s automobile. Underwood entered Calle Herran at Calle Peñafrancia in his automobile driven by his chauffeur. A street car bound from Manila to Santa Ana being immediately in front of him, he followed along behind it. Just before reaching the scene of the accident, the street car which he was following took the switch — that is, went off the main line to the left upon the switch lying alongside of the main track. Thereupon the Underwood no longer followed that street car nor went to the left, but either kept straight ahead on the main street-car track or a bit to the right. The car which the Chapman intended to board was on the main line and bound in an opposite direction to that in which Underwood was going. When the front of the "San Marcelino" car, the one the Chapman attempted to board, was almost in front of Underwood‘s automobile, his driver suddenly went to the right and struck and ran over the Chapman, as above described. 71 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Issue: Whether Underwood, as owner of the car, is liable. Held: NO. Underwood‘s driver was guilty of negligence in running upon and over the Chapman. He was passing an oncoming car upon the wrong side. Chapman, in coming out to board the car, was not obliged, for his own protection, to observe whether a car was coming upon him from his left hand. He had only to guard against those coming from the right. He knew that, according to the law of the road, no automobile or other vehicle coming from his left should pass upon his side of the car. He needed only to watch for cars coming from his right, as they were the only ones under the law permitted to pass upon that side of the street car. Underwood, however, is not responsible for the negligence of his driver, under the facts and circumstances of this case. As we have said in the case of Johnson vs. David, the driver does not fall within the list of persons in article 1903 of the CC for whose acts the defendant would be responsible. Although in David the owner of the vehicle was not present at the time the alleged negligent acts were committed by the driver, the same rule applies where the owner is present, unless the negligent acts of the driver are continued for such a length of time as to give the owner a reasonable opportunity to observe them and to direct his driver to desist therefrom. An owner who sits in his automobile, or other vehicle, and permits his driver to continue in a violation of the law by the performance of negligent acts, after he has had a reasonable opportunity to observe them and to direct that the driver cease therefrom, becomes himself responsible for such acts. The owner of an automobile who permits his chauffeur to drive up the Escolta, for example, at a speed of 60 MPH, without any effort to stop him, although he has had a reasonable opportunity to do so, becomes himself responsible, both criminally and civilly, for the results produced by the acts of his chauffeur. On the other hand, if the driver, by a SUDDEN act of negligence, and without the owner having a reasonable opportunity to prevent the act or its continuance, injures a person or violates the criminal law, the owner of the automobile, although present therein at the time the act was committed, is not responsible, either civilly or criminally, therefor. The act complained of must be continued in the presence of the owner for such a length of time that the owner, by his acquiescence, makes his driver's act his own. It does not appear from the record that, from the time the automobile took the wrong side of the road to the commission of the injury, sufficient time intervened to give the defendant an opportunity to correct the act of his driver. The interval between the turning out to meet and pass the street car and the happening of the accident was so small as not to be sufficient to charge defendant with the negligence of the driver. Whether or not the owner of an automobile driven by a competent driver, would be responsible, whether present or not, for the negligent acts of his driver when the automobile was a part of a business enterprise, and was being driven at the time of the accident in furtherance of the owner's business, we do not now decide. 3. United States v. Crame, 30 Phil. 1 (1915) Facts: At around 11-12 PM, Crame, a duly licensed chauffeur was driving an automobile along with Bill (a sailor) and Rabonsa. The vehicle was passing from Sta. Ana to Manila. At the same time, there were 2 automobiles heading to Sta. Ana from Manila. One of the cars was driven by a certain Stuart. Crame alleged that the car driven by Stuart (a Cadillac) had high powered electric lights and because of such, he was induced to reduce his speed to about 10 MPH. He asserts that he suddenly saw a man in front of his car and that, on seeing him, he altered the course of the automobile as much as possible in order to avoid collision but was unable to do so. He alleged that at the time the automobile struck the man, the machine was almost at a standstill, it coming to a complete stop within 6 feet where the injured man lay. Thereafter, Crame, Bill and Rabonsa brought the injured man to the hospital and gave an account of the incident to the authorities. Because of the accident, Coombs (victim of the accident and a US private) was rendered unconscious and remained in a state of mental debility, accompanied with loss of memory. The physician described him as incurable and hopeless imbecile. The trial court convicted Crame of the crime of producing serious physical injuries by imprudencia temeraria (reckless imprudence). It found that the accused, first, having seen the Coombs crossing the street at a certain distance in front of the automobile, did not reduce the speed of the automobile sufficiently, nor attempt to stop the machinery entirely, if that was necessary, to avoid an accident. Second, in that it does not appear that the accused sounded his horn or whistle or used his voice to call the attention of the person who was crossing the street or notify him that he should stop and avoid being struck by the automobile. Third and last, in that the accused was driving in the center, or little to the right of the center of the street instead of on the left side thereof. 72 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Issue: Whether Crame is liable. Held: YES. The accused did not see the soldier whom he ran down until it was too late, although the street at that point was brilliantly lighted; he did not sound his horn or give notice of his approach in any other manner; he did not apply the brake or make any effort whatever to stop; he was traveling on the wrong side of the street at the time of the collision. The court upheld the findings of the trial court. They found that there were 3 grounds for the negligence of Crame. First the accused claims that he was unable to stop his automobile. However this was refuted that had he begun to stop the machine upon seeing Coombs, the accident would have been avoided (considering that the speed would have been around 10-20 MPH) Second, accused failed to sound his horn and arrest the attention of the soldier who was crossing the street. There is no allegation or proof offered by the accused. Third, the accused alleged that they were unable to pass along the left side of the road since there was a ditch and that the road was uneven which would have brought greater danger on Crame and his passenger. However the court found that this view is unsustainable since there were 2 street car tracks that and that accused would not need to bring his automobile to the left side track near the ditch, since there still remains the center track. The fact that the accused did not see the soldier until the machine was very close to him is strong evidence of inattention to duty. The street at the place where the accident occurred is wide and unobstructed. There is no building on either side of the street. There is no place from which a person desiring to cross the street can dart out so suddenly and unexpectedly as to give a chauffeur no opportunity to protect him. The accused intimates in his testimony that a carromata was approaching him just before the accident occurred and that it obscured his vision to such an extent that he did not see that soldier until the very moment of meeting the carromata. This story is not corroborated by any other witness in the case. Given that there was even a carromata, he would still have seen Coombs crossing since the carromata would have only momentarily obscured his vision for a moment. There is nothing in this story of the accused which, if true, relieves from the charge of negligence under the other facts and circumstances disclosed by the evidence. Additionally, the area where the accident took place is a place where many persons habitually wait to transfer and where as a matter of fact many persons stroll about waiting for cars. The defendant was aware of these facts. Moreover, he testified himself that the street at that place was not level, that the rails of the street-car track made it difficult for automobiles to cross or pass over them and that keeping to the extreme left-hand side of the street would endanger the safety of the automobile and the passengers. All of these are facts which require care and diligence on the part of an automobile driver; and such a place should be approached guardedly, with the machine under control and with ability to stop with reasonable quickness. It appears clearly established by the evidence that the accused was driving on the right-hand side of the street when the accident happened. According to the law of the road and the custom of the country he should have been on the left-hand side of the street. According to the evidence there was abundant room for him to drive upon what may properly be called the left-hand side of the street and still be free from danger or risk. Instead of that he chose to take what appears from the evidence to have been almost the extreme right-hand side of the street. Thomas M. Bill, who was a passenger in the automobile which ran down the soldier, testified that the automobile at the time of the accident was traveling on the right-hand side of the street. The testimony showing that the accused was driving on the right-hand side of the street is corroborated by the fact that the witness Rabonsa, who testified on the trial that the accused was driving on the left-hand side of the street, first declared, in his statement to the prosecuting attorney, that, at the time of the accident, the automobile was being driven on the right-hand side of the street. While it is true that the law does not draw an inference of negligence from the mere showing that there was a collision between a man and an automobile on a public street but that negligence must be proved where, in the an action to recover damages for having been run down by defendant's automobile, it appeared that the automobile, at the time the injury was produced, was being driven on the wrong side of the street, the burden of proof was on defendant to establish that the accident occurred through other causes than his negligence. Negligence cannot be attributed to Coombs. The mere fact that he was run down by an automobile does not signify that he was negligent. At the time he was struck he was, speaking from the direction in which the accused was driving the automobile at the time, on the right-hand side of the street where he had a right to be and where the law fully protested him from vehicles traveling. Additionally, the court cannot sustain the allegation of accused that he was driving at about 10 MPH only. Accused could have stopped his vehicle immediately if he saw the soldier at about 20 feet. Furthermore, if he did not see that soldier until 73 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

too late to stop, the burden is on him to show why he did not. There is something wrong when a chauffeur runs over a man who is in plain view of the automobile for a long distance before the point of the accident is reached. Lastly, the court cannot ascribe to accused‘ defense that the soldier was drunk. It is of no moment whether he is drunk or not since it was not proven and that it would have contributed to the accident.

4. De Leon Brokerage Co., Inc., v. Court of Appeals, 4 SCRA 517 (1962) Facts: DLBC owns a cargo truck which was driven by Luna. On the day in question, Luna was instructed by DLBC to go to Pampanga and, from there, proceed to Nueva Ecija. However, after unloading its cargo in Pampanga, for unknown reasons, he drove back to Manila. On his way back, Luna figured in a collision with a passenger jeepney. As a result, there were casualties. Also, private respondent Angeline Steen (16-yrs) suffered an injury wherein her left arm had been scraped bare of flesh from shoulder to elbow. Leopoldo Steen (father) reserved the right to file a civil action pending the criminal action he instituted against Luna and the driver of the jeepney. Luna was convicted with reckless imprudence resulting to homicide and physical injuries while the jeepney driver was acquitted. After said conviction, Steen filed an action to recover damages under quasi delict and presented the judgment of conviction as evidence for his claim for damages. The trial court held Luna solidarily liable with DLBC. CA affirmed. This petition alleges that Luna was not in the discharge of his duties at the time of the accident and, thus, DLBC cannot be held solidarily liable. DLBC also claims that it cannot be held liable pursuant to Art. 2184 of the CC which states that — In motor vehicle mishaps, the owner is solidarily liable with his driver, if the former, who was in the vehicle, could have, by the use of the due diligence, prevented the misfortune. It is disputably presumed that a driver was negligent, if he had been found guilty of reckless driving or violating traffic regulations at least twice within the next preceding two months. Issue: Whether DLBC is solidarily liable with Luna. Held: YES. Having established the fact of Luna‘s negligence through the judgment of conviction that was presented as evidence, a presumption arose that Luna‘s employer, DLBC, was negligent in the selection and supervision of its employees. Moreover, DLBC was not able to prove that it exercised the required diligence. In other words, in the absence of determinative proof that the Luna deviated from his employer‘s instructions, DLBC should be held liable. With regard to DLBC‘s defense under Art. 2184, it only applies to owners of vehicles who are not included in the terms of Art. 2180 as owners of an establishment or enterprise. 5. Caedo v. Yu Khe Thai, 26 SCRA 410 (1968) Facts: A vehicular accident occurred injuring Marcial Caedo and several members of this family. The mishap occurred at about 530AM of March 24, 1958 on Highway 54. Marcial was driving his Mercury car on his way from his home in QC to the airport where his son Ephraim was scheduled to take a plane for Mindoro. With them in the car were Mrs. Caedo and 3 daughters. Coming from the opposite direction was the Cadillac of Yu Khe Thai, with his driver Rafael Bernardo at the wheel, taking the owner from his Parañaque home to Wack Wack for his regular round of golf. Bernando tried to avoid a carretela (going in the same direction) in front of him by suddenly swerving to the left lane where Caedo was driving in the opposite direction. Caedo tried to avoid the Cadillac but it was too late. Caedo et al filed the present complaint for damages against Yu Ke Thai and Bernando. The CFI ruled that Bernando was negligent; and that he is solidarily liable with Yu Ke Thai. Issue: Whether Bernardo was negligence and whether Yu Ke Thai can be held solidarily liable. Held: YES & NO. Bernando was guilty of negligence. The 2 cars were traveling at fairly moderate speeds, considering the condition of the road and the absence oftraffic — the Mercury at 40 to 50 KPH, and the Cadillac at approximately 30 to 35 miles (48 to 56 kilometers). Their headlights were mutually noticeable from a distance. Ahead of the Cadillac, going in the same direction, was a carretela owned by a certain Pedro Bautista. The carretela was towing another horse by means of a short rope coiled around the rig's vertical post on the right side and held at the other end by Pedro's son, Julian Bautista. Bernardo testified that he was almost upon the rig when he saw it in front of him, only 8 meters away. This is the first clear indication of his negligence. The carretela was provided with two lights, one on each side, and they should have given him sufficient warning to take the necessary precautions. And even if he did not notice the lights, as he claimed later on at the trial, the carretela should anyway have been visible to him from afar.

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Torts & Damages 2013

Atty. Jess Lopez

In the meantime the Mercury was coming on its own lane from the opposite direction. Bernardo, instead of slowing down or stopping altogether behind the carretela until that lane was clear, veered to the left in order to pass. As he did so the curved end of his ear's right rear bumper caught the forward rim of the rig's left wheel, obliquely to the other lane, where it collided with the oncoming vehicle. On his part Caedo had seen the Cadillac on its own Lane; he slackened his speed, judged the distances in relation to the carretela and concluded that the Cadillac would wait behind. Bernardo, however, decided to take a gamble — beat the Mercury to the point where it would be in line with the carretela, or else squeeze in between them in any case. It was a risky maneuver either way, and the risk should have been quite obvious. Caedo, confronted with the unexpected situation, tried to avoid the collision at the last moment by going farther to the right, but was unsuccessful. The photographs taken at the scene show that the right wheels of his car were on the unpaved shoulder of the road at the moment of impact. Thus, there is no question as to Bernardo‘s negligence. As to Yu Ke Thai‘s liability, under Art. 2184, if the causative factor was the driver's negligence, the owner of the vehicle who was present is likewise held liable if he could have prevented the mishap by the exercise of due diligence. An owner who sits in his automobile, or other vehicle, and permits his driver to continue in a violation of the law, by the performance of negligent acts, after he has had a reasonable opportunity to observe them and to direct that the driver cease therefrom, becomes himself responsible for such acts. On the other hand, if the driver, by a sudden act of negligence, and without the owner having a reasonable opportunity to prevent the act or its continuance, injures a person or violates the criminal law, the owner of the automobile, although present therein at the time the act was committed, is not responsible, either civilly or criminally, therefor. The act complained of must be continued in the presence of the owner for such a length of time that the owner, by his acquiescence, makes his driver's act his own. Bernardo is an experienced driver. He was Yu Ke thai‘s driver since 1987, and before that served another master for 10 years as a driver. Thus the Court declared that no negligence for having employed him at all may be imputed to his master. Negligence on the part of the latter, if any, must be sought in the immediate setting and circumstances of the accident, that is, in his failure to detain the driver from pursuing a course which not only gave him clear notice of the danger but also sufficient time to act upon it. Thus, the basis of the master's liability in civil law is not respondeat superior but rather the relationship of pater familias. The theory is that ultimately the negligence of the servant, if known to the master and susceptible of timely correction by him, reflects his own negligence if he fails to correct it in order to prevent injury or damage. We do not see that such negligence may be imputed. The car was not running at an unreasonable speed. The road was wide and open, and devoid of traffic that early morning. There was no reason for the car owner to be in any special state of alert. He had reason to rely on the skill and experience of his driver. He became aware of the presence of the carretela when his car was only twelve meters behind it, but then his failure to see it earlier did not constitute negligence, for he was not himself at the wheel. And even when he did see it at that distance, he could not have anticipated his driver's sudden decision to pass the carretela on its left side in spite of the fact that another car was approaching from the opposite direction. The time element was such that there was no reasonable opportunity for Yu Khe Thai to assess the risks involved and warn the driver accordingly. The thought that entered his mind, he said, was that if he sounded a sudden warning it might only make the other man nervous and make the situation worse. It was a thought that, wise or not, connotes no absence of that due diligence required by law to prevent the misfortune. The test of imputed negligence under Article 2184 is, to a great degree, necessarily subjective. Car owners are not held to a uniform and inflexible standard of diligence as are professional drivers. In many cases they refrain from driving their own cars and instead hire other persons to drive for them precisely because they are not trained or endowed with sufficient discernment to know the rules of traffic or to appreciate the relative dangers posed by the different situations that are continually encountered on the road. What would be a negligent omission under aforesaid Article on the part of a car owner who is in the prime of age and knows how to handle a motor vehicle is not necessarily so on the part, say, of an old and infirm person who is not similarly equipped. The law does not require that a person must possess a certain measure of skill or proficiency either in the mechanics of driving or in the observance of traffic rules before he may own a motor vehicle. The test of his negligence, within the meaning of Article 2184, is his omission to do that which the evidence of his own senses tells him he should do in order to avoid the accident. 6. FGU Insurance Corporation v. Court of Appeals, G.R. No. 118889, March 23, 1998 Facts: At 3AM, 2 vehicles (Lancers) cruising northward along EDSA figured in a traffic accident. The car owned by Lydia F. Soriano was being driven at the outer lane of the highway by Benjamin Jacildone. The other car, owned by respondent FILCAR Transport, Inc. (FILCAR), and driven by Peter Dahl-Jensen as lessee, was at the center lane, left of the other vehicle. Upon approaching the corner of Pioneer Street, the car owned by FILCAR swerved to the right hitting the left side of the car of Soriano. Dahl-Jensen, a Danish tourist, did not possess a Philippine driver‘s license. FGU Insurance, in view of its insurance contract with Soriano, paid the latter P25,382.20. By way of subrogation, FGU sued Dahl-Jensen and 75

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Torts & Damages 2013

Atty. Jess Lopez

FILCAR as well as respondent Fortune Insurance. The summons was not served on Dahl-Jensen since he was no longer staying at his given address, he was later dropped from the complaint. TC dismissed for failure of FGU to substantiate its claim of subrogation. CA affirmed but on a different ground: only the fault or negligence of Dahl- Jensen was sufficiently proved but not that of FILCAR. FGU insists rely on the ruling in MYC-Agro-Industrial Corporation v. Vda. de Caldo that the registered owner of a vehicle is liable for damages suffered by third persons although the vehicle is leased to another. Issue: May an action based on quasi-delict prosper against a rent-a-car company and, consequently, its insurer for fault or negligence of the car lessee in driving the rented vehicle? Held: NO. To prove quasi-delict under Art. 2176, the following are the requisites: (a) damage suffered by the plaintiff; (b) fault or negligence of the defendant; and, (c) connection of cause and damage. FGU failed to prove the existence of the 2nd requisite, i.e., fault or negligence of FILCAR, because only the fault or negligence of Dahl-Jensen was sufficiently established. The damage caused on the vehicle of Soriano was due to the fact that Dahl-Jensen swerved to the right while the vehicle he was driving was at the center lane. Thus, negligence was solely attributable to Dahl-Jensen and must be his personal liability . FILCAR did not have any participation. The liability under Art. 2180 arises by virtue of a presumption juris tantum of negligence on the part of the persons made responsible thereunder for failure to exercise due care and vigilance over the acts of subordinates. Art. 2180 is not applicable. FILCAR being engaged in a rent-a-car business was only the owner of the car leased to Dahl-Jensen. There is no vinculum juris between them as employer and employee. FILCAR cannot in any way be responsible for the negligent act of Dahl-Jensen, the former not being an employer of the latter. Correlating par. 5 of Art. 2180 with Art. 2184 which provides that ―in motor vehicle mishap, the owner is solidarily liable with his driver, if the former, who was in the vehicle, could have by the use of due diligence, prevented the misfortune. If the owner was not in the motor vehicle, the provisions of article 2180 are applicable.‖ Such is neither applicable because of the absence of master-driver relationship between FILCAR and Dahl-Jensen. FGU has no cause of action against respondent FILCAR on the basis of quasi-delict. Likewise, its claim against FORTUNE can neither prosper. FGU‘s insistence on MYC-Agro-Industrial Corporation is rooted in a misapprehension of our ruling. In that case, the negligent and reckless operation of the truck owned by petitioner corporation caused injuries to several persons and damage to property. Intending to exculpate itself from liability, the corporation raised the defense that at the time of the collision it had no more control over the vehicle as it was leased to another; and, that the driver was not its employee but of the lessee. The court was not persuaded as it found that the true nature of the alleged lease contract was nothing more than a disguise effected by the corporation to relieve itself of the burdens and responsibilities of an employer. 7. Mallari v. Court of Appeals, 324 SCRA 147 (2000) Facts: At around 5AM, the passenger jeepney driven by Alfredo Mallari, Jr. and owned by his co-petitioner Alfredo Mallari, Sr. collided with the delivery van of respondent Bulletin Publishing Corp. Mallari, Jr. testified that he went to the left lane of the highway and overtook a Fiera which had stopped on the right lane. Before he passed by the Fiera, he saw the van of BULLETIN coming from the opposite direction. It was driven by Felix Angeles. The sketch of the accident showed that the collision occurred after Mallari, Jr. overtook the Fiera while negotiating a curve in the highway. The points of collision were the left rear portion of the passenger jeepney and the left front side of the delivery van of BULLETIN. The 2 right wheels of the delivery van were on the right shoulder of the road and pieces of debris from the accident were found scattered along the shoulder of the road up to a certain portion of the lane travelled by the passenger jeepney. The impact caused the jeepney to turn around and fall on its left side resulting in injuries to its passengers one of whom was Israel Reyes who eventually died due to the gravity of his injuries. Claudia G. Reyes, the widow, filed a complaint for damages against Mallari, Sr. and Mallari, Jr., and also against BULLETIN, its driver Felix Angeles, and the N.V. Netherlands Insurance Company. The complaint alleged that the collision which resulted in the death of Israel Reyes was caused by the fault and negligence of both drivers. The trial court found that the proximate cause of the collision was the negligence of the driver of the Bulletin delivery van, considering the fact that the left front portion of the delivery truck driven by Felix Angeles hit and bumped the left rear portion of the passenger jeepney driven by Alfredo Mallari, Jr. Hence, the trial court ordered BULLETIN and Felix Angeles to pay jointly and severally the widow. It also dismissed the complaint against the other defendants Alfredo Mallari, Sr. and Alfredo Mallari, Jr. 76 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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On appeal the CA modified the decision and found no negligence on the part of Angeles and consequently of his employer BULLETIN. CA ruled that the collision was caused by the sole negligence of Alfredo Mallari, Jr. It absolved from any liability respondent BULLETIN, Felix Angeles and N.V. Netherlands Insurance Company. Issue: Is Mallari Jr. liable for the accident. Held: YES. Contrary to their allegation that there was no evidence whatsoever that petitioner Mallari, Jr. overtook a vehicle at a curve on the road at the time of or before the accident, the same petitioner himself testified that such fact indeed did occur. The CA correctly found, based on the sketch and spot report of the police authorities which were not disputed, that the collision occurred immediately after Mallari, Jr. overtook a vehicle in front of it while traversing a curve on the highway. This act of overtaking was in clear violation of Sec. 41, pars, (a) and (b), of RA 4136 as amended, otherwise known as The Land Transportation and Traffic Code. 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. In this case, by his own admission, Mallari, Jr. already saw that the BULLETIN delivery van was coming from the opposite direction and failing to consider the speed thereof since it was still dark at 5AM mindlessly occupied the left lane and overtook 2 vehicles in front of it at a curve in the highway. The proximate cause of the collision resulting in the death of Israel Reyes, a passenger of the jeepney, was the sole negligence of the driver of the passenger jeepney, Mallari, Jr., who recklessly operated and drove his jeepney in a lane where overtaking was not allowed by traffic rules. Under Art. 2185 CC, unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap he was violating a traffic regulation. As found by CA, Mallari failed to present satisfactory evidence to overcome this legal presumption. The negligence and recklessness of the driver of the passenger jeepney is binding against Mallari, Sr., who admittedly was the owner of the passenger jeepney engaged as a common carrier, considering the fact that in an action based on contract of carriage, the court need not make an express finding of fault or negligence on the part of the carrier in order to hold it responsible for the payment of damages sought by the passenger. Under Art. 1755, a common carrier is bound to carry the passengers safely as far as human care and foresight can provide using the utmost diligence of very cautious persons with due regard for all the circumstances. Under Art. 1756, in case of death or injuries to passengers, a common carrier is presumed to have been at fault or to have acted negligently, unless it proves that it observed extraordinary diligence. Pursuant to Art. 1759, it is liable for the death of or injuries to passengers through the negligence or willful acts of the former‘s employees. This liability of the common carrier does not cease upon proof that it exercised all the diligence of a good father of a family in the selection of its employees by the contract of carriage, the carrier jeepney owned by Mallari, Sr. assumed the express obligation to transport the passengers to their destination safely and to observe extraordinary diligence with due regard for all the circumstances, and any injury or death that might be suffered by its passengers is right away attributable to the fault or negligence of the carrier. 8. Pleyto v. Lomboy, 432 SCRA 329 (2004) Facts: Philippine Rabbit (PRBL) is a public carrier, servicing various routes in Central and Northern Luzon. Pleyto was one of its drivers. Pleyto‘s bus figured in a head on collision with a car, killing Ricardo Lomboy and injuring Carmela Lomboy. It was 11:30 am, and it was drizzling. According to one of the bus passengers, Pleyto tried to overtake a tricycle, but hit it instead. He swerved to the opposite lane, smashing head-on into the Mitsubishi Lancer, resulting in the above hassles. Carmela and Maria, the widow, filed an action for damages against PRBL and Pleyto. PRBL and Pleyto argue that the bus was running slowly, and was inspected prior to the trip. Pleyto was merely following the trike, when it suddenly stopped in the middle of the road. He stepped on the brakes, but the bus still skidded; he swerved to avoid the trike, only to collide with the Lancer. The RTC held petitioners solidarily liable. It found Pleyto negligent in its disregard of the other car. It believed the passenger‘s testimony as against petitioners‘ self-serving story. Further, it found that Pleyto clearly violated traffic rules 77 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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and regulations, and thus was negligent under Article 2185, having failed to present any proof to the contrary. PRBL was liable under Article 2180. The CA affirmed the decision. Issue: Whether or not Pleyto was negligent. Held: YES. 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 KPH 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. Indeed, Pleyto violated traffic rules and regulations when he overtook the tricycle despite the presence of an oncoming car in the other lane. Article 2185 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 CA 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. The CA found PRBL liable for Pleyto‘s negligence pursuant to Article 2180 in relation to Article 2176. 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. 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. 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. Regarding PRBL‘s negligence, PRBL presented several documents in evidence to show the various tests and prequalification requirements imposed upon petitioner Pleyto before his hiring as a driver by PRBL. However, no documentary evidence was presented to prove that PRBL exercised due diligence in the supervision of its employees, including Pleyto. It was held that ―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. 9. PCI Leasing and Finance, Inc., v. UCPB General Insurance Co., Inc., 557 SCRA 141 (2008) Facts: A Mitsubishi Lancer car owned by UCPB and insured by UCPB General Insurance Inc. was traversing the Laurel Highway in Lipa City when the car, then driven by Flaviano Isaac with Conrado Geronimo, the Asst. Manager of said bank, was hit and bumped by an 18-wheeler Fuso Tanker Truck owned by PCI Leasing allegedly leased to and operated by Superior Gas & Equitable Co., Inc. (SUGECO), and driven by its employee, defendant appellant Renato Gonzaga. The impact caused heavy damage to the Mitsubishi Lancer car resulting in an explosion of the rear part of the car. The driver and passenger suffered physical injuries as well. Worse, the driver Gonzaga continued on his way to his destination and did not bother to bring his victims to the hospital. Plaintiff-appellee paid the assured UCPB representing the insurance coverage of the damaged car. As the 18-wheeler truck is registered under the name of PCI Leasing, repeated demands were made by UCPB for payment of the aforesaid amounts. No payment was made so UCPB filed the present case. PCI Leasing, interposed the defense that it could not be held liable for the collision, since the driver of the truck, Gonzaga, was not its employee, but that of its co-defendant SUGECO since it was SUGECO, and not petitioner, that was the actual 78 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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operator of the truck, pursuant to a Contract of Lease signed by PCI and SUGECO. Petitioner, however, admitted that it was the owner of the truck in question. RTC ruled in favor of UCPB General Insurance. CA affirmed. MR was denied hence this petition. Issue: Whether PCI Leasing, as registered owner of a motor vehicle that figured in a quasi-delict may be held liable, jointly and severally, with the driver thereof, for the damages caused to third parties. Held: YES. The registered owner of the vehicle driven by a negligent driver may still be held liable under applicable jurisprudence involving laws on compulsory motor vehicle registration and the liabilities of employers for quasi-delicts under the CC. The principle of holding the registered owner of a vehicle liable for quasi-delicts resulting from its use is well-established in jurisprudence. Registration is required not to make said registration the operative act by which ownership in vehicles is transferred, as in land registration cases, because the administrative proceeding of registration does not bear any essential relation to the contract of sale between the parties but to permit the use and operation of the vehicle upon any public highway. 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. PRINCIPAL PURPOSE of motor vehicles regislation: (1) Identification of the vehicle and of the operator, in case of accident; and (2) As a deterrent from lax observance of the law and of the rules of conservative and safe operation. Should not the registered owner be allowed at the trial to prove who the actual and real owner is, and in accordance with such proof escape or evade responsibility and lay the same on the person actually owning the vehicle? NO. a registered owner allowed to evade responsibility by proving who the supposed transferee or owner is, it would be easy for him, by collusion with others or otherwise, to escape said responsibility and transfer the same to an indefinite person, or to one who possesses no property with which to respond financially for the damage or injury done. A registered owner who has already sold or transferred a vehicle has the recourse to a third-party complaint, in the same action brought against him to recover for the damage or injury done, against the vendee or transferee of the vehicle. The inconvenience of the suit is no justification for relieving him of liability; said inconvenience is the price he pays for failure to comply with the registration that the law demands and requires. The registered owner, the PCI Leasing, is primarily responsible for the damage caused to the vehicle of UCPB, but he PCI Leasing has a right to be indemnified by the real or actual owner of the amount that he may be required to pay as damage for the injury caused to the UCPB. For damage or injuries arising out of negligence in the operation of a motor vehicle, the registered owner may be held civilly liable with the negligent driver either 1) subsidiarily, if the aggrieved party seeks relief based on a delict or crime under Articles 100 and 103 of the RPC; or 2) solidarily, if the complainant seeks relief based on a quasi-delict under Articles 2176 and 2180. In case a separate civil action is filed, the long-standing principle is that the registered owner of a motor vehicle is primarily and directly responsible for the consequences of its operation, including the negligence of the driver, with respect to the public and all third persons. In contemplation of law, the registered owner of a motor vehicle is the employer of its driver, with the actual operator and employer, such as a lessee, being considered as merely the owner‘s agent. This being the case, even if a sale has been executed before a tortious incident, the sale, if unregistered, has no effect as to the right of the public and third persons to recover from the registered owner. The public has the right to conclusively presume that the registered owner is the real owner, and may sue accordingly. In this case, there is not even a sale of the vehicle involved, but a mere lease, which remained unregistered up to the time of the occurrence of the quasi- delict that gave rise to the case. Since a lease, unlike a sale, does not even involve a transfer of title or ownership, but the mere use or enjoyment of property, there is more reason, therefore, in this instance to uphold the policy behind the law, which is to protect the unwitting public and provide it with a definite person to make accountable for losses or injuries suffered in vehicular accidents. It is also important to emphasize that such principles apply to all vehicles in general, not just those offered for public service or utility. Court recognizes that the business of financing companies has a legitimate and commendable purpose. In earlier cases, it considered a financial lease or financing lease a legal contract though subject to the restrictions of the so-called Recto Law or Articles 1484 and 1485. PCI Leasing presented a lengthy discussion of the purported trend in other jurisdictions, which apparently tends to favor absolving financing companies from liability for the consequences of quasi-delictual acts or omissions involving financially leased property and adds that these developments have been legislated in our jurisdiction 79 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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in RA 8556 which provides that ―Financing companies shall not be liable for loss, damage or injury caused by a motor vehicle, aircraft, vessel, equipment, machinery or other property leased to a third person or entity except when the motor vehicle, aircraft, vessel, equipment or other property is operated by the financing company, its employees or agents at the time of the loss, damage or injury.‖ However, the new law, R.A. No. 8556, notwithstanding developments in foreign jurisdictions, do not supersede or repeal the law on compulsory motor vehicle registration. No part of the law expressly repeals Section 5(a) and (e) of R.A. No. 4136, as amended, otherwise known as the Land Transportation and Traffic Code, to wit: ―Sec. 5. Compulsory registration of motor vehicles.— (a) All motor vehicles and trailer of any type used or operated on or upon any highway of the Philippines must be registered with the Bureau of Land Transportation for the current year in accordance with the provisions of this Act. (e) Encumbrances of motor vehicles.—Mortgages, attachments, and other encumbrances of motor vehicles, in order to be valid against third parties must be recorded in the Bureau (now the Land Transportation Office). Neither is there an implied repeal of R.A. No. 4136. Thus, the rule remains the same: a sale, lease, or financial lease, for that matter, that is not registered with the Land Transportation Office, still does not bind third persons who are aggrieved in tortious incidents, for the latter need only to rely on the public registration of a motor vehicle as conclusive evidence of ownership. A lease such as the one involved in the instant case is an encumbrance in contemplation of law, which needs to be registered in order for it to bind third parties. The non-registration of the lease contract between petitioner and its lessee precludes the former from enjoying the benefits under Section 12 of R.A. No. 8556. However they are not without recourse. They may resort to third-party complaints against their lessees or whoever are the actual operators of their vehicles. In the case at bar, there is, in fact, a provision in the lease contract between petitioner and SUGECO to the effect that the latter shall indemnify and hold the former free and harmless from any ―liabilities, damages, suits, claims or judgments‖ arising from the latter‘s use of the motor vehicle. Whether petitioner would act against SUGECO based on this provision is its own option. The burden of registration of the lease contract is minuscule compared to the chaos that may result if registered owners or operators of vehicles are freed from such responsibility. PCI Leasing pays the price for its failure to obey the law on compulsory registration of motor vehicles for registration is a pre-requisite for any person to even enjoy the privilege of putting a vehicle on public roads. 10. Añonuevo v. Court of Appeals, 441 SCRA 24 (2004) Facts: At around 9PM, Villagracia was traveling along Boni Ave on his bike , while Añonuevo , traversing the opposite lane, was driving his Lancer . The car was owned by P &G., the employer of Añonuevo‘s brother , Jonathan. Añonuevo was in the course of making a left turn towards Libertad Street when the collision occurred. Villagracia sustained serious injuries as a result, which necessitated his hospitalization several times and forced him to undergo 4 operations. Villagracia sued for damages against P&G. and Añonuevo before the RTC . He also filed a criminal complaint against Añonuevo , but the latter was subsequently acquitted of the criminal charge . Trial on the civil action ensued and RTC rendered judgment against P &G and Añonuevo . CA affirmed the RTC Decision in toto . P&G and Añonuevo filed their respective appeals . P&G‘s petition was denied by this Court . Añonuevo‘s petition , on the other hand, was given due course. CA affirmed the factual findings of the RTC. Among them: that it was Añonuevo‘s veh icle which had struck Villagracia; that Añonuevo‘s vehicle had actually hit Villagracia‘s left midthigh, thus causing a comminuted fracture; that as testified by eyewitness , Añonuevo was ―umaarangkada‖ or speeding as he made the left turn into Libertad; that considering Añonuevo‘s claim that a passenger jeepney was obstructing his path as he made the turn , Añonuevo had enough warning to control his speed ; and that Añonuevo failed to exercise the ordinary precaution , care and diligence required of him in order that the accident could have been avoided. Añonuevo proffers no exculpatory version of facts on his part , nor does he dispute the conclusions made by the RTC and the CA. Añonuevo‘s arguments are especially fixated on a particular question of la w: whether Article 2185 should apply by analogy to non-motorized vehicles. In the same vein, Añonuevo insists that Villagracia‘s own fault and negligence serves to absolve the former of any liability for damages. Añonuevo points out that Villagracia‘s bi cycle had no safety gadgets such as a horn or bell, foot break or headlights, as invoked by a 1948 municipal ordinance. Nor was it duly registered with the Office of the Municipal Treasurer, as required by the same ordinance. Añonuevo claims that Villagracia violated traffic regulations when he failed to register his bicycle or install safety gadgets thereon. He posits that Article 2185 applies by analogy. 80 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Article 2185. Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap, he was violating any traffic regulation. Villagracia does not dispute these allegations , which he admitted during the trial , but directs our attention instead to the findings of Añonuevo‘s own negli gence. Villagracia also contends that , assuming there was contributory negligence on his part, such would not exonerate Añonuevo from payment of damages . Issue: (1) Whether Art. 2185 which presumes negligence on the driver of a motor vehicle if he was violating a traffic regulation should apply to non-motorized vehicles. (2) Whether Villagracia‘s negligence negates his claim for damages. Held: (1) NO. The provision was introduced for the first time in this jurisdiction with the adoption in New CC. Its applicability is expressly qualified to motor vehicles only, and there is no ground to presume that the law intended a broader coverage. Añonuevo points out that modern -day travel is more complex now than when the Code was enacted, the number and types of vehicles now in use far more numerous than as of then. He even suggests that at the time of the enactment of the Code, the legislators ―must have seen that only motor vehicles were of such public concern that they had to be specifically mentioned,‖ yet today, the interaction of vehicles of all types and nature has ―inescapably become matter of public concern‖ so as to expand the application of the law to be more responsive to the times. At the time Article 2185 was formulated, there existed a whole array of non-motorized vehicles ranging from humanpowered contraptions on wheels such as bicycles, scooters, and animal-drawn carts such as calesas and carromota. These modes of transport were even more prevalent on the roads of the 1940s and 1950s than they are today, yet the framers of the New CC chose then to exclude these alternative modes from the scope of Article 2185 with the use of the term ―motorized vehicles .‖ If Añonuevo seriously contends that the application of Article 2185 be expanded due to the greater interaction today of all types of vehicles, such argument contradicts historical experience. The ratio of motorized vehicles as to non-motorized vehicles was significantly lower than as it stands today. A motorized vehicle operates by reason of a motor engine unlike a non-motorized vehicle, which runs as a result of a direct exertion by man or beast of burden of direct physical force. A motorized vehicle, unimpeded by the limitations in physical exertion, is capable of greater speeds and acceleration than non- motorized vehicles. At the same time, motorized vehicles are more capable of inflicting greater injury or damage in the event of an accident or collision. There long has been judicial recognition of the peculiar dangers posed by the motor vehicle. As far back as 1912, in Juanillo, the Court has recognized that an automobile is capable of great speed, greater than that of ordinary vehicles hauled by animals, ―and beyond doubt it is highly dangerous when used on country roads, putting to great hazard the safety and lives of the mass of the people who travel on such roads.‖ A driver of an automobile, under such circumstances, is required to use a greater degree of care than drivers of animals, for the reason that the machine is capable of greater destruction, and furthermore, it is absolutely under the power and control of the driver; whereas, a horse or other animal can and does to some extent aid in averting an accident. Motorists are required to exercise ordinary or reasonable care to avoid collision with bicyclists. While the duty of using ordinary care falls alike on the motorist and the rider or driver of a bicycle, it is obvious, for reasons growing out of the inherent differences in the 2 vehicles, that more is required from the former to fully discharge the duty than from the latter. Art. 2185 was not formulated to compel or ensure obeisance by all to traffic rules and regulations. If such were indeed the evil sought to be remedied or guarded against, then the framers of the Code would have expanded the provision to include non- motorized vehicles or for that matter, pedestrians. (2) NO. The existence of negligence in a given case is not determined by the personal judgment of the actor in a given situation, but rather, it is the law which determines what would be reckless or negligent . Añonuevo asserts that Villagracia was negligent as the latter had transgressed a municipal ordinance requiring the registration of bicycles and the installation of safety devices thereon. The generally accepted view is that violation of a statutory duty constitutes negligence, negligence as a matter of law, or, according to the decisions on the question, negligence per se, for the reason that non-observance of what the legislature has prescribed as a suitable precaution is failure to observe that care which an ordinarily prudent man would observe, and, when the state regards certain acts as so liable to injure others as to justify their absolute prohibition, doing the forbidden act is a breach of duty with respect to those who may be injured thereby; or, as it has been otherwise expressed, when the standard of care is fixed by law, failure to conform to such standard is negligence, negligence per se or negligence in and of itself, in the absence of a legal excuse. Violation of an ordinance intended to promote safety is negligence. If by creating the hazard which the ordinance was intended to avoid it brings about the harm which the ordinance was intended to prevent, it is a legal cause of the harm. 81 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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The fact that other happenings causing or contributing toward an injury intervened between the violation of a statute or ordinance and the injury does not necessarily make the result so remote that no action can be maintained. The test is to be found not in the number of intervening events or agents, but in their character and in the natural and probable connection between the wrong done and the injurious consequence. The general principle is that the violation of a statute or ordinance is not rendered remote as the cause of an injury by the intervention of another agency if the occurrence of the accident, in the manner in which it happened, was the very thing which the statute or ordinance was intended to prevent. It cannot be denied that the statutory purpose for requiring bicycles to be equipped with headlights or horns is to promote road safety and to minimize the occurrence of road accidents involving bicycles. At face value, Villagracia‘s mishap was precisely the danger sought to be guarded against by the ordinance he violated . However , it was proven that Añonuevo was speeding as he made the left turn, and such negligent act was the proximate cause of the accident. This reckless behavior would have imperiled anyone within the path of Añonuevo‘s car as it turned into the intersection , whether they are fellow motorists, pedestrians, or cyclists. Even assuming that Añonuevo had failed to see Villagracia because the bicycle was not equipped with headlights, such lapse on the cyclist‘s part would not have acquitted the driver of his duty to slow down as he proceeded to make the left turn. The bare fact that Villagracia was violating a municipal ordinance at the time of the accident may have sufficiently established some degree of negligence on his part, but such negligence is without legal consequence unless it is shown that it was a contributing cause of the injury. It is but indicative of Villagracia‘s failure in fulfilling his obligation to the municipal government, which would then be the proper party to initiate corrective action as a result. Such failure alone is not determinative of Villagracia‘s negligence in relation to the accident. To determine if Villagracia was negligent, it is not sufficient to rely solely on the violations of the municipal ordinance, but imperative to examine Villagracia‘s behavior in relation to the contemporaneous circumstances of the accident. The rule on negligence per se must admit qualifications that may arise from the logical consequences of the facts leading to the mishap. The doctrine (and Article 2185, for that matter) is undeniably useful as a judicial guide in adjudging liability, for it seeks to impute culpability arising from the failure of the actor to perform up to a standard established by a legal fiat. But the doctrine should not be rendered inflexible so as to deny relief when in fact there is no causal relation between the statutory violation and the injury sustained. 11. Lambert v. Heirs of Rey Castillon, 452 SCRA 285 (2005) Facts: Ray Castillon visited the house of his brother and borrowed his motorcycle. He then invited his friend Sergio and went to a roadtrip around Iligan City with Ray as the driver and Sergio as the backrider. After having supper and imbibing a bottle of beer, they traversed the highway towards Tambo at a high speed. However, upon reaching Brgy. Sto. Nino, they figured in an accident with a Tamaraw jeepney owned by Lambert and driven by Reynaldo. Apparently, the jeepney was travelling in the same direction but made a sudden left turn. The incident resulted in the death of Ray Castillon and injuries to Sergio. The trial court and the CA ruled in favor of Castillon, ruling that the proximate cause of the accident was due to the negligence of Reynaldo. Issue: Whether or not the proximate cause of the accident was due to Raynaldo‘s negligence. Held: YES. When Reynaldo Gamot was approaching the side road, he slightly veered to the right for his allowance. Ray Castillon, who was following closely behind, instinctively veered to the left but it was also the moment when Reynaldo Gamot sharply turned to the left towards the side road. At this juncture both were moving obliquely to the left. Thus the motorcycle sliced into the side of the jeepney throwing the driver forward so that his forehead hit the angle bar on the left front door of the jeepney even as the motorcycle shot forward and the jeepney veered back to the right and sped away. This was also backed by testimonies that Reynaldo did not even stop for a second nor check for any following vehicles before turning left. Clearly, the abrupt and sudden left turn by Reynaldo, without first establishing his right of way, was the proximate cause of the mishap which claimed the life of Ray and injured Sergio. Proximate cause is defined as that which, in the natural and continuous sequence, unbroken by any efficient, intervening cause, produces the injury, and without which the result would not have occurred. The cause of the collision is traceable to the negligent act of Reynaldo for, as the trial court correctly held, without that left turn executed with no precaution, the mishap in all probability would not have happened. Lambert relies on the court‘s ruling in Raynera v. Hiceta. However the same is misplaced. That case also involved a motorcycle crashing into the left rear portion of another vehicle, and we declared therein that drivers of vehicles ―who bump the rear of another vehicle‖ are presumed to be ―the cause of the accident, unless contradicted by other evidence.‖ In Raynera, the death of the victim was solely attributable to his own negligence in bumping the rear of the 82 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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trailer truck which was traveling ahead of him at 20 to 30 KPH. Raynera, being the driver of the rear vehicle, had full control of the situation as he was in a position to observe the vehicle in front of him. The trailer truck therein did not make a sudden left turn as in the case at bar. Thus, the theory that drivers of vehicles ―who bump the rear of another vehicle‖ are presumed to be the cause of the accident. However, in this case, the same has been sufficiently contradicted by evidence, which is the sudden left turn made by Reynaldo which proximately caused the collision. Castillon is also guilty of contributory negligence but only serves as a mitigation of the damages awarded. It was established that Ray, at the time of the mishap: (1) was driving the motorcycle at a high speed; (2) was tailgating the Tamaraw jeepney; (3) has imbibed one or two bottles of beer; and (4) was not wearing a protective helmet. These circumstances, although not constituting the proximate cause of his demise and injury to Sergio, contributed to the same result. b. Statutes and ordinances/administrative rules 1. Marinduque Iron Mines Agents, Inc., v. Workmen‟s Compensation Commission, 99 Phil. 480 (1956) Facts: Mamador is an employee of MIMA. On Aug. 23, 1951, he boarded a haulage truck owned by MIMA with other employees and driven by Macunat. On its way to their place of work, while trying to overtake another truck on the company road, it turned over and hit a coconut tree. As a result, Mamador died. Macunat was convicted but could not pay the indemnity to Mamador heirs. For this reason, upon the heirs‘ claims before the Workmen‘s Compensation Commissioner, it ordered MIMA to pay referee‘s award of compensation to said heirs. Thus, MIMA questions the order of the Commissioner on the grounds that 1) MIMA was not given opportunity to crossexamine; 2) Since Macunat was convicted and made to pay indemnity, a claim is barred based on the Workmen‘s Compensation law; and 3) Mamador was notoriously negligent for violating the employer‘s prohibition against laborers riding haulage trucks. Issue: Whether MIMA should pay said referee‘s award to the Macunat heirs Held: YES. The law permits the Commissioner to take testimony without notice provided that ex parte evidence is reduced in writing and the adverse party is afforded the opportunity to rebut. Also, the criminal case was not a suit for damages against a third person which would bar the claimant from claiming under the Workmen‘s Compensation Law. For the last part, there is no doubt that mere riding on a haulage truck or stealing a ride thereon is not negligence because transportation by truck is not dangerous per se. Also, violation of a rule promulgated by the Commission or board is not negligence per se but it may be evidence of negligence. This prohibition by MIMA could not be of a greater obligation than the rule of a Commission or board. And the Commissioner correctly considered this violation as possible evidence of negligence; but it declared that under the circumstances, the laborer could not be declared to have acted with negligence. Nevertheless, even granting there was negligence, it surely was not "notorious" negligence, which we have interpreted to mean the same thing as "gross" negligence implying "conscious indifference to consequences" "pursuing a course of conduct which would naturally and probably result in injury" "utter disregard of consequences." Getting or accepting a free ride on the company's haulage truck couldn't be gross negligence, because as the referee found, "no danger or risk was apparent." 2. Cipriano v. Court of Appeals, 263 SCRA 711 Facts: Elias S. Cipriano is the owner Mobilkote, which is engaged in the rustproofing of vehicles. On April 30, 1991, private respondent Maclin Electronics, Inc., through an employee, brought a 1990 model Kia Pride to petitioner‘s shop for rustproofing. The vehicle was received in the shop under a Job Order which showed the date it was received for rustproofing as well its condition at the time. Neither the time of acceptance nor the hour of release, however, was specified. According to the Cipriano, the car was brought to his shop at 10AM of April 30, 1991 and was ready for release later that afternoon, as it took only 6 hours to complete the process of rustproofing. In the afternoon of May 1, 1991, fire broke out at the Lambat restaurant, which Cipriano also owned, adjoining his Mobilkote rustproofing shop. The fire destroyed both the shop and the restaurant, including the Kia Pride. The car had been kept inside the building, allegedly to protect it from theft. Cipriano claimed that despite efforts to save the vehicle, there was simply not enough time to get it out of the building, unlike 3 other cars which had been saved because they were parked near the entrance of the garage. 83

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This prompted Maclin Electrinics to bring this suit for the value of its vehicle and for damages against Cipriano. It alleged that its vehicle was lost due to the negligence and imprudence of Cipriano, citing his failure to register his business with the DTI under P.D. No. 1572 and to insure it as required in the rules implementing the Decree. Cipriano invoked the following defenses: (1) he alleged that the loss was due to a fortuitous event, (2) He was not negligent, as he employed an electrician who regularly inspected the lighting in his restaurant and rustproofing shop and he claimed he had installed fire-fighting devices. (3) He further averred that private car was ready for release as early as afternoon of April 30, 1991 and that it was Maclin‘s delay in claiming it that was the cause of the loss. (4) The materials and chemicals used for rustproofing are not inflammable and thus he could not be made to assume the risk of loss due to fire. Finally (5) he also claimed that he was not required to register his business with the Department DTI, because he was not covered by P.D. No. 1572. RTC and CA: failure of Cipriano to comply with P.D. No. 1572 is in effect a manifest act of negligence which renders him liable for the loss of the car even if the same was caused by fire. Issue: (1) Whether Cipriano was required to insure his business and the vehicles received by him in the course of his business; and (2) Whether his failure to do so constituted negligence, rendering him liable for loss due to the risk required to be insured against. Held: YES. We have already held that violation of a statutory duty is negligence per se. Cipriano‘s negligence is the source of his obligation. He is not being held liable for breach of his contractual obligation due to negligence but for his negligence in not complying with a duty imposed on him by law. It is therefore immaterial that the loss occasioned to Maclin was due to a fortuitous event, since it was Cipriano‘s negligence in not insuring against the risk which was the proximate cause of the loss. Under PD 1572 and its IRR, Cipriano is required to register with the DTI. And as a condition for such registration, Ministry Order 32 of the DTI requires covered enterprises to secure insurance coverage. Ministry Order 32 provides that consumer mechanical/industrial equipment stored for repair/service in the premises should be covered by an insurance policy for risks like theft, fire, flood, and loss. There is, thus, a statutory duty imposed on Cipriano and it is for his failure to comply with this duty that he was guilty of negligence rendering him liable for damages to Maclin. While the fire in this case may be considered a fortuitous event, this circumstance cannot exempt him from liability for loss. 3. FF Cruz and Co., Inc., v. Court of Appeals, G.R. No. 52732, August 29, 1988  See previous Doctrine: Even without applying the doctrine of res ipsa loquitur, FF Cruz‘s failure to construct a firewall in accordance with city ordinances would suffice to support a finding of negligence. In the instant case, with more reason should FF Cruz be found guilty of negligence since it had failed to construct a firewall between its property and private respondents' residence which sufficiently complies with the pertinent city ordinances. The failure to comply with an ordinance providing for safety regulations had been ruled by the Court as an act of negligence. 4. Sanitary Steam Laundry (SSL) v. Court of Appeals, 300 SCRA 20 (1998) Facts: This case involves a collision between a Mercedes Benz panel truck of SSL and a Cimarron, which caused the death of 3 persons and the injuries of several others. All the victims were riding in the Cimarron. One of those who died was the driver. The RTC found SSL‘s driver to be responsible for the vehicular accident and accordingly held SSL liable to private respondents. CA affirmed. The passengers of the Cimarron were mostly employees of the Project Management Consultants, Inc. (PMCI) who just visited the construction site of a company project in Lian. Batangas. The other passengers were family members and friends whom they invited to an excursion to the beach after the visit to the construction site. The group stayed at the beach until 5:30 PM., when they decided to go back to Manila. The Cimarron was owned by Salvador Salenga, father of one of the employees of PMCI. Driving the vehicle was Rolando Hernandez. At about 8:00 p.m., as it was traveling along Aguinaldo Highway in Cavite on its way back to Manila, the Cimarron was hit on its front portion by SSL‘s panel truck, which was traveling in the opposite direction. The panel truck was on its way to SSL‘s plant in Dasmariñas, Cavite after delivering some linen to the Makati Med. The driver, Herman Hernandez, claimed that a jeepney in front of him suddenly stopped. He said he stepped on the brakes to avoid hitting the jeepney and that this caused his vehicle to swerve to the left and encroach on a portion of the opposite lane. As a result, his panel truck collided with the Cimarron on the north-bound lane.

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The driver of the Cimarron, Rolando Hernandez, and two of his passengers, namely, Jason Bernabe and Dalmacio Salunoy, died. Several of the other passengers of the Cimarron were injured and taken to various hospitals. Private respondents filed this civil case for damages before the then CFI of Rizal against SSL. RTC of Makati awarded the damages incurred by the SSL as proved in the trial. CA affirmed. Issue: Whether SSL is liable as an employer Held: YES. It has not been shown how the alleged negligence of the Cimarron driver contributed to the collision between the vehicles. Indeed, SSL has the burden of showing a causal connection between the injury received and the violation of the Land Transportation and Traffic Code. He must show that the violation of the statute was the proximate or legal cause of the injury or that it substantially contributed thereto. SSL says that ―driving an overloaded vehicle with only one functioning headlight during nighttime certainly increases the risk of accident,‖ that because the Cimarron had only one headlight, there was ―decreased visibility,‖ and that the fact that the vehicle was overloaded and its front seat overcrowded ―decreased [its] maneuverability.‖ Mere allegations such as these are not sufficient to discharge its burden of proving clearly that such alleged negligence was the contributing cause of the injury. Based on the evidence in this case, there was no way either driver could have avoided the collision. The panel truck driver‘s testimony is consistent with the testimonies of private respondents that the panel truck went out of control and simply smashed into the Cimarron in which they were riding. Thus, Nicanor Bernabe III testified. Charito Estolano, another passenger who was seated in front of the Cimarron, similarly testified that they just saw the panel truck hurtling toward them. The foregoing testimonies show that the driver of the panel truck lost control of his vehicle and bumped the Cimarron. Hence, even if both headlights of the Cimarron were lighted, it would have been bumped just the same because the driver of the panel truck could not stop despite the fact that he applied the brakes. SSL‘s contention that because of ―decreased visibility,‖ caused by the fact that the Cimarron allegedly had only one headlight on, its driver failed to see the Cimarron is without any basis in fact. Only its driver claimed that the Cimarron had only one headlight on. The police investigator did not state in his report or in his testimony that the Cimarron had only one headlight on. Nor is there any basis in fact for SSL‘s contention that because of overcrowding in the front seat of the Cimarron there was ―decreased manueverability‖ which prevented the Cimarron driver from avoiding the panel truck. There is absolutely no basis for this claim. There is nothing in the testimonies of the passengers of the Cimarron, particularly Charito Estolano, who was seated in front, which suggest that the driver had no elbow room for maneuvering the vehicle. To the contrary, from the testimony of some of the witnesses, it appears that the driver of the Cimarron tried to avoid the collision but because of the emergency created by the speeding panel truck coming from the opposite direction he was not able to fully move his Cimarron away from the path of the oncoming vehicle. That no ―maneuvering‖ which the Cimarron driver could have done would have avoided a collision with the panel truck, given the suddenness of the events. Clearly, the overcrowding in the front seat was immaterial. The proximate cause of the accident was the negligence of SSL‘s driver. As the trial court noted, the swerving of SSL‘s panel truck to the opposite lane could mean not only that SSL‘s driver was running the vehicle at a very high speed but that he was tailgating the passenger jeepney ahead of it as well. SSL‘s driver claimed that the distance between the panel truck and the passenger jeepney in front was about 12 meters. If this was so, he would have had no difficulty bringing his panel truck to a stop. It is very probable that the driver did not really apply his brakes (which is why there were no skid marks) but that finding the jeepney in front of him to be in close proximity, he tried to avoid hitting it by swerving his vehicle to the left. In the process, however, he invaded a portion of the opposite lane and consequently hit the Cimarron. Indeed, the panel truck driver testified that his vehicle was running at the speed of 60 MPH. He tried to correct himself when asked by SSL‘s counsel whether the panel truck speedometer indicated miles or kilometers by saying that the speedometer measured kilometers and not miles, but on cross examination his testimony got muddled. Be that as it may, whether the driver meant 60 MPH (which could be 96.77 kilometers per hour) or 60 KPH, the fact remains that the panel truck was over-speeding because the maximum allowable speed for trucks and buses on open country roads, such as the Aguinaldo Highway in Imus, Cavite, is only 50 KPH. The case of Bayasen, which petitioner invokes, cannot apply to this case. There was no swerving of the vehicle in that case but skidding, and it was caused by the fact that the road was wet and slippery. In this case, the road was dry and 85

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safe. There was no reason for the vehicle to swerve because of road condition. The only explanation for this occurrence was human error. SSL‘s reliance on the McKee is also misplaced. In that case, the driver of the vehicle at fault, a truck, had an opportunity to avoid the collision but he ignored the signals from the other vehicle, a car, to slow down and allow it to safely pass the bridge. In this case, there was no such opportunity given the Cimarron on the night of the mishap. Everything happened so quickly that before the passengers of the Cimarron knew it, the vehicle had been bumped by the truck. SSL‘s failure to require submission of these documents does not mean that it did not exercise due diligence in the selection and supervision of its employees. It likewise contends that the CA‘s position that it failed to exercise due diligence in the selection and supervision of its employees by not requiring its prospective employees to undergo psychological and physical tests before employment has no basis in law because there is no law requiring such tests prior to hiring employees. The CA did not say that SSL‘s failure to submit NBI and police clearances of its driver was proof that petitioner failed to exercise due diligence in the selection of its employees. What the CA said was that SSL‘s policy of requiring prospective employees to submit NBI and police clearance and to have at least 2 years experience as driver prior to employment was not enough to prove the exercise of due diligence and that even this policy petitioner failed to prove by its failure to present the driver‘s NBI and police records during the trial. With respect to the requirement of passing psychological and physical tests prior to his employment, although no law requires it, such circumstance would certainly be a reliable indicator of the exercise of due diligence. Indeed, driving exacts a more than usual toll on the senses. Accordingly, it behooves employers to exert extra care in the selection and supervision of their employees. They must go beyond the minimum requirements fixed by law. In this case, David Bautista, the office manager of SSL in its Dasmariñas plant , said that it has a policy of requiring job applicants to submit clearances from the police and the NBI. In the case of applicants for the position of driver they are required to have at least 2 years driving experience and to be holders of a professional driver‘s license for at least two years. But the supposed company policies on employment were not in writing. Nor did Bautista show in what manner he supervised the drivers to ensure that they drove their vehicles in a safe way. (iv) -

Dangerous weapons and substances

Civil Code o Article 2188 (Memorize)

1. Araneta v. Arreglado, 104 Phil. 529 (1958) \ Facts: Araneta was talking with other Ateneans, seated atop a low ruined wall bordering Dakota Street in Manila. Arreglado, a former Atenean, passed by. The others called Dario and talked with him; they twitted and made kanchaw him on his leaving the Ateneo and enrolling in De La Salle. Arreglado resented the banter and pulled out a Japanese Lugar pistol, licensed in the name of his father. He fired it at Araneta, who was hit in the lower jaw. His friends took him to the infirmary and later to the Singian Hospital. He survived, but was inhibited and became morose. Arreglado pleaded guilty to frustrated homicide, but being only 14 years old and pursuant to Article 80 of the RPC, he was committed to the care of Mr. Lerma. Because of his good conduct, the Social Welfare Administrator discharged him and quashed the criminal case. An action was then instituted against Arreglado and his parents for damages. The CFI found Arreglado‘s father negligent in allowing his son access to the pistol; they were sentenced to Pay P3,943. The Aranetas appealed, wanting P112,000. Issue: Whether or not the damages awarded was proper Held: INADEQUATE. In allowing not more than P1,000 as compensation for the "permanent deformity and — something like an inferiority complex" as well as for the "pathological condition on the left side of the jaw" caused to said plaintiff, the court below overlooked the clear evidence on record that to arrest the degenerative process taking place in the mandible and restore the injured boy to a nearly normal condition, surgical intervention was needed, for which the doctor's charges would amount to P3,000, exclusive of hospitalization fees, expenses and medicines. Furthermore, the operation, according to Dr. Diño, would probably have to be repeated in order to effectuate a complete cure, while removal of the scar on the face obviously demanded plastic surgery. We are not impressed by the reasoning of the court a quo in refusing to consider the cost of plastic treatment as a proper element of the indemnity for damages. It argued that ―if this was really necessary it is peculiar that the father, Manuel S. Araneta, would have allowed himself to wait for the outcome of this case in order to secure funds to bring his son to 86

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America; it is admitted that plaintiff is a man of much more than moderate means and no father in his position would have let pass the present situation; he would without loss of time, have taken his son to America, cost what it may, if it was necessary; and the fact that he has waited and waited in the opinion of the court would prove that after all plastic surgery was not and is not very necessary.‖ The father's failure to submit his son to a plastic operation as soon as possible does not prove that such treatment is not called for. The damage to the jaw and the existence of the scar in Benjamin Araneta's face are physical facts that can not be reasoned out of existence. That the injury should be treated in order to restore him as far as possible to his original condition is undeniable. The father's delay, or even his negligence, should not be allowed to prejudice the son who has no control over the parent's action nor impair his right to a full indemnity. We do not believe that plaintiffs-appellants should recover the cost of a plastic operation and surgical treatment in the US, since their own experts asserted that the operation could be competently performed here by local practitioners. Still, taking into account the necessity and cost of corrective measures to fully repair the damage; the pain suffered by the injured party; his feelings of inferiority due to consciousness of his present deformity, as well as the voluntary character of the injury inflicted; and further considering that a repair, however skillfully conducted, is never equivalent to the original state, we are of the opinion that the indemnity granted by the trial court should be increased to a total of P18,000. It is also the hope of the Court that the award in the present case will remind licensed possessors of firearms of their peremptory duty to adequately safeguard such dangerous weapons at all times, and to take all requisite measures to prevent minors and other unauthorized parties from having access thereto. Competent observers have recently called attention to the fact that the growing teenage hooliganism in our society is principally due to parent's complacency in and neglect of their progeny. Wherefore, the decision appealed from is affirmed with the modification that plaintiff Benjamin Araneta shall recover damages in the amount of P18,000.00 from defendants Dario Arreglado and his parents Mr. and Mrs. Juan Arreglado, who shall answer in solidum for the payment of the indemnity, pursuant to Article 2194.

III.

DEFENSES A.

Plaintiff‘s negligence is the proximate cause of injury

-

Civil Code o Article 2179 (Memorize)

1. PLDT v. Court of Appeals, G.R. No. 57079, September 12, 1989 Facts: The case is about an action for damages instituted by Sps Esteban (private respondent) against PLDT for the injuries they sustained in the evening of July 1968 when their jeep ran over a mound of earth and fell into an open trench, an excavation allegedly undertaken by PLDT for the installation of its underground conduit system. Antonio Esteban failed to notice the open trench which was left uncovered because of the creeping darkness and the lack of any warning light or signs. Gloria Esteban allegedly sustained injuries on her arms, legs and face, and a permanent scar on her cheek, while her husband suffered cut lips. Moreover, the windshield of the jeep was shattered. PLDT contends that the injuries sustained by Spouses were the result of their own negligence and that the entity which should be held responsible, if at all, is L.R. Barte and Company, an independent contractor which undertook the construction of the manhole and the conduit system. PLDT filed a third-party complaint against Barte. Barte claimed that it had complied with the terms of its contract with PLDT by installing the necessary and appropriate standard signs in the vicinity of the work site, with barricades at both ends of the excavation and with red lights at night along the excavated area to warn the traveling public of the presence of excavations. Trial court rendered a decision in favor of Spouses ordering PLDT to pay, and ordering Barte to reimburse whatever amount paid by PLDT. Both PLDT and Spouses appealed. CA reversed holding that Spouses were negligent and consequently absolving PLDT from the claim for damages. Thereafter, CA promulgated its resolution affirming in toto the original decision of the lower court. Hence this petition for review on certiorari. Issue: Whether PLDT is liable for negligence. Held: NO. The accident which befell he Spouses was due to the lack of diligence of Antonio Esteban and was not imputable to negligent omission on the part of PLDT. Records show that: First. Estaban‘s jeep was running along the inside lane of Lacson Street. If it had remained on that inside lane, it would not have hit the ACCIDENT MOUND. Evidence shows tiremarks that the ACCIDENT MOUND was hit by the jeep 87

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swerving from the left that is, swerving from the inside lane. The accident was not due to the absence of warning signs, but to the unexplained abrupt swerving of the jeep from the inside lane. Second. That Spouses‘ jeep was on the inside lane before it swerved to hit the ACCIDENT MOUND could have been corroborated by a picture showing Lacson Street to the south of the ACCIDENT MOUND. The ditches along Lacson Street had already been covered except the 3 or 4 meters where the ACCIDENT MOUND was located. Evidence shows that the ditches on Lacson Street north of the ACCIDENT MOUND had already been covered, but not in such a way as to allow the outer lane to be freely and conveniently passable to vehicles. The situation could have been worse to the south of the ACCIDENT MOUND for which reason no picture of the ACCIDENT MOUND facing south was taken. Third. Spouses‘ jeep was not running at 25 KPH as claimed. At that speed, he could have braked the vehicle the moment it struck the ACCIDENT MOUND. It would not have climbed the ACCIDENT MOUND several feet as indicated by the tiremarks. Therefore, it must have been running quite fast. If the jeep had been braked at 25 KPH, they would not have been thrown against the windshield and they would not have suffered their injuries. Fourth. With the drizzle, he should not have run on dim lights, but should have put on his regular lights which should have made him see the ACCIDENT MOUND in time. If he was running on the outside lane at 25 KPH his failure to see the ACCIDENT MOUND in time to brake the car even on dim lights was negligence on his part. The ACCIDENT MOUND was relatively big and visible. If he did not see the ACCIDENT MOUND in time, he would not have seen any warning sign either. He knew of the existence and location of the ACCIDENT MOUND, having seen it many previous times. With ordinary precaution, he should have driven his jeep on the night of the accident so as to avoid hitting the ACCIDENT MOUND. The above findings clearly show that the negligence of Antonio Esteban was not only contributory to his injuries and those of his wife but goes to the very cause of the mishap and thereby precludes their right to recover damages. By exercising reasonable care and prudence, Antonio Esteban could have avoided the injurious consequences of his act, even assuming arguendo that there was some alleged negligence on the part of Esteban. The presence of warning signs could not have completely prevented the accident; the only purpose of said signs was to inform and warn the public of the presence of excavations on the site. Estabans already knew of the presence of said excavations. It was not the lack of knowledge of these excavations which caused the jeep to fall into the excavation but the unexplained sudden swerving of the jeep from the inside lane towards the accident mound. The omission to perform a duty, such as the placing of warning signs on the site of the excavation, constitutes the proximate cause only when the doing of the said omitted act would have prevented the injury. They cannot charge PLDT for their injuries where their own failure to exercise due and reasonable care was the cause thereof. It is both a societal norm and necessity that one should exercise a reasonable degree of caution for his own protection. Furthermore, Esteban had the last clear chance or opportunity to avoid the accident, notwithstanding the negligence he imputes to PLDT. As a resident of Lacson Street, he passed on that street almost everyday and had knowledge of the presence and location of the excavations there. It was his negligence that exposed him and his wife to danger, hence he is solely responsible for the consequences of his imprudence. Lastly, there is insufficient evidence to prove any negligence on the part of PLDT. Spouses Esteban only presented the self-serving testimony of Esteban and the unverified photograph of merely a portion of the scene of the accident. The absence of a police report of the incident and the non-submission of a medical report from the hospital where Spouses were allegedly treated have not even been satisfactorily explained. Whosoever relies on negligence for his cause of action has the burden in the first instance of proving the existence of the same if contested, otherwise his action must fail. 2. Kim v. Philippine Aerial Taxi Co., Inc., G.R. No. 39309, November 24, 1933 Facts: Teh Le Kim bought in Manila a passenger ticket for a flight to Iloilo in one of the PATCO's hydroplanes.The engine of the plane Mabuhay, in which he was to make the flight, was not working satisfactorily. Thus, Kim had to wait for some time. While the engine was being tested, Kim saw how it was started by turning the propeller repeatedly and how the man who did it ran away from it each time in order not to be caught by the said propeller. Before the plane Mabuhay was put in condition for the flight, the plane Taal arrived and it was decided to have Kim make the flight therein. Kim and his companion were carefully carried from the beach to the plane, entering the same by the rear or tail end, and were placed in their seats to which they were strapped. Later, they were shown how the straps could be tightened or loosened in case of accident and were instructed further not to touch anything in the plane. The plane landed on the waters of Guimaras Strait, in front of Iloilo, and taxied toward the beach until its pontoons struck bottom, when the plane stopped. The pilot shut off the gasoline feed pipe, permitting the engine, however, to continue to function until all the gasoline was drained from the feed pipe and carburetor. This operation was necessary in accordance with the established practice of aviation in order to avoid danger of fire which would exist if the pipes and carburetor remained full of gasoline, and to prevent the sudden cooling of the engine which might cause serious damage, especially to the valves. 88 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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At the moment the pontoons touched bottom and while the pilot was signalling to the banca (to stay away from propellers because it was dangerous), Kim unfastened the straps around him and, not even waiting to put on his hat, climbed over the door to the lower wing, went down the ladder to the pontoon and walked along the pontoon toward the revolving propeller. The propeller first grazed his forehead and, as he threw up his arm, it was caught by the revolving blades thereof and so injured that it had to be amputated. Bohn and Garrett of Warner, Barnes & Co., consignees of the PATCO in Iloilo, were on the beach to meet the plane and to make arrangements for the disembarking of the passengers. Upon seeing Kim walking toward the propeller, they shouted frantically and motioned to him to keep away from it, but the Kim took no heed of them. The usual procedure in discharging passengers from a hydroplane is to wait until the propeller stops, then turn the plane around by hand so as to have the rear or tail and thereof towards the beach, and then take the passengers to shore in a banca. The pilot in charge of the plane has had 14 years experience. Issue: Whether PATCO is liable for negligence. Held: NO. The plane arrived at the destination with nothing more left to do but to take Kim and his companion, safe and sound, ashore. In order to do this, it was necessary to wait for the propeller to stop, turn the rear or tail end of the plane towards the shore, take the passengers out by the aforesaid rear or tail end thereof, place them in a banca, and take them ashore. By sheer common sense, Kim ought to know that a propeller, be it that of a ship or of an aeroplane, is dangerous while in motion and that to approach it is to run the risk of being caught and injured thereby. He ought to know furthermore that inasmuch as the plane was on the water, he had to wait for a banca to take him ashore. Notwithstanding the shouts and warning signals given him from the shore, Kim, not being a man of ordinary prudence, hastily left the cabin of the plane, walked along one of the pontoons and directly into the revolving propeller, while the banca, which was to take him ashore was still some distance away and the pilot was instructing the boatman to keep it at a safe distance from the plane. Kim acted with reckless negligence in approaching the propeller while it was still in motion, and when the banca, was not yet in a position to take him. That Kim‘s negligence alone was the direct cause of the accident, is so clear that it is not necessary to cite authoritative opinions to support the conclusion that the injury to his right arm and the subsequent amputation thereof were due entirely and exclusively to his own imprudence and not to the slightest negligence attributable to the defendant entity or to its agents. He alone should suffer the consequences of his act. 3. American Express International, Inc., v. Cordero, G.R. No. 138550, October 14, 2005 Facts: AMEX is a foreign corporation that issues charge cards to its customers which the latter uses to purchase goods and services at accredited merchants worldwide. Nila Cordero, wife of respondent was one such holder. An extension card was also issued to her husband, Noel Cordero. Sometime after, respondent together with his wife and relatives went on a holiday trip to HK. During the trip, they went to Watsons Chemist Shop. Noel bought some goods and handed to the sales clerk his AMEX extension card. The sales clerk verified the card by making a telephone call to the AMEX Office in Hong Kong. Its representative said he wants to talk to respondent in order to verify the latter‘s identity, pursuant to the procedure observed under the ―Inspect Airwarn Support System‖ (IASS). However, respondent refused. Due to respondents‘ refusal, Susan Chong, the store manager, emerged from behind the counter and informed respondent that she had to confiscate the card. Thereupon, she cut respondent‘s AMEX card in half with a pair of scissors. This, according to respondent, caused him embarrassment and humiliation considering that it was done in front of his family and the other customers lined up at the check-out counter. Hence, Nilda had to pay for the purchases using her own AMEX card. Nilda called up AMEX‘s office in Hong Kong where it was learned through the Senior Authorized that a person in HK attempted to use a charge card with the same number as respondent‘s card. The HK AMEX Office called up respondent and after determining that he was in Manila and not in HK, placed his card under the IASS (a system used by AMEX to protect both the company and its cardholders from fraudulent use of their charge cards; once a card suspected of unauthorized use is placed in the system, the person to whom the card is tendered must verify the identity of the holder. If the true identity of the card owner is established, the card is honored and the charges are approved; otherwise the card is revoked or confiscated.). Respondent filed with the RTC a complaint for damages against AMEX. The RTC ruled in favor of Cordero. Petitioner appealed. 89

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Issue: Whether or not AMEX is liable to Cordero for the humiliation suffered by the latter. Held: NO. Respondent anchors his cause of action on Article 2176. In order that an obligation based on quasi-delict may arise, there must be no pre-existing contractual relation between the parties. But there are exceptions. There may be an action for quasi-delict notwithstanding that there is a subsisting contract between the parties. A liability for tort may arise even under a contract, where tort is that which breaches the contract. Stated differently, when an act which constitutes a breach of contract would have itself constituted the source of a quasi-delictual liability, the contract can be said to have been breached by tort, thereby allowing the rules on tort to apply. Furthermore, to constitute quasi-delict, the fault or negligence must be the proximate cause of the damage or injury suffered by the plaintiff. Proximate cause is that cause which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury and without which the result would not have occurred. Proximate cause is determined by the facts of each case upon mixed considerations of logic, common sense, policy and precedent. As explained by respondent himself, he could have used his card upon verification by the sales clerk of Watson that indeed he is the authorized cardholder. This could have been accomplished had respondent talked to AMEX‘s representative, enabling the latter to determine that respondent is indeed the true holder of the card. Clearly, no negligence which breaches the contract can be attributed to AMEX. If at all, the cause of respondent‘s humiliation and embarrassment was his refusal to talk to AMEX‘s representative. There was testimony to that effect which showed that when Watson Company called AMEX for authorization, AMEX representative requested that he talk to Mr. Cordero but he refused to talk to any representative of AMEX. AMEX could not prove then that he is really the real card holder. Additionally, according to the terms of the Cardmember Agreement, AMEX can revoke respondent‘s card without notice. Again the subject card would not have been confiscated and cut had respondent talked to AMEX‘s representative and identified himself as the genuine cardholder. Clearly, there was no negligence on the part of the AMEX. 4. Cayao-Lasam v. Spouses Ramolete, G.R. No. 159132, December 18, 2008 Facts: Editha Ramoleta was 3 mos pregnant. She was brought to Lorma Med Center in La Union due to vaginal bleeding. Upon advice of Dr. Lasam, she was admitted. After undergoing a pelvic sonogram, it was revealed that her fetus had a weak heart. The following day, another sonogram was conducted and showed no fetal movement. Due to the persistent and profuse vaginal bleeding, she was made to undergo a Dilatation and Curettage Procedure (D&C) or raspa. After the procedure, she was discharged the next day on July 31, 1994 with instructions from Dr. Laksa to return for a check-up after 4 days. Ramolete did not show up on said date. On Sep 16, 1994, Ramolete was brought to the hospital as she suffered from vomiting and severe abdominal pain. It was later found that there was a dead fetus in her womb. As such, her uterus had ruptured and had to undergo a hysterectomy. As a result, she can no longer bear a child. Filed an administrative case with the Professional Regulation Commission (PRC) for gross negligence and malpractice. PRC dismissed the case but, on appeal, it reversed itself and caused the revocation of Dr. Lasam‘s license. Upon the latter‘s appeal to the CA via Rule 43, it was dismissed because PRC was apparently not enumerated as one of the quasi judicial agencies in Rule 43. Hence, this appeal. Issue: (1) Whether mode of appeal was correct (NOT IMPORTANT) (2) Whether Dr. Lasam is guilty of medical malpractice. (1) RULE 43 was proper. PRC can be considered by analogy. (2) NOT LIABLE. Medical malpractice is a particular form of negligence which consists in the failure of a physician or surgeon to apply to his practice of medicine that degree of care and skill which is ordinarily employed by the profession generally, under similar conditions, and in like surrounding circumstances. In order to successfully pursue such a claim, a patient must prove that the physician or surgeon either failed to do something which a reasonably prudent physician or surgeon would not have done, and that the failure or action caused injury to the patient. The 4 elements involved in malpractice suits are: duty, breach, injury, proximate cause. To prove these, expert testimony is required. In the present case, Ramolete did not present any expert testimony to support their claim that Dr. Lasam failed to do something which a reasonably prudent physician or surgeon would have done. On the other hand, Lasam presented the testimony of Dr. Augusto M. Manalo, who was clearly an expert on the subject as he specializes in gynecology and obstetrics, authored and co-authored various publications on the subject, and is a professor at the UP. Manalo claimed that the raspa procedure was not the proximate cause of the rupture of Ramolete‘s uterus which resulted to the hysterectomy. 90 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Further, Manalo testified that the raspa procedure was conducted in accordance with the standard practice, with the same level of care that any reasonably competent doctor would use to treat a condition under the same circumstances, and that there was nothing irregular in the way the petitioner dealt with Editha. Medical malpractice is often brought as a civil action for damages under Article 2176 of which proximate cause between the negligence and the injury is one of the requisites that need be proven. Proximate cause has been defined as that which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces injury, and without which the result would not have occurred. An injury or damage is proximately caused by an act or a failure to act, whenever it appears from the evidence in the case that the act or omission played a substantial part in bringing about or actually causing the injury or damage; and that the injury or damage was either a direct result or a reasonably probable consequence of the act or omission. In this case, when Ramolete was discharged after the raspa on July 31, 1994, Lasam advised her to return 4 days later. However, she failed to do so. This being the case, the chain of continuity as required in order that the doctrine of proximate cause can be validly invoked was interrupted. Had she returned, the respondent could have examined her thoroughly. Also, Dr. Manalo testified that assuming there was in fact a misdiagnosis, the same would have been rectified if Editha followed the Ramolete‘s order to return for a check-up. Ramolete omitted the diligence required by the circumstances which could have avoided the injury. The omission in not returning for a follow-up evaluation played a substantial part in bringing about her own injury. Had Editha returned, Lasam could have conducted the proper medical tests and procedure necessary to determine her health condition and applied the corresponding treatment which could have prevented the rupture of her uterus. The raspa procedure having been conducted in accordance with the standard medical practice, it is clear that her omission was the proximate cause of her own injury and not merely a contributory negligence on her part. Contributory negligence is the act or omission amounting to want of ordinary care on the part of the person injured, which, concurring with the defendant‘s negligence, is the proximate cause of the injury. Where the immediate cause of an accident resulting in an injury is the plaintiff‘s own act, which contributed to the principal occurrence as one of its determining factors, he cannot recover damages for the injury. Again, based on the evidence presented, in which no negligence can be attributed to the Lasam, the immediate cause of the accident resulting in Ramolete‘s injury was her own omission when she did not return for a follow-up check up, in defiance of Lasam‘s orders. The immediate cause of Ramolete‘s injury was her own act; thus, she cannot recover damages from the injury. 5. Pantaleon v. American Express International, Inc., G.R. No. 174269, August 25, 2010 Facts: In October 1991, Pantaleon, together with his wife and kids went on a guided Euro tour. The group began their sightseeing at around 8:50 AM with a trip to the Coster Diamond House (Coster). To have enough time to take a guided city tour of Amsterdam before their departure scheduled on that day, the tour group planned to leave Coster by 9:30 a.m. at the latest. While at Coster, Mrs. Pantaleon decided to purchase some diamond pieces worth a total of $13K. Pantaleon presented his AMEX credit card to the sales clerk to pay for this purchase. He did this at around 9:15AM. At around 9:40AM., Coster had not received approval from AMEX for the purchase so Pantaleon asked the store clerk to cancel the sale. The store manager, however, convinced Pantaleon to wait a few more minutes. Subsequently, the store manager informed Pantaleon that AMEX was asking for bank references; Pantaleon responded by giving the names of his Philippine depository banks. 45 minutes after Pantaleon presented his credit card, AMEX still had not approved the purchase. Since the city tour could not begin until the Pantaleons were onboard the tour bus, Coster decided to release the purchased items to Pantaleon even without AMEX‘s approval. From the records, it appears that after Pantaleon‘s purchase was transmitted for approval to AMEX‘s Amsterdam office at 9:20 a.m.; was referred to AMEX‘s Manila office at 9:33 a.m.; and was approved by the Manila office at10:19 a.m. At 10:38 a.m., AMEX‘s Manila office finally transmitted the Approval Code to AMEX‘s Amsterdam office. In all, it took AMEX a total of 78 mins to approve Pantaleon‘s purchase and to transmit the approval to the jewelry store. After the trip to Europe, the Pantaleon family proceeded to the US. Again, Pantaleon experienced delay in securing approval for purchases using his AMEX credit card on 2 separate occasions. Upon return to Manila, Pantaleon sent AMEX a letter demanding an apology for the humiliation and inconvenience he and his family experienced due to the delays in obtaining approval for his credit card purchases. AMEX responded by explaining that the delay in 91

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Atty. Jess Lopez

Amsterdam was due to the amount involved – the charged purchase of $13K deviated from Pantaleon‘s established charge purchase pattern. Dissatisfied with this explanation, Pantaleon filed an action for damages against the AMEX. RTC ruled in favor of Pantaleon. The CA reversed. The SC then affirmed the RTC decision and held that AMEX was guilty of mora solvendi, or debtor‘s default. AMEX, as debtor, had an obligation as the credit provider to act on Pantaleon‘s purchase requests, whether to approve or disapprove them, with ―timely dispatch.‖ Based on the evidence on record, Court found that AMEX failed to timely act on Pantaleon‘s purchases. The decision was based mainly on the testimony of AMEX‘s credit authorized personnel who testified that the approval time for credit card charges would be 3 to 4 seconds under regular circumstances; but in Pantaleon‘s case, it took AMEX 78 minutes to approve the Amsterdam purchase. AMEX now files an MR questioning the said decision. Amex claims that the transaction necessarily required the carefully review Pantaleon‘s credit history and bank reference (because of the large amount of the transaction and that it deviated from Pantaleon‘s usual spending practices). As such, it was only in line wit hthe extraordinary diligence required of banks that it conduct such inquiry, to protect the interest both if Amex and Pantaleon. Issue: Whether or not AMEX was negligent. Held: NO. E-credit card transaction involves 3 contracts, namely: (a) the sales contract between the credit card holder and the merchant or the business establishment which accepted the credit card; (b) the loan agreement between the credit card issuer and the credit card holder; and lastly, (c) the promise to pay between the credit card issuer and the merchant or business establishment. When a credit card company gives the holder the privilege of charging items at establishments associated with the issuer, a necessary question in a legal analysis is – when does this relationship begin? There are 2 diverging views on the matter. First view: each credit card transaction is considered a separate offer and acceptance, and thus the mere issuance of a credit card did not create a contractual relationship with the cardholder. Second view: the card membership agreement itself is a binding contract between the credit card issuer and the card holder. In our jurisdiction, we generally adhere to the 2nd view, recognizing the relationship between the credit card issuer and the credit card holder as a contractual one that is governed by the terms and conditions found in the card membership agreement. This contract provides the rights and liabilities of a credit card company to its cardholders and vice versa. A card membership agreement is a contract of adhesion as its terms are prepared solely by the credit card issuer, with the cardholder merely affixing his signature signifying his adhesion to these terms. This circumstance, however, does not render the agreement void; we have uniformly held that contracts of adhesion are ―as binding as ordinary contracts, the reason being that the party who adheres to the contract is free to reject it entirely.‖ The only effect is that the terms of the contract are construed strictly against the party who drafted it. We have to distinguish the contractual relationship between the credit card issuer and card holder with the creditor-debtor relationship which only arises after the credit card issuer has approved the cardholder‘s purchase request. The first relates merely to an agreement providing for credit facility to the cardholder. The latter involves the actual credit on loan agreement involving three contracts, namely: the sales contract between the credit card holder and the merchant or the business establishment which accepted the credit card; the loan agreement between the credit card issuer and the credit card holder; and the promise to pay between the credit card issuer and the merchant or business establishment. From the loan agreement perspective, the contractual relationship begins to exist only upon the meeting of the offer and acceptance of the parties involved. In more concrete terms, when cardholders use their credit cards to pay for their purchases, they merely offer to enter into loan agreements with the credit card company. Only after the latter approves the purchase requests that the parties enter into binding loan contracts. This view finds support in the reservation found in the card membership agreement itself which clearly states that AMEX ―reserve[s] the right to deny authorization for any requested Charge.‖ By so providing, AMEX made its position clear that it has no obligation to approve any and all charge requests made by its card holders. Since AMEX has no obligation to approve the purchase requests of its credit cardholders, Pantaleon cannot claim that AMEX defaulted in its obligation. The 3 requisites for a finding of default are: (a) that the obligation is demandable and liquidated; (b) the debtor delays performance; and (c) the creditor judicially or extrajudicially requires the debtor‘s performance.

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Atty. Jess Lopez

Clearly, the first requisite is no longer met because AMEX, by the express terms of the credit card agreement, is not obligated to approve Pantaleon‘s purchase request. Without a demandable obligation, there can be no finding of default. Apart from the lack of any demandable obligation, we also find that Pantaleon failed to make the demand required by Article 1169. As previously established, the use of a credit card to pay for a purchase is only an offer to the credit card company to enter a loan agreement with the credit card holder. Before the credit card issuer accepts this offer, no obligation relating to the loan agreement exists between them. On the other hand, a demand is defined as the ―assertion of a legal right; xxx an asking with authority, claiming or challenging as due.‖ A demand presupposes the existence of an obligation between the parties. Even assuming that AMEX had the right to review his credit card history before it approved his purchase requests, Pantaleon insists that AMEX had an obligation to act on his purchase requests, either to approve or deny, in ―a matter of seconds‖ or ―in timely dispatch.‖ Pantaleon impresses upon us the existence of this obligation by emphasizing two points: (a) his card has no pre-set spending limit; and (b) in his twelve years of using his AMEX card, AMEX had always approved his charges in a matter of seconds. However, this view is untenable. AMEX‘s credit authorizer, Edgardo Jaurigue, explained that having no pre-set spending limit in a credit card simply means that the charges made by the cardholder are approved based on his ability to pay, as demonstrated by his past spending, payment patterns, and personal resources. Nevertheless, every time Pantaleon charges a purchase on his credit card, the credit card company still has to determine whether it will allow this charge, based on his past credit history. This right to review a card holder‘s credit history, although not specifically set out in the card membership agreement, is a necessary implication of AMEX‘s right to deny authorization for any requested charge. Moreover, based on the credit card membership agreement, there is no provision in this agreement that obligates AMEX to act on all cardholder purchase requests within a specifically defined period of time. Even the law makes no requirement that the bank must act on purchase requests at a defined period of time. As financial institutions engaged in the business of providing credit, credit card companies fall under the supervisory powers of the BSP. In light of the foregoing, AMEX is neither contractually bound nor legally obligated to act on its cardholders‘ purchase requests within any specific period of time, much less a period of a ―matter of seconds‖ that Pantaleon uses as his standard. The standard therefore is implicit and, as in all contracts, must be based on fairness and reasonableness, read in relation to the CC provisions on human relations, as will be discussed below. However, this does not give AMEX an unlimited right to put off action on cardholders‘ purchase requests for indefinite periods of time. In acting on cardholders‘ purchase requests, AMEX must take care not to abuse its rights and cause injury to its clients and/or third persons. It is an elementary rule in our jurisdiction that good faith is presumed and that the burden of proving bad faith rests upon the party alleging it. Although it took AMEX some time before it approved Pantaleon‘s three charge requests, we find no evidence to suggest that it acted with deliberate intent to cause Pantaleon any loss or injury, or acted in a manner that was contrary to morals, good customs or public policy. We also cannot turn a blind eye to the circumstances surrounding the Coster transaction which, in our opinion, justified the wait. As Edgardo Jaurigue clarified, the reason why Pantaleon had to wait for AMEX‘s approval was because he had to go over Pantaleon‘s credit card history for the past twelve months. ]It would certainly be unjust for us to penalize AMEX for merely exercising its right to review Pantaleon‘s credit history meticulously. As borne by the records, Pantaleon knew even before entering Coster that the tour group would have to leave the store to have enough time to take the city tour of Amsterdam before they left the country. After 9:30 a.m., Pantaleon‘s son, who had boarded the bus ahead of his family, returned to the store to inform his family that they were the only ones not on the bus and that the entire tour group was waiting for them. Significantly, Pantaleon tried to cancel the sale at 9:40 a.m. because he did not want to cause any inconvenience to the tour group. However, when Coster‘s sale manager asked him to wait a few more minutes for the credit card approval, he agreed, despite the knowledge that he had already caused a 10-minute delay and that the city tour could not start without him. A person who knowingly and voluntarily exposes himself to danger cannot claim damages for the resulting injury. The doctrine of volenti non fit injuria (to which a person assents is not esteemed in law as injury) refers to self-inflicted injury or to the consent to injury which precludes the recovery of damages by one who has knowingly and voluntarily exposed himself to danger, even if he is not negligent in doing so. This doctrine is wholly applicable to this case. Pantaleon himself testified that the most basic rule when travelling in a tour group is that you must never be a cause of any delay because the schedule is very strict. When Pantaleon made up his mind to push through with his purchase, he must have known that the group would become annoyed and irritated with him. This was the natural, foreseeable consequence of his decision to make them all wait.

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AMEX did not violate any legal duty to Pantaleon under the circumstances under the principle of damnum absque injuria, or damages without legal wrong, loss without injury. As we held in BPI Express Card v. CA: ―We do not dispute the findings of the lower court that private respondent suffered damages as a result of the cancellation of his credit card. However, there is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. In such cases, the consequences must be borne by the injured person alone, the law affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong. These situations are often called damnum absque injuria. In other words, in order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted from a breach of duty which the defendant owed to the plaintiff - a concurrence of injury to the plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort damages is the premise that an individual was injured in contemplation of law. Thus, there must first be a breach of some duty and the imposition of liability for that breach before damages may be awarded; and the breach of such duty should be the proximate cause of the injury.‖ B.

Contributory negligence

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Civil Code o Article 2179 (Memorize)

1. Rakes v. The Atlantic, Gulf and Pacific Company, 7 Phil. 359 (1907) Facts: Rakes was a negro working as a laborer for Atlantic Gulf in the early 1900s. One day, they were working in the company‘s yard and they were transporting heavy rails using two cars. Each car carrying 7 rails (560 lbs each). The cars were pulled by rope from the front and other workers are pushing the cars from behind. There were no side guards installed on the sides of the cars but the rails were secured by ropes. The track where the cars move were also weakened by a previous typhoon. It was alleged that Atlantic‘s foreman was notified of said damage in the tracks but the same were left unrepaired. While the cars were being moved and when it reached the depressed portion of the track, and while Rakes was beside one of the cars, the ropes gave in and the rails slipped thereby crushing his leg and causing it to be amputated. Rakes sued Atlantic Gulf and he won; he was awarded 5,000 pesos for damages ($2,500). Atlantic assailed the decision of the lower court alleging that they specifically ordered their workers to be walking only before or after the cars and not on the side of the cars because the cars have no side guards to protect them in case the rails would slip. Atlantic also alleged that Rakes should be suing the foreman as it was him who neglected to have the tracks repaired; that Rakes himself was negligent for having known of the depression on the track yet he continued to work. Issue: Whether Atlantic is negligence for the injury of its nigga laborer. Held: YES but RAKES IS CONTRIBUTORILY LIABLE. The most controverted question in the case is that of the negligence of the Rakes, contributing to the accident, to what extent it existed in fact and what legal effect is to be given it. In 2 particulars is he charged with carelessness: First. That having noticed the depression in the track he continued his work; and Second, That he walked on the ends of the ties at the side of the car instead of along the boards, either before or behind it. The depression in the track might indicate either a serious or a trivial difficulty. FIRST POINT: nothing in the evidence to show that Rakes did or could see the displaced timber underneath the sleeper. The claim that he must have done so is a conclusion drawn from what is assumed to have been a probable condition of things not before us, rather than a fair inference from the testimony. While the method of construction may have been known to the men who had helped build the road, it could not have been known to Rakes who had worked at this job less than 2 days. A man may easily walk along a railway without perceiving a displacement of the underlying timbers. The foreman testified that he knew the state of the track on the day of the accident and that it was then in good condition. A witness for the Atlantic, swore that he never noticed the depression in the track. The sagging of the track Rakes did perceive, but that was reported in his hearing to the foreman who neither promised nor refused to repair it. His lack of caution in continuing at his work after noticing the slight depression of the rail was not of so gross a nature as to constitute negligence, barring his recovery. Rakes did not know the cause of the one rail being lower than the other" and "it does not appear in this case that heknew before the accident occurred that the stringers and rails joined in the same place." As regards the SECOND CHARGE of Negligence against the plaintiff: that there is no specific finding upon the instruction given by the defendant to its employees to walk only upon the planks, nor upon the necessity of Rakes putting himself upon the ties at the side in order to get hold upon the car. Rakes and his witnesses swear that not only were they not forbidden to proceed in this way, but were expressly directed by the foreman to do so. However, both the officers of the company and 3 of the workmen testify that there was a general prohibition frequently made known to all the 94

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gang against walking by the side of the car, and the foreman swears that he repeated the prohibition before the starting of this particular load. The preponderance is in favor of the Atlantic‘s contention to the extent of the general order being made known to the workmen. The disobedience of Rakes in placing himself in danger contributed in some degree to the injury as a proximate, although not as its primary cause. What effect is to be given such an act of contributory negligence? Does it defeat a recovery, according to the American rule, or is it to be taken only in reduction of damages? American States adhere to the doctrine of comparative negligence - allowing a recovery by a plaintiff whose own act contributed to his injury, provided his negligence was slight as compared with that of the defendant. The theory of proportional damages which reduces the award. However, the overwhelming weight of adjudication establishes the principle in American jurisprudence that any negligence, however slight, on the part of the person injured which is one of the causes proximately contributing to his injury, bars his recovery. In Grand Trunk Railway Company vs. Ives, which stated the present rule of law which is: Although the defendant's negligence may have been the primary cause of the injury complained of, yet an action for such injury can not be maintained if the proximate and immediate cause of the injury can be traced to the want of ordinary care and caution in the person injured. However, the contributory negligence of the party injured will not defeat the action if it be shown that the defendant might, by the exercise of reasonable care and prudence, have avoided the consequences of the injured party's negligence. Difficulty seems to be apprehended in deciding which acts of the injured party shall be considered immediate causes of the accident. The test is simple. Distinction must be made between the accident and the injury, between the event itself, without which there could have been no accident, and those acts of the victim not entering into it, independent of it, but contributing to his own proper hurt. The cause of the accident under review was the displacement of the crosspiece or the failure to replace it. This produced the event giving occasion for damages — that is, the sinking of the track and the sliding of the iron rails. Rakes‘ act in walking by the side of the car did not contribute, although it was an element of the damage. Had the crosspiece been out of place wholly or partly through his act or omission of duty, that would have been one of the determining causes of the event or accident, for which he would have been responsible. Where he contributes to the principal occurrence, as one of its determining factors, he can not recover. Where, in conjunction with the occurrence, he contributes only to his own injury, he may recover the amount that the defendant responsible for the event should pay for such injury, less a sum deemed a suitable equivalent for his own imprudence. The judgment of the trial court, fixing the damage incurred by the plaintiff at 5,000 pesos is modified; we deduct therefrom 2,500 pesos, the amount fairly attributable to his negligence. 2. Taylor v. Manila Electric Railroad and Light Co., 16 Phil. 8 (1910)  See previous Doctrine: When the immediate cause of an accident resulting in an injury is the plaintiff's own act, which contributed to the principal occurrence as one of its determining factors, he can not recover damages for the injury. 3. National Power Corporation v. Casionan, G.R. No. 165969, November 27, 2008 Facts: Sometime in 1970, NPC installed high-tension electrical transmission lines (69 KV) traversing a trail leading to Sangilo, Itogon, in Dalicno. Some of the lines sagged and dangled at a height of only 8 to 10 feet. As early as 1991, the leaders of Ampucao, Itogon made verbal and written requests to NPC for the institution of safety measures. They wrote the Area Manager to make immediate repairs, reiterating the dangers posed to small-scale miners during the wet season; they related an incident where a boy was nearly electrocuted. In March 1995, the Area Manager wrote the Itogon Mayor that NPC installed 9 additional poles, and identified a possible rerouting scheme. 3 months later, Noble and his co-pocket miner, Jimenez, were at Dalcino. They cut 2 bamboo poles; Noble carried the shorter pole and walked through the abovementioned trail towards their workplace. The tip of the pole he was carrying touched one of the wires, and Jimenez saw Noble fall to the ground, dead. The Municipal Health Officer determined the Cause of Death to be cardiac arrest caused by electrocution. Police found wires hanging 8 to 10 feet from the ground. The trail was the only viable way; the other side was a precipice. No warning signs were present. After the incident, NPC repaired the lines and put up warning signs. The heirs filed a claim for damages before the RTC. NPC denies negligence, averring that danger signs previously installed were stolen by kids, and that some poles sank due to pocket mining. It averred that it could not have been electrocution, there being a lack of extensive burns. The RTC and CA ruled in favor of the Heirs. 95 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Issue: Whether damages should be deleted in lieu of Noble‘s contributory negligence. Held: NO. NPC makes an absurd contention that the mere presence of the high tension wires above the trail did not cause the victim‘s death. Instead, it was Noble‘s negligent carrying of the bamboo pole that caused his death. It insists that Noble was negligent when he allowed the bamboo pole he was carrying to touch the high tension wires. This is especially true because other people traversing the trail have not been similarly electrocuted. The sagging high tension wires were an accident waiting to happen. As established during trial, the lines were sagging around 8 to 10 feet in violation of the required distance of 18 to 20 feet. If the transmission lines were properly maintained by NPC, the bamboo pole carried by Noble would not have touched the wires. He would not have been electrocuted. Moreover, there is no contributory negligence on Noble‘s part. Negligence is the failure to observe, for the protection of the interest of another person, that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury. On the other hand, contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard which he is required to conform for his own protection. There is contributory negligence when the party‘s act showed lack of ordinary care and foresight that such act could cause him harm or put his life in danger. It is an act or omission amounting to want of ordinary care on the part of the person injured which, concurring with the defendant‘s negligence, is the proximate cause of the injury. The underlying precept on contributory negligence is that a plaintiff who is partly responsible for his own injury should not be entitled to recover damages in full but must bear the consequences of his own negligence. If indeed there was contributory negligence on the part of the victim, then it is proper to reduce the award for damages. This is in consonance with Art. 2179 CC provision that liability will be mitigated in consideration of the contributory negligence of the injured party. In this case, the trail where Noble was electrocuted was regularly used by members of the community. There were no warning signs to inform passersby of the impending danger to their lives should they accidentally touch the high tension wires. Also, the trail was the only viable way from Dalicon to Itogon. Hence, Noble should not be faulted for simply doing what was ordinary routine to other workers in the area. NPC further faults the victim in engaging in pocket mining, which is prohibited by the DENR in the area. In Añonuevo v. CA, this it was ruled that the violation of a statute is NOT SUFFICIENT to hold that the violation was the proximate cause of the injury, unless the very injury that happened was precisely what was intended to be prevented by the statute. In said case, the allegation of contributory negligence on the part of the injured party who violated traffic regulations when he failed to register his bicycle or install safety gadgets thereon was struck down. In sum, the victim was not guilty of contributory negligence. Hence, NPC is not entitled to a mitigation of its liability. 4. Lambert v. Heirs of Rey Castillon, 452 SCRA 285 (2005)  See previous Doctrine: The underlying precept on contributory negligence is that a plaintiff who is partly responsible for his own injury should not be entitled to recover damages in full but must bear the consequences of his own negligence. The defendant must thus be held liable only for the damages actually caused by his negligence. The determination of the mitigation of the defendant‘s liability varies depending on the circumstances of each case. In the case at bar, it was established that Ray, at the time of the mishap: (1) was driving the motorcycle at a high speed; (2) was tailgating the Tamaraw jeepney; (3) has imbibed one or two bottles of beer; and (4) was not wearing a protective helmet. These circumstances, although not constituting the proximate cause of his demise and injury to Sergio, contributed to the same result. The contribution of these circumstances are all considered and determined in terms of percentages of the total cause. Hence, pursuant to Rakes v. AG & P, the heirs of Ray Castillon shall recover damages only up to 50% of the award. In other words, 50% of the damage shall be borne by the private respondents; the remaining 50% shall be paid by the petitioner. 5. Estacion v. Bernardo, G.R. No. 144723, February 27, 2006 Facts: Noe Bernardo boarded a Ford Fiera passenger jeep driven by respondent Geminiano Quinquillera, owned by Cecilia Bandoquillo and was seated on the extension seat placed at the center of the Fiera. An old woman wanted to ride, so Noe offered his seat. Since the Fiera was already full, Noe hung or stood on the left rear carrier of the vehicle. The Fiera began to slow down and then stopped by the right shoulder of the road to pick up passengers. An Isuzu cargo truck, owned by Estacion and driven by Gerosano, which was traveling in the same direction, hit the rear end portion of the Fiera where respondent Noe was standing. The cargo truck smashed Noe against the Fiera 96 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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crushing his legs and feet, which made him fall to the ground. A passing vehicle brought him to the Silliman University Medical Center where his lower left leg was amputated. Police investigation reports showed that Noe was one of the 11 passengers of the Fiera who suffered injuries; that only 1 tire mark from the front right wheel of the cargo truck was seen on the road. The sketch of the accident showed the relative positions of the two vehicles, their distances from the shoulder of the road and the skid marks of the right front wheel of the truck measuring about 48 feet. Noe filed a complaint for damages arising from quasi delict against Estacion as the registered owner of the cargo truck and his driver Gerosano. It was alleged that the proximate cause of his injuries and suffering was the reckless imprudence of Gerosano and Estacion‘s negligence in the selection of a reckless driver and for operating a vehicle that was not road-worthy. Estacion and his driver Gerosano denied the allegations. They filed a third party complaint against the owner and driver of the Fiera. It was alleged that it was the reckless imprudence of Fiera driver and his clear violation of the traffic rules and regulations which was the proximate cause of the accident and asked for indemnification. Driver of the cargo truck, Gerosano, was charged criminally for reckless imprudence resulting to multiple physical injuries with damage to property. MCTC found him guilty of the crime charged. Trial court (in this case) ruled that Gerosano‘s gross negligence and reckless imprudence had been confirmed by the Judgment in Criminal Case No. 463 and such negligence of Gerosano is the direct and proximate cause of the incident and of the injuries suffered by respondent Noe. It was also found that faulty breaks (only 1 tiremark) caused the truck to hit the Fiera. Also, tiremarks showed that the truck had been driving fast. CA affirmed. Issue: Who should be liable. Held: ALL ARE GUILTY OF NEGLIGENCE. The truck was running at a fast speed because if Gerosano was really driving at a speed of 40 KPH and considering that the distance between the truck and the Fiera in front was about 10 meters, he had more than enough time to slacken his speed and apply his break to avoid hitting the Fiera. From the way the truck reacted to the application of the brakes, it showed that Gerosano was driving at a fast speed because the brakes skidded a lengthy 48 feet as shown in the sketch of police investigator of the tire marks visibly printed on the road. Photographs taken after the incident and the testimony of Gerosano as to the extent of damage to the truck, i.e. the truck‘s windshield was broken and its hood was damaged after the impact, further support the finding of both courts that Gerosano was driving at a fast pace. Based on the sketch report, there was only one tire mark of the right tire of the cargo truck during the incident which, as testified to by police investigator, meant that the brakes of the truck were not aligned otherwise there would be two tire marks impressions on the road. Indeed, it is the negligent act of petitioner‘s driver of driving the cargo truck at a fast speed coupled with faulty brakes which was the proximate cause of respondent Noe‘s injury. Gerosano admitted that his truck was at a distance of 10 meters prior to the impact. The distance between the two vehicles was such that it would be impossible for Gerosano not to have seen that the Fiera had pulled over to pick up passengers. Also, Noe‘s act of standing on the rear carrier of the Fiera exposing himself to bodily injury is in itself negligence on his part. Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is required to conform for his own protection. It has been established by the testimony of Noe that he was with 4 or 5 other persons standing on the rear carrier of the Fiera since it was already full. Noe‘s act of standing on the left rear carrier portion of the Fiera showed his lack of ordinary care and foresight that such act could cause him harm or put his life in danger. It has been held that ―to hold a person as having contributed to his injuries, it must be shown that he performed an act that brought about his injuries in disregard of warning or signs of an impending danger to health and body. Noe‘s act of hanging on the Fiera is definitely dangerous to his life and limb. Also, there was overloading which is in violation of traffic rules and regulations. Quinquillera should not have taken more passengers than what the Fiera can accommodate. If the Fiera was not overloaded, Noe would not have been standing on the rear carrier and sustained such extent of injury. Quinquillera was negligent in allowing Noe to stand on the Fiera‘s rear portion. Under the law, no driver shall allow any person to ride on running board, step board, or mudguard. Quinquillera‘s act of permitting Noe to hang on the rear portion of the Fiera in such a dangerous position creates undue risk of harm to Noe. Quinquillera failed to observe that degree of care, precaution and vigilance that the circumstances justly demand. Since respondent Quinquillera is negligent, there arises a presumption of negligence on the part of his employer, respondent Bandoquillo, in supervising her employees properly. Such presumption was not rebutted at all by Bandoquillo. 97 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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For the employer to avoid the solidary liability for a tort committed by his employee, an employer must rebut the presumption by presenting adequate and convincing proof that in the selection and supervision of his employee, he or she exercises the care and diligence of a good father of a family. Case law teaches that for an employer to have exercised the diligence of a good father of a family in the selection of employees, he should not be satisfied with the applicant‘s mere possession of a professional driver‘s license; he must also carefully examine the applicant for employment as to his qualifications, his experience and record of service. Petitioner failed to show that he examined driver Gerosano as to his qualifications, experience and service records. The testimony of driver Gerosano in his cross-examination showed the non-observance of these requirements. Gerosano testified that petitioner was his first employer in Dumaguete and that he was accepted by petitioner on the very day he applied for the job; that his driver‘s license was issued in Mindanao where he came from and that while petitioner asked him about his driving record in Mindanao, he did not present any document of his driving record. These clearly established that petitioner did not exercise due diligence in the selection. The fact that petitioner‘s driver Gerosano was driving in an efficient manner when petitioner was with him in his first two trips would not conclusively establish that Gerosano was not at all reckless. It could not be considered as due diligence in the supervision of his driver to exempt petitioner from liability. In the supervision of his driver, petitioner must show that he had formulated training programs and guidelines on road safety for his driver which the records failed to show. Estacion failed to rebut the presumption of negligence in the selection and supervision of his employees. Furthermore, there was no proof that he exercised diligence in maintaining his cargo truck roadworthy and in good operating condition. While Estacion‘s mechanic driver testified that he made a routine check up one day before the mishap happened, and found the truck operational, there was no record of such inspection. Since there was contributory negligence on the part of Noe, Estacion‘s liability should be mitigated in accordance to Art. 2179. The underlying precept of this article on contributory negligence is that a plaintiff who is partly responsible for his own injury should not be entitled to recover damages in full but must bear the consequences of his own negligence. The defendant must thus be held liable only for the damages actually caused by his negligence. The demands of substantial justice are satisfied by distributing the damages on a 20-80 ratio excluding attorney‘s fees and litigation expenses. (based on the Phoenix Construction v. IAC case) Petitioner and respondents Bandoquillo and Quinquillera are jointly and severally liable for the 80% of the damages as well as attorney‘s fees and litigation expenses. 6. Philippine National Railways v. Brunty, G.R. No. 169891, November 2, 2006 Facts: Rhonda Brunty, Garcia, and Mercelita (the driver) were riding in a Mercedes Benz sedan en route to Baguio. A PNR Train driven by Alfonso Reyes was also departing from La Union station. At 2PM, Mercelita et al. were already approaching the railroad crossing at Barangay Rizal, Moncada, Tarlac. Mercelita was driving at approximately 70 KPH and drove past a vehicle, unaware of the railroad track up ahead. Eventually the sedan collided with the train, instantly killing Mercelita and gravely injuring Rhonda and Garcia. Rhonda Brunty died thereafter. Ethel Brunty (herein respondent) demanded for damages against PNR but the same remained unheeded. Hence she filed a complaint, alleging that the death of Rhonda, Mercelita and Garica were the direct and proximate result of the gross and reckless negligence of PNR in not providing the necessary equipment at the railroad in Tarlac. They pointed out that there was no flagbar or red light signal to warn motorists who were about to cross the railroad track, and that the flagman or switchman was only equipped with a hand flashlight. They also aver the negligence of PNR in supervising its employees, particularly the driver and operator of the train. PNR meanwhile claims that it had the right of way on the railroad crossing in question, and that it has no legal duty to put up a bar or red light signal in any such crossing. It insisted that there were adequate, visible, and clear warning signs strategically posted on the sides of the road before the railroad crossing. It countered that the immediate and proximate cause of the accident was Mercelita‘s negligence, and that he had the last clear chance to avoid the accident. The driver disregarded the warning signs, the whistle blasts of the oncoming train and the flashlight signals to stop given by the guard. Issues: (1) Whether or not the accident was due to Mercelita‘s negligence. (2) Whether Mercelita was guilty of contributory negligence. (3) Whether last clear chance is applicable Held: PNR IS NEGLIGENT. MERCELITA GUILTY OF CONTRIBUTORY NEGLIGENCE.

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It was clearly established that respondents sustained damage or injury as a result of the collision. PNR‘s negligence is likewise beyond cavil. Considering the circumstances prevailing at the time of the fatal accident, the alleged safety measures installed by the PNR at the railroad crossing is not only inadequate but does not satisfy well-settled safety standards in transportation. An examination of the photographs of the railroad crossing at Moncada, Tarlac presented as evidence by PNR itself would yield the following: (1) absence of flagbars or safety railroad bars; (2) inadequacy of the installed warning signals; and (3) lack of proper lighting within the area. Thus, even if there was a flagman stationed at the site as claimed by PNR, it would still be impossible to know or see that there is a railroad crossing/tracks ahead, or that there is an approaching train from the Moncada side of the road since one‘s view would be blocked by a cockpit arena. A vehicle coming from the Moncada side would have difficulty in knowing that there is an approaching train because of the slight curve, more so, at an unholy hour as 2AM. Thus, it is imperative on the part of the PNR to provide adequate safety equipment in the area. It may broadly be stated that railroad companies owe to the public a duty of exercising a reasonable degree of care to avoid injury to persons and property at railroad crossings, which duties pertain both in the operation of trains and in the maintenance of the crossings. The Court has previously determined the liability of the PNR for damages for its failure to put a cross bar, or signal light, flagman or switchman, or semaphores. Such failure is evidence of negligence and disregard of the safety of the public, even if there is no law or ordinance requiring it because public safety demands that said device or equipment be installed. Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is required to conform for his own protection. To hold a person as having contributed to his injuries, it must be shown that he performed an act that brought about his injuries in disregard of warning or signs of an impending danger to health and body.To prove contributory negligence, it is still necessary to establish a causal link, although not proximate, between the negligence of the party and the succeeding injury. In a legal sense, negligence is contributory only when it contributes proximately to the injury, and not simply a condition for its occurrence. It is established that there was a slight curve before approaching the tracks, the place was not properly illuminated, one‘s view was blocked by a cockpit arena, and Mercelita was not familiar with the road. Despite all that, it was found that Mercelita was then driving the Benz at a speed of 70 KPH and, in fact, had overtaken a vehicle a few yards before reaching the railroad track. Mercelita should not have driven the car the way he did. However, while his acts contributed to the collision, they nevertheless do not negate PNR liability (which according to the court, it was bereft of any allegation and proof as to the relationship between Mercelita and Rhonda Brunty. Hence, the finding of contributory negligence on the part of Mercelita, which generally has the effect of mitigation of liability, does not apply). The doctrine of last clear chance does not apply. The doctrine of last clear chance states that where both parties are negligent but the negligent act of one is appreciably later than that of the other, or where it is impossible to determine whose fault or negligence caused the loss, the one who had the last clear opportunity to avoid the loss but failed to do so, is chargeable with the loss. Stated differently, the antecedent negligence of plaintiff does not preclude him from recovering damages caused by the supervening negligence of defendant, who had the last fair chance to prevent the impending harm by the exercise of due diligence. The proximate cause of the injury having been established to be the negligence of PNR, the above doctrine finds no application in the instant case. 7. Del Rosario v. Manila Electric Co., 57 Phil. 478 (1932) Facts: Around 2PM on Aug 4, 1930, in Dimasalang St, a 6 triple braid weather proof wire commonly used by MECo to conduct electricity for lighting was noticed to be burning. After a while, the wire parted and one of its ends fell to the ground. Thus, he phoned MECo and apprised the latter of the incident. The latter promised to send an inspector. Meanwhile, at 4PM, a school had just been dismissed and children, including Alberto del Rosario (9 years old) and 2 others, were on their way home. Upon seeing the wire, they were all curious as to what it was. One of Alberto‘s companions was with his electrician father. As such, said father told them not to touch it. But since Alberto was still curious and challenged and was walking ahead of his group, put his index finger on the wire. Immediately, he fell to the ground. Upon being taken to the hospital, he was pronounced dead. The MECo inspector came only after Alberto fell victim to the wire. His parents now seek to hold MECo for negligence. Issue: Whether Alberto del Rosario was negligence such that MECo can be exonerated. Held: NO. CORP IS LIABLE. The presumption of negligence on the part of MECo from the breakage of this wire has not been overcome, and MECo is responsible for the accident.Moreover, despite being informed about the wire, it took MECo more than an hour an a half before it could send its inspector.

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Moreover, it is doubtful whether contributory negligence can properly be imputed to the deceased, owing to his immature years and the natural curiosity which a child would feel to do something out of the ordinary, and the mere fact that the deceased ignored the caution of a companion of the age of 8 years does not alter the case. But even supposing that contributory negligence could in some measure be properly imputed to the de ceased, yet such negligence would not be wholly fatal to the right of action in this case, not having been the determining cause of the accident. C.

Assumption of Risk

1. Afialda v. Hisole, 85 Phil. 67 (1949) Facts: This is an action for damages arising from injury caused by an animal. The complaint alleges that the now deceased, Loreto Afialda, was employed by the Spouses Hisole as caretaker of their carabaos at a fixed compensation; that while tending the animals, he was gored by one of them and later died as a consequence of his injuries; that the mishap was due neither to his own fault nor to force majeure; and that Afialda is his elder sister and heir depending upon him for support. Plaintiff seeks to hold Spouses liable under article 1905 of the Civil Code, which reads: The possessor of an animal, or the one who uses the same, is liable for any damages it may cause, even if such animal should escape from him or stray away. This liability shall cease only in case, the damage should arise from force majeure or from the fault of the person who may have suffered it. Spouses were absolved by the lower court because above provision was interpreted to mean that the owner of the animal is answerable only for damages caused to a stranger and that for damage to the caretaker, the owner would be liable only if he had been negligent or at fault. Issue: Whether the owner of the animal is liable when the damage is caused to its caretaker. Held: NOT LIABLE. Claiming that the lower court was in error, Afialda‘s counsel contends that the article 1905 does not distinguish between damage caused to the caretaker and makes the owner liable whether or not he has been negligent or at fault. This opinion, however, appears to have been rendered in a case where an animal caused injury to a stranger or third person. It is therefore no authority for a case like the present where the person injured was the caretaker of the animal. The distinction is important. For the statute names the possessor or user of the animal as the person liable for any damages it may cause, and this for the obvious reason that the possessor or user has the custody and control of the animal and is therefore the one in a position to prevent it from causing damage. Here, the animal was in custody and under the control of the caretaker, who was paid for his work as such. Obviously, it was the caretaker's business to try to prevent the animal from causing injury or damage to anyone, including himself. And being injured by the animal under those circumstances was one of the RISKS OF THE OCCUPATION which he had voluntarily assumed and for which he must take the consequences. In a decision of the Spanish SC, the death of an employee who was bitten by a feline which his master had asked him to take to his establishment was by said tribunal declared to be a veritable accident of labor (Manresa) which should come under the labor laws rather than under article 1905 CC. The present action, however, is not brought under the Workmen's Compensation Act, there being no allegation that, among other things, Spouses‘ business, whatever that might be, had a gross income of P20,000. As already stated, Spouses‘ liability is made to rest on article 1905 CC. But action under that article is not tenable for the reasons already stated. On the other hand, if action is to be based on article 1902 of the Civil Code, it is essential that there be fault or negligence on the part of the Spouses as owners of the animal that caused the damage. But, the complaint contains no allegation on those points. 2. Ilocos Norte Electric Company v. Court of Appeals, 179 SCRA 5, (1989) Facts: In the evening of June 28 until the early morning of June 29, 1967 a strong typhoon by the code name ―Gening‖ buffeted the province of Ilocos Norte. After the typhoon had abated and when the floodwaters were beginning to recede, the deceased Isabel Lao Juan, ventured out of the house of her son in-law, Antonio Yabes and proceeded towards the direction of the Five Sisters Emporium, of which she was the owner and proprietress, to look after the merchandise therein that might have been damaged. Wading in waist-deep flood, the deceased was followed by Aida Bulong and by Linda. Aida and Linda walked side by side at a distance of between 5 and 6 meters behind the deceased. Suddenly, the deceased screamed ―Ay‖ and quickly sank into the water. The 2 girls attempted to help, but fear dissuaded them from 100

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doing so because on the spot where the deceased sank they saw an electric wire dangling from a post and moving in snake-like fashion in the water. Upon their shouts for help, Ernesto dela Cruz came out of the house of Antonio Yabes. Ernesto tried to go to the deceased, but at 4 meters away from her he turned back shouting that the water was grounded. When Antonio Yabes was informed by Ernesto that his mother- in-law had been electrocuted, he acted immediately. He passed by the City Hall of Laoag to request the police to ask the people of Ilocos Norte Electric Company (INELCO) to cut off the electric current. The floodwater was receding and the lights inside the house were out indicating that the electric current had been cut off. Yabes instructed his boys to fish for the body of the deceased. The body was recovered about 2 meters from an electric post. About 4A.M. on that fateful date, Power Plant Engineer of the NPC at the Laoag Diesel-Electric Plant, noticed certain fluctuations in their electric meter which indicated such abnormalities as grounded or short-circuited lines. He decided to make an inspection. On the way, he saw grounded and disconnected lines. Electric lines were hanging from the posts to the ground. Since he could not see any INELCO lineman, he decided to go to the INELCO Office which was still closed. As he turned right at the intersection of Guerrero and Rizal, he saw an electric wire about 30 meters long strung across the street ―and the other end seemed to play with the current of the water.‖ Having learned of the death of Isabel Lao Juan, he passed by the house of the deceased to which the body had been taken. Using the resuscitator, he tried to revive the deceased. His efforts proved futile. Rigor mortis was setting in. On the left palm of the deceased, Engr. Juan noticed a hollow wound. Proceeding to the INELCO office, he met 2 linemen. He told them about the grounded lines of the INELCO. He went on a 3rd inspection trip preparatory to the restoration of power. The dangling wire he saw was no longer there. Upon the request of the relatives of the deceased, Dr. Castro examined the body. He found that the skin was grayish or, in medical parlance, cyanotic, which indicated death by electrocution. On the left palm, the doctor found an ―electrically charged wound‖ or a first degree burn. The certificate of death prepared by Dr. Castro stated the cause of death as ―circulatory shock electrocution‖ Defendant presented the testimonies of its officers and employees and sought to prove that on and even before June 29, 1967 the electric service system of the INELCO did not suffer from any defect that might constitute a hazard to life and property. The service lines, devices and other INELCO equipment in Area No. 9 had been newly-installed prior to the date in question. Defendant had installed safety devices; had 12 lines-men charged with the duty of making a round-theclock check-up. It claimed that although a strong typhoon struck the province of Ilocos Norte putting to streets of Laoag City under water, only a few known places in Laoag were reported to have suffered damaged electric lines. Fabico Abijero testified that in the early morning before 6 am on June 29, 1967, he did not see any cut or broken wires in or near the vicinity. What he saw were many people fishing out the body of Isabel Lao Juan. A witness in the person of Dr. Antonio Briones was presented by the defense to show that the deceased could not have died of electrocution. Without an autopsy on the cadaver of the victim, no doctor, not even a medicolegal expert, can speculate as to the real cause of death. Cyanosis could not have been found in the body of the deceased 3 hours after her death, because cyanosis, which means lack of oxygen circulating in the blood and rendering the color of the skin purplish, appears only in a live person. The presence of the elongated burn in the left palm of the deceased is not sufficient to establish her death by electrocution; since burns caused by electricity are more or less round in shape and with points of entry and exit. Had the deceased held the lethal wire for a long time, the laceration in her palm would have been bigger and the injury more massive. An action for damages was instituted by the heirs of the deceased. In INELCO‘s Answer, they raised as a special defense that the deceased could have died simply either by drowning or by electrocution due to negligence attributable only to herself and not to INELCO. The deceased, without INELCO‘s knowledge, caused the installation of a burglar deterrent by connecting a wire from the main house to the iron gate and fence of steel matting, thus, charging the latter with electric current whenever the switch is on. INELCO then conjectures that the switch to said burglar deterrent must have been left on, hence, causing the deceased‘s electrocution when she tried to open her gate CFI found the facts in favor of INELCO and dismissed the complaint but awarded moral damages and attorney‘s fees Issue: (1) Whether deceased died of electrocution. (2) Whether INELCO may be held liable for the death. Held: (1) YES. It was shown that the deceased died of electrocution, derived from the photographed burnt wounds on the left palm. Such wounds undoubtedly point to the fact that the deceased had clutched a live wire of the INELCO. This was corroborated by the testimony of Dr. Jovencio Castro who actually examined the body of the deceased a few hours after the death and described the said burnt wounds as a ―first degree burn‖ and ―electrically charged.‖

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Witnesses Linda Alonzo Estavillo and Aida Bulong added that after the deceased screamed ―Ay‖ and sank into the water, they tried to render some help but were overcome with fear by the sight of an electric wire dangling moving in the water in a snake-like fashion. The nature of the wounds as described by the witnesses who saw them can lead to no other conclusion than that they were ―burns,‖ and there was nothing else in the street where the victim was wading thru which could cause a burn To escape liability, INELCO ventures into the theory that the deceased was electrocuted, if such was really the case, when she tried to open her steel gate, which was electrically charged by an electric wire she herself caused to install to serve as a burglar deterrent. Such is mere speculation, not backed up with evidence. ―each party must prove his own affirmative allegations.‖ In fact, ―during the trial, this theory was abandoned‖ by the INELCO. (2) While it is true that typhoons and floods are considered Acts of God for which no person may be held responsible, it was not the said eventuality which directly caused the victim‘s death. It was through the intervention of INELCO‘s negligence that death took place. Defendant called to the witness-stand its electrical engineer, chief lineman, and lineman to show exercise of extraordinary diligence and to negate the charge of negligence. The witnesses testified in a general way about their duties and the measures which defendant usually adopts to prevent hazards to life and limb. Lower court found that the electric lines and other equipment of INELCO were properly maintained. The finding of the lower court, however, was based on what the INELCO‘s employees were supposed to do, not on what they actually did or failed to do on the date in question, and not on the occasion of the emergency situation brought about by the typhoon. The lower court made a mistake in assuming that INELCO‘s employees worked around the clock during the occurrence of the typhoon. Engr. Antonio Juan of the NPC affirmed that when he first set out on an inspection trip, he saw grounded and disconnected electric lines of the defendant but he saw no INELCO lineman. The INELCO Office at the Life theatre on Rizal Street was still closed. Conrado Asis, electrical engineer, testified that he conducted a general inspection of the franchise area of the INELCO only on June 30, 1967, the day following the typhoon. The reason he gave for the delay was that all their vehicles were submerged. In times of calamities, extraordinary diligence requires a supplier of electricity to be in constant vigil to prevent or avoid any probable incident that might imperil life or limb. The evidence does not show that INELCO did that. On the contrary, evidence discloses that there were no men policing the area, nor even manning its office. Under the circumstances of the case, INELCO was negligent in seeing to it that no harm is done to the general public considering that the measure of care required of electric companies must be commensurate with or proportionate to the danger. The duty of exercising this high degree of diligence and care extends to every place where persons have a right to be. The negligence of INELCO having been shown, it may not now absolve itself from liability by arguing that the victim‘s death was solely due to a fortuitous event. When an act of God combines or concurs with the negligence of the defendant to produce an injury, the defendant is liable if the injury would not have resulted but for his own negligent conduct or omission. INELCO claims that the CA gravely abused its discretion and erred in not applying the legal principle of ―assumption of risk‖ in the present case to bar private respondents from collecting damages from INELCO. The maxim volenti non fit injuria (to a willing person, injury is not done) relied upon by INELCO finds no application. It is imperative to note the surrounding circumstances which impelled the deceased to leave the comforts of a roof and brave the subsiding typhoon. As testified, the deceased, accompanied by Aida and Linda, were on their way to the latter‘s grocery store ―to see to it that the goods were not flooded.‖ As such, shall We punish her for exercising her right to protect her property from the floods by imputing upon her the unfavorable presumption that she assumed the risk of personal injury? Definitely not. For it has been held that a person is EXCUSED from the force of the rule — that when he voluntarily assents to a known danger he must abide by the consequences, if an emergency is found to exist or if the life or property of another is in peril or when he seeks to rescue his endangered property. Clearly, an emergency was at hand as the deceased‘s property, a source of her livelihood, was faced with an impending loss. Furthermore, the deceased, at the time the fatal incident occurred, was at a place where she had a right to be without regard to INELCO‘s consent as she was on her way to protect her merchandise. Hence, private respondents, as heirs, may not be barred from recovering damages as a result of the death caused by INELCO‘s negligence. 3. Calalas v. Court of Appeals, G.R. No. 122039, May 31, 2000  See previous Doctrine: The fact that Sunga was seated in an ―extension seat‖ placed her in a peril greater than that to which the other passengers were exposed. Therefore, not only was petitioner unable to overcome the presumption of negligence imposed on him for the injury sustained by Sunga, but also, the evidence shows he was actually negligent in transporting passengers. We find it hard to give serious thought to petitioner‘s contention that Sunga‘s taking an ―extension seat‖ amounted to an implied assumption of risk. It is akin to arguing that the injuries to the many victims of the tragedies in our seas 102 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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should not be compensated merely because those passengers assumed a greater risk of drowning by boarding an overloaded ferry. This is also true of petitioner‘s contention that the jeepney being bumped while it was improperly parked constitutes caso fortuito. A caso fortuito is an event which could not be foreseen, or which, though foreseen, was inevitable. This requires that the following requirements be present: (a) the cause of the breach is independent of the debtor‘s will; (b) the event is unforeseeable or unavoidable; (c) the event is such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (d) the debtor did not take part in causing the injury to the creditor. Petitioner should have foreseen the danger of parking his jeepney with its body protruding two meters into the highway. D.

Last Clear Chance

1. Picart v. Smith, 37 Phil. 809 (1918)  See previous Doctrine: It goes without saying that the plaintiff himself was not free from fault, for he was guilty of antecedent negligence in planting himself on the wrong side of the road. But as we have already stated, the defendant was also negligent; and in such case the problem always is to discover which agent is immediately and directly responsible. It will be noted that the negligent acts of the 2 parties were NOT CONTEMPORANEUS, since the negligence of the defendant succeeded the negligence of the plaintiff by an APPRECIABLE INTERVAL. Under these circumstances the law is that the person who has the last fair chance to avoid the impending harm and fails to do so is chargeable with the consequences, without reference to the prior negligence of the other party. The decision in the case of Rakes vs. Atlantic, Gulf and Pacific Co. should perhaps be mentioned in this connection. This Court there held that while contributory negligence on the part of the person injured did not constitute a bar to recovery, it could be received in evidence to reduce the damages which would otherwise have been assessed wholly against the other party. The defendant company had there employed the plaintiff, as a laborer, to assist in transporting iron rails from a barge in Manila harbor to the company's yards located not far away. The rails were conveyed upon cars which were hauled along a narrow track. At certain spot near the water's edge the track gave way by reason of the combined effect of the weight of the car and the insecurity of the road bed. The car was in consequence upset; the rails slid off; and the plaintiff's leg was caught and broken. It appeared in evidence that the accident was due to the effects of the typhoon which had dislodged one of the supports of the track. The court found that the defendant company was negligent in having failed to repair the bed of the track and also that the plaintiff was, at the moment of the accident, guilty of contributory negligence in walking at the side of the car instead of being in front or behind. It was held that while the defendant was liable to the plaintiff by reason of its negligence in having failed to keep the track in proper repair nevertheless the amount of the damages should be reduced on account of the contributory negligence in the plaintiff. As will be seen the defendant's negligence in that case consisted in an omission only. The liability of the company arose from its responsibility for the dangerous condition of its track. In this case, where the defendant was actually present and operating the automobile which caused the damage, we do not feel constrained to attempt to weigh the negligence of the respective parties in order to apportion the damage according to the degree of their relative fault. It is enough to say that the negligence of the defendant was in this case the immediate and determining cause of the accident and that the antecedent negligence of the plaintiff was a more remote factor in the case. 2. Philippine National Railways Corporation v. Vizcara, G.R. No. 190022, February 15, 2012 Facts: On May 14, 2004, at about 3AM, Reynaldo Vizcara (Reynaldo) was driving a passenger jeepney headed towards Bicol to deliver onion crops, with his companions, Cresencio Vizcara, Crispin Natividad, Samuel Natividad, Dominador Antonio, and Joel Vizcara. While crossing the railroad track in Tiaong, Quezon, a PNR train, then being operated by respondent Japhet Estranas, suddenly turned up and rammed the passenger jeepney. The collision resulted to the instantaneous death of Reynaldo, Cresencio, Crispin, and Samuel. On the other hand, Dominador and Joel, sustained serious physical injuries. At the time of the accident, there was no level crossing installed at the railroad crossing. Additionally, the ―Stop, Look and Listen‖ signage was poorly maintained. The ―Stop‖ signage was already faded while the ―Listen‖ signage was partly blocked by another signboard. The survivors of the mishap, Joel and Dominador, together with the heirs of the deceased filed an action for damages against PNR, Estranas and Ben Saga, the alternate driver of the train. The respondents alleged that the proximate cause of the fatalities and serious physical injuries sustained by the victims of the accident was the PNR‘s gross negligence in not providing adequate safety measures to prevent injury to persons and properties. They pointed out that in the railroad track of Tiaong, Quezon where the accident happened, there was no level crossing bar, lighting equipment or bell installed to warn motorists of the existence of the track and of the approaching train. PNR claimed that they exercised due diligence in operating the train and monitoring its roadworthiness. They asseverate that right before the collision, Estranas was driving the train at a moderate speed. 400 meters away from the railroad 103 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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crossing, he started blowing his horn to warn motorists of the approaching train. When the train was only 50 meters away from the intersection, Estranas noticed that all vehicles on both sides of the track were already at a full stop. Thus, he carefully proceeded at a speed or 25 KPH, still blowing the train‘s horn. However, when the train was already 10 meters away from the intersection, the passenger jeepney being driven by Reynaldo suddenly crossed the tracks. Estranas immediately stepped on the brakes to avoid hitting the jeepney but due to the sheer weight of the train, it did not instantly come to a complete stop until the jeepney was dragged 20 to 30 meters away from the point of collision. RTC ruled in favor of the respondents. CA affirmed. MR was denied by the CA hence the present petition. Issue: Whether or not the doctrine of last clear chance applies. Held: NO. PNR maintain that the proximate cause of the collision was the negligence and recklessness of the driver of the jeepney, that as a professional driver, Reynaldo is presumed to be familiar with traffic rules and regulations, including the right of way accorded to trains at railroad crossing and the precautionary measures to observe in traversing the same. That in utter disregard of the right of way enjoyed by PNR trains, he failed to bring his jeepney to a full stop before crossing the railroad track and thoughtlessly followed the ten-wheeler truck ahead of them. His failure to maintain a safe distance between the jeepney he was driving and the truck ahead of the same prevented him from seeing the PNR signage displayed along the crossing. Both courts ruled that the PNR fell short of the diligence expected of it, taking into consideration the nature of its business, to forestall any untoward incident. In particular, the PNR failed to install safety railroad bars to prevent motorists from crossing the tracks in order to give way to an approaching train. Aside from the absence of a crossing bar, the ―Stop, Look and Listen‖ signage installed in the area was poorly maintained, hence, inadequate to alert the public of the impending danger. A reliable signaling device in good condition, not just a dilapidated ―Stop, Look and Listen‖ signage, is needed to give notice to the public. It is the responsibility of the railroad company to use reasonable care to keep the signal devices in working order. Failure to do so would be an indication of negligence. There was no contributory negligence on the part of the respondents. They were not even aware of the forthcoming danger. The jeepney carrying the respondents was following a 10-wheeler truck. It bears noting that the prevailing circumstances immediately before the collision did not manifest even the slightest indication of an imminent harm. To begin with, the truck they were trailing was able to safely cross the track. There was no crossing bar to prevent them from proceeding or, at least, a stoplight or signage to forewarn them of the approaching peril. Thus, relying on his faculties of sight and hearing, Reynaldo had no reason to anticipate the impending danger. Railroad companies owe to the public a duty of exercising a reasonable degree of care to avoid injury to persons and property at railroad crossings, which duties pertain both to the operation of trains and to the maintenance of the crossings. The responsibility of the PNR to secure public safety does not end with the installation of safety equipment and signages but, with equal measure of accountability, with the upkeep and repair of the same. As held in Cusi v. PNR, if warning devices are installed in railroad crossings, the travelling public has the right to rely on such warning devices to put them on their guard and take the necessary precautions before crossing the tracks. The doctrine of last clear chance is not applicable. The doctrine of last clear chance provides that where both parties are negligent but the negligent act of one is appreciably later in point of time than that of the other, or where it is impossible to determine whose fault or negligence brought about the occurrence of the incident, the one who had the last clear opportunity to avoid the impending harm but failed to do so, is chargeable with the consequences arising therefrom. Stated differently, the rule is that the antecedent negligence of a person does not preclude recovery of damages caused by the supervening negligence of the latter, who had the last fair chance to prevent the impending harm by the exercise of due diligence. To reiterate, the proximate cause of the collision was the PNR‘s negligence in ensuring that motorists and pedestrians alike may safely cross the railroad track. The unsuspecting driver and passengers of the jeepney did not have any participation in the occurrence of the unfortunate incident which befell them. Likewise, they did not exhibit any overt act manifesting disregard for their own safety. Thus, absent preceding negligence on the part of the respondents, the doctrine of last clear chance cannot be applied. 3. Achevara v. Ramos, G.R. No. 175172, September 29, 2009 Facts: Arnulfo Ramos died in a vehicular accident that happened at the national highway along Candon, Ilocos Sur. Elvira Ramos and her two minor children, filed a Complaint for damages under Article 2176 against Cresencia Achevara (operator of passenger jeep), Alfredo Achevara (husband of the operator and as administrator of the conjugal partnership properties of the Sps Achevara) and Benigno Valdez (driver) for the death of her husband Arnulfo Ramos.. It was alleged in the complaint that Benigno Valdez was driving a passenger jeep heading north on the national highway in a reckless, careless, and negligent manner; that he tried to overtake a motorcycle, causing his passenger jeep to encroach on the opposite lane and bump the oncoming vehicle driven by Arnulfo Ramos. Injuries sustained by Arnulfo 104 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Ramos caused his death. It was alleged that Crescencia Achevara failed to exercise due diligence in the selection and supervision of Benigno Valdez as driver of the passenger jeep. 

Alfredo Gamera (for Ramos) o working as a jueteng collector at the same joint where the deceased Arnulfo Ramos was also employed o testified that at about 10:00 a.m. of April 22, 1995, he and his wife were seated at the waiting shed along the national highway in Candon, Ilocos Sur, waiting for a ride to the town proper of Candon. o saw a motorcycle, driven by Police Officer 3 (PO3) Baltazar de Peralta, coming from the interior part of Tablac and proceeding south toward the town proper. He also saw a southbound passenger jeep, driven by Benigno Valdez, that wanted to overtake the motorcycle of PO3 De Peralta. o testified that a passenger jeep encroached on the lane of the northbound owner-type jeep driven by Arnulfo Ramos, which resulted in the collision. o point of impact was on the lane of the vehicle of Arnulfo Ramos. o he was about 100 meters from the place where the vehicular accident occurred. o speed of the passenger jeep was about 70 kilometers per hour, while that of the owner-type jeep was about 30 kilometers per hour. o On cross-examination, it was found that Gamera went to the Police Station in Candon, Ilocos Sur to execute his sworn statement only on May 30, 1992, one month after the incident and after respondent Elvira Ramos talked to him o at the preliminary investigation, Gamera did not mention in his sworn statement that his wife was present during the incident

*wife also testified as to the damages incurred, Doctor testified as to cause of death

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

PO3 Baltazar de Peralta (for Achevera) o testified that at about 9:00 a.m. of April 22, 1995, he was on board his motorcycle at the waiting shed. He was about to go southward, but waited a while to let a southbound passenger jeep pass by. Then he followed behind the passenger jeep. o When the passenger jeep was about 75 meters away from him on the western lane of the national highway, PO3 De Peralta spotted an owner-type jeep coming from the south on the eastern lane of the road. o owner-type jeep was running in a zigzag manner as it went over the many holes on the road. It did not slacken speed, causing the jeep‘s front wheels to wiggle, before it bumped the passenger jeep coming from the north. o collision occurred on the lane of the passenger jeep, about two feet away from the center line of the road, causing the owner-type jeep to turn around and return to its former position, with its right wheel removed; while the passenger jeep veered to the right lane. o accident happened on a straight part of the highway, but there were many holes on the eastern lane. He stated that nothing impeded his view of the incident o known respondents‘ witness, Alfredo Gamera, who was his barangay mate for 20 years. He declared that he never saw Gamera at the waiting shed or at the scene of the incident on the morning of April 22, 1995.



Herminigildo Pagaduan o testified that at 7:00 a.m. of April 22, 1995, he was at the house of Barangay Captain Victorino Gacusan o Gacusan was then the overall monitor of the jueteng joint o Pagaduan and Gacusan had earlier agreed to attend the wake of an army captain that morning. While Pagaduan was waiting for Barangay Captain Gacusan, the latter made a phone call requesting for a vehicle to take them to Tamorong o Not long after, a yellow owner-type jeep arrived, which was driven by Arnulfo Ramos, an employee of the jueteng joint. All of them rode the jeep o Barangay Captain Gacusan was on the driver‘s seat, Pagaduan sat beside Gacusan, while Arnulfo Ramos and the others sat on the rear seat. o the group headed west to Tamorong via Darapidap. When they reached a bridge, Barangay Captain Gacusan tried to increase the speed of the jeep, but it suddenly wiggled. o Gacusan stopped the jeep, and they all alighted from it o did not proceed to Tamorong, but returned to the house of Gacusan by tricycle. o next day, he heard from Gacusan that the jeep they had used in their aborted trip to Tamorong met an accident



Benigno Valdez (for Achevera) o driving the passenger jeep of his aunt, Crescencia Achevara, on the national highway in Tablac, Candon, Ilocos Sur heading south, while the owner-type jeep of Arnulfo Ramos was heading north. o owner-type jeep was wiggling and running fast in a zigzag manner, when its right front wheel got detached and the owner-type jeep bumped the left side of his passenger jeep. Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Valdez swerved the passenger jeep to the western edge of the road to avoid a collision, but to no avail, as it bumped a post. He passed out. surrendered himself to the Police Station



Alfredo Achevara (for Achevera) o declared that before they employed Benigno Valdez to drive the passenger jeep, the former exercised the diligence of a good father of a family in selecting, training and supervising the latter o required Valdez to show them his professional driver‘s license, and investigated his personal background and training/experience as a driver. o For apprenticeship, they required him to drive from Metro Manila to Tagaytay City, and then back to Metro Manila for a day. o Trial court held that the doctrine of last clear chance, as contended by Ramos, was applicable to this case. CA affirmed. Issue: Whether or Achevera are liable to Ramos. Held: Ramos version of the vehicular accident was rebutted by Acheverra. Testimony of Alfredo Gamera, that the vehicular accident occurred because the passenger jeep driven by Benigno Valdez tried to overtake the motorcycle driven by PO3 and encroached on the lane of the owner-type jeep, which resulted in the collision, was refuted by PO3 Baltazar de Peralta, who testified that the passenger jeep did not overtake his motorcycle since he was the one following behind the passenger jeep. Gamera also testified that the collision took place on the lane of the owner-type jeep, about 2 meters east the center line of the national highway. However, SPO2 Marvin Valdez, who investigated the incident, found both vehicles on the western lane of the national highway. It is undeniable that the collision took place on the western lane of the national highway or the lane of the passenger jeep driven by Benigno Valdez. It was the owner-type jeep driven by Arnulfo Ramos that encroached on the lane of the passenger jeep. Court also found Arnulfo Ramos guilty of gross negligence for knowingly driving a defective jeep on the highway. An ordinarily prudent man would know that he would be putting himself and other vehicles he would encounter on the road at risk for driving a mechanically defective vehicle. Under the circumstances, a prudent man would have had the owner-type jeep repaired or would have stopped using it until it was repaired. Ramos‘ negligence in driving the owner-type jeep—despite knowledge of its mechanical defect, and his failure to have it repaired first before driving, to prevent damage to life and property—did not only constitute contributory negligence. Ramos‘ negligence was the immediate and proximate cause of the accident. Since foreseeability is the fundamental basis of negligence, Valdez could not have foreseen that an accident might happen due to the mechanical defect in the vehicle of Ramos. It was Ramos alone who fully knew and could foresee that an accident was likely to occur if he drove his defective jeep, which indeed happened. Hence, the proximate cause of the vehicular accident was the negligence of Ramos in driving a mechanically defective vehicle. The acts of negligence of Arnulfo Ramos and Benigno Valdez were contemporaneous when Ramos continued to drive a wiggling vehicle on the highway despite knowledge of its mechanical defect, while Valdez did not immediately veer to the rightmost side of the road upon seeing the wiggling vehicle of Ramos—perhaps because it still kept to its lane and Valdez did not know the extent of its mechanical defect. When the owner-type jeep encroached on the lane of the passenger jeep, Valdez realized the peril at hand and steered the passenger jeep toward the western shoulder of the road to avoid a collision. It was at this point that it was perceivable that Ramos must have lost control of his vehicle, and that it was Valdez who had the last opportunity to avoid the collision by swerving the passenger jeep towards the right shoulder of the road. The doctrine of last clear chance applies to a situation where the plaintiff was guilty of prior or antecedent negligence, but the defendant—who had the last fair chance to avoid the impending harm and failed to do so—is made liable for all the consequences of the accident, notwithstanding the prior negligence of the plaintiff. However, the doctrine does NOT apply where the party charged is required to act instantaneously, and the injury cannot be avoided by the application of all means at hand after the peril is or should have been discovered. Even if it can be said that it was Benigno Valdez who had the last chance to avoid the mishap when the owner-type jeep encroached on the western lane of the passenger jeep, Valdez no longer had the opportunity to avoid the collision. When the owner-type jeep encroached on the lane of the passenger jeep, Benigno Valdez maneuvered his vehicle towards the western shoulder of the road to avoid a collision, but the owner-type jeep driven by Ramos continued to move to the western lane and bumped the left side of the passenger jeep. The time the owner-type jeep encroached on the lane of Valdez to the time of impact was only a matter of seconds, he no longer had the opportunity to avoid the collision.

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Both Arnulfo Ramos and Benigno Valdez failed to exercise reasonable care and caution that an ordinarily prudent man would have taken to prevent the vehicular accident. Since the gross negligence of Arnulfo Ramos and the inexcusable negligence of Benigno Valdez were the proximate cause of the vehicular accident, respondents cannot recover damages pursuant to Article 2179. 4. Bank of America NT & SA v. Philippine Racing Club, G.R. No. 150228, July 30, 2009 Facts: PRCI maintains several accounts, one of which is with petitioner BA. The authorized joint signatories with respect to said account were PRCIs President (Antonia Reyes) and VP for Finance (Gregorio Reyes). Both of them were scheduled to go out of the country sometime later in connection with the corporation‘s business. In order not to disrupt operations in their absence, they pre-signed several checks relating to their account with BA. The intention was to insure continuity of PRCI‘s operations by making available cash/money especially to settle obligations that might become due. These checks were entrusted to the accountant with instruction to make use of the same as the need arose. The internal arrangement was, in the event there was need to make use of the checks, the accountant would prepare the corresponding voucher and thereafter complete the entries on the pre-signed checks. However, it turned out later that a John Doe (later found out to be Clarita Mesina, an employee of PRCI) presented to BA for encashment 2 checks of PRCI, each with an indicated value of P110,000. These checks were among those pre-signed by the authorized signatories of PRCI. The 2 checks had similar entries with similar infirmities and irregularities. On the space where the name of the payee should be indicated (Pay To The Order Of) the following 2-line entries were instead typewritten: on the upper line was the word ―CASH‖ while the lower line had the following typewritten words, viz: ―ONE HUNDRED TEN THOUSAND PESOS ONLY.‖ Despite all these irregularities/infirmities and the substantial amount involved, BA never even verified or confirmed the legitimacy of the checks. Not even a verification process or a phone call was made. Neither was there a transaction by PRCI that calls for payment of P220,000. Hence PRCI demanded payment from BA which fell to deaf-ears. Hence PRCI filed the complaint. Issue: (1) Whether or not the proximate cause of the wrongful encashment was due to the negligence of BA or the practice of PRCI in pre-signing the checks and leaving it with his employees. (2) Whether or not BA had the last clear chance in preventing the unauthorized encashment of checks. Held: BA‘s NEGLIGENCE was the cause of the loss. Conversely, BA had the last clear chance to avoid the loss. It is well-settled that banks are engaged in a business impressed with public interest, and it is their duty to protect in return their many clients and depositors who transact business with them. They have the obligation to treat their client‘s account meticulously and with the highest degree of care, considering the fiduciary nature of their relationship. The diligence required of banks, therefore, is more than that of a good father of a family. All these circumstances should have alerted the bank to the possibility that the holder or the person who is attempting to encash the checks did not have proper title to the checks or did not have authority to fill up and encash the same. As noted by the CA, BA could have made a simple phone call to its client to clarify the irregularities and the loss to PRCI due to the encashment of the stolen checks would have been prevented. In the case at bar, extraordinary diligence demands that BA should have ascertained from PRCI the authenticity of the subject checks or the accuracy of the entries therein not only because of the presence of highly irregular entries on the face of the checks but also of the decidedly unusual circumstances surrounding their encashment. PRCI‘s witness testified that for checks in amounts greater than P20,000.00 it is the company‘s practice to ensure that the payee is indicated by name in the check. This was not rebutted by PRCI. Indeed, it is highly uncommon for a corporation to make out checks payable to ―CASH‖ for substantial amounts such as in this case. If each irregular circumstance in this case were taken singly or isolated, the bank‘s employees might have been justified in ignoring them. However, the confluence of the irregularities on the face of the checks and circumstances that depart from the usual banking practice of PRCI should have put BA‘s employees on guard that the checks were possibly not issued by the respondent in due course of its business. BA‘s subtle sophistry cannot exculpate it from behavior that fell extremely short of the highest degree of care and diligence required of it as a banking institution. The court however agrees that PRCI‘s practice of pre-signing its checks should be deemed seriously negligent behavior and a highly risky means of ensuring the efficient operation of business. Nevertheless, while both parties were guilty of negligent acts that led to the loss. BA will still emerge as the party foremost liable in this case. In instances where both parties are at fault, this Court has consistently applied the doctrine of last clear chance in order to assign liability. Under that doctrine, the one who had a last clear opportunity to avoid the impending harm but failed to do so is chargeable with the consequences thereof.

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BA had the final opportunity to avert the injury that befell the PRCI. Failing to make the necessary verification due to the volume of banking transactions on that particular day is a flimsy and unacceptable excuse, considering that the ―banking business is so impressed with public interest where the trust and confidence of the public in general is of paramount importance such that the appropriate standard of diligence must be a high degree of diligence, if not the utmost diligence. 5. Lapanday Agricultural and Development Corporation (LADECO) v. Angala, G.R. No. 153076, June 21, 2007 Facts: On May 1993 at 2:45PM, a Datsun crewcab owned by LADECO and driven by Deocampo collided with a Chevy pickup owned by Angala and driven by Borres. Both vehicles were running along Castillo St. Davao City heading towards Lanang when the accident occurred. Angala filed an action for quasi-delict and damages against LADECO & Deocampo. It claims that his pickup was slowing down to about 5-10KPH and was making a left turn when it was bumped from behind by the crewcar who was running at around 60-70 kph. The complaint also contended that the crewcab only stopped after 21 meters from the point of impact. Angala testified that since he was seated at the back, he could see a blinking light indicating the signal to turn left as well as the speedometer. On the other hand, Deocampo claimed that wen the pickup was about 10 meters away from the crewcar when it made a Uturn towards the left. He also testified that no turning signal was seen from the pickup. Moreso, he alleged that he tried to avoid the pickup but he was unable to avoid the collision. He also said that he did not apply the breaks because the collision was inevitable. RTC held LADECO & Deocampo solidarily liable. CA affirmed in toto. Hence, this petition. Issue: Whether Angala is entitled damages awarded. Held: YES. Both parties were found to be negligence in this case. Borres (Angala‘s driver) was at the outer lane when he executed the U-turn in violation of RA 4136 regarding the rule on turning at intersections. He should have stayed at the inner lane. On the other hand, Deocampo was equally negligent. Borres slowed down prior to making the U-turn. As such Deocampo should have also slowed down especially since he noticed the pickup as far as 20 meters away. Moreover, traffic was light at that time. In fact, they were the only vehicles in the street. Deocampo could have avoided the crewcab if he was not driving fast before the collision. Since both parties are negligent, the doctrine of LAST CLEAR CHANCE applies. This docrine states that where both parties are negligent but the negligent act of one is appreciably later than that of the other, or where it is impossible to determine whose fault or negligence caused the loss, the one who had the last clear opportunity to avoid the loss but failed to do so is chargeable with the loss. Here, Deocampo had the last clear chance to avoid the collision. Since Deocampo was driving the rear vehicle, he had full control of the situation since he was in a position to observe the vehicle in front of him. Deocampo had the responsibility of avoiding bumping the vehicle in front of him. A U-turn is done at a much slower speed to avoid skidding and overturning, compared to running straight ahead. Deocampo could have avoided the vehicle if he was not driving very fast while following the pick-up. Deocampo was not only driving fast, he also admitted that he did not step on the brakes even upon seeing the pick-up. He only stepped on the brakes after the collision. LADECO is solidarily liable wth Deocampo for failing to prove that it exercised due diligence. 6. Tiu v. Arriesgado, 437 SCRA 426 (2004) Facts: At about 10PM. of March 1987, the cargo truck was loaded with firewood and left for Cebu City. Upon reaching Compostela, Cebu, just as the truck passed over a bridge, one of its rear tires exploded. The driver, Sergio Pedrano, then parked along the right side of the national highway and removed the damaged tire to have it vulcanized at a nearby shop, about 700 m away. Pedrano left his helper, Jose Mitante, Jr. to keep watch over the stalled vehicle, and instructed the latter to place a spare tire 6 fathoms away behind the stalled truck to serve as a warning for oncoming vehicles. The truck‘s tail lights were also left on. It was about 12mn. At about 4:45 AM., A passenger bus with plate number PBP-724 driven by Virgilio Te Laspiñas was cruising along the same national highway. The passenger bus was also bound for Cebu City, and had come from Maya, Daanbantayan, Cebu. Among its passengers was the Spouses Arriesgado. As the bus was approaching the bridge, Laspiñas saw the stalled truck, which was then about 25 meters away. He applied the break and tried to swerve to the left to avoid hitting the truck. But it was too late; the bus rammed into the truck‘s left rear. The impact damaged the right side of the bus and left several passengers injured. Pedro Arriesgado lost 108

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consciousness and suffered a fracture in his right collar. His wife, Felisa, was brought to the Danao City Hospital. She was later transferred to the Southern Island Medical Center where she died shortly thereafter. PedroArriesgado then filed a complaint for breach of contract of carriage, damages and attorney‘s fees before the RTC, against the Tiu (bus operator) and his driver, Laspiñas on May 27, 1987. Arriesgado alleged that the passenger bus in question was cruising at a fast and high speed along the national road, and that Laspiñas did not take precautionary measures to avoid the accident. They alleged that Laspiñas was negotiating the uphill climb along the national highway in a moderate and normal speed. It was further alleged that the truck was parked in a slanted manner, its rear portion almost in the middle of the highway, and that no early warning device was displayed. Laspiñas promptly applied the brakes and swerved to the left to avoid hitting the truck head-on, but despite his efforts to avoid damage to property and physical injuries on the passengers, the right side portion of the bus hit the cargo truck‘s left rear. They further alleged that the cargo truck is owned by Benjamin Condor and was left unattended by its driver Sergio Pedrano at the time of the incident; and that third-party defendant Sergio Pedrano, as driver of the cargo truck and Benjamin Condor, as the registered owner who failed to exercise due diligence in the selection and supervision of Pedrano, are jointly and severally liable to the third-party plaintiffs for whatever liability that may be adjudged. Finally, they claim that during the vehicular accident in question, third-party defendant was clearly violating Section 34, par. (g) of the Land Transportation and Traffic Code. Issue: Whether the driver/owner of the bus are liable with the driver/owner of the parked truck. Held: SOLIDARILY LIABLE. Laspiñas claimed that he was traversing the two-lane road at Compostela, Cebu at a speed of only 40-50 kphr before the incident occurred. He also admitted that he saw the truck which was parked in an ―oblique position‖ at about 25 meters before impact, and tried to avoid hitting it by swerving to the left. However, even in the absence of expert evidence, the damage sustained by the truck itself supports the finding of both the trial court and the appellate court, that the passenger bus driven by Laspiñas was traveling at a fast pace. Since he saw the stalled truck at a distance of 25 meters, Laspiñas had more than enough time to swerve to his left to avoid hitting it; that is, if the speed of the bus was only 40 to 50 KPH as he claimed. As found by the CA, it is easier to believe that Laspiñas was driving at a very fast speed, since at 4:45 a.m., the hour of the accident, there were no oncoming vehicles at the opposite direction. Laspiñas could have swerved to the left lane with proper clearance, and, thus, could have avoided the truck. Instinct, at the very least, would have prompted him to apply the breaks to avert the impending disaster which he must have foreseen when he caught sight of the stalled truck. As shown by preponderance of evidence that Laspiñas failed to observe extraordinary diligence as a driver of the common carrier in this case. It is quite hard to accept his version of the incident that he did not see at a reasonable distance ahead the cargo truck that was parked when the Rough Rider [Bus] just came out of the bridge which is on an more elevated position than the place where the cargo truck was parked. With its headlights fully on, defendant driver of the Rough Rider was in a vantage position to see the cargo truck ahead which was parked and he could just easily have avoided hitting and bumping the same by maneuvering to the left without hitting the said cargo truck. Besides, it was shown that there was still much room or space for the Rough Rider to pass at the left lane of the said national highway even if the cargo truck had occupied the entire right lane thereof. It is not true that if the Rough Rider would proceed to pass through the left lane it would fall into a canal considering that there was much space for it to pass without hitting and bumping the cargo truck at the left lane of said national highway. The records, further, showed that there was no incoming vehicle at the opposite lane of the national highway which would have prevented the Rough Rider from not swerving to its left in order to avoid hitting and bumping the parked cargo truck. But the evidence showed that the Rough Rider instead of swerving to the still spacious left lane of the national highway plowed directly into the parked cargo truck hitting the latter at its rear portion; and thus, the (sic) causing damages not only to herein plaintiff but to the cargo truck as well. Indeed, Laspiñas‘ negligence in driving the bus is apparent in the records. By his own admission, he had just passed a bridge and was traversing the highway of Compostela, Cebu at a speed of 40 to 50 KPH before the collision occurred. The maximum speed allowed by law on a bridge is only 30 KPH. And, as correctly pointed out by the trial court, petitioner Laspiñas also violated Section 35 of the Land Transportation and Traffic Code, Republic Act No. 4136, as amended: Sec. 35. Restriction as to speed. – (a) Any person driving a motor vehicle on a highway shall drive the same at a careful and prudent speed, not greater nor less than is reasonable and proper, having due regard for the traffic, the width of the highway, and or any other condition then and there existing; and no person shall drive any motor vehicle upon a highway at such speed as to endanger the life, limb and property of any person, nor at a speed greater than will permit him to bring the vehicle to a stop within the assured clear distance ahead. Under Article 2185 of the Civil Code, a person driving a vehicle is presumed negligent if at the time of the mishap, he was violating any traffic regulation. 109

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Contrary to the Tiu‘s contention, the principle of last clear chance is inapplicable in the instant case, as it only applies in a suit between the owners and drivers of 2 colliding vehicles. It does not arise where a passenger demands responsibility from the carrier to enforce its contractual obligations, for it would be inequitable to exempt the negligent driver and its owner on the ground that the other driver was likewise guilty of negligence. The common law notion of last clear chance permitted courts to grant recovery to a plaintiff who has also been negligent provided that the defendant had the last clear chance to avoid the casualty and failed to do so. Accordingly, it is difficult to see what role, if any, the common law of last clear chance doctrine has to play in a jurisdiction where the common law concept of contributory negligence as an absolute bar to recovery by the plaintiff, has itself been rejected, as it has been in Article 2179. Thus, Tiu cannot escape liability for the death of Arriesgado‘s wife due to the negligence of Laspiñas, his employee, on this score. As shown by preponderance of evidence that Laspiñas failed to observe extraordinary diligence as a driver of the common carrier in this case. It is quite hard to accept his version of the incident that he did not see at a reasonable distance ahead the cargo truck that was parked when the Rough Rider [Bus] just came out of the bridge which is on an more elevated position than the place where the cargo truck was parked. With its headlights fully on, defendant driver of the Rough Rider was in a vantage position to see the cargo truck ahead which was parked and he could just easily have avoided hitting and bumping the same by maneuvering to the left without hitting the said cargo truck. Besides, it was shown that there was still much room or space for the Rough Rider to pass at the left lane of the said national highway even if the cargo truck had occupied the entire right lane thereof. It is not true that if the Rough Rider would proceed to pass through the left lane it would fall into a canal considering that there was much space for it to pass without hitting and bumping the cargo truck at the left lane of said national highway. The records, further, showed that there was no incoming vehicle at the opposite lane of the national highway which would have prevented the Rough Rider from not swerving to its left in order to avoid hitting and bumping the parked cargo truck. But the evidence showed that the Rough Rider instead of swerving to the still spacious left lane of the national highway plowed directly into the parked cargo truck hitting the latter at its rear portion; and thus, they causing damages not only to herein plaintiff but to the cargo truck as well. Indeed, Laspiñas‘ negligence in driving the bus is apparent in the records. By his own admission, he had just passed a bridge and was traversing the highway of Compostela, Cebu at a speed of 40 to 50 KPH before the collision occurred. The maximum speed allowed by law on a bridge is only 30 KPH. In this case, both the trial and the CA failed to consider that Pedrano was also negligent in leaving the truck parked askew without any warning lights or reflector devices to alert oncoming vehicles, and that such failure created the presumption of negligence on the part of his employer, E.

Prescription

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Civil Code o Article 1146

1. Ferrer v. Ericta, G.R. No. L-41767, August 23, 1978 Facts: A complaint for damages dated December 27, 1974 but actually filed on January 6, 1975 was filed against Mr. and Mrs. Francis as owners or operators of a Ford pick-up car. It was alleged that at about 5:00 pm of December 31, 1970, their son, Dennis Pfleider, who was then only 16, without proper official authority, drove the above-described vehicle, without due regard to traffic rules and regulations, and without taking the necessary precaution and as a consequence the pickup car was overturned, causing physical injuries to Annette Ferrer, who was then a passenger therein, which injuries paralyzed her and required medical treatment and confinement at different hospitals for more than 2 years. The Spouses filed their answer, putting up the affirmative defense that Dennis Pfleider exercised due care and utmost diligence in driving the vehicle; alleging that Ferrer and the other persons aboard said vehicle were not passengers in the strict sense of the term, but were merely joy riders and that, consequently, Sps Francis had no obligation whatsoever to Ferrer. At the pre-trial on May 12, 1975, only Ferrer and counsel were present. Spouses were declared in default and Ferrer was allowed to present their evidence ex parte. On June 26, 1975, Spouses filed a motion to ―set aside the order of default and subsequent pleadings‖ on the ground that their failure to appear for pre-trial was due to accident or excusable neglect. This was opposed by petitioners. The motion of the Spouses was denied. On the same date, Judge Ericta rendered judgment against Spouses, finding that the minor, Dennis Pfleider, was allowed by his parents to operate a Ford pick-up car and because of his reckless negligence caused the accident on July 21, 1975. 110 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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On September 1,1975, Spouses filed an MR of the decision and of the order denying the motion to set aside order of default contending that the complaint shows on its face ―that it was filed only on January 6, 1975, or after the lapse of MORE THAN FOUR YEARS from the date of the accident on December 31, 1970‖, likewise appearing from the complaint and, therefore, the action has already prescribed. In opposition, the Ferrer maintained, among others, that the defense of prescription had been waived because it was not alleged in the Answer. Judge Ericta issued an order absolving the Spouses from any liability on the ground of prescription since the complaint was filed more than 4 years after the date of the accident, and the action to recover damages based on quasidelict prescribes in 4 years. Hence, this petition for mandamus. Issue; Whether the defense of prescription had been deemed waived by the Spouses‘ failure to allege the same in their answer. Held: NOT WAIVED. ACTION HAS PRESCRIBED. As early as Chua Lamko v. Dioso, this Court sustained the dismissal of a counterclaim on the ground of prescription, although such defense was not raised in the answer of the plaintiff. Where the answer does not take issue with the complaint as to dates involved in the defendant‘s claim of prescription, his failure to specifically plead prescription in the answer does not constitute a waiver of the defense of prescription, it was explained that the defense of prescription, even if not raised in a motion to dismiss or in the answer, is not deemed waived UNLESS such defense raises issues of fact not appearing upon the preceding pleading. In a case, it was said that while it is true that the defense of prescription can only be considered if the same is invoked as such in the answer of the defendant and that in this particular instance no such defense was invoked because the defendants had been declared in default, but such rule does not obtain when the evidence shows that the cause of action upon which plaintiff‘s complaint is based is already barred by the statute of limitations. In another case, it was patent from the stamp appearing on the first page of the complaint that the complaint was actually filed on May 31, 1963, this Court sustained the dismissal of the complaint on the ground of prescription, although such defense was not raised in the answer. Section 2 of Rule 9 of the Rules of Court that ―defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived.‖ The fact that the plaintiff‘s own allegation in the complaint or the evidence it presented shows clearly that the action had prescribed removes this case from the rule regarding waiver of the detense by failure to plead the same. There is no issue of fact involved in connection with the question of prescription. The complaint alleged that the accident occurred on December 31, 1970. It is undisputed that the action for damages was only filed on January 6, 1975. Actions for damages arising from physical injuries because of a tort must be filed within 4 years. The 4-year period begins from the day the quasi-delict is committed or the date of the accident. 2. Kramer v. Court of Appeals, 178 SCRA 518 (1989) Facts: In the early morning of April 8, 1976, a fishing boat (owned by Kramer) figured in a collision (en route from Marinduque to Manila) with an inter-island vessel, the M/V Asia Philippines owned by the private respondent TransAsia Shipping Lines, Inc. The F/B Marjolea sank, taking with it its fish catch. After the mishap, the captains of both vessels filed their respective marine protests with the Board of Marine Inquiry of the Philippine Coast Guard. The Board conducted an investigation for the purpose of determining the proximate cause. On October 19, 1981, the Board concluded that the loss of the F/B Marjolea and its fish catch was attributable to the negligence of the employees of the private respondent who were on board the M/V Asia Philippines during the collision. The findings made by the Board served as the basis of a subsequent Decision of the Commandant of the Philippine Coast Guard dated April 29, 1982 wherein the second mate of the M/V Asia Philippines was suspended. On May 30, 1985, the petitioners instituted a Complaint for damages against the private respondent. Issue: Whether or not a Complaint for damages instituted by Kramer against TransAsia arising from a marine collision barred by statute of limitation. Held: BARRED. The TransAsia filed a Motion seeking the dismissal of the Complaint on the ground of prescription. He argued that under Article 1146, the prescriptive period for instituting a Complaint for damages arising from a quasidelict like a maritime collision is 4 years. He maintained that the Kramer should have filed their Complaint within 4 111 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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years from the date when their cause of action accrued, i.e., from April 8, 1976 when the maritime collision took place, and that accordingly, the Complaint filed on May 30, 1985 was instituted beyond the four-year prescriptive period. For their part, the Kramer contended that maritime collisions have peculiarities and characteristics which only persons with special skill, training and experience like the members of the Board of Marine Inquiry can properly analyze and resolve. The Kramer argued that the running of the prescriptive period was tolled by the filing of the marine protest and that their cause of action accrued only on April 29, 1982, the date when the Decision ascertaining the negligence of the crew of the M/V Asia Philippines had become final, and that the 4-year prescriptive period under Article 1146 of the Civil Code should be computed from the said date. The petitioners concluded that inasmuch as the Complaint was filed on May 30, 1985, the same was seasonably filed. Under Article 1146 of the Civil Code, an action based upon a quasi-delict must be instituted within four (4) years. The prescriptive period begins from the day the quasi-delict is committed. The right of action accrues when there exists a cause of action, which consists of 3 elements, namely: a) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; b) an obligation on the part of defendant to respect such right; and c) an act or omission on the part of such defendant violative of the right of the plaintiff. It is only when the last element occurs or takes place that it can be said in law that a cause of action has arisen. The prescriptive period must be counted when the last element occurs or takes place, that is, the time of the commission of an act or omission violative of the right of the plaintiff, which is the time when the cause of action arises. In this action for damages arising from the collision of 2 vessels, the 4 year prescriptive period must be counted from the day of the collision. The aggrieved party need not wait for a determination by an administrative body like a Board of Marine Inquiry, that the collision was caused by the fault or negligence of the other party before he can file an action for damages. Immediately after the collision the aggrieved party can seek relief from the courts by alleging such negligence or fault of the owners, agents or personnel of the other vessel. Thus, the court correctly found that the action of Kramer has prescribed. The collision occurred on April 8, 1976. The complaint for damages was filed in court only on May 30, 1985, was beyond the four (4) year prescriptive period. 3. Santos v. Pizardo, G.R. No. 151452, July 29, 2005 Facts: In an Information dated 25 April 1994, Sibayan was charged with Reckless Imprudence Resulting to Multiple Homicide and Multiple Physical Injuries. The Viron Transit Bus driven by Sibayan collided with a Lite Ace, killing the driver and 3 passengers thereof. 5 passengers were injured. He was convicted and sentenced to 2 years, 4 months, and 1 day to 4 years and 2 months. However, a separate civil action was reserved; no civil liability was pronounced. On October 2000, petitioners filed a complaint for damages against Sibayan, Viron Transit, and its President/Chairman pursuant to their reservation. Viron moved to dismiss on the ground of improper service of summons, prescription, laches, and defective certification of non-forum-shopping. Petitioners opposed as the right to file a separate action prescribes in 10 years. The RTC dismissed, as actions based on quasi-delict prescribes in 4 years, notwithstanding the reservation. The CA dismissed their petition for Certiorari for being the wrong mode of appeal. Issue: Whether or not the cause of action has prescribed. Held: NO. Our Revised Penal Code provides that every person criminally liable for a felony is also civilly liable. Such civil liability may consist of restitution, reparation of the damage caused and indemnification of consequential damages. When a criminal action is instituted, the civil liability arising from the offense is impliedly instituted with the criminal action, subject to 3 notable exceptions: FIRST, when the injured party expressly waives the right to recover damages from the accused; SECOND, when the offended party reserves his right to have the civil damages determined in a separate action in order to take full control and direction of the prosecution of his cause; and THIRD, when the injured party actually exercises the right to maintain a private suit against the offender by instituting a civil action prior to the filing of the criminal case. Notably, it was the 1985 Rules on Criminal Procedure, as amended in 1988, which governed the institution of the criminal action, as well as the reservation of the right to file a separate civil action. Petitioners expressly made a reservation of their right to file a separate civil action as a result of the crime committed by Sibayan. On account of this reservation, the MTC, in its decision convicting Sibayan, did not make any pronouncement as to the latter‘s civil liability. Predicating their claim on the judgment of conviction and their reservation to file a separate civil action made in the criminal case, petitioners filed a complaint for damages against Sibayan, Viron Transit and its President/Chairman. Petitioners assert that by the institution of the complaint, they seek to recover private respondents‘ civil liability arising 112 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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from crime. Unfortunately, based on its misreading of the allegations in the complaint, the trial court dismissed the same, declaring that petitioners‘ cause of action was based on quasi delict and should have been brought within 4 years from the time the cause of action accrued, i.e., from the time of the accident. A reading of the complaint reveals that the allegations therein are consistent with petitioners‘ claim that the action was brought to recover civil liability arising from crime. Although there are allegations of negligence on the part of Sibayan and Viron Transit, such does not necessarily mean that petitioners were pursuing a cause of action based on quasi delict, considering that at the time of the filing of the complaint, the cause of action ex quasi delicto had already prescribed. Besides, in cases of negligence, the offended party has the choice between an action to enforce civil liability arising from crime under the Revised Penal Code and an action for quasi delict under the Civil Code. An act or omission causing damage to another may give rise to two separate civil liabilities on the part of the offender, i.e., (1) civil liability ex delicto, under Article 100 RPC; and (2) independent civil liabilities, such as those (a) not arising from an act or omission complained of as a felony, e.g., culpa contractual or obligations arising from law under Article 31, intentional torts under Articles 32 and 34, and culpa aquiliana under Article 2176; or (b) where the injured party is granted a right to file an action independent and distinct from the criminal action under Article 33. Either of these liabilities may be enforced against the offender subject to the caveat under Article 2177 of the that the plaintiff cannot recover damages twice for the same act or omission of the defendant and the similar proscription against double recovery under the Rules above-quoted. At the time of the filing of the complaint for damages in this case, the cause of action ex quasi delicto had already prescribed. Nonetheless, petitioners can pursue the remaining avenue opened for them by their reservation, i.e., the surviving cause of action ex delicto. This is so because the prescription of the action ex quasi delicto does not operate as a bar to an action to enforce the civil liability arising from crime especially as the latter action had been expressly reserved. We held that the dismissal of the action based on culpa aquiliana is not a bar to the enforcement of the subsidiary liability of the employer. Once there is a conviction for a felony, final in character, the employer becomes subsidiarily liable if the commission of the crime was in the discharge of the duties of the employees. This is so because Article 103 of the Revised Penal Code operates with controlling force to obviate the possibility of the aggrieved party being deprived of indemnity even after the rendition of a final judgment convicting the employee. Seen in this light, the trial court should not have dismissed the complaint on the ground of prescription, but instead allowed the complaint for damages ex delicto to be prosecuted on the merits, considering petitioners‘ allegations in their complaint, opposition to the motion to dismiss and motion for reconsideration of the order of dismissal, insisting that the action was to recover civil liability arising from crime. This does not offend the policy that the reservation or institution of a separate civil action waives the other civil actions. The rationale behind this rule is the avoidance of multiple suits between the same litigants arising out of the same act or omission of the offender. However, since the stale action for damages based on quasi delict should be considered waived, there is no more occasion for petitioners to file multiple suits against private respondents as the only recourse available to them is to pursue damages ex delicto. This interpretation is also consistent with the bar against double recovery for obvious reasons. The case is REMANDED. 4. De Guzman v. Toyota Cubao, Inc., G.R. No. 141480, November 29, 2006 Facts: On November 27, 1997, petitioner purchased from respondent a brand new white Toyota Hi-Lux. The vehicle was delivered to petitioner 2 days later. On October 18, 1998, petitioner demanded the replacement of the engine of the vehicle because it developed a crack after traversing Marcos Highway during a heavy rain. Petitioner asserted that Toyota should replace the engine with a new one based on an implied warranty. Respondent countered that the alleged damage on the engine was not covered by a warranty. On April 20, 1999, petitioner filed a complaint for damages against respondent with the RTC. Respondent moved to dismiss as petitioner‘s cause of action had prescribed as the case was filed more than 6 months from the date the vehicle was sold and/or delivered. Since no warranty card or agreement was attached to the complaint, the contract of sale of the subject pick-up carried an implied warranty that it was free from any hidden faults or defects, or any charge or encumbrance not declared or known to the buyer. The prescriptive period thereof is 6 months under the Civil Code (Art. 1571). RTC granted respondent‘s motion and dismissed. RTC denied petitioner‘s motion for reconsideration hence this petition for certiorari. Petitioner contends that under RA No. 7394 (Consumer Act of the Philippines), the prescriptive period is 2 years. Issue: Whether or not the action has prescribed.

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Held: YES. Petitioner specifies that in his complaint, he neither asked for a rescission of the contract of sale nor did he pray for a proportionate reduction of the purchase price. What petitioner claims is the enforcement of the contract, that is, that respondent should replace either the vehicle or its engine with a new one. Petitioner cites Article 169 of Republic Act No. 7394 as the applicable provision, so as to make his suit come within the purview of the 2-year prescriptive period. Tangentially, petitioner also justifies that his cause of action has not yet prescribed because this present suit, which was an action based on quasi-delict, prescribes in four years. Petitioner‘s argument is erroneous. Article 1495 of the Civil Code states that in a contract of sale, the vendor is bound to transfer the ownership of and to deliver the thing that is the object of sale. The Civil Code set forth the available remedies of a buyer against the seller on the basis of a warranty against hidden defects. Under Article 1599, once an express warranty is breached, the buyer can accept or keep the goods and maintain an action against the seller for damages. In the absence of an existing express warranty on the part of the respondent, as in this case, the allegations in petitioner‘s complaint for damages were clearly anchored on the enforcement of an implied warranty against hidden defects, i.e., that the engine of the vehicle which respondent had sold to him was not defective. By filing this case, petitioner wants to hold respondent responsible for breach of implied warranty for having sold a vehicle with defective engine. Such being the case, petitioner should have exercised this right within 6 months from the delivery of the thing sold. Since petitioner filed the complaint on April 20, 1999, or more than 19 months counted from November 29, 1997 (the date of the delivery of the motor vehicle), his cause of action had become time-barred. Petitioner contends that the subject motor vehicle comes within the context of Republic Act No. 7394. Petitioner relies on Article 68 (f) (2) in relation to Article 169 of Republic Act No. 7394. Article 4 (q) of the said law defines ―consumer products and services‖ as goods, services and credits, debts or obligations which are primarily for personal, family, household or agricultural purposes, which shall include, but not limited to, food, drugs, cosmetics, and devices. The following provisions of Republic Act No. 7394 state: Art. 67. Applicable Law on Warranties.—The provisions of the Civil Code on conditions and warranties shall govern all contracts of sale with conditions and warranties. Art. 68. Additional Provisions on Warranties.—In addition to the Civil Code provisions on sale with warranties, the following provisions shall govern the sale of consumer products with warranty: e) Duration of warranty. The seller and the consumer may stipulate the period within which the express warranty shall be enforceable. If the implied warranty on merchantability accompanies an express warranty, both will be of equal duration. Any other implied warranty shall endure not less than sixty (60) days nor more than one (1) year following the sale of new consumer products. f) Breach of warranties—x x x xxx 2) In case of breach of implied warranty, the consumer may retain in the goods and recover damages, or reject the goods, cancel the contract and recover from the seller so much of the purchase price as has been paid, including damages.‖ (Emphasis supplied.) ARTICLE 169. Prescription - All actions or claim accruing under the provisions of this Act and the rules and regulations issued pursuant thereto shall prescribe within two (2) years from the time the consumer transaction was consummated or the deceptive or unfair and unconscionable act or practice was committed and in case of hidden defects, from discovery thereof. Under RA No. 7394, the provisions of the Civil Code on conditions and warranties shall govern all contracts of sale with condition and warranties (Art. 67). The duration of the implied warranty (not accompanied by an express warranty, as in this case) shall endure not less than sixty days nor more than one (1) year following the sale of new consumer products (Art. 68, par. [e]). The two (2) year prescriptive period under Art. 169 cannot prevail over Art. 68 because the latter is the specific provision on the matter. Consequently, even if the complaint is made to fall under the Republic Act No. 7394, the same should still be dismissed since the prescriptive period for implied warranty thereunder, which is one year, had likewise lapsed. F.

Fortuitous Event

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Civil Code o Article 1174 (Memorize)

1. Gotesco v. Chatto, 210 SCRA 18 (1992) Facts: In the afternoon of June 4, 1982 Gloria E. Chatto, and her 15-year old daughter, Lina went to see the movie ‗Mother Dear‘ at Superama I theater, owned by Gotesco Investment Corporation. Hardly 10 minutes after entering the theater, the ceiling of its balcony collapsed. Pandemonium ensued. Shocked and hurt, Chattos managed to crawl under 114

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the fallen ceiling. They walked to the nearby FEU Hospital where they were confined and treated for 1 day and subsequently transferred to the UST hospital. Due to continuing pain in the neck, headache, and dizziness, plaintiff went toUSA in July 1982 for further treatment. She stayed in the U.S. for about 3 months during which time she had to return to the Cook County Hospital 5 or 6 times. Gtesco tried to avoid liability by alleging that the collapse of the ceiling of its theater was done due to force majeure. Gotesco maintained that its theater did not suffer from any structural or construction defect. During the trial, Mr. Ong, employee of Gotesco, testified that he personally inspected the buildings whenever he could (but did not give specific dates). He also testified that an investigation was conducted. However, there were no results with respect to said investigation in connection to the cause of the collapsed. He literally could not give any specific reason therefor. (PROBABLY DUE TO THE FACT THAT HE WASN‘ Trial Court ruled in favor of the Chattos. CA affirmed. CA held: ―The lower court did not also err in its finding that the collapse of the ceiling of the theater‘s balcony was due to construction defects and not to force majeure. It was the burden of defendant-appellant to prove that its theater did not suffer from any structural defect when it was built and that it has been well maintained when the incident occurred. Considering the collapse of the ceiling of its theater‘s balcony barely 4 years after its construction, it behooved defendant-appellant to conduct an exhaustive study of the reason for the tragic incident. There was no authoritative investigation conducted by impartial civil and structural engineers on the cause of the collapse of the theater‘s ceiling. Jesus Lim Ong is not an engineer. He is a graduate of architecture from the St. Louie (sic) University in Baguio City. It does not appear he has passed the government examination for architects. The ignorance of Mr. Ong about the cause of the collapse of the ceiling of their theater cannot be equated as an act of God. To sustain that proposition is to introduce sacrilege in our jurisprudence.‖ Issue: Whether or not the incident was due to force majeure. Held: NO. Having interposed it as a defense, it had the burden to prove that the collapse was indeed caused by force majeure. It could not have collapsed without a cause. That Mr. Ong could not offer any explanation does not imply force majeure. Gotesco could have easily discovered the cause of the collapse if indeed it were due to force majeure. The real reason why Mr. Ong could not explain the cause or reason is that either he did not actually conduct the investigation or that he is, as the CA impliedly held, incompetent. He is not an engineer, but an architect who had not even passed the government‘s examination. Verily, the post-incident investigation cannot be considered as material to the present proceedings. What is significant is the finding that the collapse was due to CONSTRUCTION DEFECTS. There was no evidence offered to overturn this finding. The building was constructed barely 4 years prior to the accident in question. It was not shown that any of the causes denominated as force majeure obtained immediately before or at the time of the collapse of the ceiling. Such defects could have been easily discovered if only Gotesco exercised due diligence and care in keeping and maintaining the premises. But as disclosed by the testimony of Mr. Ong, there was no adequate inspection of the premises before the date of the accident. His answers to the leading questions on inspection disclosed neither the exact dates of said inspection nor the nature and extent of the same. That the structural designs and plans of the building were duly approved by the City Engineer and the building permits and certificate of occupancy were issued DO NOT AT ALL PROVE that there were no defects in the construction, especially as regards the ceiling, considering that no testimony was offered to prove that it was ever inspected at all. IMPLIED WARRANTY has given rise to the rule that: ―Where a patron of a theater or other place of public amusement is injured, and the thing that caused the injury is wholly and exclusively under the control and management of the defendant, and the accident is such as in the ordinary course of events would not have happened if proper care had been exercised, its occurrence raises a presumption or permits of an inference of negligence on the part of the defendant.‖ That presumption or inference was not overcome by the Gotesco. Even assuming for the sake of argument that, the cause of the collapse was due to force majeure, Gotesco would STILL BE LIABLE because it was guilty of negligence, which the trial court denominated as gross. As gleaned from Bouvier‘s definition of and Cockburn‘s elucidation on force majeure, for one to be exempt from any liability because of it, he must have exercised care, i.e., he should not have been guilty of negligence.

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Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

2. Servando v. Philippine Steam Navigation Co., 117 SCRA 832 (1982) Facts: Servando & Bico loaded on board Phil. Steam Navigation‘s vessel for carriage several cavans of rice and cartons of colored paper, toys and general merchandise. A bill of lading was issued by PSN which contained a peculiar stipulation: Clause 14. Carrier shall not be responsible for loss or damage to shipments billed 'owner's risk' unless such loss or damage is due to negligence of carrier. Nor shall carrier be responsible for loss or damage caused by force majeure, dangers or accidents of the sea or other waters; war; public enemies; . . . fire. Upon arrival, the cargoes were discharged in good order unto the warehouse of the Bureau of Customs. However, on the same day, the warehouse was razed by a fire, destroying Servando‘s cargoes. Bico was able to take delivery of a certain portion of his goods. Their claim for the value of said goods were rejected by the PSN. The lower court ruled in favor of Servando & Bico, holding that the delivery of the shipment in question to the warehouse of the Bureau of Customs is not the delivery contemplated by Article 1736 which imposes upon common carriers the duty to observe extraordinary diligence from the moment the goods are unconditionally placed in their possession "until the same are delivered, actually or constructively, by the carrier to the consignee or to the person who has a right to receive them. Moreover, since the burning of the warehouse occurred before actual or constructive delivery of the goods to the Servando & Bico, the loss is chargeable against the PSN. Issue: Whether PSN is liable for the loss. Held: NO. The court upheld the validity of the contractual stipulation. Servando‘s contention that the same did not bind them since it was printed in fine letters on the back of the bills of lading and was not signed does not persuade. The agreement contained in the above quoted Clause 14 is a mere iteration of the basic principle of law written in Article 1174 of the Civil Code: ―Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable.‖ Thus, where fortuitous event or force majeure is the immediate and proximate cause of the loss, the obligor is exempt from liability for non-performance. The Partidas, the antecedent of Article 1174 of the Civil Code, defines 'CASO FORTUITO' as 'an event that takes place by accident and could not have been foreseen. Examples of this are destruction of houses, unexpected fire, shipwreck, violence of robbers. There is nothing in the record to show that PSN incurred in delay in the performance of its obligation. It appears that PSN had not only notified Servando of the arrival of their shipment, but had demanded that the same be withdrawn. In fact, pursuant to such demand, Uy Bico had taken delivery of 907 cavans of rice before the burning of the warehouse. Nor can the PSN or its employees be charged with negligence. The storage of the goods in the Customs warehouse pending withdrawal thereof by Servando was undoubtedly made with their knowledge and consent. Since the warehouse belonged to and was maintained by the government, it would be unfair to impute negligence to the appellant, the latter having no control whatsoever over the same. Caso fortuito in the ―Enciclopedia Juridicada Espanola - In a legal sense and, consequently, also in relation to contracts, a 'caso fortuito' presents the following essential characteristics: (1) the cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will; (2) it must be impossible to foresee the event which constitutes the 'caso fortuito', or if it can be foreseen, it must be impossible to avoid; (3) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (4) the obligor must be free from any participation in the aggravation of the injury resulting to the creditor." In the case at bar, the burning of the customs warehouse was an extraordinary event which happened independently of the will of the PSN. The latter could not have foreseen the event. The lower court relied in the ruling of Yu Biao Sontua v. Ossorio wherein in that case, the defendant was held liable for damages arising from a fire caused by the negligence of the defendant‘s employees. Unlike in this case, there is no shred of proof to prove that the fire that broke out was attributable to the negligence of PSN‘s employees.

3. Edgar Cokaliong Shipping Lines v. UCPB General Insurance Company, G.R. No. 146018, June 25, 2003 116

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Facts: In Dec. 1991, Nestor Angelia & Zosimo Mercado each delivered to Cokaliong Shipping (CS) cargo (carton of Christmas decors, sacks of plastic toys, assorted goods) to be transported on board the M/V Tandag on its voyage from Cebu to Surigao del Sur. Both were covered by a bill of lading. Also, each were considered as the shipper and consignee of their respective cargo. Said bills of lading were insured by a certain Feiciana Legaspi with the UCPB General Insurance Corp against all risks. While in transit, after the vessel had passed the Mandaue-Mactan bridge, fire ensued in the engine room and, despite earnest efforts of the officers and crew, fire engulfed and destroyed the entire vessel resulting in loss of life as well as the cargo. Thereafter, Legaspi filed a claim under the Marine Risk for the loss of the cargo covered by the bills of lading. UCPB paid the claim. Then, as Legaspi‘s subrogee, UCPB filed a complaint based on torts against CS to collect the amount it paid to the subrogee. UCPB alleged that the loss was due to CS‘ negligence. RTC ruled for UCPB. CA affirmed and said that CS failed to prove that the fire that consumed the vessel was caused by something other than its negligence in the upkeep, maintenance, and operation of the vessel. Hence, this petition. CS argues that the cause of the loss was force majeure and adds that its exercise of due diligence was adequately proven by the findings of the Coast Guard. Issue: Whether the cause of the loss was force majeure. Held: NO. The uncontroverted findings of the Philippine Coast Guard show that the M/V Tandag sank due to a fire, which resulted from a crack in the auxiliary engine fuel oil service tank. Fuel spurted out of the crack and dripped to the heating exhaust manifold, causing the ship to burst into flames. The crack was located on the side of the fuel oil tank, which had a mere 2-inch gap from the engine room walling, thus precluding constant inspection and care by the crew. Having originated from an unchecked crack in the fuel oil service tank, the fire could not have been caused by force majeure. Broadly speaking, force majeure generally applies to a natural accident, such as that caused by a lightning, an earthquake, a tempest or a public enemy. Hence, FIRE IS NOT CONSIDERED A NATURAL DISASTER OR CALAMITY. In Eastern Shipping Lines it was said: ―This must be so as it arises almost invariably from some act of man or by human means. It does not fall within the category of an act of God unless caused by lighting or by other natural disaster or calamity. It may even be caused by the actual fault or privity of the carrier. Article 1680, which considers fire as an extraordinary fortuitous event refers to leases or rural lands where a reduction of the rent is allowed when more than one-half of the fruits have been lost due to such event, considering that the law adopts a protective policy towards agriculture. As the peril of fire is not comprehended within the exceptions in Article 1734, Article 1735 of the Civil Code provides that in all cases other than those mentioned in Article 1734, the common carrier shall be presumed to have been at fault or to have acted negligently, unless it proves that it has observed the extraordinary diligence required by law.‖ Where loss of cargo results from the failure of the officers of a vessel to inspect their ship frequently so as to discover the existence of cracked parts, that loss cannot be attributed to force majeure, but to the negligence of those officials. The law provides that a common carrier is presumed to have been negligent if it fails to prove that it exercised extraordinary vigilance over the goods it transported. Ensuring the seaworthiness of the vessel is the first step in exercising the required vigilance. CS did not present sufficient evidence showing what measures or acts it had undertaken to ensure the seaworthiness of the vessel. It failed to show when the last inspection and care of the auxiliary engine fuel oil service tank was made, what the normal practice was for its maintenance, or some other evidence to establish that it had exercised extraordinary diligence. It merely stated that constant inspection and care were not possible, and that the last time the vessel was drydocked was in November 1990. Necessarily, in accordance with Article 1735, we hold CS responsible for the loss of the goods covered by Bills of Lading Nos. 58 and 59. G.

Diligence (see cases under Article 2180)

H.

Mistake and Waiver

1. Gatchalian v. Delim, 203 SCRA 126 (1991) Facts: At noon on 11 July 1973, Reynalda Gatchalian boarded, as a paying passenger, Arsenio Delim‘s ―Thames‖ mini bus. On the way, while the bus was running along the highway in Barrio Payocpoc, Bauang, Union, ―a snapping sound‖ 117

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

was suddenly heard at one part of the bus and, shortly thereafter, the vehicle bumped a cement flower pot on the side of the road, went off the road, turned turtle and fell into a ditch. Several passengers, including Gatchalian, were injured. They were promptly taken to Bethany Hospital for medical treatment. Upon medical examination, Gatchalian was found to have sustained physical injuries on the leg, arm and forehead etc. While there, Arsenio‘s wife Adela Delim visited and paid for the expenses, hospitalization and transportation fees. However, before she left, she had the injured passengers including the Gatchalian sign an already prepared Joint Affidavit constituting a waiver of any future complaint: ―That we are no longer interested to file a complaint, criminal or civil against the said driver and owner of the said Thames, because it was an accident and the said driver and owner of the said Thames have gone to the extent of helping us to be treated upon our injuries.‖ However, notwithstanding this document, Gatchalian filed an action Ex Contractu to recover compensatory and Actual Damages. Delim denied liability on the ground that it was an accident and the Joint which constitutes as a waiver. The trial court dismissed the complaint based on the waiver and the CA affirmed. Issue: Whether the waiver was valid. Held: NO. There was no valid waiver of her cause of action had been made by Gatchalian. A waiver, to be valid and effective, must in the first place be couched in clear and unequivocal terms which leave no doubt as to the intention of a person to give up a right or benefit which legally pertains to him. A waiver may not casually be attributed to a person when the terms thereof do not explicitly and clearly evidence an intent to abandon a right vested in such person. The degree of explicitness which this Court has required in purported waivers is illustrated in Yepes and Susaya v. Samar Express Transit , where the Court in reading and rejecting a purported waiver said: ―It appears that before their transfer to the Leyte Provincial Hospital, appellees were asked to sign as, in fact, they signed the document Exhibit I wherein they stated that "in consideration of the expenses which said operator has incurred in properly giving us the proper medical treatment, we hereby manifest our desire to waive any and all claims against the operator of the Samar Express Transit. Even a cursory examination of the document mentioned above will readily show that appellees did not actually waive their right to claim damages from appellant for the latter's failure to comply with their contract of carriage. All that said document proves is that they expressed a „desire‟ to make the waiver — which obviously is not the same as making an actual waiver of their right. A WAIVER of the kind invoked by appellant must be clear and unequivocal (Decision of the Supreme Court of Spain of July 8, 1887) — which is not the case of the one relied upon in this appeal.‖ If we apply the standard used in Yepes and Susaya, we would have to conclude that the terms of the Joint Affidavit in the instant case cannot be regarded as a waiver cast in ―clear and unequivocal‖ terms. Moreover, the circumstances under which the Joint Affidavit was signed by Gatchalian need to be considered. Gatchalian testified that she was still reeling from the effects of the vehicular accident, having been in the hospital for only three days, when the purported waiver in the form of the Joint Affidavit was presented to her for signing; that while reading the same, she experienced dizziness but that, seeing the other passengers who had also suffered injuries sign the document, she too signed without bothering to read the Joint Affidavit in its entirety. Considering these circumstances there appears substantial doubt whether Gatchalian understood fully the import of the Joint Affidavit (prepared by or at the instance of private respondent) she signed and whether she actually intended thereby to waive any right of action against private respondent. Finally, because what is involved here is the liability of a common carrier for injuries sustained by passengers in respect of whose safety a common carrier must exercise extraordinary diligence, we must construe any such purported waiver most strictly against the common carrier. For a waiver to be valid and effective, it must not be contrary to law, morals, public policy or good customs. To uphold a supposed waiver of any right to claim damages by an injured passenger, under circumstances like those exhibited in this case, would be to dilute and weaken the standard of extraordinary diligence exacted by the law from common carriers and hence to render that standard unenforceable. We believe such a purported waiver is offensive to public policy. Sub-issue: Was Delim negligent? Yes. 118

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

We have already noted that a duty to exercise extraordinary diligence in protecting the safety of its passengers is imposed upon a common carrier. The standard of extraordinary diligence imposed upon common carriers is considerably more demanding than the standard of ordinary diligence, i.e., the diligence of a good paterfamilias established in respect of the ordinary relations between members of society. Thus, the question which must be addressed is whether or not Delim has successfully proved that he had exercised extraordinary diligence to prevent the mishap involving his mini-bus. The records before the Court are bereft of any evidence showing that Delim had exercised the extraordinary diligence required by law. Curiously, he did not even attempt, during the trial before the court a quo, to prove that he had indeed exercised the requisite extraordinary diligence. Respondent did try to exculpate himself from liability by alleging that the mishap was the result of force majeure. But allegation is not proof and here again, he utterly failed to substantiate his defense of force majeure. To exempt a common carrier from liability for death or physical injuries to passengers upon the ground of force majeure, the carrier must clearly show not only that the efficient cause of the casualty was entirely independent of the human will, but also that it was impossible to avoid. Elements of force majeure: (1) the cause of the unforeseen and unexpected occurence, or of the failure of the debtor to comply with his obligation, must be independent of the human will; (2) it must be impossible to foresee the event which constitutes the "caso fortuito", or if it can be foreseen, it must be impossible to avoid; (3) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (4) the obligor must be free from any participation in the aggravation of the injury resulting to the creditor. Upon the other hand, the record yields affirmative evidence of fault or negligence on the part of Delim‘s common carrier. In her direct examination, Gatchalian narrated that shortly before the vehicle went off the road and into a ditch, a "snapping sound" was suddenly heard at one part of the bus. One of the passengers, an old woman, cried out, ―What happened?‖ The driver replied, nonchalantly, ―That is only normal.‖ The driver did not stop to check if anything had gone wrong with the bus. Moreover, the driver's reply necessarily indicated that the same ―snapping sound‖ had been heard in the bus on previous occasions. This could only mean that the bus had not been checked physically or mechanically to determine what was causing the "snapping sound" which had occurred so frequently that the driver had gotten accustomed to it. Such a sound is obviously alien to a motor vehicle in good operating condition, and even a modicum of concern for life and limb of passengers dictated that the bus be checked and repaired. The obvious continued failure of respondent to look after the roadworthiness and safety of the bus, coupled with the driver's refusal or neglect to stop the mini-bus after he had heard once again the "snapping sound" and the cry of alarm from one of the passengers, constituted wanton disregard of the physical safety of the passengers, and hence gross negligence on the part of Delim and his driver. 2. Theis v. Court of Appeals, 268 SCRA 167 (1997) Facts: TCT Nos. 15515 (parcel no. 1); 15516 (parcel no. 2); 15684 (parcel no. 3). The above lands are situated in Tagaytay. Beside parcel no. 3 is a vacant lot (parcel no. 4). Calsons constructed a 1-storey house on parcel no. 3. Parcel no. 1 and parcel no. 2, remained idle. In a survey conducted in 1985, there were ERRORS IN THE DESIGNATION OF THE LANDS: a) parcel no. 3, (where the two-storey house stands) became TCT No. 15515 (parcel no 1) b) parcel nos. 1 and 2 were mistakenly surveyed to be located on parcel no. 4 (which was not owned by Calsons) and covered by TCT Nos. 15516 and 15684 Unaware of the mistake by which Calsons appeared to be the owner of parcel no. 4 as indicated in the erroneous survey, and based on the erroneous information given by the surveyor that parcel no. 4 is covered by TCT No. 15516 and 15684, Calsons sold said parcel no. 4 to Theis. Upon execution of the Deed of Sale, Calsons delivered TCT Nos. 15516 and 15684 to Theis who immediately registered the same. After returning from Germany, they went to Tagaytay to look over the vacant lots and to plan the construction of their house thereon, they discovered that parcel no. 4 was owned by another person; that the lots actually sold to them were parcel nos. 2 and 3 covered by TCT Nos. 15516 and 15684, respectively. Parcel no. 3 however, could not have been sold by the Calsons as a two-storey house, the construction cost of which far exceeded the price paid by the Calsons, had already been built thereon even prior to the execution of the contract. Theis insisted that they wanted parcel no. 4, which is the idle lot beside parcel no. 3. However, Calsons could not have possibly sold the same to them for it did not own parcel no. 4. The mistake in the identity of the lots is traceable to the erroneous survey conducted in 1985. To remedy the mistake, Calsons offered parcel nos. 1 and 2 covered by TCT Nos. 15515 and 15516, respectively, as these 2 were precisely the 2 vacant lots which they owned and intended to sell when it entered into the transaction with 119

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Theis. Theis refused and insisted on taking parcel no. 3, covered by TCT No. 155864 and upon which a 2-storey house stands. Such refusal of Theis prompted Calsons to offer the return of an amount double the price paid by Theis. Latter still refused. Calsons was then compelled to file an action for annulment of deed of sale and reconveyance. Trial court annulled said contract of sale after finding that there was indeed a mistake in the identification of the parcels of land. Trial court, which was affirmed by the CA, held that — ―When one sells or buys a real property, he either sells or buys the property as he sees it, in its actual setting and by its physical metes and bounds, and not be the mere lot number assigned to the same property in the certificate of title or in any document. And, when a buyer of real property decides to purchase from his seller, he is ordinarily bound by prudence to ascertain the true nature, identity or character of the property that he intends to buy and ascertain the title of his vendor before he parts with his money. The foregoing precepts and precautions were observed by the parties. Both brokers of the sale brought defendants to the vicinity where plaintiff‘s 3 adjacent parcels of land are located and pointed to defendants the 2 vacant parcels right beside plaintiff‘s house. When defendants intimated to the brokers their desire to buy the vacant lots pointed to them, they were brought to plaintiff‘s representative where the parties discussed the terms of the sale. It is clear that defendants did not intend to buy the parcel of land where plaintiff‘s house stood as defendant Betty Theis declared in her testimony that they wanted to buy the parcel at the right side of plaintiff‘s house where she and her husband would construct their house. Neither can this Court accept the hypothesis that plaintiff intended to sell that parcel where its house was already constructed for if this was its true intention, it would not sell its two (2) lots at the price of P486,000.00 which is way below the costs of its construction of P1,500,000.00. Consent of the parties is one of the essential elements to the validity of the contract and where consent is given through mistake, the validity of the contractual relations between the parties is legally impaired. When defendants bought the properties of plaintiff, they intended to buy the vacant lots owned by the latter. As the sale that was finally consummated by the parties had covered the parcel where plaintiff‘s house was constructed even before the sale took place, this Court can safely assume that the deed of sale executed by the parties did not truly express their true intention. The mistake on the subject of the sale appears to be substantial as the OBJECT of the transaction is DIFFERENT from that intended by the parties. This fiasco could have been cured and the pain and travails of this litigation avoided, had parties agreed to a reformation of the deed of sale. The defendants refused, insisting that they wanted the vacant lots on the right side of plaintiff‘s house, which was impossible for plaintiff 3 to do, as said vacant lots were not of its own dominion.‖ Issue: Whether Calsons is liable. Held: NO. According to Art. 1390, contracts are voidable/annullable, even though no damage was done to the contracting parties where consent is vitiated by mistake, violence, intimidation, undue influence, or fraud. Also, according to Art. 1331, in order that mistake may invalidate consent, it should refer to the substance of the thing which is the object of the contract, or to those conditions which have principally moved one or both parties to enter into the contract. Tolentino explains that the concept of error must include both ignorance, which is the absence of knowledge with respect to a thing, and mistake properly speaking, which is a (1) wrong conception about said thing, or (2) a belief in the existence of some circumstances, fact, or event, which in reality does not exist. In both cases, there is a lack of full and correct knowledge about the thing. The mistake committed by Calsons in selling parcel no. 4 to the Theis falls within the second type. Such mistake invalidated its consent and as such, annulment of the deed of sale is proper. Calsons obviously committed an honest mistake in selling parcel no. 4. It is quite impossible for them to sell the lot since he does not own it. The GOOD FAITH of the Calsons is evident in the fact that when the mistake was discovered, it immediately offered 2 other vacant lots to the Theis or to reimburse them with twice the amount paid. That Theis refused either option left the Calsons with no other choice but to file an action for the annulment of the deed of sale on the ground of mistake.

Theis cannot be justified in their insistence that parcel no. 3, upon which Theis constructed a two-storey house, be given to them. The cost of construction for the said house P1.5m far exceeds the amount paid by the petitioners (P486,000.00). Calsons‘ witness, Atty. Tarciso Calilung clarified that parcel no. 4, the lot mistakenly sold, was a vacant lot. To allow the Theis to take parcel no. 3 would be to countenance unjust enrichment. They intended at the outset to purchase a vacant lot, their refusal to accept the offer of the Calsons to give them two (2) other vacant lots in exchange, as well as their insistence on parcel no. 3, which is a house and lot, is manifestly unreasonable. I. 120

Emergency Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

1. Gan v. Court of Appeals, G.R. No. L-44264, September 19, 1988 Facts: At about 8:00 AM, the Hedy Gan was driving a Toyota car. There were 2 vehicles, a truck, and a jeepney parked on one side of the road, one following the other about 2 to 3 meters from each other. As the car driven by the accused approached the place where the 2 vehicles were parked, there was a vehicle coming from the opposite direction, followed by another, which tried to overtake and bypass the one in front of it and thereby encroached the lane of the car driven by the Gan. To avoid a head-on collision with the oncoming vehicle, the Gan swerved to the right and as a consequence, the front bumper of the Toyota Crown Sedan hit an old man who was about to cross the boulevard from south to north, pinning him against the rear of the parked jeepney. The force of the impact caused the parked jeepney to move forward hitting the rear of the parked truck ahead of it. The pedestrian was injured, the Toyota Sedan was damaged on its front, the jeep suffered damages on its rear and front parts, and the truck sustained scratches at the wooden portion of its rear. The body of the old man who was later identified as Isidoro Casino was immediately brought to the Jose Reyes Memorial Hospital but was (pronounced) dead on arrival. An information for Homicide thru Reckless Imprudence was filed against Gab. The trial court rendered judgment finding her guilty beyond reasonable doubt of the offense charged. She appealed to the CA, which modified the conviction to homicide thru SIMPLE imprudence. Issue: Whether or not Gan is criminally liable. Held: NO. A corollary rule (to the test of negligence – WWPD) is what is known in the law as the EMERGENCY RULE One who suddenly finds himself in a place of danger, and is required to act without time to consider the best means that may be adopted to avoid the impending danger, is not guilty of negligence, if he fails to adopt what subsequently and upon reflection may appear to have been a better method, unless the emergency in which he finds himself is brought about by his own negligence. The CA in finding the Gan guilty said: ―The accused should have stepped on the brakes when she saw the car going in the opposite direction followed by another which overtook the first by passing towards its left. She should not only have swerved the car she was driving to the right but should have also tried to stop or lessen her speed so that she would not bump into the pedestrian who was crossing at the time but also the jeepney which was then parked along the street.‖ The course of action suggested by the CA would seem reasonable were it not for the fact that such suggestion did not take into account the amount of time afforded Gan to react to the situation she was in. The suggested course of action presupposes sufficient time for Gan to analyze the situation confronting her and to ponder on which of the different courses of action would result in the least possible harm to herself and to others. Due to the lack of eyewitnesses, no evidence was presented by the prosecution with respect to the relative distances of Gan to the parked jeepney and the oncoming overtaking vehicle that would tend to prove that she did have sufficient time to reflect on the consequences of her instant decision to swerve her car to the right without stepping on her brakes. In fact, the evidence presented by the prosecution on this point is her statement to the police. Under the circumstances narrated, we find that the CA is asking too much from a mere mortal like the petitioner who in the blink of an eye had to exercise her best judgment to extricate herself from a difficult and dangerous situation caused by the driver of the overtaking vehicle. Gan certainly could not be expected to act with all the coolness of a person under normal conditions. The danger confronting her was real and imminent, threatening her very existence. She had no opportunity for rational thinking but only enough time to heed the very powerful instinct of self-preservation. Moreover, she was driving her car within the legal limits. The EMERGENCY RULE enunciated above applies with full force to the case at bar and consequently absolve Gan from any criminal negligence in connection with the incident under consideration. We set aside the award of damages to the heirs of the victim, who by executing a release of the claim due them, had effectively and clearly waived their right thereto. 2. McKee v. Intermediate Appellate Court, 211 SCRA 517 (1992)  supra Doctrine: Jose Koh's entry into the lane of the truck was necessary in order to avoid what was, in his mind at that time, a greater peril — death or injury to the 2 boys. Such act can hardly be classified as negligent. Considering the sudden intrusion of the 2 boys into the lane of the car, We find that Jose Koh adopted the best means possible in the given situation to avoid hitting them. Using the test of negligence (WWPMD) , it is clear that he was not guilty of negligence. In any case, assuming arguendo that Jose Koh is negligent, it cannot be said that his negligence was the proximate cause of the collision.

121

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Torts & Damages 2013

Atty. Jess Lopez

The entry of the car into the lane of the truck would not have resulted in the collision had the latter heeded the EMERGENCY SIGNALS given by the former to slow down and give the car an opportunity to go back into its proper lane. Instead of slowing down and swerving to the far right of the road, which was the proper precautionary measure under the given circumstances, the truck driver continued at full speed towards the car. The truck driver's negligence becomes more apparent in view of the fact that the road is 7.50 meters wide while the car measures 1.598 meters and the truck, 2.286 meters, in width. This would mean that both car and truck could pass side by side with a clearance of 3.661 meters to spare. Furthermore, the bridge has a level sidewalk which could have partially accommodated the truck. Any reasonable man finding himself in the given situation would have tried to avoid the car instead of meeting it head-on. The truck driver's negligence is apparent in the records. He himself said that his truck was running at 48 kph along the bridge while the maximum speed allowed by law on a bridge is only 30 kph. Under Article 2185 of the Civil Code, a person driving a vehicle is presumed negligent if at the time of the mishap, he was violating any traffic regulation. Even if Jose Koh was indeed negligent, the doctrine of last clear chance finds application here. Last clear chance is a doctrine in the law of torts which states that the contributory negligence of the party injured will not defeat the claim for damages if it is shown that the defendant might, by the exercise of reasonable care and prudence, have avoided the consequences of the negligence of the injured party. In such cases, the person who had the last clear chance to avoid the mishap is considered in law solely responsible for the consequences thereof. It was the truck driver's negligence in failing to exert ordinary care to avoid the collision which was, in law, the proximat e cause of the collision. As employers of the truck driver, the private respondents are, under Article 2180 of the Civil Code, directly and primarily liable for the resulting damages. 3. Valenzuela v. Court of Appeals, G.R. Nos. 115024 & 117944, February 7, 1996 Facts: According to the PLAINTIFF, At 2 AM, Ma. Lourdes Valenzuela was driving a blue Mitsubishi Lancer travelling along Aurora Blvd. with Cecilia Ramon heading towards the direction of Manila when she noticed something wrong with her tires. She stopped at a lighted place where there were people, to verify whether she had a flat tire and to solicit help if needed. Having been told by the people present that her rear right tire was flat, she parked along the sidewalk, about 1-1/2 feet away, put on her emergency lights, alighted from the car, and went to the rear to open the trunk. She was standing at the left side of the rear of her car pointing to the tools to a man who will help her fix the tire when she was suddenly bumped by a 1987 Mitsubishi Lancer driven by Richard Li and registered in the name of respondent Alexander Commercial, Inc. Valenzuela was thrown against the windshield of the car of ACI, which was destroyed, and then fell to the ground. She was pulled out from under ACI‘s car. Plaintiff‘s left leg was severed up to the middle of her thigh, with only some skin and muscle connected to the rest of the body. She was confined in the hospital for 20 days and was eventually fitted with an artificial leg. According the RESPONDENT, Richard Li denied that he was negligent. He was on his way home, travelling at 55 kph. Considering that it was raining, visibility was affected and the road was wet. Traffic was light. He testified that he was driving along the inner portion of the right lane of Aurora Blvd. towards the direction of Araneta Avenue, when he was suddenly confronted with a car coming from the opposite direction, travelling at 80 kph, with ―full bright lights.‖ Temporarily blinded, he instinctively swerved to the right to avoid colliding with the oncoming vehicle, and bumped Valenzeula‘s car, which he did not see because it was midnight blue in color, with no parking lights or early warning device, and the area was poorly lighted. He alleged in his defense that the left rear portion of Valenzuela‘s car was protruding as it was then ―at a standstill diagonally‖ on the outer portion of the right lane towards Araneta Avenue. Li confirmed the testimony of Valenzuela‘s witness that after being bumped the car of the Valenzuela swerved to the right and hit another car parked on the sidewalk. Li counterclaimed for damages, alleging that Valenzuela was reckless or negligent, as she was not a licensed driver. Trial court found Li guilty of gross negligence and liable for damages under Article 2176. The trial court likewise held ACI., Li‘s employer, jointly and severally liable for damages pursuant to Article 2180. MR denied. On appeal, CA affirmed and found that there was ample basis from the evidence of record for the trial court‘s finding that the Valenzuela‘s car was properly parked at the right, beside the sidewalk when it was bumped by defendant‘s car, and dismissed defendant‘s argument. CA however, absolved ACI from any liability towards Lourdes Valenzuela. Issue: Whether Valenzuala was contributorily negligent. Held: NO. 122

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

LI‘S LIABILITY: Valenzuela‘s version of the incident was fully corroborated by an uninterested witness, Rogelio Rodriguez, the owner-operator of a beerhouse (Lambingan sa Kambingan) located just across the scene of the accident. Rodriguez further added that he was standing in front of his establishment, when he saw the car hit Valenzuela, hurtling her against the windshield of the defendant‘s Mitsubishi Lancer, from where she eventually fell under the defendant‘s car. Spontaneously reacting to the incident, he crossed the street, noting that a man reeking with the smell of liquor had alighted from the offending vehicle in order to survey the incident. Equally important, Rodriguez declared that he observed Valenzuela‘s car parked parallel and very near the sidewalk, contrary to Li‘s allegation that Valenzuela‘s car was close to the center of the right lane. Given a light rainfall, the visibility of the street, and the road conditions on a principal metropolitan throroughfare like Aurora Boulevard, Li would have had ample time to react to the changing conditions of the road if he were alert—as every driver should be—to those conditions. Driving exacts a more than usual toll on the senses. Physiological ―fight or flight‖ mechanisms are at work, provided such mechanisms were not dulled by drugs, alcohol, exhaustion, drowsiness, etc. Li‘s failure to react in a manner which would have avoided the accident could therefore have been only due to either or both of the two factors: 1) that he was driving at a “very fast” speed as testified by Rodriguez; and 2) that he was under the influence of alcohol. It was not even necessary for him to swerve a little to the right in order to safely avoid a collision with the ―oncoming car‖ considering that Aurora Blvd. is a double lane avenue separated at the center by a dotted white paint, and there is plenty of space for both cars, since her car was running at the right lane going towards Manila and the on-coming car was also on its right lane going to Cubao. ON VALENZUELA‘S LACK OF CONTRIBUTORY NEGLIGENCE: Valenzuela was not guilty of contributory negligence. Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is required to conform for his own protection. Courts have traditionally been compelled to recognize that an actor who is confronted with an emergency is not to be held up to the standard of conduct normally applied to an individual who is in no such situation. The law takes stock of impulses of humanity when placed in threatening or dangerous situations and does not require the same standard of thoughtful and reflective care from persons confronted by unusual and oftentimes threatening conditions. Under the ―EMERGENCY RULE‖ adopted by this Court in Gan, an individual who suddenly finds himself in a situation of danger and is required to act without much time to consider the best means that may be adopted to avoid the impending danger, is not guilty of negligence if he fails to undertake what subsequently and upon reflection may appear to be a better solution, unless the emergency was brought by his own negligence. While the emergency rule applies to those cases in which reflective thought, or the opportunity to adequately weigh a threatening situation is absent, the conduct which is required of an individual in such cases is dictated not exclusively by the suddenness of the event which absolutely negates thoroughful care, but by the OVER-ALL NATURE OF THE CIRCUMSTANCES. A woman driving a vehicle suddenly crippled by a flat tire on a rainy night will not be faulted for stopping at a point which is both convenient for her to do so and which is not a hazard to other motorists. She is not expected to run the entire boulevard in search for a parking zone or turn on a dark street or alley where she would likely find no one to help her. It would be hazardous for her not to stop and assess the emergency (simply because the entire length of Aurora Boulevard is a no-parking zone) because the hobbling vehicle would be both a threat to her safety and to other motorists. To avoid putting herself and other motorists in danger, she did what was best under the situation. As narrated by CA: ―She stopped at a lighted place where there were people, to verify whether she had a flat tire and to solicit help if needed. Having been told by the people present that her rear right tire was flat and that she cannot reach her home she parked along the sidewalk, about 1 1/2 feet away, behind a Toyota Corona Car.‖ In fact, CA noted, Pfc. Felix Ramos, the investigator on the scene of the accident confirmed that Valenzuela‘s car was parked very close to the sidewalk. The sketch showed Valenzuela‘s car partly straddling the sidewalk, clear and at a convenient distance from motorists passing the right lane of Aurora Boulevard. Under the circumstances described, Valenzuela did exercise the standard reasonably dictated by the emergency and could not be considered to have contributed to the unfortunate circumstances which eventually led to the amputation of one of her lower extremeties. The emergency which led her to park her car on a sidewalk in Aurora Boulevard was not of her own making, and it was evident that she had taken all reasonable precautions. ACI‘S LIABILITY: When a company gives full use and enjoyment of a company car to its employee, it in effect guarantees that it is, like every good father, satisfied that its employee will use the privilege reasonably and responsively. For large companies , the privilege serves important business purposes either related to the image of success an entity 123 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

intends to present to its clients and to the public in general, or—for practical and utilitarian reasons— to enable its managerial and other employees of rank or its sales agents to reach clients conveniently. In most cases, providing a company car serves both purposes. Since important business transactions and decisions may occur at all hours in all sorts of situations and under all kinds of guises, the provision for the unlimited use of a company car therefore principally serves the business and goodwill of a company and only incidentally the private purposes of the individual who actually uses the car, the managerial employee or company sales agent. As such, in providing for a company car for business use and/or for the purpose of furthering the company‘s image, a company owes a responsibility to the public to see to it that the managerial or other employees to whom it entrusts virtually unlimited use of a company issued car are able to use the company issue capably and responsibly. Here, Li was an Assistant Manager of ACI. In his testimony, he admitted that his functions as Assistant Manager did not require him to scrupulously keep normal office hours as he was required quite often to perform work outside the office, visiting prospective buyers and contacting and meeting with company clients. These meetings, clearly, were not strictly confined to routine hours because, as a managerial employee tasked with the job of representing his company with its clients, meetings with clients were both social as well as work-related functions. The service car assigned to Li by ACI therefore enabled both Li —as well as the ACI—to put up the front of a highly successful entity, increasing the latter‘s goodwill before its clientele. It also facilitated meeting between Li and its clients by providing the former with a convenient mode of travel. In fine, ACI has not demonstrated, to our satisfaction, that it exercised the care and diligence of a good father of the family in entrusting its company car to Li. No allegations were made as to whether or not the company took the steps necessary to determine or ascertain the driving proficiency and history of Li, to whom it gave full and unlimited use of a company car. Not having been able to overcome the burden of demonstrating that it should be absolved of liability for entrusting its company car to Li, said company, based on the principle of bonus pater familias, ought to be jointly and severally liable with the former for the injuries sustained by Valenzuela during the accident. 4. Delsan Transport Lines, Inc., v. C&A Construction, Inc., G.R. No. 156034, October 1, 2003 Facts: C & A Construction, Inc. was engaged by NHA to construct a deflector wall at the Vitas Reclamation Area in Vitas, Tondo. At around 12 MN of October 20, 1994, Captain Demetrio T. Jusep of M/V Delsan Express (owned and operated by DLTI) received a report from his radio head operator in Japan that a typhoon was going to hit Manila in about 8) hours. Capt. Jusep tried to seek shelter at the North Harbor but could not enter the area because it was already congested. He decided to drop anchor at the vicinity of Vitas mouth, 4 miles away from a Napocor power barge. Capt. Jusep ordered his crew to go full ahead to counter the wind which was dragging the ship towards the Napocor power barge. To avoid collision, Capt. Jusep ordered a full stop of the vessel. He succeeded in avoiding the power barge, but when the engine was re-started and the ship was maneuvered full astern, it hit the deflector wall constructed by C&A. The latter demanded payment of the damage from DLTI but the latter refused to pay. C&A filed a complaint for damages. DLTI claimed that the damage was caused by a fortuitous event. Complaint filed by C&A was dismissed. The trial court ruled that DLTI was not guilty of negligence because it had taken all the necessary precautions to avoid the accident. Applying the ―emergency rule‖, it absolved DLTI of liability because the latter had no opportunity to adequately weigh the best solution to a threatening situation. CA reversed. DLTI filed the instant petition contending that Capt. Jusep was not negligent in waiting until 8:35AM of October 21, 1994 before transferring the vessel to the North Harbor inasmuch as it was not shown that had the transfer been made earlier, the vessel could have sought shelter. DLTI claimed that it cannot be held vicariously liable under Article 2180 of because C&A failed to allege in the complaint that DLTI was negligent in the selection and supervision of its employees and in fact, the company exercised due diligence in the selection of Capt. Jusep who is a duly licensed and competent Master Mariner. Issue: (1) Whether Capt. Jusep was negligent. (2) Whether DLTI is solidarily liable under 2180 Held: (1) YES. As early as 12:00 MN of October 20, 1994, he received a report from his radio head operator in Japan that a typhoon was going to hit Manila after 8 hours but he did nothing until 8:35 AM of October 21, 1994, when he decided to seek shelter at the North Harbor, which unfortunately was already congested. The finding of negligence cannot be rebutted upon proof that the ship could not have sought refuge at the North Harbor even if the transfer was done earlier. It is not the speculative success or failure of a decision that determines the existence of negligence in the present case, but the failure to take immediate and appropriate action under the circumstances. 124 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Despite knowledge that the typhoon was to hit Manila in 8 hours, he complacently waited for the lapse of more than 8 hours thinking that the typhoon might change direction. He cannot claim that he waited for the sun to rise instead of moving the vessel at midnight immediately after receiving the report because of the difficulty of traveling at night. The hour of 8:35 a.m. is way past sunrise. Furthermore, he did not transfer as soon as the sun rose because, according to him, it was not very cloudy and there was no weather disturbance yet. When he ignored the weather report notwithstanding reasonable foresight of harm, Capt. Jusep showed an inexcusable lack of care and caution which an ordinary prudent person would have observed in the same situation. Had he moved the vessel earlier, he could have had greater chances of finding a space at the North Harbor considering that the Navotas Port where they docked was very near North Harbor. The RTC erred in applying the emergency rule. Under this rule, one who suddenly finds himself in a place of danger, and is required to act without time to consider the best means that may be adopted to avoid the impending danger, is not guilty of negligence, if he fails to adopt what subsequently and upon reflection may appear to have been a better method, unless the danger in which he finds himself is brought about by his own negligence. Such emergency rule is not applicable to the instant case because the danger where Capt. Jusep found himself was caused by his own negligence. (2) YES. Whenever an employee‘s negligence causes damage or injury to another, there instantly arises a presumption juris tantum that the employer failed to exercise diligentissimi patris families in the selection (culpa in eligiendo) or supervision (culpa in vigilando) of its employees. To avoid liability for a quasi-delict committed by his employee, an employer must overcome the presumption by presenting convincing proof that he exercised the care and diligence of a good father of a family in the selection and supervision of his employee. It is not enough that the employees chosen be competent and qualified, inasmuch as the employer is still required to exercise due diligence in supervising its employees. DLTI presented no evidence that it formulated rules/guidelines for the proper performance of functions of its employees and that it strictly implemented and monitored compliance therewith. It cannot disclaim liability on the basis of C&A‘s failure to allege in its complaint that the former did not exercise due diligence in the selection and supervision of its employees. In Viron Transportation Co., Inc, it was held that it is not necessary to state that petitioner was negligent in the supervision or selection of its employees, inasmuch as its negligence is presumed by operation of law. Allegations of negligence against the employee and that of an employer-employee relation in the complaint are enough to make out a case of quasidelict under Article 2180 of the Civil Code. 5. Orix Metro Leasing and Finance Corporation v. Mangalinao, G.R. Nos. 174089 & 174266, January 25, 2012 Facts: In 1990, while it was raining at night, 3 vehicles were traversing the 2-lane northbound NLEX. Edurese was driving a Nissan Pathfinder with other passengers (including the Mangalinao spouses). Before them on the outer lane was a Fuso 10-wheeler truck driven by Loreto (accompanied by truck helper Charlie). The Fuso was moving in an erratic and swerving motion. Behind the Pathfinder was another 10-wheeler Isuzu truck driven by Antonio (accompanied by Rodolfo). Just when the Pathfinder was about to overtake the Fuso, the Fuso suddenly swerved to the left and cut into the Pathfinder‘s lane. The Pathfinder hit the Fuso‘s left door and body which caused both vehicles to stop in the expressway. What immediately followed was a pileup wherein the Isuzu 10-wheeler truck crashed into the rear of the Pathfinder, despite Antonio stepping on the brakes. All the passengers in the Pathfinder were killed. The truck drivers escaped serious injuries and death. The minor orphaned heirs of the Mangalinao spouses demanded compensation from the truck owners (Sonny and Orix) which was ignored. They filed a claim based on quasi-delict against the truck drivers and the owners, imputing recklessness, negligence, and imprudence on the truck drivers for the deaths of their sister and parents; while alleging that Sonny and Orix equally liable for failing to exercise the diligence of a good father of a family in the selection and supervision of their respective drivers. Sonny and Antonio countered, attributing fault for the accident solely on Loreto‘s reckless driving of his truck which suddenly stopped and slid across the highway. They claimed that Sonny had exercised the expected diligence required of an employer; that Antonio had been all along driving with care; and, that with the abrupt and unexpected collision of the vehicles before him and their precarious proximity, he had no way of preventing his truck from hitting the Pathfinder. The RTC and the CA ruled in favor of the Mangalinao spouses, holding that both truck drivers are at fault and should be held liable. Lucilo, who was driving the Fuso truck, was reckless when he caused the swerving of his vehicle directly on the lane of the Pathfinder to his left. The Pathfinder had no way to avoid a collision because it was about to pass the truck when suddenly blocked. On the other hand, the Isuzu truck was practically tailgating the Pathfinder on the dark slippery highway such that when the Pathfinder collided with the Fuso truck, it became inevitable for the Isuzu truck to crash into the Pathfinder. So, de los Santos, the driver of the Isuzu truck was likewise reckless. 125 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Issue: Whether Sonny, Antonio , and Orix are liable. Held: YES. With regard to the FUSO TRUCK, there is no doubt that the driver was negligent. Testimonies stated that the Fuso had lost control, skidded to the left and blocked the way of the Pathfinder, which was about to overtake. The Pathfinder had absolutely no chance to avoid the truck. Instead of slowing down and moving towards the shoulder in the highway if it really needed to stop, it was very negligent of Loreto to abruptly hit the brake in a major highway wherein vehicles are highly likely to be at his rear. He opened himself up to a major danger and naturally, a collision was imminent. Meanwhile, on the part of the ISUZU TRUCK, the court also found fault on their part. Based on the testimony given by Antonio, the court made the conclusion that, indeed, Antonio was also guilty of the mishap that occurred. Antonio, upon noticing the irregular way of driving of the Fuso truck, slowed down his speed to about 50-60 km/h. However the smashed front of the Isuzu strongly indicates the strong impact of the ramming of the rear of the Pathfinder that pinned its passengers. Furthermore, Antonio admitted that despite stepping on the brakes, the Isuzu still suddenly smashed into the rear of the Pathfinder causing extensive damage to it, as well as hitting the right side of the Fuso. These militate against Antonio‘s claim that he was driving at a safe speed, that he had slowed down, and that he was 3 cars away. Clearly, the Isuzu was not within the safe stopping distance to avoid the Pathfinder in case of emergency. Thus, the ‗Emergency Rule‘ invoked WILL NOT APPLY. Such principle states: [O]ne who suddenly finds himself in a place of danger, and is required to act without time to consider the best means that may be adopted to avoid the impending danger, is not guilty of negligence, if he fails to adopt what subsequently and upon reflection may appear to have been a better method, unless the emergency in which he finds himself is brought about by his own negligence. Considering the wet and slippery condition of the road that night, Antonio should have been prudent to reduce his speed and increase his distance from the Pathfinder. Had he done so, it would be improbable for him to have hit the vehicle in front of him or if he really could not avoid hitting it, prevent such extensive wreck to the vehicle in front. With the glaring evidence, he obviously failed to exercise proper care in his driving. Orix cannot also escape liability since he is the operator of the Fuso truck. Orix cannot point fingers at the alleged real owner to exculpate itself from vicarious liability under Article 2180. Regardless of whoever Orix claims to be the actual owner of the Fuso by reason of a contract of sale, it is nevertheless primarily liable for the damages or injury the truck registered under it have caused. It has already been explained that where a registered owner allowed to evade responsibility by proving who the supposed transferee or owner is, it would be easy for him, by collusion with others or otherwise, to escape said responsibility and transfer the same to an indefinite person, or to one who possesses no property with which to respond financially for the damage or injury done. A victim of recklessness on the public highways is usually without means to discover or identify the person actually causing the injury or damage. He has no means other than by a recourse to the registration in the Motor Vehicles Office to determine who is the owner. The protection that the law aims to extend to him would become illusory were the registered owner given the opportunity to escape liability by disproving his ownership. Besides, the registered owners have a right to be indemnified by the real or actual owner of the amount that they may be required to pay as damage for the injury caused to the plaintiff, which Orix rightfully acknowledged by filing a third-party complaint against the owner of the Fuso, Manuel. J.

Damnum absque injuria

1. Board of Liquidators v. Kalaw, G.R. No. L-18805, August 14, 1967 Facts: National Coconut Corporation (NACOCO) was a chartered as a non-profit governmental organization, in charge of all transactions involving coconut and its by-products. Maximo Kalaw sat as its General Manager and board chairman. Because of 4 typhoons that hit the country, NACOCO was unable to fulfill its obligations under the numerous contracts it entered into with several buyers. Coconut trees throughout the country suffered extensive damage. Copra production decreased. Prices spiralled. Warehouses were destroyed. Cash requirements doubled. Deprivation of export facilities increased the time necessary to accumulate shiploads of copra. Quick turnovers became impossible, financing a problem. A meeting was then held. Kalaw made a full disclosure of the situation, apprised the board of the impending heavy losses. No action was taken on the contracts. Neither did the board vote thereon at the meeting of January 7, 1948 following. Then, on January 11, 1948, President Roxas made a statement that the NACOCO head did his best to avert the losses, emphasized that government concerns faced the same risks that confronted private companies, that NACOCO was recouping its losses, and that Kalaw was to remain in his post. Not long thereafter, that is, on January 30, 1948, the board met again with Kalaw, Bocar, Garcia and Moll in attendance. They unanimously approved 6 contracts but were only partially performed. 126 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

The aggrieved buyers who were parties to the said contracts threatened to bring damage suits but most of these were settled except for one who actually pushed through with the suit (Louis Dreyfus ltd.). Subsequently, NACOCO was abolished by EO 372, giving the Board of Liquidators the function of settling and closing its affairs. All the settlements sum up to P1.3M. It is this sum that NACOCO, through the Board of Liquidators, now seeks to recover from GM Kalaw and the other 2 directors, charging the latter with negligence and bad faith/breach of trust for having approved entered into the aforementioned unprofitable contracts. It is alleged that while the by-laws required prior approval of the board, Kalaw entered into the contracts alone as general manager and without the board‘s prior approval. Sometime after, Kalaw died and the suit was brought against his estate. Issue: Whether Kalaw and the rest of the Board were guilty negligence and bad faith and/or breach of trust for having entered into the unprofitable contracts. Held: NO. Bad faith does not simply connote bad judgment or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of wrong; it means breach of a known duty thru some motive or interest or ill will; it partakes of the nature of fraud. Applying this precept to the given facts herein, we find that there was no "dishonest purpose," or "some moral obliquity," or "conscious doing of wrong," or "breach of a known duty," or "some motive or interest or ill will" that "partakes of the nature of fraud. To what then may we trace the damage suffered by NACOCO. The facts yield the answer. Four typhoons wreaked havoc then on our copra-producing regions. Result: Copra production was impaired, prices spiralled, warehouses destroyed. Quick turnovers could not be expected. NACOCO was not alone in this misfortune. The record discloses that private traders, old, experienced, with bigger f acilities, were not spared; also suff ered tremendous losses. The typhoons were known to BOL, In fact, NACOCO resisted the suits filed by Louis Dreyfus & Co. by pleading in its answers force majeure as an affirmative defense, and there vehemently asserted that ―as a result of the said typhoons, extensive damage was caused to the coconut trees in the copra producing regions of the Philippines and according to estimates of competent authorities, it will take about one year until the coconut producing regions will be able to produce their normal coconut yield and it will take some time until the price of copra will reach normal levels;" and that "it had never been the intention of the contracting parties in entering into the contract in question that, in the event of a sharp rise in the price of copra in the Philippine market produce by force majeure or by causes beyond defendant's control, the defendant should buy the copra contracted for at exorbitant prices far beyond the buying price of the plaintiff under the contract." Indeed, were it not for the typhoons, NACOCO could have, with ease, met its contractual obligations. Stock accessibility was no problem. NACOCO had 90 buying agencies spread throughout the islands. It could purchase 2,000 tons of copra a day, The various contracts involved delivery of but 16,500 tons over a five-month period. Despite the typhoons, NACOCO was still able to deliver a little short of 50% of the tonnage required under the contracts. Kalaw's acts were not the result of haphazard decisions either. Kalaw invariably consulted with NACOCO's Chief Buyer, Sisenando Barretto, or the Assistant General Manager. The dailies and quotations from abroad were guideposts to him. Of course, Kalaw could not have been an insurer of prof its. He could not be expected to predict the coming of unpredictable typhoons. And even as typhoons supervened, Kalaw was not remissed in his duty. As the trial court correctly observed, this is a case of damnum absque injuria. Conjunction of damage and wrong is here absent. There cannot be an actionable wrong if either one or the other is wanting. That Kalaw cannot be tagged with crassa negligentia or as much as simple negligence, would seem to be supported by the fact that even as the contracts were being questioned in Congress and in the NACOCO board itself, President Roxas defended the actuations of Kalaw. On December 27, 1947, President Roxas expressed his desire "that the Board of Directors should reelect Hon. Maximo M. Kalaw as General Manager of the National Coconut Corporation.‖ And, on January 7, 1948, at a time when the contracts had already been openly disputed, the board, at its regular meeting, appointed Maximo M. Kalaw as acting general manager of the corporation. 2. Farolan v. Solmac Marketing Corporation, G.R. No. 83589, March 13, 1991 Facts: Solmac Marketing Corporation was the assignee, transferee, and owner of an importation of Clojus Recycling Plastic Products of what is technically known as polypropylene film. This shipment arrived in December 1981. Acting Customs Commissioner Farolan and Parayno (acting chief of Customs Intelligence) did not release the shipment. BOC claims that the products are of higher class considered as polypropylene film which is restricted by LOI. Thus, Parayno first wrote the BOI asking for the latter's advice on whether or not the subject importation may be released. A series of exchange of correspondence between the BOI and the Bureau of Customs ensued. 127

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Torts & Damages 2013

Atty. Jess Lopez

Bureau of Investments had a different view; BOI said that the goods should be released ‗without the drilling of holes‘. Farolan then wrote the BOI requesting for definite guidelines regarding the disposition of importations of Oriented Polypropylene (OPP) and Polypropylene (PP) then being held at the BOC. The BOI Chairman replied on Feb 1984. (In short, the shipment was held by the BOC for more than 2 years). Solmac sued Farolan and Parayno (in their official capacities) for Mandamus and damages, claiming that Parayno and Farolan acted with bad faith in not releasing the shipment. The RTC granted the petition. But even before that time, Farolan and Parayno had already released the said shipment ‗without drilling of holes‘ so they found no reason to appeal the decision. However, Solmac appealed since no damages were awarded. CA granted the claim of Solmac for damages. (take note here that the CA made a mistake, as it called Ramon Farolan by a different name, ‗Damian Farolan‘. This is irrelevant but just in case Sir asks). Issue: Whether Farolan acted in good faith in not immediately releasing the questioned importation. In other words, can they be held liable in their personal and private capacities for damages suffered by Solmac. Held: NO. They acted in good faith. Such is always presumed and it is upon him who alleges the contrary that the burden of proof lays. Bad faith was not substantiated; in fact, evidence shows that there was indeed confusion with what course of action to take on the said shipment, negating Solmac‘s claim of bad faith. In Abando v. Lozada, we defined good faith as refering to a state of the mind which is manifested by the acts of the individual concerned. It consists of the honest intention to abstain from taking an unconscionable and unscrupulous advantage of another. It is the opposite of fraud, and its absence should be established by convincing evidence. Bad faith was not proven. FIRST, there was the report of the National Institute of Science and Technology (NIST) that the subject importation was not OPP film scraps but oriented polypropylene, whose importation to the Philippines was restricted under LOI 658-B. It was on the strength of this finding that the Farolan withheld the release of the subject importation for being contrary to law. SECOND, the Farolan testified that, on many occasions, the BOC sought the advice of the BOI on whether the subject importation might be released. THIRD, Parayno also testified during the trial that up to that time (of the trial) there was no clear-cut policy on the part of the BOI regarding the entry into the Philippines of oriented polypropylene (OPP), as the letters of BOI Governors ordering the release of the subject importation did not clarify the BOI policy on the matter. Also, based on the testimonies of the witnesses, it can be gathered that even the highest officers of the BOI themselves (chairman, vice chairman, etc) were not in agreement as to what proper course to take on the subject of the various importations withheld by the BOC. The conflicting recommendations of the BOI on this score prompted the Farolan to seek final clarification from the former with regard to its policy on these importations. This resulted in the inevitable delay in the release of the Clojus shipment, one of the several of such importations. The confusion over the disposition of this particular importation obviates bad faith. Thus the RTC‘s finding that the Farolan acted in good faith in not immediately releasing the Clojus shipment pending a definitive policy of the BOI on this matter is correct. It is supported by substantial evidence on record, independent of the presumption of good faith, which as stated earlier, was not successfully rebutted. DAMNUM ABSQUE INJURIA: mistakes committed by public officers are not actionable absent any clear showing of malice or gross negligence amounting to bad faith.When a public officer takes his oath of office, he binds himself to perform the duties of his office faithfully and to use reasonable skill and diligence, and to act primarily for the benefit of the public. Thus, in the discharge of his duties, he is to use that prudence, caution, and attention which careful men use in the management of their affairs. In this case, prudence dictated that Farolan first obtain from the BOI the latter's definite guidelines regarding the disposition of the various importations. As public officers, the they had the duty to see to it that the law they were tasked to implement, i.e., LOI 658-B, was faithfully complied with. But even granting that the Farolan committed a mistake in withholding the release of the subject importation because indeed it was composed of OPP film scraps, contrary to the evidence submitted by the NIST that the same was pure oriented OPP, nonetheless, it is the duty of the Court to see to it that public officers are not hampered in the performance of their duties or in making decisions for fear of personal liability for damages due to honest mistake. Whatever damage they may have caused as a result of such an erroneous interpretation, if any at all, is in the nature of a damnum absque injuria. Mistakes concededly committed by public officers are not actionable absent any clear showing that they were motivated by malice or gross negligence amounting to bad faith. After all, even under the law of public officers, the acts of the Farolan are protected by the presumption of good faith.

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Atty. Jess Lopez

In the same vein, the presumption, disputable though it may be, that an official duty has been regularly performed applies in favor of the Farolan. Omnia praesumuntur rite et solemniter esse acta. (All things are presumed to be correctly and solemnly done.) It was Solmac‘s burden to overcome this juris tantum presumption. 3. BPI Express Card Corporation v. Court of Appeals, G.R. No. 120639, September 25, 1998 Facts: Marasigan, a lawyer, was a complimentary member of BPI Express Credit Card and was issued a Credit Card with a credit limit of P3,000. His membership was renewed for another year or until February 1990 and the credit limit was increased to P5,000. The he oftentimes exceeded his credit limit but this was never taken against him by BPI and even his mode of paying his monthly bills in check was tolerated. His statement of account for October 1989 amounting to P8,987.84 was not paid in due time. Marasigan admitted having inadvertently failed to pay his account for the said month because he was in Quezon province attending to some professional and personal commitments. He was informed by his secretary that BPI was demanding immediate payment of his outstanding account, was requiring him to issue a check for P15,000 which would include his future bills, and was threatening to suspend his credit card. Marasigan issued Far East Bank check in the amount of P15,000.00, postdated December 15, 1989 which was received on November 23, 1989; the head of the collection department of BPI was formally informed of the postdated check about a week later. On November 28, 1989, BPI served Marasigan a letter by ordinary mail informing him of the temporary suspension of the privileges of his credit card and the inclusion of his account number in their Caution List. He was also told to refrain from further use of his credit card to avoid any inconvenience/embarrassment and that unless he settles his outstanding account with the defendant within 5 days from receipt of the letter, his membership will be permanently cancelled. There is no showing that Marasigan received this letter before December 8, 1989. Confident that he had settled his account with the issuance of the postdated check, Marasigan invited some guests on December 1989 and entertained them at Café Adriatico . When he presented his credit card to Café Adriatico for the bill amounting to P735.32, said card was dishonored. One of his guests, Mary Ellen Ringler, paid the bill by using her own credit card. In a letter addressed to the BPI, he requested that he be sent the exact billing due him as of December 15, 1989, to withhold the deposit of his postdated check and that said check be returned to him because he had already instructed his bank to stop the payment thereof as the defendant violated their agreement that Marasigan issue the check to BPI to cover his account amounting to only P8,987.84 on the condition that the defendant will not suspend the effectivity of the card. No reply was received by Marasigan. Plaintiff sent defendant another letter dated March 12, 1990 reminding the latter that he had long rescinded and cancelled whatever arrangement he entered into with defendant and requesting for his correct billing, less the improper charges and penalties, and for an explanation within 5 days from receipt thereof why his card was dishonored despite assurance to the contrary by defendant‘s personnel-incharge, otherwise the necessary court action shall be filed. He alleged further that after a few days, a certain Atty. Albano called him inquiring as to how the matter can be threshed out extrajudicially but the latter said that such is a serious matter which cannot be discussed over the phone. BPI served its final demand to the Marasigan requiring him to pay in full his overdue account, including stipulated fees and charges, within 5 days from receipt thereof or face court action and also to replace the postdated check with cash within the same period or face criminal suit for violation of the Bouncing Checks Law. Marasigan, in a reply demanded BPI‘s compliance with his request in his first letter within 3 days from receipt, otherwise he will file a case against them. Marasigan filed a complaint for damages against BPI. Trial court ruled for Marasigan, finding that BPI abused its right in contravention of Article 19; ordering the defendant to pay damages but also ordering plaintiff to pay defendant its outstanding obligation. CA affirmed. Issue: (1) Whether BPI had the right to suspend the credit card of Marasigan. (2) Whether before the suspension of Marasigan‘s credit card, the parties entered into an agreement where the card could still be used and would be duly honored by accredited establishements. (3) Whether Marasigan can recover damages arising from the cancellation of his card. Held: (1) YES. Under the terms and conditions of the credit card, signed by the private respondent, any card with outstanding balances after 30 days from original billing/statement shall automatically be suspended. (2) YES. The purpose of the arrangement between the parties on November 22, 1989, was for the immediate payment of the Marasigan‘s outstanding account, in order that his credit card would not be suspended. As agreed upon by the parties, on the following day, he did issue a check for P15,000. However, the check was postdated 15 December 1989. A check is only a substitute for money and not money, the delivery of such an instrument does not, by itself operate as payment. 129 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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This is especially true in the case of a postdated check. Thus, the issuance by Marasigan of the postdated check was not effective payment. It did not comply with his obligation under the arrangement with Miss Lorenzo. BPI was therefore justified in suspending his credit card. (3) NO. To find the existence of an abuse of right under Article 19 the following elements must be present: (1) There is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. Good faith is presumed and the burden of proving bad faith is on the party alleging it. This, Marasgan failed to do. The action of BPI belies the existence of bad faith. As early as 28 October 1989, BPI could have suspended Marasigan‟s card outright. Instead, BPI allowed private respondent to use his card for several weeks. BPI had even notified BPI of the impending suspension of his credit card and made special accommodations for him for settling his outstanding account. As such, BPI cannot be said to have capriciously and arbitrarily canceled Marasigan‘s credit card. Marasigan suffered damages. However, there is a material distinction between damages and injury. INJURY is the illegal invasion of a legal right; DAMAGE is the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. In such cases, the consequences must be borne by the injured person. The law affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong. These situations are often called damnum absque injuria. In order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted from a breach of duty which the defendant owed to the plaintiff — a concurrence of injury to the plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort damages is the premise that an individual was injured in contemplation of law. Thus, there must first be a breach of some duty and the imposition of liability for that breach before damages may be awarded; and the breach of such duty should be the proximate cause of the injury. We therefore DISAGREE that the dishonor of the credit card of the Marasigan by Café Adriatico is attributable to BPI for its willful or gross neglect to inform the Marasigan of the suspension of his credit card. It was Marasigan‘s failure to settle his obligation which caused the suspension of his credit card and subsequent dishonor at Café Adriatico . He can not now pass the blame to the BPI for not notifying him of the suspension of his card. The application contained the stipulation that BPI could automatically suspend a card whose billing has not been paid for more than 30 days. Nowhere is it stated in the terms and conditions of the application that there is a need of notice before suspension may be effected. This notwithstanding, on November 28, 1989, the day of the suspension of Marasigan‘s card, BPI sent a letter by ordinary mail notifying him that his card had been temporarily suspended. There is a disputable presumption that letters duly directed and mailed were received on the regular course of mail. Aside from the Marasigan‘s bare denial, he failed to present evidence to rebut the presumption that he received said notice. In fact upon cross-examination, Marasigan admitted that he did receive the letter notifying him of the cancellation. As it was his own negligence which was the proximate cause of his embarrassing and humiliating experience, we find the award of damages by the respondent court clearly unjustified. 4. Custodio v. Court of Appeals, G.R. No. 116100, February 9, 1996 Facts: The Mabasa owns a parcel of land with a 2-door apartment erected thereon situated at Interior P. Burgos St. Taking P. Burgos Street as the point of reference, on the left side, going to Mabasa‘s property, the row of houses will be as follows: That of defendant spouses Custodio, then that of defendants spouses Santos and then that of plaintiff Mabasa. On the right side is that of defendant Morato and then a Septic Tank. As an access to P. Burgos Street from Mabasa‘s property, there are 2 possible passageways. The first passageway is approximately one meter wide and is about 20 meters far from Mabasa‘s residence to P. Burgos Street. Such path passes between the previously mentioned row of houses. The second passageway is about 3 meters in width and length from plaintiff Mabasa‘s residence to P. Burgos Street; it is about 26 meters. In passing thru said passageway, a less than a meter wide path through the septic tank and with 5-6 meters in length, has to be traversed. When said property was purchased by Mabasa, there were tenants occupying the premises and who were acknowledged by him as tenants. However, one of said tenants vacated the apartment and when Mabasa went to see the premises, he saw that there had been built an adobe fence in the first passageway making it narrower in width. 130

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Atty. Jess Lopez

Said adobe fence was first constructed by Santoses along their property which is also along the first passageway. Defendant Morato constructed her adobe fence and even extended said fence in such a way that the entire passageway was enclosed. It was then that the remaining tenants of said apartment vacated the area. Defendant Santos testified that she constructed said fence because there was an incident when her daughter was dragged by a bicycle pedalled by a son of one of the tenants in said apartment along the first passageway. Mabasa filed a civil case for the grant of an easement of right of way against the Custodios, the Santoses, and Morato. A decision was rendered by the trial court, ordering Custodios and Santoses to give plaintiff permanent access — ingress and egress, to the public street and ordering the Mabasa to pay defendants Custodios and Santoses the sum of Eight Thousand Pesos (P8,000) as indemnity for the permanent use of the passageway. Plaintiff (Mabasa) represented by his heirs, herein private respondents, went to the CA raising the sole issue of whether or not the lower court erred in not awarding damages in their favor. The CA rendered its decision affirming the judgment of the trial court with modification ordering Custodios, etc to pay plaintiffs-appellants 65K as Actual Damages, 30K as Moral Damages, and 10K Pesos as Exemplary Damages. The rest of the appealed decision is affirmed to all respects. Issue: Whether or not the grant of right of way to herein Mabasa is proper and whether damages should be awarded. Held: NO. The award of damages has no substantial legal basis. A reading of the decision of the CA will show that the award of damages was based solely on the fact that the original plaintiff, Pacifico Mabasa, incurred losses in the form of unrealized rentals when the tenants vacated the leased premises by reason of the closure of the passageway. However, the mere fact that the plaintiff suffered losses does not give rise to a right to recover damages. To warrant the recovery of damages, there must be both a right of action for a legal wrong inflicted by the defendant, and damage resulting to the plaintiff therefrom. Wrong without damage, or damage without wrong, does not constitute a cause of action, since damages are merely part of the remedy allowed for the injury caused by a breach or wrong. There is a material distinction between damages and injury. INJURY is the illegal invasion of a legal right; DAMAGE is the loss, hurt, or harm which results from the injury; and DAMAGES are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. These situations are often called damnum absque injuria. In order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted from a breach of duty which the defendant owed to the plaintiff — a concurrence of injury to the plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort damages is the premise that an individual was injured in contemplation of law. Thus, there must first be the breach of some duty and the imposition of liability for that breach before damages may be awarded; it is not sufficient to state that there should be tort liability merely because the plaintiff suffered some pain and suffering. In order that the law will give redress for an act causing damage, that act must be not only hurtful, but wrongful. There must be damnum et injuria. If, as may happen in many cases, a person sustains actual damage, that is, harm or loss to his person or property, without sustaining any legal injury, that is, an act or omission which the law does not deem an injury, the damage is regarded as damnum absque injuria. In the case at bar, although there was damage, there was no legal injury. Contrary to the claim of Mabasa, petitioners could not be said to have violated the principle of abuse of right. In order that the principle of abuse of right provided in Article 21 of the Civil Code can be applied, it is essential that the following requisites concur: (1) The defendant should have acted in a manner that is contrary to morals, good customs or public policy; (2) The acts should be willful; and (3) There was damage or injury to the plaintiff. The act of petitioners in constructing a fence within their lot is a valid exercise of their right as owners. At the time of the construction of the fence, the lot was not subject to any servitudes. There was no easement of way existing in favor of Mabasa, either by law or by contract. The fact that Mabasa had no existing right over the said passageway is confirmed by the very decision of the trial court granting a compulsory right of way in their favor after payment of just compensation. It was only that decision which gave Mabasa the right to use the said passageway after payment of the compensation and imposed a corresponding duty on petitioners not to interfere in the exercise of said right. Hence, prior to said decision, petitioners had an absolute right over their property and their act of fencing and enclosing the same was an act which they may lawfully perform in the employment and exercise of said right. 131 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

5. Amonoy v. Gutierrez, G.R. No. 140420, February 15, 2001 Facts: The case had its roots in a Special Proceeding for the settlement of the estate of one Julio Cantolos re: 6 parcels of land in Tanay, Rizal. Amonoy was counsel of the heirs. A Project of Partition was submitted and approved, which Amonoy charging P27,600 as attorney‘s fees. The Pasamba and Formida then executed a deed of real estate mortgage on the 2 lots adjudicated to them to secure the payment of his fees. The estate was then closed. Said fees were not paid. Amonoy filed for foreclosure, and secured a judgment in his favor, and payment was ordered, otherwise, the lots would be foreclosed. They were, and Amonoy was the highest bidder for both. Included in those sold was the lot on which the Sp. Gutierrez had their house. The heirs tried to annul the sale, but this was dismissed. A Writ of Possession as well as an order for demolition was issued. The aggrieved parties then filed a petition with the Supreme Court. ―On a twin musiyun (Mahigpit na Musiyon Para Papanagutin Kaugnay ng Paglalapastangan) with full titles as fanciful and elongated as their Petisyung (Petisyung Makapagsuri Taglay and Pagpigil ng Utos), a temporary restraining order was granted on 2 June 1986 enjoining the demolition of the petitioners' houses.‖ The petition for Certiorari was granted, and the Writ of Possession and demolition was reversed. However, the house had already been destroyed. They thus filed a complaint for damages in connection with the same against Amonoy. The RTC dismissed it, while the CA granted damages. Hence, the present appeal. Issue: Whether or not Amonoy is liable for damages. Held: YES. LIABLE. Well-settled is the maxim that damage resulting from the legitimate exercise of a person's rights is a loss without injury — damnum absque injuria — for which the law gives no remedy. In other words, one who merely exercises one's rights does no actionable injury and cannot be held liable for damages. Amonoy invokes this legal precept in arguing that he is not liable for the demolition of respondents' house. He maintains that he was merely acting in accordance with the Writ of Demolition ordered by the RTC. We reject this submission. Damnum absque injuria finds no application to this case. True, Amonoy commenced the demolition of respondents' house on May 30, 1986 under the authority of a Writ of Demolition issued by the RTC. But the records show that a Temporary Restraining Order (TRO), enjoining the demolition of respondents' house, was issued by the Supreme Court on June 2, 1986. The CA also found, based on the Certificate of Service of the Supreme Court process server, that a copy of the TRO was served on Amonoy himself on June 4, 1986. Amonoy, however, did not heed the TRO of this Court. We agree with the CA that he unlawfully pursued the demolition of respondents' house well until the middle of 1987. This is clear from Respondent Angela Gutierrez's testimony. The foregoing disproves the claim of Amonoy that the demolition, which allegedly commenced only on May 30, 1986, was completed the following day. It likewise belies his allegation that the demolitions had already ceased when he received notice of the TRO. Although the acts of Amonoy may have been legally justified at the outsset, their continuation after the issuance of the TRO amounted to an insidious abuse of his right. Indubitably, his actions were tainted with bad faith. Had he not insisted on completing the demolition, respondents would not have suffered the loss that engendered the suit before the RTC. Verily, his acts constituted not only an abuse of a right, but an invalid exercise of a right that had been suspended when he received the TRO from this Court on June 4, 1986. By then he was no longer entitled to proceed with the demolition. ―The exercise of a right ends when the right disappears, and it disappears when it is abused, especially to the prejudice of others. The mask of a right without the spirit of justcie which gives it life, is repugnant to the modern concept of social law. It cannot be said that a person exercises a right when he unnecessarily prejudices another. Over and above the specific precepts of postive law are the supreme norms of justice; and he who violates them violates the law. For this reason it is not permissible to abuse our rights to prejudice others.‖ ―Artilce 19, known to contain what is commonly referred to as the principle of abuse of rights, sets certain standards which may be observed not only in the exercise of one's rights but also in the performance of one's duties.These standards are the following: to act with justice; to give everyone his due; recognizes the primordial limitation on all rights: that in their exercise, the norms of human conduct set forth in Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be held responsible.‖ Clearly then, the demolition of respondents' house by Amonoy, despite his receipt of the TRO, was not only an abuse but also an unlawful exercise of such right. In insisting on his alleged right, he wantonly violated this Court's Order and wittingly caused the destruction of respondents; house. 132 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Atty. Jess Lopez

Obviously, Amonoy cannot invoke damnum absque injuria, a principle premised on the valid exercise of a right. Anything less or beyond such exercise will not give rise to the legal protection that the principle accords. And when damage or prejudice to another is occasioned thereby, liability cannot be obscured, much less abated. In the ultimate analysis, Amonoy‘s liability is premised on the obligation to repair or to make whole the damage caused to another by reason of one's act or omission, whether done intentionally or negligently and whether or not punishable by law. 6. DOLE Philippines, Inc. (Stanfilco), v. Rodriguez, G.R. No. 174646, August 22, 2012 Facts: Africa is the registered owner of a banana plantation. Africa entered into a Farm Management Contract (FMC) with his Farm Manager Yuchenco for the purpose of planting and growing bananas and/or other crops and of marketing the products and fruits thereof. Yuchengco assigned his rights as farm manager to Checkered Farms, Inc. Checkered Farms entered into an Exclusive Purchasing Agreement with DOLE (Stanfilco) who bound itself to purchase all the acceptable bananas that would be produced by the former on the lot subject of the FMC. Checkered Farms on the other hand undertook to allow DOLE to introduce installations and improvements on the land and to dismantle and remove all non-permanent installations and improvements it has introduced upon the expiration of the period of the contract provided that DOLE has the option to leave them on the land without cost to Checkered Farms. Over the years, DOLE introduced on the subject parcel of land several improvements: plantation roads and canals, footbridges, irrigation pumps, pipelines, hoses, and overhead cable proppings. Checkered Farms requested for a 10-year extension of the contract due to expire: request was not acted upon by Africa. Africa ceded and assigned the 17-hectare subject land to Rodriguez as payment and in full satisfaction of the former‘s obligation to the latter. Rodriguez introduced himself to Checkered Farms as Africa‘s successor­in­interest and informed it that he was taking over complete possession and absolute control of the subject land. Rodriguez manifested his interest in DOLE‘s banana grower‘s program. Since he was interested in its corporate grower‘s contract, Rodriguez allowed DOLE to assume temporarily the continued operation and management of the banana plantation. Checkered Farms asked Rodriguez that it be allowed to operate the banana plantation until February 1992 to fully wind up the operational activities: Rodriguez denied the request. In the same letter, Rodriguez demanded for the accounting of fruits harvested from the expiration of their contract. Checkered Farms claimed that the plantation produced 382 boxes of exportable fruits equivalent to P8,564.44 and incurred expenses of P91,973.48.2 DOLE rejected Rodriguez‘s proposal for the company‘s contract growing arrangement. Instead, it offered to grant the same terms and conditions as those given to independent small growers in General Santos City. Rodriguez requested for reconsideration of the denial of his application for the company‘s contract growing arrangement and asked DOLE to desist from dismantling the improvements thereon. As no agreement was reached between DOLE and Rodriguez, the latter demanded from the former an accounting. DOLE eventually dismantled and removed the improvements in the plantation. Rodriguez sent a letter demanding the payment of the bananas harvested during the interim administration of Stanfilco and protesting the ―unwarranted and wanton destruction of the farm: Stanfilco refused to heed demand. Africa filed a Complaint for Recovery of Sum of Money and Damages against DOLE and its officials alleging that its staff, acting under the direct supervision of Epelepsia who has been working directly with the instructions of Bulaun, all performing under the administrative and operational responsibility of Murillo, stealthily, treacherously and ruthlessly raided the subject plantation destroying the facilities therein which makes them liable for damages. Africa also demanded indemnity for damages suffered from DOLE‘s act of depriving the former from using the water facilities installed in the plantation that resulted in the spoilage of Africa‘s plants. DOLE alleged that he was the owner of the irrigation system on the subject plantation. Thus, it has the right to remove them after the expiration of its contract with Africa; That it was a valid exercise of its rights as owner of the irrigation system and an exercise of the right to dismantle and remove the same under the Exclusive Purchasing Agreement with Checkered Farms. RTC rendered a Decision in favor of Africa, making DOLE solidarily liable. CA affirmed and likewise upheld Africa‘s legal standing. Hence, this petition.

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DOLE asserts that the resulting injury to Africa arose from the removal and dismantling of improvements that it undertook pursuant to the provisions of the Exclusive Purchasing Agreement with Checkered Farms is damnum absque injuria. It points out that it removed only the removable irrigation facilities refraining from exercising said legal right with respect to the drainage canals, the roads and the overhead proppings which covered the entire length of the farm. Issue: Whether or not the CA erred in not applying the legal principle of Damnum absque injuria considering that it found the removal and dismantling of the DOLE installations and improvements to be in mere discharge of a contractual right. Held: NO. It is settled that DOLE was given the right to dismantle the improvements introduced on the subject plantation as clearly provided for in its contract with Checkered Farms. On the basis of the contractual provision, DOLE insists that it cannot be held liable for damages allegedly suffered by Africa based on the principle of damnum absque injuria. The Court does not agree. Under the principle of DAMNUM ABSQUE INJURIA, the legitimate exercise of a person‘s rights, even if it causes loss to another, does not automatically result in an actionable injury. The law does not prescribe a remedy for the loss. This principle, however, DOES NOT APPLY when there is an abuse of a person‟s right as in this case. While we recognize DOLE‘s right to remove the improvements on the subject plantation, it, however, exercised such right arbitrarily, unjustly and excessively resulting in damage to Africa‘s plantation. The exercise of a right, though legal by itself, must nonetheless be in accordance with the proper norm. When the right is exercised arbitrarily, unjustly or excessively and results in damage to another, a legal wrong is committed for which the wrongdoer must be held responsible. The exercise of a right ends when the right disappears, and it disappears when it is abused, especially to the prejudice of others. Abuse of right under Article 19 sets the standards which may be observed not only in the exercise of one‟s rights but also in the performance of one‟s duties. When a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be held responsible. One is not allowed to exercise his right in a manner which would cause unnecessary prejudice to another or if he would thereby offend morals or good customs. Thus, a person should be protected only when he acts in the legitimate exercise of his right, that is when he acts with prudence and good faith; but not when he acts with negligence or abuse. In this case, evidence presented by Africa shows that as a result of the diggings made by DOLE in order to remove the pipes, banana plants were uprooted. Some of these plants in fact had fruits yet to be harvested causing loss to Africa. After the removal of said pipes, DOLE failed to restore the plantation to its original condition by its failure to cover the diggings with soil. As found by the CA, the Damage Report submitted by Angel Flores stated that there was ground destruction because diggings were done indiscriminately without concern for the standing banana plants. He even added that the destruction of the ground was extensive. The witnesses for DOLE likewise admitted that they had the responsibility to cover the diggings made but failed to do so after the pipelines had been retrieved. Witnesses and pictures also showed that indeed, banana plants were uprooted and scattered around the plantation. It is noteworthy that DOLE was given the right to remove only the improvements and facilities that were ―non­ permanent‖ instead of giving it the unqualified right to remove everything that it introduced to the plantation. Though not specifically stated in the contract, the reason for said qualification on DOLE‟s right of removal is the imperative need to protect the plantation from unnecessary destruction that may be caused by the exercise of the right. If permanent structures were allowed to be removed, damage to the plantation would not be avoided. This qualified right should have given DOLE the necessary warning to exercise its right with caution with due regard to the other structures in the plantation and most especially the banana plants and fruits therein. If it was able to consider cutting the pipes underneath the roads within the plantation so as not to destroy said roads, why did it not take into consideration the banana plants and fruits that would be destroyed by reason thereof? Africa would not have been unduly prejudiced had it waited for the bananas to be harvested before removing the pipes. Clearly, DOLE abused its right. Complementing the principle of abuse of rights are the provisions of Articles 20 and 21. The foregoing rules provide the legal bedrock for the award of damages to a party who suffers damage whenever one commits an act in violation of some legal provision, or an act which though not constituting a transgression of positive law, nevertheless violates certain rudimentary rights of the party aggrieved. ARTICLE 20 pertains to damages arising from a violation of law which does not obtain here as petitioner was perfectly within its right to remove the improvements introduced in the subject plantation. ARTICLE 21, on the other hand, refers to acts contra bonus mores. The act is within the article only when it is done willfully. The act is willful if it is done with knowledge of its injurious effect; it is not required that the act be done purposely to produce the injury. Undoubtedly, DOLE removed the pipes with knowledge of its injurious effect which is the destruction of the banana plants and fruits; and failed to cover the diggings which caused ground destruction. It should, therefore, be liable for damages. 134 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013 IV.

Atty. Jess Lopez

VICARIOUS LIABILITY -

Civil Code o Articles 2180 to 2182 (Memorize)

A.

Parents and Guardians

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Family Code (as amended by RA 6809) o Articles 219, 221, 236

1. Exconde v. Capuno, 101 Phil. 843 (1957) Facts: Dante Capuno, 15 yrs old, was a member of the Boy Scouts and a student of the Balintawak Elementary School. He attended a parade in honor of Dr . José 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. The jeep turned turtle and two of its passengers , Amado Ticzon and Isidoro Caperiña, died as a consequence. It 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. Dante Capuno was found guilty of double homicide through reckless imprudence for the death of Isidoro Caperiña and Amado Ticzon. Sabina Exconde (mother of Isidro) 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. --she reserved her right to bring separate civil action Exconde contends that Delfin Capuno (father) 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. Capuno set up the defense that if any one should be held liable for the death of Isidoro Caperiña , it should be 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. Lower court sustained the defense and only Dante Capuno was required to pay the damages. Plaintiff appealed to CA but the case was certified to SC (only involves questions of law). Issue: Whether Delfin Capuno (father) 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 . Held: YES. Father is held vicariously liable. Delfin Capuno and Dante Capuno are jointly and severally liable for the damages. Head of school/school not liable It is true that under the law, "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. Dante Capuno was then a student of the Balintawak Elementary School and as part of his extra-curricular activity, he attended the parade in honor of Dr . José 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 institution of arts and trades as provided for by law. Father liable 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. It is a 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". 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. The defendants failed to prove this.

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Atty. Jess Lopez

REYES, J. B. L., J., dissenting: There is no sound reason for limiting Art. 1903 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? The words "arts and trades" in Art. 1903 does not qualify "teachers" but only "heads of establishments". 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. There is no question that the pupil, Dante Capuno, was instructed by the City School Supervisor to attend the Rizal parade. 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. 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. Having proved that he entrusted 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. 2. Tamargo v. Court of Appeals, 209 SCRA 518 (1992) Facts: Adelberto Bundoc, a minor of 10 years of age shot Jennifer Tamargo with an air rifle killing her. The adoptive parent and natural parents of Tamargo filed a complaint for damages against the parents of Bundoc. Prior to the incident, the spouses Rapisura filed a petition to adopt Adelberto Bundoc. The same was granted after the incident. Respondents Bundoc alleged that because of the adoption proceedings, they were not indispensable parties to the case, and that the adopting parents (Sps. Rapisura) were indispensable parties to the action since parental authority had shifted to the adopting parents from the moment the successful petition for adoption was filed. Tamargo meanwhile countered that since Adelberto Bundoc was then actually living with his natural parents, parental authority had not ceased nor been relinquished by the mere filing and granting of a petition for adoption. Issue: Whether Sps. Bundoc are indispensible parties to the case. Held: YES. Adelberto Bundoc's voluntary act of shooting Jennifer Tamargo with an air rifle gave rise to a cause of action on quasi-delict against him under Art. 2176. Upon the other hand, the law imposes civil liability upon the father and, in case of his death or incapacity, the mother, for any damages that may be caused by a minor child who lives with them. Article 2180 of the Civil Code reads: This principle of parental liability is a species of what is frequently designated as vicarious liability, or the doctrine of "imputed negligence" under Anglo-American tort law, where a person is not only liable for torts committed by himself, but also for torts committed by others with whom he has a certain relationship and for whom he is responsible. Thus, parental liability is made a natural or logical consequence of the duties and responsibilities of parents — their parental authority — which includes the instructing, controlling and disciplining of the child. The civil liability imposed upon parents for the torts of their minor children living with them, may be seen to be based upon the parental authority vested by the Civil Code upon such parents. The civil law assumes that when an unemancipated child living with its parents commits a tortious acts, the parents were negligent in the performance of their legal and natural duty closely to supervise the child who is in their custody and control. Parental liability is, in other words, anchored upon parental authority coupled with presumed parental dereliction in the discharge of the duties accompanying such authority. The parental dereliction is, of course, only presumed and the presumption can be overturned under Article 2180 of the Civil Code by proof that the parents had exercised all the diligence of a good father of a family to prevent the damage. The respondent‘s argument that the decree of adoption that was issued in favor of the Rapisura spouses vested parental authority to them as of the time of the filing of the petition for adoption (before Bundoc shot Tamargo) is unavailing. Under the Civil Code, the basis of parental liability for the torts of a minor child is the relationship existing between the parents and the minor child living with them and over whom, the law presumes, the parents exercise supervision and control. Article 58 of the Child and Youth Welfare Code, re-enacted this rule: 136 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Article 58 Torts — Parents and guardians are responsible for the damage caused by the child under their parental authority in accordance with the civil Code. Article 221 of the Family Code has similarly insisted upon the requisite that the child, doer of the tortious act, shall have beer in the actual custody of the parents sought to be held liable for the ensuing damage: Art. 221. Parents and other persons exercising parental authority shall be civilly liable for the injuries and damages caused by the acts or omissions of their unemancipated children living in their company and under their parental authority subject to the appropriate defenses provided by law. (Emphasis supplied) The court do not believe that parental authority is properly regarded as having been retroactively transferred to and vested in the adopting parents, the Rapisura spouses, at the time the air rifle shooting happened. The court does not consider that retroactive effect may be given to the decree of adoption so as to impose a liability upon the adopting parents accruing at a time when adopting parents had no actual or physically custody over the adopted child. Retroactive affect may perhaps be given to the granting of the petition for adoption where such is essential to permit the accrual of some benefit or advantage in favor of the adopted child. In the instant case, however, to hold that parental authority had been retroactively lodged in the Rapisura spouses so as to burden them with liability for a tortious act that they could not have foreseen and which they could not have prevented (since they were at the time in the United States and had no physical custody over the child Adelberto) would be unfair and unconscionable. Such a result, moreover, would be inconsistent with the philosophical and policy basis underlying the doctrine of vicarious liability. Put a little differently, no presumption of parental dereliction on the part of the adopting parents, the Rapisura spouses, could have arisen since Adelberto was not in fact subject to their control at the time the tort was committed. 3. Libi v. Intermediate Appellate Court, 214 SCRA 16 (1992) Facts: Two years before their deaths, Julie Gotiong & Wendel Libi were sweethearts. On December 1978, Julie broke up with Wendell (ganun talaga eh) after she supposedly found him to be sadistic and irresponsible. During the first 2 weeks of January 1979 (still within the 3 Month Rule), Wendel kept pestering Julie with demands for reconciliation but the latter persisted in her refusal. This prompted Wendel to resort to threats against her. To avoid him, Julie stayed with her best friend from Jan 7-13. On Jan 14, the lovers were found dead inside the Gotiong residence in Cebu. Each died from a single gunshot wound from the same firearm, a Smith and Wesson revolver licensed under Cresencio Libi‘s (father) name, which was also recovered in the crime scene. No witnesses to the incident. Sps Gotiong alleged that Wendel killed Julie and then shot himself. Sps. Libi rejected this and claimed that an unknown party whom Wendel may have displeased or antagonized by reason of his work as a narcotics informer of the Constabulary Anti-Narcotics Unit (CANU) killed the two. Sps. Gotiong, as Julie‘s parents, filed a Civil Case against Wendel‘s parents to recover damages arising from the latter‘s vicarious liability under Art. 2180. Trial court dismissed. On appeal, IAC reversed and adjudged Sps. Lubi subsidiarily liable. Issue: Whether Art. 2180 was correctly interpreted to make Sps. Libi liable for vicarious liability. Held: Conclusion was correct but the liability imposed was wrong. (Not really important but in case he asks: Libi‘s contention that an unknown party killed them both was found to be unavailing. FIRST, the fact that they could not find gun powder residue (as seen in the negative paraffin test) in the Wendel‘s wound does not automatically rule out suicide. This is because, within 8 hours after the killing, the bodies were already brought to the Cosmopolitan Funeral Homes and dried. Also, there was a possibility that smokeless powder was used which would thus not produce any gunpowder when subjected to a paraffin test. SECOND, the testimony of Libi‘s witnesses that they saw a ―shadow‖ of the supposed killer a few moments after the incident was rebutted by the testimony of one Manolo Alfonso. Manolo and his sister Malou were waiting for Julie when they heard her scream. Thus, Manolo climbed the fence to see what happened. When he heard the first gunshot, another one rang out 5 seconds later. Manolo explains that the ―shadow‖ the other witnesses saw was actually him and not the unknown killer.) As a defense, Sps Libi claimed they execised the diligence of a good father of a family. The diligence of a good father of a family required by law in a parent and child relationship consists, to a large extent, of the instruction and supervision of the child. However, it was established that Cresencio owned the gun in question which he kept in a locked safety deposit box in a drawer inside their room. Each spouse had a key and the wife‘s key was always in her bag. All these were known to Wendel. While it was never seen that Wendel ever used the gun, his mother admitted that on the night of the incident, 137 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Petitioners were gravely remiss in their duties as parents in not diligently supervising the activities of their son, despite his minority and immaturity, so much so that it was only at the time of Wendell‘s death that they allegedly discovered that he was a CANU agent and that Cresencio‘s gun was missing from the safety deposit box. Both parents were sadly wanting in their duty and responsibility in monitoring and knowing the activities of their children who, for all they know, may be engaged in dangerous work such as being drug informers, or even drug users. Neither was a plausible explanation given for the photograph of Wendell, with a handwritten dedication to Julie Ann at the back thereof, holding upright what clearly appears as a revolver and on how or why he was in possession of that firearm. Petitioners should be held liable for the civil liability based on what appears from all indications was a crime committed by their minor son. Now, we do not have any objection to the doctrinal rule holding the parents liable, but the categorization of their liability as being subsidiary, and not primary, in nature requires a hard second look considering previous decisions of this court on the matter which warrant comparative analyses. If the liability of the parents for crimes or quasi-delicts of their minor children is subsidiary, then the parents can neither invoke nor be absolved of civil liability on the defense that they acted with the diligence of a good father of a family to prevent damages. On the other hand, if such liability imputed to the parents is considered direct and primary, that diligence would constitute a valid and substantial defense. We believe that the civil liability of parents for quasi delicts of their minor children, as contemplated in Article 2180, is primary and not subsidiary. In fact, if we apply Article 2194 of said code which provides for solidary liability of joint tortfeasors, the persons responsible for the act or omission, in this case the minor and the father and, in case of his death or incapacity, the mother, are solidarily liable. Accordingly, such parental liability is primary and not subsidiary, hence the last paragraph of Article 2180 provides that ―(t)he 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.‖ We are also persuaded that the liability of the parents for felonies committed by their minor children is likewise primary, not subsidiary. Just like the rule in Article 2180, the civil liability of the parents for crimes committed by their minor children is likewise direct and primary, and also subject to the defense of lack of fault or negligence on their part, that is, the exercise of the diligence of a good father of a family. To hold that the civil liability under Article 2180 would apply only to quasi-delicts and not to criminal offenses would result in the absurdity that in an act involving mere negligence the parents would be liable but not where the damage is caused with criminal intent In Exconde, where the 15-year old minor was convicted of double homicide through reckless imprudence, in a separate civil action arising from the crime the minor and his father were held jointly and severally liable for failure of the latter to prove the diligence of a good father of a family. The same liability in solidum and, therefore, primary liability was imposed in a separate civil action in Araneta on the parents and their 14-year old son who was found guilty of frustrated homicide, but on the authority of Article 2194. However, in Salen, the father was declared subsidiarily liable for damages arising from the conviction of his son, who was over 15 but less than 18 years of age, by applying Article 2180 but, this time, disregarding Article 2194 of the Civil Code. Under Article 2180, the enforcement of such liability shall be effected against the father and, in case of his death or incapacity, the mother. This was amplified by the Child and Youth Welfare Code which provides that the same shall devolve upon the father and, in case of his death or incapacity, upon the mother or, in case of her death or incapacity, upon the guardian, but the liability may also be voluntarily assumed by a relative or family friend of the youthful offender. However, under the Family Code, this civil liability is now, without such alternative qualification, the responsibility of the parents and those who exercise parental authority over the minor offender. For civil liability arising from quasi-delicts committed by minors, the same rules shall apply in accordance with Articles 2180 and 2182 of the Civil Code, as so modified. In the case at bar, whether the death of the hapless Julie Ann Gotiong was caused by a felony or a quasi-delict committed by Wendell Libi, respondent court did not err in holding petitioners liable for damages arising therefrom. B.

Owners and Managers of Enterprises/Employers

1. Bahia v. Litonjua, 30 Phil. 624 (1915) Facts: This is an action to recover damages from the defendants for the death of plaintiff‘s daughter alleged to have been caused by the negligence of defendant‘s servant in driving an automobile over the child and causing her death. Ramon Ramirez was the owner and manager of a garage in the city of Manila known as the International Garage. His mother, the Fausta Litonjua, sometime before the accident from which this action springs, purchased an automobile and 138 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

turned it over to the garage to assist her son in the business in which he was engaged. On the 14th of May, 1911, Ramirez rented the said automobile to the defendant Mariano Leynes, together with a chauffeur and a machinist, to be used by him for a short time to carry persons living in Balayan to and from the fiesta which was about to take place in Tuy. According to the arrangement between them, Ramires was to furnish the automobile, chauffeur, and machinist, and the defendant Leynes was to pay him therefor P20 a day. On the 16th of May, 1911, while passing from Balayan to Tuy, the automobile, by reason of a defect in the steering gear, refused to obey the direction of the driver in turning a corner in the streets of Balayan, and, as a consequence, ran across the street and into the wall of a house against which the daughter of plaintiff was leaning at the time. The font of the machine struck the child in the center of the body and crushed her to death. The action was brought against the mother of Ramirez, who bought the automobile, and Leynes, under whose direction and control the automobile was being operated at the time of the accident. Ramirez was not made a party. LC held: Litonjua is not liable, Leynes is liable. Issue: Whether or not Leynes, the lessee of the vehicle, is liable under Art. 2180. Held: NO. While it may be said that, at the time of the accident, the chauffeur who was driving the machine was a servant of Leynes, in as much as the profits derived from the trips of the automobile belonged to him and the automobile was operated under his direction, nevertheless, this fact is not conclusive in making him responsible for the negligence of the chauffeur or for defects in the automobile itself. Article 1903 of the Civil Code not only establishes liability in cases of negligence, but also provides when that liability shall cease. It says: The liability referred to in this article shall cease when the persons mentioned therein prove that they employed all the diligence of a good father of a family to avoid the damages. From this article two things are apparent: (1) That when an injury is caused by the negligence of a servant or employee there instantly arises a presumption of a law that there was negligence on the part of the master or employer either in the selection of the servant or employee, or in supervision over him after the selection, or both; and (2) that presumption is juris tantum and not juris et de jure, and consequently, may be rebutted. It follows necessarily that if the employees shows to the satisfaction of the court that in selection and supervision he has exercised the care and diligence of a good father of a family, the presumption is overcome and he is relieved from liability. This theory bases the responsibility of the master ultimately on his own negligence and not on that of his servant. This is the notable peculiarly of the Spanish law negligence. It is, of course, in striking contrast to the American doctrine that, in relations with strangers, the negligence of the servant is conclusively the negligence of the master. In the case before us the death of the child caused by a defect in the steering gear of the automobile immediately raised the presumption that Leynes was negligent in selecting a defective automobile or in his failure to maintain it in good condition after selection, and the burden of proof was on him to show that he had exercised the care of a good father of a family. As to SELECTION, Leynes has clearly shown that he exercised the care and diligence of a good father of a family. He obtained the machine from a reputable garage and it was, so far as appeared, in good condition. The workmen were likewise selected from a standard garage, were duly licensed by the Government in their particular calling, and apparently thoroughly competent. The machine had been used but a few hours when the accident occurred and it is clear from the evidence that the defendant had no notice, either actual or constructive, of the defective condition of the steering gear. From the commencement of the use of the machine until the accident occurred sufficient time had not elapsed to require an examination of the machine by the defendant as a part of his duty of inspection and supervision. While it does not appear that Leynes formulated rules and regulations for the guidance of the drivers and gave them proper instructions, designed for the protection of the public and the passengers, the evidence shows, as we have seen, that the death of the child was not caused by a failure to promulgate rules and regulations. It was caused by a defect in the machine as to which Leynes has shown himself free from responsibility. Leynes having shown to the satisfaction of the court that he exercised the care and diligence of a good father of a family is relieved of responsibility with respect to the death of plaintiff‘s child. 2. Philippine Rabbit Bus Lines, Inc., v. Phil-American Forwarders, Inc., G.R. No. L-25142, March 25, 1975 Facts: Philippine Rabbit Bus Lines (PRBL) and Pangalangan filed a complaint for damages against Phil-American Forwarders (―PAF‖), Balingit, and Pineda. They alleged that on November 24, 1962, Pineda recklessly drove a PAF freight truck along the national highway at Pampanga. It bumped PRBL‘s bus, driven by Pangalangan, and he suffered injuries. The bus was disabled for 79 days. Balingit was PAF‟s manager. 139

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Torts & Damages 2013

Atty. Jess Lopez

Balingit filed a motion to dismiss the complaint against him for lack of cause of action, as he was not Pineda‘s employer. The CFI granted dismissal; hence, this appeal. Issue: Whether or not the terms ―employers‖ and ―owners and managers of an establishment or enterprises‖ in Article 2180 include the manager of a corporation. Held: NO. 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. (Side Issue) 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. Affirmed. 3. Martin v. Court of Appeals, 205 SCRA 591 (1992) Facts: At around 2AM in the morning, a private car owned by Ernesto Martin, while being driven by Nestor Martin, it crashed into a Meralco electric post. The car was wrecked and the pole severely damaged. Meralco sued Ernesto for damages in the RTC of Pasig, as the employer of Nestor Martin. The RTC decision held in favor of the plaintiff, which was affirmed by the CA. Issue: Whether the employer of the driver is liable. Held: The complaint for damages was filed by MERALCO against only Ernesto Martin as alleged employer of Nestor Martin, the driver of the car at the time of the accident. Nestor Martin (driver) was not impleaded. The action was based on tort under Article 2180, providing in part that: ―Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.‖ The above rule is applicable only if there is an employer-employee relationship although it is not necessary that the employer be engaged in any business or industry. It differs in this sense from Article 103 of the RPC, which requires that the employer be engaged in an industry to be subsidiarily liable for the felony committed by his employee in the course of his employment. Whether or not engaged in any business or industry, the employer under Article 2180 is liable for the torts committed by his employees within the scope of their assigned task. But it is necessary first to establish the employment relationship. Once this is done, the plaintiff must show, to hold the employer liable, that the employee was acting within the scope of his assigned task when the tort complained of was committed. It is only then that the defendant, as employer, may find it necessary to interpose the defense of due diligence in the selection and supervision of the employee as allowed in that article. In the case at bar, no evidence whatsoever was adduced by the MERALCO to show that the Ernesto was the employer of Nestor Martin at the time of the accident. The trial court merely presumed the existence of the employer-employee relationship and held that the MERALCO had not refuted that presumption. It noted that although the defendant alleged that he was not Nestor Martin's employer, "he did not present any proof to substantiate his allegation." A presumption is defined as an inference as to the existence of a fact not actually known, arising from its usual connection with another which is known, or a conjecture based on past experience as to what course human affairs ordinarily take. It is either a presumption juris, or of law, or a presumption hominis, or of fact. There is no law directing the deduction made by the courts below from the particular facts presented to them by the parties. Such deduction is not among the conclusive presumptions under Section 2 or the disputable presumptions under Section 3 of Rule 131 of the Rules of Court. In other words, it is not a presumption juris. Neither is it a presumption hominis, which is a reasonable deduction from the facts proved without an express direction of law to that effect. The facts proved, or not denied, viz., the ownership of the car and the circumstances of the accident, are not enough bases for the inference that the 140 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

petitioner is the employer of Nestor Martin. Most male persons know how to drive and do not have to employ others to drive for them unless this is needed for business reasons. Many cannot afford this luxury, and even if they could, may consider it an unnecessary expense and inconvenience. In the present case, the more plausible assumption is that Nestor Martin is a close relative of Ernesto Martin and on the date in question borrowed the car for some private purpose. Nestor would probably not have been accommodated if he were a mere employee for employees do not usually enjoy the use of their employer's car at 2AM. As the employment relationship between Ernesto Martin and Nestor Martin could not be presumed, it was necessary for the MERALCO to establish it by evidence. It was enough for the Martin to deny the alleged employment relationship, without more, for he was not under obligation to prove this negative averment. The above observations make it unnecessary to examine the question of the driver's alleged negligence or the lack of diligence on the part of the Martin in the selection and supervision of his employee. 4. St. Francis High School v. Court of Appeals, G.R. No. 82465, February 25, 1991 Facts: Ferdinand Castillo, 13, a freshman student of Section 1-C at St. Francis wanted to join a school picnic by 1-B and 1-C at Talaan Beach, Quezon. His parents did not allow him to join due to short notice. However, they did allow him to bring food to the teachers with the directive that he should go back home after so doing. The teachers, however, persuaded him to go to the beach. While they were in the water, one of the female teachers was apparently drowning. Ferdinand attempted to come to her rescue, but he drowned. He could not be resuscitated. His parents then filed a complaint against the school and the teachers, alleging their failure to exercise the proper diligence of a good father of a family in preventing Ferdie‘s drowning. The RTC held the teachers solidarily liable, but absolved the school of liability for lack of evidence to show that the picnic was school-sanctioned. The verbal precautions were insufficient; they did not even test the depth of the water; two other persons drowned; the male supervisors were somewhere ―having a drinking spree‖. It also held liable two teachers who arrived after the drowning. The CA, however, found the school liable, since ―it cannot be gainsaid that the same was held under the supervision of the teachers employed by the said school‖. It absolved the two latecomers since they were attending to an entrance exam as part of their duties and had no participation in the negligence of the others. It also held that the matter of permission on the part of the parents is irrelevant to the determination of negligent behavior. Issue: Whether or not there was negligence attributable to the defendant pursuant to Art. 2180 in relation to Art 2176. Held: NOT LIABLE. If at all petitioners are liable for SFHS, this is because of their own negligence or the negligence of people under them. In the instant case however, as will be shown hereunder, SFHS are neither guilty of their own negligence nor guilty of the negligence of those under them. At the outset, it should be noted that parents of the victim Ferdinand allowed their son to join the excursion. Testimony of Dr. Castillo on cross exam. by Atty. Flores Q Now, when your son asked you for money to buy food, did you not ask him where he will bring this? A I asked him where he was going, he answered, I am going to the picnic, and when I asked him where, he did not answer, sir. Q And after giving the money, you did not tell him anything more? A No more, sir. Q And after that you just learned that your son join the picnic? A Yes, sir. Q And you came to know of it after the news that your son was drowned in the picnic came to you, is that correct? A Yes, sir. Q From 8:00 o'clock in the morning up to 12:00 o'clock noon of March 20, 1982, you did not know that your son join the picnic? A No, sir, I did not know. Q Did you not look for your son during that time? A I am too busy with my profession, that is why I was not able, sir. Q You did not ask your wife? A I did not, sir. Q And neither did your wife tell you that your son join the picnic? A Later on after 12:00, sir. 141

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Q And during that time you were too busy that you did not inquire whether your son have joined that picnic? A Yes, sir. (TSN, pp. 16-17, hearing of April 2, 1984 witness Romulo Castillo) The fact that he gave money to his son to buy food for the picnic even without knowing where it will be held, is a sign of consent for his son to join the same. Furthermore. Testimony of Dr. Lazaro on cross examination: Q How did you conduct this mental and physical examination? A I have interviewed several persons and the patient herself She even felt guilty about the death of her son because she cooked adobo for him so he could join the excursion where her son died of drowning. Q Why were you able to say she was feeling guilty because she was the one who personally cooked the adobo for her son? A It was during the interview that I had gathered it from the patient herself. She was very sorry had she not allowed her son to join the excursion her son would have not drowned. I don't know if she actually permitted her son although she said she cooked adobo so he could join. (Emphasis Supplied) (TSN, p. 19, hearing of April 30, 1984, Dr. Lazaro — witness). CA committed an error in applying Article 2180 of the Civil Code in rendering SFHS liable for the death of respondent's son. Article 2180, par. 4 states that: 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. Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry. Under this paragraph, it is clear that before an employer may be held liable for the negligence of his employee, the act or omission which caused damage or prejudice must have occurred while an employee was in the performance of his assigned tasks. In the case at bar, the teachers were not in the actual performance of their assigned tasks. The incident happened not within the school premises, not on a school day and most importantly while the teachers and students were holding a purely private affair, a picnic. It is clear from the beginning that the incident happened while some members of the I-C class of St. Francis High School were having a picnic at Talaan Beach. This picnic had no permit from the school head or its principal, Benjamin Illumin because this picnic is not a school sanctioned activity neither is it considered as an extra-curricular activity. As earlier pointed out by the trial court, mere knowledge by petitioner/principal Illumin of the planning of the picnic by the students and their teachers does not in any way or in any manner show acquiescence or consent to the holding of the same. The application therefore of Article 2180 has no basis in law and neither is it supported by any jurisprudence. If we were to affirm the findings of CAt on this score, employers would forever be exposed to the risk and danger of being hailed to Court to answer for the misdeeds or omissions of the employees even if such act or omission he committed while they are not in the performance of their duties. Finally, no negligence could be attributable to the teachers to warrant the award of damages to the respondents-spouses. Petitioners Connie Arquio the class adviser of I-C, the section where Ferdinand belonged, did her best and exercised diligence of a good father of a family to prevent any untoward incident or damages to all the students who joined the picnic. In fact, Connie invited co-petitioners Tirso de Chavez and Luisito Vinas who are both P.E. instructors and scout masters who have knowledge in First Aid application and swimming. Moreover, even respondents' witness, Segundo Vinas, testified that "the defendants (petitioners herein) had life savers especially brought by the defendants in case of emergency." (p. 85, Rollo) The records also show that both petitioners Chavez and Vinas did all what is humanly possible to save the child. Testimony of Luisito Vinas on cross examination, Q And when you saw the boy, Ferdinand Castillo, you approached the boy and claim also having applied first aid on him? A Yes, sir. 142

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Torts & Damages 2013

Atty. Jess Lopez

Q And while you were applying the so called first aid, the children were covering you up or were surrounding you? A Yes, sir. Q You were rattled at that time, is it not? A No, sir. Q You mean you were in calm and peaceful condition? A Yes, sir. Q Despite the fact that the boy was no longer responding to your application of first aid? A Yes, sir. Q You have never been disturbed, "nababahala" in the process of your application of the first aid on the body of Ferdinand Castillo? A No, sir, because we were attending to the application of first aid that we were doing, sir. Q After you have applied back to back pressure and which you claimed the boy did not respond, were you not disturb anyway? A I was disturbed during that time, sir. Q For how many minutes have you applied the back to back pressure? A From 9 to 11 times, sir. Q You mean 9 to 11 times of having applied the pressure of your body on the body of Ferdinand Castillo? A Yes, sir. Q Will you please describe how you applied a single act of back to back pressure? A This has been done by placing the boy lay first downwards, then the face was a little bit facing right and doing it by massaging the back of the child, sir." (TSN, pp. 32-35, hearing of July 30, 1984) Testimony of Tirso de Chavez on direct examination ATTY. FLORES: Q Who actually applied the first aid or artificial respiration to the child? A Myself, sir. Q How did you apply the first aid to the guy? A The first step that I took, with the help of Mr. Luisito Vinas, was I applied back to back pressure and took notice of the condition of the child. We placed the feet in a higher position, that of the head of the child, sir. Q After you have placed the boy in that particular position, where the feet were on a higher level than that of the head, what did you do next? A The first thing that we did, particularly myself, was that after putting the child in that position, I applied the back to back pressure and started to massage from the waistline up, but I noticed that the boy was not responding, sir. Q For how long did you apply this back to back pressure on the boy? A About 10 seconds, sir. Q What about Mr. Vinas? A Almost the same a little longer, for 15 seconds, sir. Q After you noticed that the boy was not responding, what did you do? A When we noticed that the boy was not responding, we changed the position of the boy by placing the child facing upwards laying on the sand then we applied the mouth to mouth resuscitation, sir. (pp. 92-93, Rollo) With these facts in mind, no moral nor exemplary damages may be awarded in favor of respondentsspouses. The case at bar does not fall under any of the grounds to grant moral damages. DISSENT, Padilla, J. In my opinion, the record clearly shows negligence on the part of the teachers, with the exception of Aragones and Jaro. I may concede, albeit with reservation, that the aforementioned petitioners may not have been negligent in finding ways and means to revive the young Castillo AFTER the drowning incident. Their application of first-aid measures may have failed to revive him but the petitioners had fully exhausted their efforts to save the deceased. This concession, however, is given with hesitation, for there is indication in the record that peti tioners may have tarried too long in securing immediate medical attention for the deceased. All this aside, I am really disturbed about, and would like to emphasize the demonstrated lack of diligence on the part of the petitioners-teachers BEFORE the unfortunate incident took place. Despite awareness that the waters in the area were deep, petitioners-teachers did not take concrete steps to make sure their wards did not stray too far and too deeply. Even if they were not actually informed of the possible dangers which the area posed, petitioners-teachers should have first “tested the waters”, so to speak, to ensure which parts thereof were safe for swimming purposes.

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Atty. Jess Lopez

However, this was not the case for as testified to by petitioner de Chavez, ―they admitted that they did not even go to the water to check its depth although they were aware that some parts of it were deep.‖ At best, it appears that only oral safety instructions were imparted to the young excursionists. It thus appears that the petitioners-teachers failed to exercise the proper diligence or what I may refer to as DILIGENCE BEFORE THE FACT. As earlier mentioned, the steps taken to revive the deceased may be considered adequate, despite my reservations, but the over-all lack of diligence on the part of petitioners-teachers suffices to put them within the standards set by this Court in determining the existence of negligence. 5. Castilex Industrial Corporation v. Vasquez, 321 SCRA 393 (1999)  Supra Doctrine: The negligence of ABAD is not an issue at this instance. CASTILEX presumes said negligence but claims that it is not vicariously liable for the injuries and subsequent death caused by ABAD. CASTILEX contends that the 5th paragraph of Article 2180 should only apply to instances where the employer is not engaged in business or industry. Since it is engaged in the business of manufacturing and selling furniture it is therefore not covered by said provision. Instead, the 4th paragraph should apply. CASTILEX‘s interpretation of the 5th paragraph is not accurate. The phrase ―even though the former are not engaged in any business or industry‖ found in the 5th paragraph should be interpreted to mean that it is not necessary for the employer to be engaged in any business or industry to be liable for the negligence of his employee who is acting within the scope of his assigned task. A distinction must be made between the 2 provisions to determine what is applicable. Both provisions apply to employers: the 4th PAR, to owners and managers of an establishment or enterprise; and the 5th PAR, to employers in general, whether or not engaged in any business or industry. The 4th PAR. covers negligent acts of employees committed either in the service of the branches or on the occasion of their functions, while the 5th PAR encompasses negligent acts of employees acting within the scope of their assigned task. The latter is an expansion of the former in both employer coverage and acts included. Negligent acts of employees, whether or not the employer is engaged in a business or industry, are covered so long as they were acting within the scope of their assigned task, even though committed neither in the service of the branches nor on the occasion of their functions. For, admittedly, employees oftentimes wear different hats. They perform functions which are beyond their office, title or designation but which, nevertheless, are still within the call of duty. This court has applied the 5th par. to cases where the employer was engaged in a business or industry such as truck operators and banks. The CA cannot, therefore, be faulted in applying the said paragraph of Article 2180 to this case. It is undisputed that ABAD was a Production Manager of CASTILEX at the time of the tort occurrence. As to whether he was acting within the scope of his assigned task is a question of fact, which the court a quo and the CA resolved in the affirmative. It was enough for CASTILEX to deny that ABAD was acting within the scope of his duties; it was not under obligation to prove this negative averment. ABAD, who was presented as a hostile witness, testified that at the time of the incident, he was driving a companyissued vehicle, registered under the name of CASTILEX. He was then leaving the restaurant where he had some snacks and had a chat with his friends after having done overtime work for the petitioner. However, the mere fact that ABAD was using a service vehicle at the time of the injurious incident is not of itself sufficient to charge CASTILEX with liability for the negligent operation of said vehicle unless it appears that he was operating the vehicle within the course or scope of his employment. The following are principles in American Jurisprudence on the employer‘s liability for the injuries inflicted by the negligence of an employee in the use of an employer‘s motor vehicle: USE OF VEHICLE GOING TO or FROM MEALS: It has been held that an employee who uses his employer‘s vehicle in going from his work to a place where he intends to eat or in returning to work from a meal is not ordinarily acting within the scope of his employment in the absence of evidence of some special business benefit to the employer. Evidence that by using the employer‘s vehicle to go to and from meals, an employee is enabled to reduce his time-off and so devote more time to the performance of his duties supports the finding that an employee is acting within the scope of his employment while so driving the vehicle. USE OF VEHICLE GOING TO or FROM WORK: In the same vein, traveling to and from the place of work is ordinarily a personal problem or concern of the employee, and not a part of his services to his employer. Hence, in the absence of some special benefit to the employer other than the mere performance of the services available at the place where he is needed, the employee is not acting within the scope of his employment even though he uses his employer‘s motor vehicle. The employer may, however, be liable where he derives some special benefit from having the employee drive home in the employer‘s vehicle as when the employer benefits from having the employee at work earlier and, presumably, 144

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Torts & Damages 2013

Atty. Jess Lopez

spending more time at his actual duties. Where the employee‘s duties require him to circulate in a general area with no fixed place or hours of work, or to go to and from his home to various outside places of work, and his employer furnishes him with a vehicle to use in his work, the courts have frequently applied what has been called the ―special errand‖ or ―roving commission‖ rule, under which it can be found that the employee continues in the service of his employer until he actually reaches home. However, even if the employee be deemed to be acting within the scope of his employment in going to or from work in his employer‘s vehicle, the employer is not liable for his negligence where at the time of the accident, the employee has left the direct route to his work or back home and is pursuing a personal errand of his own. USE OF VEHICLE OUTSIDE REGULAR WORKING HOURS: An employer who loans his motor vehicle to an employee for the latter‘s personal use outside of regular working hours is generally not liable for the employee‘s negligent operation of the vehicle during the period of permissive use, even where the employer contemplates that a regularly assigned motor vehicle will be used by the employee for personal as well as business purposes and there is some incidental benefit to the employer. Even where the employee‘s personal purpose in using the vehicle has been accomplished and he has started the return trip to his house where the vehicle is normally kept, it has been held that he has not resumed his employment, and the employer is not liable for the employee‘s negligent operation of the vehicle during the return trip. The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based on the doctrine of respondeat superior, not on the principle of bonus pater familias as in ours. Whether the fault or negligence of the employee is conclusive on his employer as in American law or jurisprudence, or merely gives rise to the presumption juris tantum of negligence on the part of the employer as in ours, it is indispensable that the employee was acting in his employer‘s business or within the scope of his assigned task. In the case at bar, it is undisputed that ABAD did some overtime work at the CASTILEX‘s office, which was located in Mandaue City. Thereafter, he went to Goldie‘s Restaurant in Fuente Osmeña, Cebu City, which is about 7 km away from his place of business. A witness for the Vasquez, a sidewalk vendor, testified that Fuente Osmeña is a ―lively place‖ even at dawn because Goldie‘s Restaurant and Back Street were still open and people were drinking thereat. Moreover, prostitutes, pimps, and drug addicts littered the place. At the Goldie‘s Restaurant, ABAD took some snacks and had a chat with friends. It was when ABAD was leaving the restaurant that the incident in question occurred. That same witness for the respondents testified that at the time of the vehicular accident, ABAD was with a woman in his car, who then shouted: ―Daddy, Daddy!‖ This woman could not have been ABAD‘s daughter, for ABAD was only 29 years old at the time. To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a personal purpose line with his duties at the time he figured in a vehicular accident. It was then about 2:00 a.m. of 28 August 1988, way beyond the normal working hours. ABAD‘s working day had ended; his overtime work had already been completed. His being at a place which, as petitioner put it, was known as a ―haven for prostitutes, pimps, and drug pushers and addicts,‖ had no connection to CASTILEX‘s business; neither had it any relation to his duties as a manager. Rather, using his service vehicle even for personal purposes was a form of a fringe benefit or one of the perks attached to his position. Since there is paucity of evidence that ABAD was acting within the scope of the functions entrusted to him, CASTILEX had no duty to show that it exercised the diligence of a good father of a family in providing ABAD with a service vehicle. Thus, justice and equity require that petitioner be relieved of vicarious liability for the consequences of the negligence of ABAD in driving its vehicle. 6. Mercury Drug Corporation v. Huang, G.R. No. 172122, June 22, 2007 Facts: Mercury Drug is the registered owner of a 6-wheeler 1990 Mitsubishi Truck. It has in its employ petitioner Rolando J. del Rosario as driver. Spouses Richard and Carmen Huang are the parents of respondent Stephen Huang and own the red 1991 Toyota Corolla GLI Sedan. Both vehicles figured in an accident in Taguig. Stephen Huang was driving the car, weighing 1,450 kg., while 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. 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, 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. Stephen Huang was 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 Mercury Drug for failing to exercise the diligence of a good father of a family in the selection and supervision of its driver.

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Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Mercury Drug claims that it exercised due diligence of a good father of a family in the selection and supervision of all its employees. Trial court found Mercury Drug and Del Rosario jointly and severally liable. CA affirmed. Issue: Whether Mercury & Del Rosario are solidarily liable. Held: YES. Driver‘s negligence 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 Stephen Huang‘s car, at its right, which bumped the right front side of the truck. The court took note of the testimony of Dr. Marlon Rosendo H. Daza, an expert in the field of physics. Given that 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 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. 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 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. 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. 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. The evidence proves petitioner Del Rosario‘s negligence as the direct and proximate cause of the injuries suffered by respondent Stephen Huang. Mercury Drug‘s liability The liability of the employer under Art. 2180 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. To be relieved of liability, 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. 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. Mercury Drug presented testimonial evidence on its hiring procedure. According to the Recruitment and Training Manager of Mercury Drug, applicants are required to take theoretical and actual driving tests, and psychological examination In the case of Del Rosario, however, it was 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. It was also admitted that Del Rosario used a Galant which is a light vehicle, instead of a truck during the driving tests. 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 and the only seminar he attended before the accident, which occurred in 1996, was held twelve years ago in 1984. Mercury Drug does not provide for a back-up driver for long trips. At the time of the accident, Del Rosario has been out on the road for more than 13 hours, without any alternate. 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, 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. No disciplinary action whatsoever was taken against petitioner Del Rosario. 146

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

In awarding damages, the court took into consideration the ff: ―He was only 17 years old, nearly 6 feet tall and weighed 175 pounds. He was in 4th 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 tryouts. 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. 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.‖ The mother was talking about the irony of it all: Mercury Drug caused the injury and yet they have no choice but to buy the medicines for the injury from Mercury Drug. 7. Sanitary Steam Laundry v. Court of Appeals, 300 SCRA 20 (1998)  Supra Facts: A collision occurred between a Mercedes Benz panel truck and a Cadillac Cimarron which caused the death of 3 persons and injuries of others. At around 8PM, while the Cimarron was traveling along Aguinaldo Highway in Imus, Cavite on its way back to Manila, the Cimarron was hit on its front portion by petitioner‘s panel truck. The driver of the truck claimed that a jeepney in front of him suddenly stopped. In order to avoid hitting the jeepney, the driver stepped on the brakes which caused the vehicle to swerve to the left and encroach on a portion of the opposite lane. This eventually caused the collision. Private respondents filed a civil case for damages against herein petitioner. Petitioner raises the defense that the driver of the Cimarron was negligent and was guilty of violation of traffic rules and regulations at the time of the mishap (overloaded car, the front seat was occupied by 4 (wth) persons, and the car only had one headlight functioning). They also invoke the last clear chance doctrine, stating that the driver of the Cimarron had the last clear chance when the truck driver braked and swerved as a consequence. Issue: Whether or not Sanitary Steam Laundry is liable as an employer of the negligent truck driver. Held: YES. It has not been shown how the alleged negligence of the Cimarron driver contributed to the collision between the vehicles. Indeed, petitioner has the burden of showing a causal connection between the injury received and the violation of the Land Transportation and Traffic Code. He must show that the violation of the statute was the proximate or legal cause of the injury or that it substantially contributed thereto. Negligence, consisting in whole or in part, of violation of law, like any other negligence, is without legal consequence unless it is a contributing cause of the injury. Also according to the testimonies given, it was shown that the driver of the panel truck lost control of his vehicle and bumped the Cimarron. Hence, even if both headlights of the Cimarron were lighted, it would have been bumped just the same because the driver of the panel truck could not stop despite the fact that he applied the brakes. Petitioner‘s contention that because of ―decreased visibility,‖ caused by the fact that the Cimarron allegedly had only one headlight on, its driver failed to see the Cimarron is without any basis in fact. Only its driver claimed that the Cimarron had only one headlight on. The police investigator did not state in his report or in his testimony that the Cimarron had only one headlight on. There is also no connection as to the overloading or the number of persons sitting in the front seat. It cannot be said that these circumstances affected the maneuverability of the Cimarron. It was shown that because of the swerving of the truck, no maneuvering could have avoided the outcome. Additionally it was found that the truck was at a speed above the acceptable limit. It was traversing at what appears to be 60 (mph or km/h, the court was unsure) wherein the speed limit was only 50 km/h. Employer‘s Liability Petitioner contends that the non-submission of the NBI clearance and police clearance of its driver does not mean that it failed to exercise the diligence of a good father of the family in the selection and supervision of its employees. It argues that there is no law requiring employees to submit NBI and police clearance prior to their employment. Hence, petitioner‘s failure to require submission of these documents does not mean that it did not exercise due diligence in the selection and supervision of its employees. On the other hand, it asserts that its employment of Herman Hernandez as a driver means that he had passed the screening tests of the company, including submission of the aforementioned documents. Petitioner maintains that the presumption is that the said driver submitted NBI and police clearance. He also contends that there was no need to conduct a psychological and physical test on its employees since there is no requirement under the law to do such. The court disagrees with the petitioner. It agrees with the CA in ruling that that petitioner‘s policy of requiring prospective employees to submit NBI and police clearance and to have at least 2 years experience as driver prior to 147 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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employment was not enough to prove the exercise of due diligence and that even this policy petitioner failed to prove by its failure to present the driver‘s NBI and police records during the trial. With respect to the requirement of passing psychological and physical tests prior to his employment, although no law requires it, such circumstance would certainly be a reliable indicator of the exercise of due diligence. According to the trial court: ―No tests of skill, physical as well as mental and emotional, were conducted on their would-be employees. No on-the-job training and seminars reminding employees, especially drivers, of road courtesies and road rules and regulations were done. There were no instructions given to defendant‘s drivers as to how to react in cases of emergency nor what to do after an emergency occurs. There was even failure on the part of defendant to present its concerned employee‘s 204 file. All these could only mean failure on the part of defendant to exercise the diligence required of it of a good father of a family in the selection and supervision of its employees.‖ Indeed, driving exacts a more than usual toll on the senses. Accordingly, it behooves employers to exert extra care in the selection and supervision of their employees. They must go BEYOND the minimum requirements fixed by law. 8. Carticiano v. Nuval, G.R. No. 138054, September 28, 2000 Facts: Zach Carticiano was on his way home to Imus Cavite while driving father‘s car — a Ford Laser. On the opposite side of the road and on the way to Paranaque, Darwin was driving an owner type Jeep owned by Nuval. As the 2 cars were about to pass each other, Darwin veered his vehicle to the left and thus occupied a portion of the other lane. As such, a head on collision between the 2 vehicles occurred. Consequently, Darwin immediately fled from the scene. Nearby residents pulled Zac out of the car and was brought to a hospital by a government agent who happened to be passing by. Zac suffered multiple fractures on his left leg and other injuries in his body. Nuval offered 100k as compensation for the injuries caused by but was refused. Thereafter, Zac initiated a criminal complaint against Darwin. Also, a civil suit was filed against Nuval as owner. Zac claims that Darwin‘s recklessness was the proximate cause for the injury he sustained and, as the Nuval‘s employee, the latter was liable for not execising due diligence in the selection and supervision of his employee. On the other hand, Nuval argues that Darwin was not an employee but only a casual who had worked with Nuval for only 5 days but was thereafter terminated. Furthermore, he claims that Darwin was not authorized to drive the vehicle. CA exonerated Nuval on the ground that Zac did not present evidence showing that the driver was actually an employee of Nuvali at the time of the accident. Moreover, assuming that he was, it was not shown that he was acting within the scope of his assigned task when the incident happened. Issue: Whether Nuval can be held liable for the negligence of Darwin. Held. YES. The only proof proferred by Nuval to show that Darwin was no longer his employee was the payroll in which the latter‘s name was not included. However, as revealed by the testimonies of the witnesses presented during trial, Nuval had other employees working for him who were not listed in the payroll either. The rather easy access which Darwin had to the keys to the vehicle of Nuval further weakened the latter‘s cause. First, nobody questioned the fact that the former had freely entered Nuval‟s house where the keys to the vehicle were kept. The theory of Nuval that Darwin must have stolen the keys as well as the vehicle is rather farfetched and not supported by any proof whatsoever. It is obviously an afterthought concocted to present some semblance of a defense. Second, both Nuval and his employees who testified did not act as if the vehicle had been stolen. He had not reported the alleged theft of his vehicle. Neither did he search nor ask his employees to search for the supposedly stolen vehicle. In fact, he testified that his employees had told him that the keys and the vehicle had merely ―probably‖ been stolen by Darwin. Moreover, facts established in the case show that Darwin was acting within the scope of the authority given him when the collision occurred. That he had been hired only to bring Nuval‘s children to and from school must be rejected. While this may be one of the assigned tasks given him, no convincing proof was presented showing that it was his only task. His authority was to drive Nuval‘s vehicle. Third parties are not bound by the allegation that the driver was authorized to operate the jeep only when the employer‘s children were on board the vehicle. Giving credence to this outlandish theory would enable employers to escape their legal liabilities with impunity. Such loophole is easy to concoct and is simply unacceptable. Nuvali‘s defense that, at the time of the accident, Darwin was no longer his employee, having been merely hired for a few days, is inconsistent with his other argument of due diligence in the selection of an employee

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Atty. Jess Lopez

Once a driver is proven negligent in causing damages, the law presumes the vehicle owner equally negligent and imposes upon the latter the burden of proving proper selection of employee as a defense. The allegation of contributory negligence is also unavailing because the accident was caused by the fact that Darwin‘s jeep suddenly veered towards Zacarias‘ lane when the vehicles were about to pass each other. This made it difficult for Zac to avoid the impending injury. Also, no evidence was presented that Zac could have evaded the jeep had he been more diligent under the circumstances. 9. Universal Aquarius, Inc., v. Q.C. Human Resources Management Corporation, G.R.. 155990, Sep. 12, 2007 Facts: Universal Aquarius, Inc. (Universal) is engaged in the manufacture and distribution of chemical products in Metro Manila. It operates a chemical plant in Antipolo City. Conchita Tan (Tan), as a proprietor under the name and style of Marman Trading (Marman), is engaged in the trading, delivery and distribution of chemical products in Metro Manila, with a depot in Antipolo City adjoining Universal's chemical plant. Q.C. Human Resources Management Corporation (Resources) is engaged in supplying manpower to various establishments. It supplied Universal with about 74 temporary workers to assist Universal in the operation of its chemical plant in Antipolo City. On December 19, 2000, Capocyon and 36 other union officers and members of Obrero Pilipino, (labor union) picketed, barricaded and obstructed the entry and exit of Universal's Antipolo City chemical plant and intercepted Universal's delivery trucks thereby disrupting its business operations. Marman's depot, which adjoined Universal's plant, suffered a similar fate. On December 27, 2000, Universal and Tan filed a Complaint against the strikers and Resources before the RTC for breach of contract and damages suffered due to the disruption of their respective business operations. On January 3, 2001, Universal forged an Agreement (To End Labor Dispute) with Obrero Pilipino. Thus, the strike which affected the business operations of Universal and Marman ended. Universal and Tan then filed a Notice of Dismissal as against the strikers. On January 8, 2001, Resources filed a Motion to Dismiss on the grounds that the complaint stated no cause of action against it; that, assuming the existence of such cause of action, the same was lost upon dismissal of the case against the individual defendants; and lack of jurisdiction. Issue: Whether the complaint states a cause of action. Held: The Rules of Court makes it clear that failure to make a sufficient allegation of a cause of action in the complaint warrants the dismissal thereof. Section 2, Rule 2 defines a cause of action as the act or omission by which a party violates the right of another. It is the delict or the wrongful act or omission committed by the defendant in violation of the primary right of the plaintiff. Its essential elements are as follows: 1. A right in favor of the plaintiff by whatever means and under whatever law it arises or is created; 2. An obligation on the part of the named defendant to respect or not to violate such right; and 3. Act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages or other appropriate relief. It is only upon the occurrence of the last element that a cause of action arises, giving the plaintiff the right to maintain an action in court for recovery of damages or other appropriate relief. Anent UNIVERSAL'S claim for breach for contract and damages, the Court is convinced that the Complaint sufficiently states a cause of action against Resources. The Complaint alleged that Universal had a contract of employment of temporary workers with Resources; and that Resources violated said contract by supplying it with unfit, maladjusted individuals who staged a strike and disrupted its business operations. However, with regard to TAN'S CLAIM for damages, the Court finds that she has no cause of action against Resources. A thorough reading of the allegations of the Complaint reveals that Tan's claim for damages clearly springs from the strike effected by the employees of Resources. It is settled that an employer's liability for acts of its employees attaches only when the tortious conduct of the employee relates to, or is in the course of, his employment. The question then is whether, at the time of the damage or injury, the employee is engaged in the affairs or concerns of the employer or, independently, in that of his own. An employer incurs no liability when an employee‘s conduct, act or omission is beyond the range of employment. Unquestionably, when Resources' employees staged a strike, they were acting on their own, beyond the range of their employment. Thus, Resources cannot be held liable for damages caused by the strike staged by its employees.

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10. Filamer Christian Institute v. Court of Appeals, G.R. No. 75112, October 16, 1990 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Facts: Private respondent Potenciano Kapunan, Sr., is an 82 year old retired schoolteacher (now deceased) who was hit by a Pinoy jeep while he was walking along Roxas Ave., Roxas City, at 6:30 p.m. The jeep was owned by Filamer Christian Institute (FCI), and driven by its alleged employee, Funtecha. Funtecha was a student at the school who was assigned work in exchange for free education. He was accompanied by Allan Masa; they both fled the scene. Kapunan was brought by a tricycle driver to the hospital, where he stayed for 20 days. Evidence establishes that only one headlight was functioning at the time. Funtecha only had a student permit, but he convinced Allan Masa – the authorized driver – to allow him to drive. Kapunan filed a criminal case against Funtecha alone for physical injuries through reckless imprudence; he reserved the right to file an independent civil action. Funtecha was found guilty. Kapunan also filed a civil action for damages before the RTC against FCI, Funtecha, and Masa – Allan was not included. Agustin Masa – the president and director - was being sued in his personal capacity for allegedly allowing Funtecha – his houseboy - to drive despite not having a license. The RTC found Filamer, Funtecha, and Allan Masa (a non-party) solidarily liable. Zenith Insurance Corp. was likewise ordered to pay FCI. FCI and Zenith appealed, but the latter‘s appeal was dismissed for non-payment of docket fees. Issue: Whether or not employer in Art. 2180 applies to FCI as regards Funtecha. Held: NO. In disclaiming liability, Filamer has invoked the provisions of the Labor Code, 7 specifically Section 14, Rule X of Book III which reads: Sec. 14. Working scholars. — There is no employer-employee relationship between students on the one hand, and schools, colleges or universities on the other, where students work for the latter in exchange for the privilege to study free of charge; provided the students are given real opportunity, including such facilities as may be reasonable, necessary to finish their chosen court under such arrangement. It is manifest that under the just-quoted provision of law, Filamer cannot be considered as Funtecha's employer. Funtecha belongs to that special category of students who render service to the school in exchange for free tuition. Funtecha worked for FCI for 2 hours daily for 5 days a week. He was assigned to clean the school passageways from 4:00 a.m. to 6:00 a.m. with sufficient time to prepare for his 7:30 a.m. classes. As admitted by Agustin Masa in open court, Funtecha was not included in the company payroll. The wording of Section 14 is clear and explicit and leaves no room for equivocation. To dismiss the implementing rule as one which governs only the "personal relationship" between the school and its students and not where there is already a third person involved, as espoused by private respondents, is to read into the law something that was not legislated there in the first place. The provision of Section 14 is obviously intended to eliminate an erstwhile gray area in labor relations and seeks to define in categorical terms the precise status of working scholars in relation to the learning institutions in which they work for the privilege of a free education. But even if we were to concede the status of an employee on Funtecha, still the primary responsibility for his wrongdoing cannot be imputed to FCI for the plain reason that at the time of the accident, it has been satisfactorily shown that Funtecha was not acting within the scope of his supposed employment. His duty was to sweep the school passages for 2 hours every morning before his regular classes. Taking the wheels of the Pinoy jeep from the authorized driver at 6:30 in the evening and then driving the vehicle in a reckless manner resulting in multiple injuries to a third person were certainly not within the ambit of his assigned tasks. In other words, at the time of the injury, Funtecha was not engaged in the execution of the janitorial services for which he was employed, but for some purpose of his own. It is but fair therefore that Funtecha should bear the full brunt of his tortious negligence. Filamer cannot be made liable for the damages he had caused. Private respondents' attempt to hold petitioner Filamer directly and primarily answerable to the injured party under Article 2180 of the Civil Code would have prospered had they proceeded against Allan Masa, the authorized driver of the Pinoy jeep and undisputably an employee of petitioner. It was Allan's irresponsible act of entrusting the wheels of the vehicle to the inexperienced Funtecha which set into motion the chain of events leading to the accident resulting in injuries to Kapunan, Sr. But under the present set of circumstances, even if the trial court did find Allan guilty of negligence, such conclusion would not be binding on Allan. It must be recalled that Allan was never impleaded in the complaint for damages and should be considered as a stranger as far as the trial court's judgment is concerned. It is axiomatic that no man shall be affected by a proceeding to which he is a stranger.

150

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

11. Filamer Christian Institute v. Court of Appeals, G.R. No. 75112, August 17, 1992 RESOLUTION: In the 1990 decision, the SC ruled that the FCI is not liable for the injuries caused by Funtecha on the grounds that the latter was not an authorized driver for whose acts the petitioner shall be directly and primarily answerable, and that Funtecha was merely a working scholar who, under Section 14, Rule X, Book III of the Rules and Regulations Implementing the Labor Code is not considered an employee of the petitioner. Funtecha was a working student, being a part-time janitor and a scholar of Filamer. He was, in relation to the school, an employee even if he was assigned to clean the school premises for only 2 hours in the morning of each school day. Having a student driver‘s license, Funtecha requested the driver, Allan Masa, and was allowed, to take over the vehicle while the latter was on his way home one late afternoon. The place where Allan lives is also the house of his father, the school president, Agustin Masa. Moreover, it is also the house where Funtecha was allowed free board while he was a student of Filamer Christian Institute. Allan Masa turned over the vehicle to Funtecha only after driving down a road, negotiating a sharp dangerous curb, and viewing that the road was clear. According to Allan‘s testimony, a fast moving truck with glaring lights nearly hit them so that they had to swerve to the right to avoid a collision. Upon swerving, they heard a sound as if something had bumped against the vehicle, but they did not stop to check. Actually, the Pinoy jeep swerved towards the pedestrian, Potenciano Kapunan who was walking in his lane in the direction against vehicular traffic, and hit him. Allan affirmed that Funtecha followed his advise to swerve to the right. At the time of the incident (6:30 P.M.) in Roxas City, the jeep had only one functioning headlight. Allan testified that he was the driver and at the same time a security guard of the FCI. He further said that there was no specific time for him to be off-duty and that after driving the students home at 5:00 in the afternoon, he still had to go back to school and then drive home using the same vehicle. Driving the vehicle to and from the house of the school president where both Allan and Funtecha reside is an act in furtherance of the interest of the FCI. Allan‘s job demands that he drive home the school jeep so he can use it to fetch students in the morning of the next school day. The school president had knowledge that the jeep was routinely driven home for the said purpose. The school president also had knowledge of Funtecha‘s possession of a student driver‘s license and his desire to undergo driving lessons during the time that he was not in his classrooms. In learning how to drive while taking the vehicle home in the direction of Allan‘s house, Funtecha was not driving for the purpose of his enjoyment or for a ―frolic of his own‖ but ultimately, for the service for which the jeep was intended by the petitioner school. The Court is constrained to conclude that the act of Funtecha in taking over the steering wheel was one done for and in behalf of his employer for which act FCI cannot deny any responsibility by arguing that it was done beyond the scope of his janitorial duties. The clause ―within the scope of their assigned tasks‖ for purposes of raising the presumption of liability of an employer, includes any act done by an employee, in furtherance of the interests of the employer or for the account of the employer at the time of the infliction of the injury or damage. Even if somehow, the employee driving the vehicle derived some benefit from the act, the existence of a presumptive liability of the employer is determined by answering the question of whether or not the servant was at the time of the accident performing any act in furtherance of his master‘s business. Section 14, Rule X, Book III of the Rules implementing the Labor Code, on which the petitioner anchors its defense, was promulgated by the SOLE only for the purpose of administering and enforcing the provisions of the Labor Code on conditions of employment. Rule X is merely a guide to the enforcement of the substantive law on labor. The Court, thus, makes the distinction and so holds that Section 14, Rule X, Book III of the Rules is not the decisive law in a civil suit for damages instituted by an injured person during a vehicular accident against a working student of a school and against the school itself. There exists in the present case an extra-contractual obligation arising from the negligence or reckless imprudence of a person ―whose acts or omissions are imputable, by a legal fiction, to other(s) who are in a position to exercise an absolute or limited control over (him).‖ Funtecha is an employee of Filamer. He need not have an official appointment for a driver‘s position in order that the petitioner may be held responsible for his grossly negligent act, it being sufficient that the act of driving at the time of the incident was for the benefit of the petitioner. The fact that Funtecha was not the school driver or was not acting within the scope of his janitorial duties does not relieve the FCI of the burden of rebutting the presumption juris tantum that there was negligence on its part either in the selection of a servant or employee, or in the supervision over him. The petitioner has failed to show proof of its having exercised the required diligence of a good father of a family over its employees Funtecha and Allan. Supervision includes the formulation of suitable rules and regulations for the guidance of its employees and the issuance of proper instructions intended for the protection of the public and persons with whom the employer has relations through his employees. An employer is expected to impose upon its employees he necessary discipline called for in the performance of any act indispensable to the business and beneficial to their employer. 151 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

In the present case, FCI has not shown that it has set forth such rules and guidelines as would prohibit any one of its employees from taking control over its vehicles if one is not the official driver or prohibiting the driver and son of the Filamer president from authorizing another employee to drive the school vehicle. Furthermore, the FCI has failed to prove that it had imposed sanctions or warned its employees against the use of its vehicles by persons other than the driver. In the absence of evidence that the FCI had exercised the diligence of a good father of a family in the supervision of its employees, the law imposes upon it the vicarious liability for acts or omissions of its employees. The liability of the employer is, under Article 2180, primary and solidary. However, the employer shall have recourse against the negligent employee for whatever damages are paid to the heirs of the plaintiff. The actual driver of the school jeep, Allan Masa, was not made a party defendant in the civil case for damages. This is quite understandable considering that as far as the injured pedestrian, Potenciano Kapunan, was concerned, it was Funtecha who was the one driving the vehicle and presumably was one authorized by the school to drive. The plaintiff and his heirs should not now be left to suffer without simultaneous recourse against the petitioner for the consequent injury caused by a janitor doing a driving chore for the petitioner even for a short while. For the purpose of recovering damages under the prevailing circumstances, it is enough that the plaintiff and the private respondent heirs were able to establish the existence of employer-employee relationship between Funtecha and petitioner Filamer and the fact that Funtecha was engaged in an act not for an independent purpose of his own but in furtherance of the business of his employer. 12. Metro Manila Transit Corporation v. Court of Appeals, 223 SCRA 521 (1993)  See p. 791 of textbook Facts: 28 August, 1979, 6 a.m. – Nenita Custodio was a machine operator working for Dynetics Inc. in Taguig. She boarded a Jeep driven by Agudo Calebag and owned by Victorin Lamayo to go to work. While it was traveling at a fast pace along DBP Ave., a Metro Manila Transit Corp. (―MMTC‖) bus driven by Godofredo Leonardo was also traveling quickly along Honeydew Road. As both approached the intersection of both roads, they failed to slow down nor blow their horns. (Typical Filipino driving.) They thus collided, the jeep ramming the left portion of the bus. Custodio was thrown onto the pavement, unconscious with serious physical injuries. She was brought to the Medical City Hospital where she regained consciousness one week later, and was confined for 24 days thereon. Custodio then filed a complaint for damages against everyone with the assistance of her parents, being a minor. They denied all allegations and pointed fingers at each other. MMTC averred that its bus was driven prudently and carefully, and that since the jeep hit the bus, it was the jeep that was driven recklessly. Lamayo alleged that MMTC and its driver should be liable, being the sole cause of the accident. Calebag the jeepney driver was declared in default. MMTC presented Garbo, a Training Officer, to present the requirements for its divers, i.e. NBI clearance, diploma, birth certificate, license, work certification, interview, checks with other companies, final interview, psycho-physical tests, xrays, and a Constabulary Highway Patrol Group seminar. Its Transport Supervisor, Bautista, also testified as to his duty of monitoring the daily operations and to enforce compliance with its guidelines concerning uniform, traffic rules, and fitness. The RTC found both drivers and the jeep owner solidarily liable, but absolved MMTC for showing diligence in the selection and supervision of its employees. The CA modified this by holding MMTC likewise liable. Issue: (1) Whether or not documentary evidence is needed to support the positive testimonies above. (2) Whether or not their testimonies may be disturbed on appeal (3) Whether or not the evidence presented re: diligence of MMTC in the selection and supervision of its employees is sufficient Held: NO. 1. The first two issues raised by petitioner shall be correlatively discussed in view of their interrelation. In its present petition, MMTC insists that the oral testimonies of its employees were presented as witnesses in its behalf sufficiently prove, even without the presentation documentary evidence, that driver Leonardo had complied with all the hiring and clearance requirements and had undergone all trainings, tests and examinations preparatory to actual employment, and that said positive testimonies spell out the rigid procedure for screening of job applicants and the supervision of its employees in the field. It underscored the fact that it had indeed complied with the measure of diligence in the selection and supervision of its employees as enunciated in Campo, et al. vs. Camarote, et al. requiring an employer, in the exercise of the diligence of a good father of a family, to carefully examine the applicant for employment as to his qualifications, experience and record service, and not merely be satisfied with the possession of a professional driver's license. When as in this case, the findings of the CA and the trial court are contrary to each other, this court may scrutinize the evidence on record, in order to arrive at a correct finding based thereon. 152 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

A perusal of the same shows that since there is no dispute as to the finding of concurrent negligence on the part of the defendant Calebag, the driver of the passenger jeepney, and co-defendant Leonardo, the bus driver of petitioner MMTC, both of whom were solidarily held liable with defendant Lamayo, the owner of the jeepney, we are spared the necessity of determining the sufficiency of evidence establishing the fact of negligence. The contrariety is in the findings of the two lower courts, and which is the subject of this present controversy, with regard to the liability of MMTC as employer of one the erring drivers. The trial court, in absolving MMTC from liability ruled that — On the question as to whether defendant MMTC was successful in proving its defense that indeed it had exercised the due diligence of a good father of a family in the selection and supervision of defendant Leonardo, this Court finds that based on the evidence presented during the trial, defendant MMTC was able to prove that it was not only careful and diligent in choosing and screening applicants for job openings but also strict (and) diligent in supervising its employees by seeing to it that its employees were in proper uniforms, briefed in traffic rules and regulations before the start of duty, checked employees to determine whether they were positive for alcohol and followed other rules and regulations and guidelines of the Bureau of Land Transportation as well as its company. Having successfully proven such defense, defendant MMTC therefore, cannot be held liable for the accident. Having reached this conclusion, the Court now, holds that defendant MMTC be totally absolved from liability and that the complaint against it be dismissed whereas respondent court was of the opinion that — It is surprising though that witness Milagros Garbo did not testify nor present any evidence that defendant-appellee's driver, defendant Godofredo Leonardo has complied with or has undergone all clearances and trainings she referred to. The clearances, result of seminars and tests which Godofredo Leonardo submitted and complied with, if any, were not presented in court despite the fact that they are obviously in the possession and control of defendant-appellee. Instead, it resorted to generalities. The Court has ruled that due diligence in (the) selection and supervision of employee(s) are not proved by mere testimonies to the effect that its applicant has complied with all the company requirements before one is admitted as an employee but without proof thereof. On the part of Christian Bautista, the transport supervisor of defendant-appellee, he testified that it is his duty to monitor the operation of buses in the field; to countercheck the dispatchers' duty prior to the operation of the buses in the morning; to see to it that bus crew follows written guidelines of the company (t.s.n., April 29, 1988, pp. 4-5), but when asked to present in court the alleged written guidelines of the company he merely stated that he brought with him a "wrong document" and defendant-appellee's counsel asked for reservation to present such written guidelines in the next hearing but the same was (sic) never presented in court. A thorough and scrupulous review of the records of this case reveals that the conclusion of CA is more firmly grounded on jurisprudence and amply supported by the evidence of record than that of the court below. It is procedurally required for each party in a case to prove his own affirmative assertion by the degree of evidence required by law. Coming now to the case at bar, while there is no rule which requires that testimonial evidence, to hold sway, must be corroborated by documentary evidence, or even subject evidence for that matter, inasmuch as the witnesses' testimonies dwelt on mere generalities, we cannot consider the same as sufficiently persuasive proof that there was observance of due diligence in the selection and supervision of employees. Petitioner's attempt to prove its diligentissimi patris familias in the selection and supervision of employees through oral evidence must fail as it was unable to buttress the same with any other evidence, object or documentary, which might obviate the apparent biased nature of the testimony. Our view that the evidence for petitioner MMTC falls short of the required evidentiary quantum as would convincingly and undoubtedly prove its observance of the diligence of a good father of a family has its precursor in the underlying rationale pronounced in the earlier case of Central Taxicab Corp. vs. Ex-Meralco Employees Transportation Co., et al., set amidst an almost identical factual setting, where we held that: This witness spoke of an "affidavit of experience" which a driver-applicant must accomplish before he is employed by the company, a written "time schedule" for each bus, and a record of the inspections and thorough checks pertaining to each bus before it leaves the car barn; yet no attempt was ever made to present in evidence any of these documents, despite the fact that they were obviously in the possession and control of the defendant company. Albert also testified that he kept records of the preliminary and final tests given him as well as a record of the qualifications and experience of each of the drivers of the company. It is rather strange, therefore, that he failed to produce in court the all important record of Roberto, the driver involved in this case. The failure of the defendant company to produce in court any "record" or other documentary proof tending to establish that it had exercised all the diligence of a good father of a family in the selection and supervision of its drivers and buses, notwithstanding the calls therefor by both the trial court and the opposing counsel, argues strongly against its pretensions.

153

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

We are fully aware that there is no hard-and-fast rule on the quantum of evidence needed to prove due observance of all the diligence of a good father of a family as would constitute a valid defense to the legal presumption of negligence on the part of an employer or master whose employee has by his negligence, caused damage to another.. (R)educing the testimony of Albert to its proper proportions, we do not have enough trustworthy evidence left to go by. We are of the considered opinion, therefore, that the believable evidence on the degree of care and diligence that has been exercised in the selection and supervision of Roberto Leon y Salazar, is not legally sufficient to overcome the presumption of negligence against the defendant company. Whether or not the diligence of a good father of a family has been observed by petitioner is a matter of proof which under the circumstances in the case at bar has not been clearly established. It is not felt by the Court that there is enough evidence on record as would overturn the presumption of negligence, and for failure to submit all evidence within its control, assuming the putative existence thereof, petitioner MMTC must suffer the consequences of its own inaction and indifference. In any event, we do not find the evidence presented by petitioner sufficiently convincing to prove the diligence of a good father of a family, which for an employer doctrinally translates into its observance of due diligence in the selection and supervision of its employees but which mandate, to use an oft-quoted phrase, is more often honored in the breach than in the observance. Petitioner attempted to essay in detail the company's procedure for screening job applicants and supervising its employees in the field, through the testimonies of Milagros Garbo, as its training officer, and Christian Bautista, as its transport supervisor, both of whom naturally and expectedly testified for MMTC. It then concluded with its sweeping pontifications that "thus, there is no doubt that considering the nature of the business of petitioner, it would not let any applicant-drivers to be (sic) admitted without undergoing the rigid selection and training process with the end (in) view of protecting the public in general and its passengers in particular; . . . thus, there is no doubt that applicant had fully complied with the said requirements otherwise Garbo should not have allowed him to undertake the next set of requirements . . . and the training conducted consisting of seminars and actual driving tests were satisfactory otherwise he should have not been allowed to drive the subject vehicle. These statements strike us as both presumptuous and in the nature of petitio principii, couched in generalities and shorn of any supporting evidence to boost their verity. As earlier observed, respondent court could not but express surprise, and thereby its incredulity, that witness Garbo neither testified nor presented any evidence that driver Leonardo had complied with or had undergone all the clearances and trainings she took pains to recite and enumerate. The supposed clearances, results of seminars and tests which Leonardo allegedly submitted and complied with were never presented in court despite the fact that, if true, then they were obviously in the possession and control of petitioner. The case at bar is clearly within the coverage of Article 2176 and 2177, in relation to Article 2180 provisions on quasi-delicts as all the elements thereof are present, to wit: (1) damages suffered by the plaintiff, (2) fault or negligence of the defendant or some other person for whose act he must respond, and (3) the connection of cause and effect between fault or negligence of the defendant and the damages incurred by plaintiff. It is to be noted that petitioner was originally sued as employer of driver Leonardo under Article 2180, the pertinent parts of which provides that: The basis of the employer's vicarious liability has been explained under this ratiocination: ―The responsibility imposed by this article arises by virtue of a presumption juris tantum of negligence on the part of the persons made responsible under the article, derived from their failure to exercise due care and vigilance over the acts of subordinates to prevent them from causing damage. Negligence is imputed to them by law, unless they prove the contrary. Thus, the last paragraph of the article says that such responsibility ceases if is proved that the persons who might be held responsible under it exercised the diligence of a good father of a family (diligentissimi patris familias) to prevent damage. It is clear, therefore, that it is not representation, nor interest, nor even the necessity of having somebody else answer for the damages caused by the persons devoid of personality, but it is the non-performance of certain duties of precaution and prudence imposed upon the persons who become responsible by civil bond uniting the actor to them, which forms the foundation of such responsibility. The above rule is, of course, applicable only where there is an employer-employee relationship, although it is not necessary that the employer be engaged in business or industry. Whether or not engaged in any business or industry, the employer under Article 2180 is liable for torts committed by his employees within the scope of their assigned tasks. But, it is necessary first to establish the employment relationship. Once this is done, the plaintiff must show, to hold the employer liable, that the employee was acting within the scope of his assigned task when the tort complained of was committed. It is only then that the defendant, as employer, may find it necessary to interpose the defense of due diligence in the selection and supervision of employees. The diligence of a good father of a family required to be observed by employers to prevent damages under Article 2180 refers to due diligence in the selection and supervision of employees in order to protect the public. With the allegation and subsequent proof of negligence against the defendant driver and of an employer-employee relation between him and his co-defendant MMTC in this instance, the case in undoubtedly based on a quasi-delict under Article 2180 When the employee causes damage due to his own negligence while performing his own duties, there 154 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

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. For failure to rebut such legal presumption of negligence in the selection and supervision of employees, the employer is likewise responsible for damages, the basis of the liability being the relationship of pater familias or on the employer's own negligence. As early as the case of Gutierrez vs. Gutierrez, and thereafter, we have consistently held that where the injury is due to the concurrent negligence of the drivers of the colliding vehicles, the drivers and owners of the said vehicles shall be primarily, directly and solidarily liable for damages and it is immaterial that one action is based on quasi-delict and the other on culpa contractual, as the solidarily of the obligation is justified by the very nature thereof. . It should be borne in mind that the legal obligation of employers to observe due diligence in the selection and supervision of employees is not to be considered as an empty play of words or a mere formalism, as appears to be the fashion of the times, since the non-observance thereof actually becomes the basis of their vicarious liability under Article 2180. On the matter of selection of employees, Campo vs. Camarote, supra, lays down this admonition: ―In order that the owner of a vehicle may be considered as having exercised all diligence of a good father of a family, he should not have been satisfied with the mere possession of a professional driver's license; he should have carefully examined the applicant for employment as to his qualifications, his experience and record of service. These steps appellant failed to observe; he has therefore, failed to exercise all due diligence required of a good father of a family in the choice or selection of driver.‖ Due diligence in the supervision of employees, on the other hand, includes the formulation of suitable rules and regulations for the guidance of employees and the issuance of proper instructions intended for the protection of the public and persons with whom the employer has relations through his or its employees and the imposition of necessary disciplinary measures upon employees in case of breach or as may be warranted to ensure the performance of acts indispensable to the business of and beneficial to their employer. To this, we add that actual implementation and monitoring of consistent compliance with said rules should be the constant concern of the employer, acting through dependable supervisors who should regularly report on their supervisory functions. In order that the defense of due diligence in the selection and supervision of employees may be deemed sufficient and plausible, it is not enough to emptily invoke the existence of said company guidelines and policies on hiring and supervision. As the negligence of the employee gives rise to the presumption of negligence on the part of the employer, the latter has the burden of proving that it has been diligent not only in the selection of employees but also in the actual supervision of their work. The mere allegation of the existence of hiring procedures and supervisory policies, without anything more, is decidedly not sufficient to overcome presumption. We emphatically reiterate our holding, as a warning to all employers, that (t)he mere formulation of various company policies on safety without showing that they were being complied with is not sufficient to exempt petitioner from liability arising from negligence of its employees. It is incumbent upon petitioner to show that in recruiting and employing the erring driver the recruitment procedures and company policies on efficiency and safety were followed. Paying lip-service to these injunctions or merely going through the motions of compliance therewith will warrant stern sanctions from the Court. In requiring the highest possible degree of diligence from common carriers and creating a presumption of negligence against them, the law compels them to curb the recklessness of their drivers. While the immediate beneficiaries of the standard of extraordinary diligence are, of course, the passengers and owners of the cargo carried by a common carrier, they are not the only persons that the law seeks to benefit. For if common carriers carefully observe the statutory standard of extraordinary diligence in respect of their own passengers, they cannot help but simultaneously benefit pedestrians and the owners and passengers of other vehicles who are equally entitled to the safe and convenient use of our roads and highways. The law seeks to stop and prevent the slaughter and maiming of people (whether passengers or not) and the destruction of property (whether freight or not) on our highways by buses, the very size and power of which seem often to inflame the minds of their drivers. 13. Filipinas Broadcasting Network, Inc., v. AGO Medical and Educational Center, G.R. 141994, Jan. 17, 2005 Facts: ―Exposé‖ is a radio documentary program hosted by Carmelo Mel Rim a and June Alegre. It‘s is aired every morning over DZRC-AM which is owned by Filipinas Broadcasting Network, Inc. (FBNI). Rima and Alegre exposed various alleged complaints from students, teachers, and parents against Ago Medical and Educational Center-Bicol Christian College of Medicine (AMEC) and its administrators. Claiming that the broadcasts were defamatory, AMEC and Angelita Ago (―Ago‖), as Dean of AMEC‘s College of Medicine, filed a complaint for damages against FBNI, Rima, and Alegre. AMEC and Ago included FBNI as defendant for allegedly failing to exercise due diligence in the selection and supervision of its employees, particularly Rima and Alegre. Alegre allegedly said: ―Let us begin with the less burdensome: if you have children taking medical course at AMECBCCM, advise them to pass all subjects because if they fail in any subject they will repeat their year level, taking up all subjects including those they have passed already. xxx Second: Earlier AMEC students in Physical Therapy had 155 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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complained that the course is not recognized by DECS. Third: Students are required to take and pay for the subject even if the subject does not have an instructor — such greed for money on the part of AMEC‘s administration. It is a public knowledge that the AMEC has survived and has been surviving for the past few years since its inception because of funds support from foreign foundations. If you will take a look at the AMEC premises you‘ll find out that the names of the buildings there are foreign soundings. There is a McDonald Hall. That is a very concrete and undeniable evidence that the support of foreign foundations for AMEC is substantial, isn‘t it? On the other hand, the administrators of AMEC- BCCM, AMEC Science High School and the AMEC- Institute of Mass Communication in their effort to minimize expenses in terms of salary are absorbing or continues to accept ―rejects‖. (Former teachers of Aquinas University but were removed because of immorality) AMEC is a dumping ground, garbage, not merely of moral and physical misfits. Probably they only qualify in terms of intellect. The Dean of Student Affairs of AMEC is Justita Lola, as the family name implies. She is too old to work, being an old woman. Is the AMEC administration exploiting the very [e]nterprising or compromising and undemanding Lola?‖ While Rima allegedly said: ―My friends based on the expose, AMEC is a dumping ground for moral and physically misfit people. What does this mean? Immoral and physically misfits as teachers. May I say I‘m sorry to Dean Justita Lola. But this is the truth. The truth is this, that you are no longer fit to teach. You are too old. As an aviation, your case is zero visibility. Don‘t insist. Why did AMEC still absorb her as a teacher, a dean, and chairman of the scholarship committee at that. The reason is practical cost saving in salaries because an old person is not fastidious, so long as she has money to buy the ingredient of beetle juice. The elderly can get by— that‘s why she (Lola) was taken in as Dean. On our end our task is to attend to the interests of students. It is likely that the students would be influenced by evil. When they become members of society outside of campus will be liabilities rather than assets.‖ Rima and Alegre, through Atty. Rozil Lozares, filed an Answer alleging that the broadcasts against AMEC were fair and true. FBNI, Rima and Alegre claimed that they were plainly impelled by a sense of public duty to report the ―goings-on in AMEC, [which is] an institution imbued with public interest.‖ Thereafter, trial ensued. Trial court rendered a Decision finding FBNI and Alegre liable for libel except Rima. In absolving Rima from the charge , the trial court ruled that Rima‘s only participation was when he agreed with Alegre‘s exposé. It found Rima‘s statement within the ―bounds of freedom of speech, expression, and of the press.‖ CA affirmed the trial court‘s judgment with modification. CA made Rima solidarily liable with FBNI and Alegre. CA upheld the trial court‘s ruling that the questioned broadcasts are libelous per se and that FBNI, Rima and Alegre failed to overcome the legal presumption of malice. Finding no factual basis for the imputations against AMEC‘s administrators, the CA ruled that the broadcasts were made with reckless disregard as to whether they were true or false as it failed to present in court any of the students who allegedly complained against AMEC. Rima and Alegre merely gave a single name when asked to identify the students. According to the CA, these circumstances cast doubt on the veracity of the broadcasters‘ claim that they were ―impelled by their moral and social duty to inform the public about the students‘ gripes.‖ CA held that FBNI failed to exercise due diligence in the selection and supervision of its employees for allowing Rima and Alegre to make the radio broadcasts without the proper KBP accreditation. Issue: Whether FBNI is solidarily liable with its broadcasters Allegre and Rima Held: YES. A libel is a public and malicious imputation of a crime, or of a vice or defect, real or imaginary, or any act or omission, condition, status, or circumstance tending to cause the dishonor, discredit, or contempt of a natural or juridical person, or to blacken the memory of one who is dead. There is no question that the broadcasts were made public and imputed to AMEC defects or circumstances tending to cause it dishonor, discredit and contempt. Rima and Alegre‘s remarks such as ―greed for money on the part of AMEC‘s administrators‖; ―AMEC is a dumping ground, garbage of x x x moral and physical misfits‖; and AMEC students who graduate ―will be liabilities rather than assets‖ of the society are libelous per se. Taken as a whole, the broadcasts suggest that AMEC is a money-making institution where physically and morally unfit teachers abound. Every defamatory imputation is presumed malicious. Rima and Alegre failed to show adequately their good intention and justifiable motive in airing the supposed gripes of the students. As hosts of a documentary or public affairs program, Rima and Alegre should have presented the public issues ―free from inaccurate and misleading information.‖ Hearing the students‘ alleged complaints a month before the exposé , they had sufficient time to verify their sources and information. However, Rima and Alegre hardly made a thorough investigation of the students‘ alleged gripes. Neither did they inquire about nor confirm the purported irregularities in AMEC from the DECS. Alegre testified that he merely went to AMEC to verify his report from an alleged AMEC official who refused to disclose any information. Alegre 156

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simply relied on the words of the students ―because they were many and not because there is proof that what they are saying is true.‖ There was reckless disregard of whether their report was true or not. The broadcasts were not ―the result of straight reporting.‖ Significantly, some courts in the US apply the privilege of ―neutral reportage‖ in libel cases involving matters of public interest or public figures. Under this privilege, a republisher who accurately and disinterestedly reports certain defamatory statements made against public figures is shielded from liability, regardless of the republisher‘s subjective awareness of the truth or falsity of the accusation. Rima and Alegre cannot invoke the privilege of neutral reportage because unfounded comments abound in the broadcasts. Moreover, there is no existing controversy involving AMEC when the broadcasts were made. The privilege of neutral reportage applies where the defamed person is a public figure who is involved in an existing controversy, and a party to that controversy makes the defamatory statement. FBNI‘s reliance on Borjal is misplaced. In Borjal, the Court elucidated on the ―doctrine of fair comment,‖ [F]air commentaries on matters of public interest are privileged and constitute a valid defense in an action for libel or slander. When the discreditable imputation is directed against a public person in his public capacity, it is not necessarily actionable. True, AMEC is a private learning institution whose business of educating students is ―genuinely imbued with public interest.‖ The welfare of the youth in general and AMEC‘s students in particular is a matter which the public has the right to know. Thus, similar to the newspaper articles in Borjal, the subject broadcasts dealt with matters of public interest. However, unlike in Borjal, the questioned broadcasts in the present case are not based on established facts. Defendants have not presented in court, nor even gave name of a single student who made the complaint to them, much less present written complaint or petition to that effect. The broadcasters, contrary to the mandates of their duties, did not verify and analyze the truth of the reports before they aired it, in order to prove that they are in good faith. 1. Alegre contended that plaintiff school had no permit and is not accredited to offer Physical Therapy courses. Yet, plaintiff produced a certificate coming from DECS that as of Sept. 22, 1987 or more than 2 years before the controversial broadcast, accreditation to offer Physical Therapy course had already been given the plaintiff. Defendants could have easily known this were they careful enough to verify. 2. The allegation that plaintiff was getting tremendous aids from foreign foundations like McDonald Foundation prove not to be true also. The truth is there is no McDonald Foundation existing. Although a big building of plaintiff school was given the name McDonald building, that was only in order to honor the first missionary in Bicol of plaintiffs‘ religion. 3. Defendants did not even also bother to prove their claim, though denied by Dra. Ago, that when medical students fail in one subject, they are made to repeat all the other subject[s], even those they have already passed, nor their claim that the school charges laboratory fees even if there are no laboratories in the school. 4. Dr. Lola was observed by this court not to be physically decrepit yet, nor mentally infirmed, but is still alert and docile. Had the comments been an expression of opinion based on established facts, it is immaterial that the opinion happens to be mistaken, as long as it might reasonably be inferred from the facts. However, the comments of Rima and Alegre were not backed up by facts. Therefore, the broadcasts are not privileged and remain libelous per se. The broadcasts also violate the Radio Code of the Kapisanan ng mga Brodkaster sa Pilipinas, Ink. (―Radio Code‖) 4. Public affairs program shall present public issues free from personal bias, prejudice and inaccurate and misleading information. 7. The station shall be responsible at all times in the supervision of public affairs, public issues and commentary programs so that they conform to the provisions and standards of this code. The Radio Code is a voluntary code of conduct imposed by the radio broadcast industry on its own members. The Radio Code is a public warranty by the radio broadcast industry that radio broadcast practitioners are subject to a code by which their conduct are measured for lapses, liability and sanctions. The public has a right to expect and demand that radio broadcast practitioners live up to the code of conduct of their profession, just like other professionals. A professional code of conduct provides the standards for determining whether a person has acted justly, honestly and with good faith in the exercise of his rights and performance of his duties as required by Article 1937 of the Civil Code. A professional code of conduct also provides the standards for determining whether a person who willfully causes loss or injury to another has acted in a manner contrary to morals or good customs under Article 2138 of the Civil Code. III. Whether FBNI is solidarily liable with Rima and Alegre for moral damages, attorney‘s fees and costs of suit (RELEVANT ISSUE) 157

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FBNI contends that it is not solidarily liable with Rima and Alegre for the payment of damages and attorney‘s fees because it exercised due diligence in the selection and supervision of its employees, particularly Rima and Alegre. FBNI maintains that its broadcasters, including Rima and Alegre, undergo a ―very regimented process‖ before they are allowed to go on air. ―Those who apply for broadcaster are subjected to interviews, examinations and an apprenticeship program.‖ FBNI further argues that Alegre‘s age and lack of training are irrelevant to his competence as a broadcaster. FBNI points out that the ―minor deficiencies in the KBP accreditation of Rima and Alegre do not in any way prove that FBNI did not exercise the diligence of a good father of a family in selecting and supervising them.‖ Rima‘s accreditation lapsed due to his non-payment of the KBP annual fees while Alegre‘s accreditation card was delayed allegedly for reasons attributable to the KBP Manila Office. FBNI claims that membership in the KBP is merely voluntary and not required by any law or government regulation. FBNI‘s arguments do not persuade us. The basis of the present action is a tort. Joint tortfeasors are jointly and severally liable for the tort which they commit. Joint tortfeasors are all the persons who command, instigate, promote, encourage, advise, countenance, cooperate in, aid or abet the commission of a tort, or who approve of it after it is done, if done for their benefit. Thus, AMEC correctly anchored its cause of action against FBNI on Articles 2176 and 2180. As operator of DZRC-AM and employer of Rima and Alegre, FBNI is solidarily liable to pay for damages arising from the libelous broadcasts. As stated by the CA, ―recovery for defamatory statements published by radio or television may be had from the owner of the station, a licensee, the operator of the station, or a person who procures, or participates in, the making of the defamatory statements.‖ An employer and employee are solidarily liable for a defamatory statement by the employee within the course and scope of his or her employment, at least when the employer authorizes or ratifies the defamation. In this case , Rima and Alegre were clearly performing their official duties as hosts of FBNI‘s radio program Exposé when they aired the broadcasts. FBNI neither alleged nor proved that Rima and Alegre went beyond the scope of their work at that time. There was likewise no showing that FBNI did not authorize and ratify the defamatory broadcasts. Moreover, there is insufficient evidence on record that FBNI exercised due diligence in the selection and supervision of its employees, particularly Rima and Alegre. FBNI merely showed that it exercised diligence in the selection of its broadcasters without introducing any evidence to prove that it observed the same diligence in the supervision of Rima and Alegre. FBNI did not show how it exercised diligence in supervising its broadcasters. FBNI‟s alleged constant reminder to its broadcasters to “observe truth, fairness and objectivity and to refrain from using libelous and indecent language” is not enough to prove due diligence in the supervision of its broadcasters. The following are ways of showing diligence in the supervision of broadcasters: (1) Adequate training of the broadcasters on the industry‘s code of conduct; (2) Sufficient information on libel laws; and (3) Continuous evaluation of the broadcasters‘ performance. No clear and convincing evidence shows that Rima and Alegre underwent FBNI‘s ―regimented process‖ of application. Furthermore, FBNI admits that Rima and Alegre had deficiencies in their KBP accreditation, which is one of FBNI‘s requirements before it hires a broadcaster. Significantly, membership in the KBP, while voluntary, indicates the broadcaster‘s strong commitment to observe the broadcast industry‘s rules and regulations. Clearly, these circumstances show FBNI‘s lack of diligence in selecting and supervising Rima and Alegre. Hence, FBNI is solidarily liable to pay damages together with Rima and Alegre. 14. Jayme v. Apostol, G.R. No. 163609, November 27, 2008 Facts: Mayor Miguel of Koronadal, South Cotabato was on board the Isuzu pick-up truck driven by Fidel Lozano, an employee of the Municipality of Koronadal. The pick-up truck was registered under the name of Rodrigo Apostol, but it was then in the possession of Ernesto Simbulan. Lozano borrowed the pick-up truck from Simbulan to bring Miguel to Buayan Airport at General Santos City to catch his Manila flight. The pick-up truck accidentally hit Marvin C. Jayme, a minor, who was then crossing the National Highway. The collision sent Marvin some 50 meters away from the point of impact, a clear indication that Lozano was driving at a very high speed at the time of the accident. He sustained severe head injuries with subdural hematoma and diffused cerebral contusion and had to be airlifted to Davao for more intensive treatment. He died after 6 days. Parents of Marvin, filed a complaint for damages with the RTC against respondents. They prayed that all respondents be held solidarily liable for their loss. All respondents denied liability for Marvin‘s death. Apostol and Simbulan averred that Lozano took the pick-up truck without their consent. Likewise, Miguel and Lozano pointed out that Marvin‘s sudden sprint across the highway made it impossible to avoid the accident. Yet, Miguel denied being on board the vehicle when it hit Marvin. Defendant Municipality of Koronadal cannot be held liable for the damages incurred by other defendants (being an agency of the State performing governmental functions). 158 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Trial court held Fidel Lozano, Rodrigo Apostol, and Mayor Fernando Miguel jointly and severally liable. Mayor Miguel interposed an appeal to the CA. Mayor Miguel contended that the RTC erred in ruling that he was Lozano‘s employer and, hence, solidarily liable for the latter‘s negligent act. Mayor Miguel also denied that he did not exercise due care and diligence in the supervision of Lozano. CA held that Mayor Miguel should not be held liable for damages for the death of Marvin Jayme. CA also reiterated the settled rule that it is the registered owner of a vehicle who is jointly and severally liable with the driver for damages incurred by passengers or third persons as a consequence of injuries or death sustained in the operation of the vehicle. Hence, this petition. According to Jayme, the element of direct control is not negated by the fact that Lozano‘s employer was the Municipality of Koronadal. Mayor Miguel, being Lozano‘s superior, still had control over the manner the vehicle was operated. Issue: Whether the mayor should be held vicariously liable Held: NO. Employer is the MUNICIPALITY. The doctrine of vicarious liability or imputed liability finds no application in the present case. To sustain claims against employers for the acts of their employees, the following requisites must be established: (1) That the employee was chosen by the employer personally or through another; (2) That the service to be rendered in accordance with orders which the employer has the authority to give at all times; and (3) That the illicit act of the employee was on the occasion or by reason of the functions entrusted to him. To make the employee liable under paragraphs 5 and 6 of Article 2180, it must be established that the injurious or tortuous act was committed at the time the employee was performing his functions. The employer-employee relationship cannot be assumed. It is incumbent upon the plaintiff to prove the relationship by preponderant evidence. To determine the existence of an employment relationship, we rely on the four-fold test: (1) the employer‘s power of selection; (2) payment of wages or other remuneration; (3) the employer‘s right to control the method of doing the work; and (4) the employer‘s right of suspension or dismissal. CA correctly held that it was the Municipality which was the lawful employer of Lozano at the time of the accident. It is uncontested that Lozano was employed as a driver by the municipality. That he was subsequently assigned to Mayor Miguel during the time of the accident is of no moment. Municipality remains to be Lozano‘s employer notwithstanding Lozano‘s assignment to Mayor Miguel. This Court has, on several occasions, held that an employer-employee relationship still exists even if the employee was loaned by the employer to another person or entity because control over the employee subsists. Spouses Jayme argued that Mayor Miguel had at least supervision and control over Lozano and how the latter operated or drove the Isuzu pick-up during the time of the accident. They, however, failed to buttress this claim. Even assuming arguendo that Mayor Miguel had authority to give instructions or directions to Lozano, he still can not be held liable. In Benson v. Sorrell, the New England Supreme Court ruled that mere giving of directions to the driver does not establish that the passenger has control over the vehicle. Neither does it render one the employer of the driver. Moreover, no negligence may be imputed against a fellow employee although the person may have the right to control the manner of the vehicle‘s operation. In the absence of an employer-employee relationship establishing vicarious liability, the driver‘s negligence should not be attributed to a fellow employee who only happens to be an occupant of the vehicle. Whatever right of control the occupant may have over the driver is not sufficient by itself to justify an application of the doctrine of vicarious liability. Handley v. Lombardi is instructive on this exception to the rule on vicarious liability: ―In the case of actionable negligence, the rule is well-settled both in this state and elsewhere that the negligence of a subordinate employee or subagent is not to be imputed to a superior employee or agent, but only to the master or principal.‖ In Swanson v. McQuown, Supreme Court adhered to the general rule that a public official is not liable for the wrongful acts of his subordinates on a vicarious basis since the relationship is not a true master-servant situation. The court went on to rule that the only exception is when they cooperate in the act complained of, or direct or encourage it. Mayor Miguel was neither Lozano‘s employer nor the vehicle‘s registered owner. There existed no causal relationship between him and Lozano or the vehicle used that will make him accountable for Marvin‘s death. Mayor Miguel was a mere passenger at the time of the accident. The failure of a passenger to assist the driver, by providing him warnings or by serving as lookout does not make the passenger liable for the latter‘s negligent acts. The driver‘s duty is not one that may be delegated to others. 159 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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The true and lawful employer of Lozano is the Municipality. Unfortunately for Spouses Jayme, the municipality may not be sued because it is an agency of the State engaged in governmental functions and, hence, immune from suit. ―It has already been remarked that municipal corporations are suable because their charters grant them the competence to sue and be sued. Nevertheless, they are generally not liable for torts committed by them in the discharge of governmental functions and can only be held answerable only if it can be shown that they were acting in proprietary capacity. In permitting such entities to be sued, the State merely gives the claimant the right to show that the defendant was not acting in governmental capacity when the injury was committed or that the case comes under the exceptions recognized by law. Failing this, the claimant cannot recover.‖ The liability attaches to the registered owner, the negligent driver and his direct employer. ―Settled is the rule that the registered owner of a vehicle is jointly and severally liable with the driver for damages incurred by passengers and third persons as a consequence of injuries or death sustained in the operation of said vehicles. Regardless of who the actual owner of the vehicle is, the operator of record continues to be the operator of the vehicle as regards the public and third persons, and as such is directly and primarily responsible for the consequences incident (sic) to its operation‖ The law on the matter is clear: only the negligent driver, the driver‟s employer, and the registered owner of the vehicle are liable for the death of a third person resulting from the negligent operation of the vehicle. 15. Ramos v. Court of Appeals, 321 SCRA 584 (1999)  16. Ramos v. Court of Appeals, 380 SCRA 467 (2002)  Supra Issue: (1) Was Dr. Gutierez negligent and whether it was the faulty intubation which was the proximate cause of Erlinda‘s coma? (2) Whether Dr. Hosaka can be held liable by virtue of the Captain of the Ship doctrine. (3) Whether DLSMC is solidarily responsible with the doctors. Held: (1) YES. It has been sufficiently established that she failed to exercise the standards of care in the administration of anesthesia on a patient. She did not perform a ―preoperative evaluation‖ of the patient before administering anaesthesia. Particularly, she did not check the patient‘s airway. As she herself admitted, she saw Erlinda for the first time on the day of the operation itself, one hour before the scheduled operation. The injury incurred by Erlinda does not normally happen absent any negligence in the administration of anesthesia and in the use of an endotracheal tube. Upon these facts and under these circumstances, a layman would be able to say, as a matter of common knowledge and observation, that the consequences of professional treatment were not as such as would ordinarily have followed if due care had been exercised. Thus, res ipsa loquitur is applicable. (2) YES. That there is a trend in American jurisprudence to do away with the Captain-of-the-Ship doctrine does not mean that this Court will ipso facto follow said trend. Due regard for the peculiar factual circumstances obtaining in this case justify the application of the Captain-of-the-Ship doctrine. From the facts on record it can be logically inferred that Dr. Hosaka exercised a certain degree of, at the very least, supervision over the procedure then being performed on Erlinda. (1) He recommended Gutierrez thereby representing to Ramos that she possessed the necessary competence and skills. (2) He was the attending physician of Erlinda and gave instructions to call another anaesthesiologist to help Erlinda. (3) Drs. Hosaka and Gutierrez worked as a team. Their work cannot be placed in separate watertight compartments because their duties intersect with each other. Moreover, Dr. Hosaka‘s irresponsible conduct of arriving very late for the scheduled operation of petitioner Erlinda is violative, not only of his duty as a physician ―to serve the interest of his patients with the greatest solicitude, giving them always his best talent and skill,‖ but also of Article 19 CC which requires a person, in the performance of his duties, to act with justice and give everyone his due. (3) NO. There is no employer-employee relationship (see 4 fold test in labor) between DLSMC and Drs. Gutierrez and Hosaka which would hold DLSMC solidarity liable under Art. 2180. First, a hospital does not hire or engage the services of a consultant, but rather, accredits the latter and grants him or her the privilege of maintaining a clinic and/or admitting patients in the hospital upon a showing by the consultant that he or she possesses the necessary qualifications. Second, it is not the hospital but the patient who pays the consultant‘s fee for services rendered by the latter. Third, a hospital does not dismiss a consultant; instead, the latter may lose his or her accreditation or privileges granted by the hospital. Fourth, when a doctor refers a patient for admission in a hospital, it is the doctor who prescribes the treatment to be given to said patient. The hospital‘s obligation is limited to providing the patient with the preferred room accommodation, the nutritional diet and medications prescribed by the doctor, the 160 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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equipment and facilities necessary for the treatment of the patient, as well as the services of the hospital staff who perform the ministerial tasks of ensuring that the doctor‘s orders are carried out strictly. As explained by DLSMC, that the admission of a physician to membership in DLSMC‘s medical staff as active or visiting consultant is first decided upon by the Credentials Committee thereof, which is composed of the heads of the various specialty departments such as the Department of Obstetrics and Gynecology, Pediatrics, Surgery with the department head of the particular specialty applied for as chairman. The Credentials Committee then recommends to DLSMC's Medical Director or Hospital Administrator the acceptance or rejection of the applicant physician, and said director or administrator validates the committee's recommendation. Similarly, in cases where a disciplinary action is lodged against a consultant, the same is initiated by the department to whom the consultant concerned belongs and filed with the Ethics Committee consisting of the department specialty heads. The medical director/hospital administrator merely acts as exofficio member of said committee. Neither is there any showing that it is DLSMC which pays any of its consultants for medical services rendered by the latter to their respective patients. Moreover, the contract between the consultant in respondent hospital and his patient is separate and distinct from the contract between respondent hospital and said patient. The FIRST has for its object the rendition of medical services by the consultant to the patient, while the SECOND concerns the provision by the hospital of facilities and services by its staff such as nurses and laboratory personnel necessary for the proper treatment of the patient. Further, no evidence was adduced to show that the injury suffered by petitioner Erlinda was due to a failure on the part of respondent DLSMC to provide for hospital facilities and staff necessary for her treatment. 17. Nogales v. Capitol Medical Center, G.R. No. 142625, December 19, 2006  Supra Issue: Whether CMC is vicariously liable for Estrada‘s negligence. Held: YES. CMC disclaims liability by asserting that Estrada was a mere visiting physician and that it admitted Corazon because her physical condition then was classified an emergency obstetrics case. The employer (or the hospital) must have the right to control both the means and the details of the process by which the employee (or the physician) is to accomplish his task. After a thorough examination of the voluminous records of this case, no single evidence points to CMC‘s exercise of control over Estrada‘s treatment and management of Corazon‘s condition. Throughout the pregnancy, Corazon was under the exclusive prenatal care of Estrada. At the time of her admission at CMC and during her delivery, it was Estrada who attended to Corazon. There was no showing that CMC had a part in diagnosing her condition. While Estrada enjoyed staff privileges at CMC, such fact alone did not make him an employee of CMC. CMC merely allowed Dr. Estrada to use its facilities when she was about to give birth. The question now is whether CMC is automatically exempt from liability considering that Estrada is a mere independent contractor-physician. In general, a hospital is not liable for the negligence of an independent contractor-physician. There is, however, an exception to this principle. The hospital may be liable if the physician is the ―ostensible‖ agent of the hospital. This exception is also known as the ―doctrine of apparent authority.‖ Under said doctrine, a hospital can be held vicariously liable for the negligent acts of a physician providing care at the hospital, regardless of whether the physician is an independent contractor, unless the patient knows, or should have known, that the physician is an independent contractor. For a hospital to be liable under the doctrine of apparent authority, a plaintiff must show that: (1) the hospital, or its agent, acted in a manner that would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital; (2) where the acts of the agent create the appearance of authority, the plaintiff must also prove that the hospital had knowledge of and acquiesced in them; and (3) the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence. Said ―Holding Out‖ does not require an express representation by the hospital that the person alleged to be negligent is the employee. The doctrine essentially involves two factors to determine the liability of an independent contractor physician. HOSPITAL‘S MANIFESTATIONS It sometimes described as an inquiry whether the hospital acted in a manner which would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital. In this regard, the hospital need not make express representations to the patient that the treating physician is an employee of the hospital; rather a representation may be general and implied. Said doctrine is also a species of the doctrine of estoppel. In this case, CMC impliedly held out Estrada as a member of its medical staff thus clothing him with apparent authority leading Nogales to believe that Estrada was an employee/agent. Instances: (1) CMC granted staff privileges 161

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to Estrada; (2) Signing of Consent Forms signed did not indicate that Estrada was an independent contractor; (3) Estrada‘s referral to the Head of OB-GYNE gave the impression that Estrada was a member the CMC staff. PATIENT‘S RELIANCE It is sometimes characterized as an inquiry on whether the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence. The records show that the Spouses Nogales relied upon a perceived employment relationship with CMC in accepting Estrada‘s services. Rogelio‘s consent in Corazon‘s hysterectomy to be performed by a different physician, namely Espinola, is a clearindication of Rogelio‘s confidence in CMC‘s surgical staff. Likewise unconvincing is CMC‘s argument that petitioners are estopped from claiming damages based on the Consent on Admission and Consent to Operation. The documents do not expressly release CMC from liability for injury to Corazon due to negligence during her treatment or operation. Neither do the consent forms expressly exempt CMC from liability for Corazon‘s death due to negligence during such treatment or operation. Such release forms, being in the nature of contracts of adhesion, are construed strictly against hospitals. Besides, a blanket release in favor of hospitals ―from any and all claims,‖ which includes claims due to bad faith or gross negligence, would be contrary to public policy and thus void. When a person needing urgent medical attention rushes to a hospital, he cannot bargain on equal footing with the hospital on the terms of admission and operation. Such a person is literally at the mercy of the hospital 18. Professional Services, Inc., v. Agana, 513 SCRA 478 (2007)  Supra 19. Professional Services, Inc., v. Agana, G.R. Nos. 126297, 126467, 127590, February 2, 2010  Supra Issue: Whether a hospital may be held liable for the negligence of physicians-consultants allowed to practice in its premises. Held: YES. PSI is liable to the Aganas, not under the principle of respondeat superior for lack of evidence of an employment relationship with Dr. Ampil but under the principle of OSTENSIBLE AGENCY for the negligence of Dr. Ampil and, pro hac vice, under the principle of CORPORATE NEGLIGENCE for its failure to perform its duties as a hospital. A hospital as a juridical entity cannot practice medicine, in reality it utilizes doctors, surgeons and medical practitioners in the conduct of its business of facilitating medical and surgical treatment. There are 3 legal relationships that crisscross: 1) hospital and the doctor; 2) hospital and the patient; 3) patient and the doctor. The exact nature of each relationship determines the basis and extent of the liability of the hospital for the negligence of the doctor. Where an employment relationship exists, the hospital may be held vicariously liable under Article 2176 in relation to Article 2180 or respondeat superior. Even when no employment relationship exists but it is shown that the hospital holds out to the patient that the doctor is its agent, the hospital may still be vicariously liable under Article 2176 in relation to Article 1431 and Article 1869 or the principle of apparent authority. Regardless of its relationship with the doctor, the hospital may be held directly liable to the patient for its own negligence or failure to follow established standard of conduct to which it should conform as a corporation. There is ample evidence that the PSI held out to the patient that Dr. Ampil was its agent. There are 2 factors that determine apparent authority: 1) hospital‘s implied manifestation to the patient which led the latter to conclude that the doctor was the hospital‘s agent; and 2) patient‘s reliance upon the conduct of the hospital and the doctor, consistent with ordinary care and prudence. Enrique testified that he consulted Dr. Ampil regarding the condition of his wife and as advised by Dr. Ampil, he ―asked [his] wife to go to Medical City to be examined by [Dr. Ampil] - indicates that it was Enrique who actually made the decision on whom Natividad should consult and where. When asked what impelled him to choose Dr. Ampil, he said ―I have known him to be a specialist on that part of the body; A staff member of the Medical City which is a prominent and known hospital; because he is a neighbor, I expect more than the usual medical service.‖ The decision made by Enrique for Natividad to consult Dr. Ampil was significantly influenced by the impression that Dr. Ampil was a staff member of Medical City. Enrique looked upon Dr. Ampil not as independent of but as integrally related to Medical City. In the ―Consent for Hospital Care‖ signed by Agana, PSI virtually reinforced the public impression that Dr. Ampil was a physician of its hospital, rather than one independently practicing in it; that the medications and treatments he prescribed were necessary and desirable; and that the hospital staff was prepared to carry them out. PSI pointed out in its memorandum that Dr. Ampil‘s hospital affiliation was not the exclusive basis – that had Dr. Ampil been affiliated with another hospital, he would still have been chosen by the Aganas as Natividad‘s surgeon. Court cannot speculate. Under the circumstances at that time, Enrique decided to consult Dr. Ampil for he believed him to be a staff member of a prominent and known hospital. PSI is vicariously liable for the negligence of Dr. Ampil as its ostensible agent. 162 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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While PSI had no power to control the means or method by which Dr. Ampil conducted the surgery, PSI had the power to review or cause the review of what may have irregularly transpired within its walls. PSI defined the standards of its corporate conduct – that it had a corporate duty to Natividad even after her operation to ensure her safety as a patient. The corporate duty was not limited to having its nursing staff note or record the 2 missing gauzes but it extended to determining Dr. Ampil‘s role in it, bringing the matter to his attention, and correcting his negligence. Given the standard of conduct that PSI defined for itself, the inquiry is whether the hospital measured up to it. PSI excuses itself from fulfilling its corporate duty on the ground that Dr. Ampil assumed the personal responsibility of informing Natividad about the 2 missing gauzes. Dr. Ricardo Jocson, who was part of the group of doctors that attended to Natividad, testified that the group talked about the missing gauzes but Dr. Ampil assured them that he would personally notify the patient about it. PSI claimed no reason for it to act on the report on the 2 missing gauzes because Natividad Agana showed no signs of complications. The excuses are totally unacceptable. PSI could not simply wave off the problem and nonchalantly delegate to Dr. Ampil the duty to review what transpired during the operation. The purpose of such review would have been to pinpoint when, how and by whom two surgical gauzes were mislaid to avert any jeopardy to Natividad‘s recovery. PSI could not have expected that purpose to be achieved by merely hoping that the person likely to have mislaid the gauzes might be able to retrace his own steps. By its own standard of corporate conduct, PSI‘s duty to initiate the review was non-delegable. While Dr. Ampil may have had the primary responsibility of notifying Natividad about the missing gauzes, PSI imposed upon itself the separate and independent responsibility of initiating the inquiry into the missing gauzes. The purpose of the first would have been to apprise Natividad of what transpired during her surgery, second would have been to pinpoint any lapse in procedure to prevent a recurrence thereof and to determine corrective measures that would ensure the safety of Natividad. That Dr. Ampil negligently failed to notify Natividad did not release PSI from its self-imposed separate responsibility. PSI had the duty to take notice of medical records prepared by its own staff when these bear earmarks of a surgery gone awry. The record taken during the operation of Natividad which reported a gauze count discrepancy should have given PSI sufficient reason to initiate a review and should not have waited for Natividad to complain. PSI took no heed of the record of operation and consequently did not initiate a review of what transpired during Natividad‘s operation. Rather, it shirked its responsibility and passed it on to others — to Dr. Ampil whom it expected to inform Natividad, and to Natividad herself to complain before it took any meaningful step. By its inaction, therefore, PSI failed its own standard of hospital care. The corporate negligence ascribed to PSI is different from the medical negligence attributed to Dr. Ampil. The duties of the hospital are distinct from those of the doctor-consultant. The failure of PSI to fulfill its duties as a hospital corporation gave rise to a direct liability to the Aganas distinct from that of Dr. Ampil. PSI‘s hospital liability based on ostensible agency and corporate negligence applies only to this case, pro hac vice and is not intended to set a precedent and should not serve as a basis to hold hospitals liable for every form of negligence of their doctorsconsultants. The ruling is unique to this case, for the liability of PSI arose from an implied agency with Dr. Ampil and an admitted corporate duty to Natividad. The agony of Aganas has gone on for 26 long years with Natividad coming to the end of her days racked in pain and agony. Such wretchedness could have been avoided had PSI simply done what was logical: heed the report of a guaze count discrepancy, initiate a review, and take corrective measures. PSI is liable for P15 million. C.

The State

1. Merritt v. Government of the Philippine Islands, G.R. No. 11154, March 21, 1916 Facts: Merritt was riding a motorcycle going towards the western part of Calle Padre Faura at a speed on 10-12 mph. While he was crossing the intersection, a General Hospital ambulance moving in the opposite direction turned suddenly, unexpectedly, and without any whistle or horn, to the right, towards the wrong lane, and hitting Merrit. He was severely injured. He was entirely unconscious, had multiple fractures, and his brain had suffered material injury. His right leg was broken, and showed a contraction. He became slightly deaf and mentally weak, particularly when he tried to use his money for mathematical calculations.  He was one of the best constructors of wooden buildings, and now he could not work even at half capacity. A partnership wherein he was a partner was dissolved, and a contract for building the Uy Chaco building was given up. Issue: Whether or not the Government is liable for the damages sustained by the Meritt as a result of the collision, even if it be true that the collision was due to the negligence of the chauffeur. Held: NO. The collision between the plaintiff's motorcycle and the ambulance of the General Hospital was due solely to the negligence of the chauffeur. 163

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The two items which constitute a part of the P14,741 and which are drawn in question by the plaintiff are (a) P5,000, the award awarded for permanent injuries, and (b) the P2,666, the amount allowed for the loss of wages during the time the plaintiff was incapacitated from pursuing his occupation. We find nothing in the record which would justify us in increasing the amount of the first. As to the second, the record shows, and the trial court so found, that the plaintiff's services as a contractor were worth P1,000 per month. The court, however, limited the time to two months and twenty-one days, which the plaintiff was actually confined in the hospital. In this we think there was error, because it was clearly established that the plaintiff was wholly incapacitated for a period of six months. The mere fact that he remained in the hospital only two months and twenty-one days while the remainder of the six months was spent in his home, would not prevent recovery for the whole time. We, therefore, find that the amount of damages sustained by the plaintiff, without any fault on his part, is P18,075. As the negligence which caused the collision is a tort committed by an agent or employee of the Government, the inquiry at once arises whether the Government is legally-liable for the damages resulting therefrom. Act No. 2457, effective February 3, 1915, reads: 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. SECTION 1. E. Merritt is hereby authorized to bring suit in the Court of First Instance of the city of Manila against the Government of the Philippine Islands in order to fix the responsibility for the collision between his motorcycle and the ambulance of the General Hospital, and to determine the amount of the damages, if any, to which Mr. E. Merritt is entitled on account of said collision, and the Attorney-General of the Philippine Islands is hereby authorized and directed to appear at the trial on the behalf of the Government of said Islands, to defendant said Government at the same. Enacted, February 3, 1915. Did the defendant, in enacting the above quoted Act, simply waive its immunity from suit or did it also concede its liability to the plaintiff? If only the former, then it cannot be held that the Act created any new cause of action in favor of the plaintiff or extended the defendant's liability to any case not previously recognized. All admit that the Insular Government cannot be sued by an individual without its consent. It is also admitted that the instant case is one against the Government. As the consent of the Government to be sued by the plaintiff was entirely voluntary on its part, it is our duty to look carefully into the terms of the consent, and render judgment accordingly. The plaintiff was authorized to bring this action against the Government "in order to fix the responsibility for the collision between his motorcycle and the ambulance of the General Hospital and to determine the amount of the damages, if any, to which Mr. E. Merritt is entitled on account of said collision." These were the two questions submitted to the court for determination. The Act was passed "in order that said questions may be decided." We have "decided" that the accident was due solely to the negligence of the chauffeur, who was at the time an employee of the defendant, and we have also fixed the amount of damages sustained by the plaintiff as a result of the collision. Does the Act authorize us to hold that the Government is legally liable for that amount? If not, we must look elsewhere for such authority, if it exists. The Government having been "modeled after the Federal and State Governments in the United States," we may look to the decisions of the high courts of that country for aid in determining the purpose and scope of Act No. 2457. In the US the rule that the state is not liable for the torts committed by its officers or agents whom it employs, except when expressly made so by legislative enactment, is well settled. "The Government," says Justice Story, "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." In the case of Melvin vs. State, the plaintiff sought to recover damages from the state for personal injuries received on account of the negligence of the state officers at the state fair, a state institution created by the legislature for the purpose of improving agricultural and kindred industries; to disseminate information calculated to educate and benefit the industrial classes; and to advance by such means the material interests of the state, being objects similar to those sought by the public school system. In passing upon the question of the state's liability for the negligent acts of its officers or agents, the court said: ―No claim arises against any government is favor of an individual, by reason of the misfeasance, laches, or unauthorized exercise of powers by its officers or agents.‖ As to the scope of legislative enactments permitting individuals to sue the state where the cause of action arises out of either fort or contract, the rule is stated in 36 Cyc., 915, thus:

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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. In Apfelbacher vs. State decided April 16, 1915, the Act of 1913, which authorized the bringing of this suit, read: SECTION 1. Authority is hereby given to George Apfelbacher, of the town of Summit, Waukesha County, Wisconsin, to bring suit in such court or courts and in such form or forms as he may be advised for the purpose of settling and determining all controversies which he may now have with the State of Wisconsin, or its duly authorized officers and agents, relative to the mill property of said George Apfelbacher, the fish hatchery of the State of Wisconsin on the Bark River, and the mill property of Evan Humphrey at the lower end of Nagawicka Lake, and relative to the use of the waters of said Bark River and Nagawicka Lake, all in the county of Waukesha, Wisconsin. In determining the scope of this act, the court said: Plaintiff claims that by the enactment of this law the legislature admitted liability on the part of the state for the acts of its officers, and that the suit now stands just as it would stand between private parties. It is difficult to see how the act does, or was intended to do, more than remove the state's immunity from suit. It simply gives authority to commence suit for the purpose of settling plaintiff's controversies with the estate. Nowhere in the act is there a whisper or suggestion that the court or courts in the disposition of the suit shall depart from well established principles of law, or that the amount of damages is the only question to be settled. The act opened the door of the court to the plaintiff. It did not pass upon the question of liability, but left the suit just where it would be in the absence of the state's immunity from suit. If the Legislature had intended to change the rule that obtained in this state so long and to declare liability on the part of the state, it would not have left so important a matter to mere inference, but would have done so in express terms. A statute of Massachusetts enacted in 1887 gave to the superior court "jurisdiction of all claims against the commonwealth, whether at law or in equity," with an exception not necessary to be here mentioned. In construing this statute the court, in Murdock Grate Co. vs. Commonwealth (152 Mass., 28), said: The statute we are discussing disclose no intention to create against the state a new and heretofore unrecognized class of liabilities, but only an intention to provide a judicial tribunal where well recognized existing liabilities can be adjudicated. In Sipple vs. State, where the board of the canal claims had, by the terms of the statute of New York, jurisdiction of claims for damages for injuries in the management of the canals such as the plaintiff had sustained, Chief Justice Ruger remarks: "It must be conceded that the state can be made liable for injuries arising from the negligence of its agents or servants, only by force of some positive statute assuming such liability." It being quite clear that Act No. 2457 does not operate to extend the Government's liability to any cause not previously recognized, we will now examine the substantive law touching the defendant's liability for the negligent acts of its officers, agents, and employees. Paragraph 5 of article 1903 of the Civil Code reads: The state is liable in this sense when it acts through a special agent, but not when the damage should have been caused by the official to whom properly it pertained to do the act performed, in which case the provisions of the preceding article shall be applicable. The supreme court of Spain in defining the scope of this paragraph said: 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; on the contrary, we must presuppose all foresight humanly possible on its part in order that each branch of service serves the general weal an that of private persons interested in its operation. Between these latter and the state, therefore, no relations of a private nature governed by the civil law can arise except in a case where the state acts as a judicial person capable of acquiring rights and contracting obligations. 165

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That the Civil Code in chapter 2, title 16, book 4, regulates the obligations which arise out of fault or negligence; and whereas in the first article thereof. No. 1902, where the general principle is laid down that where a person who by an act or omission causes damage to another through fault or negligence, shall be obliged to repair the damage so done, reference is made to acts or omissions of the persons who directly or indirectly cause the damage, the following articles refers to this persons and imposes an identical obligation upon those who maintain fixed relations of authority and superiority over the authors of the damage, because the law presumes that in consequence of such relations the evil caused by their own fault or negligence is imputable to them. This legal presumption gives way to proof, however, because, as held in the last paragraph of article 1903, responsibility for acts of third persons ceases when the persons mentioned in said article prove that they employed all the diligence of a good father of a family to avoid the damage, and among these persons, called upon to answer in a direct and not a subsidiary manner, are found, in addition to the mother or the father in a proper case, guardians and owners or directors of an establishment or enterprise, the state, but not always, except when it acts through the agency of a special agent, doubtless because and only in this case, the fault or negligence, which is the original basis of this kind of objections, must be presumed to lie with the state. That although in some cases the state might by virtue of the general principle set forth in article 1902 respond for all the damage that is occasioned to private parties by orders or resolutions which by fault or negligence are made by branches of the central administration acting in the name and representation of the state itself and as an external expression of its sovereignty in the exercise of its executive powers, yet said article is not applicable in the case of damages said to have been occasioned to the petitioners by an executive official, acting in the exercise of his powers, in proceedings to enforce the collections of certain property taxes owing by the owner of the property which they hold in sublease. That the responsibility of the state is limited by article 1903 to the case wherein 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. This concept does not apply to any executive agent who is an employee of the acting administration and who on his own responsibility performs the functions which are inherent in and naturally pertain to his office and which are regulated by law and the regulations." That according to paragraph 5 of article 1903 of the Civil Code and the principle laid down in a decision, among others, of the 18th of May, 1904, in a damage case, the responsibility of the state is limited to that which it contracts through a SPECIAL AGENT, duly empowered by a definite order or commission to perform some act or charged with some definite purpose which gives rise to the claim, and not where the claim is based on acts or omissions imputable to a public official charged with some administrative or technical office who can be held to the proper responsibility in the manner laid down by the law of civil responsibility. Consequently, the trial court in not so deciding and in sentencing the said entity to the payment of damages, caused by an official of the second class referred to, has by erroneous interpretation infringed the provisions of articles 1902 and 1903 of the Civil Code. It is, therefore, evidence that the State is only liable, according to the above quoted decisions of the Supreme Court of Spain, for the acts of its agents, officers and employees when they act as special agents within the meaning of paragraph 5 of article 1903, supra, and that the chauffeur of the ambulance of the General Hospital was not such an agent. 2. Fontanilla v. Maliaman, G.R. No. 55963, December 1, 1989 Facts: On August 21, 1976, a pickup owned and operated by respondent National Irrigation Administration then driven officially by Hugo Garcia employee of said government 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 Restituto Deligo was injured while Francisco Fontanilla died. At the time of the accident, Garcia was a licensed professional driver and who qualified for employment as such regular driver of NIA after having passed the written and oral examinations on traffic rules and maintenance of vehicles given by NIA authorities. After trial, the trial court rendered judgment which directed NIA to pay damages (death benefits) and actual expenses to petitioners. NIA appealed said decision to the CA. Instead of filing the required brief in the aforecited CA case, Fontanilla filed the instant petition with this Court. Solicitor General that contends that the filing of the instant petition is not proper in view of the appeal taken by respondent NIA to the CA against the judgment sought to be reviewed. The focal issue raised in NIA‘s appeal to the CA 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 Fontanilla‘s 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. 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 166

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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. NIA 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. Issue: Whether or not NIA is liable to petitioner for the acts of its driver Garcia. Held: YES. Even as the trial court touched on the failure or laxity of NIA 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 Fontanilla 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 the New Civil Code. Paragraphs 5 and 6 of Art. 2180 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 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; and (2) Its PRIVATE or BUSINESS aspects (as when it engages in private enterprises) where it becomes liable as an ordinary employer. 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 non-governmental 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. 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 NIA is an agency of the government exercising proprietary functions (to collect fees for the continuous operation and to transact business as may be necessary to attain objectives), by express provision of Rep. Act No. 3601. 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 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 NIA 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.

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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 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, 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 recklessness 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. 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. 3. Fontanilla v. Maliaman, G.R. No. 55963 & 61045, February 27, 1991 RESOLUTION: In its MR of the 1989 decision, the NIA, through the SolGen, maintains that, on the strength of PD No. 552 and the case of Angat River Irrigation System, et al. vs. Angat River Workers‟ Union, et al., ―the NIA does not perform solely and primarily proprietary functions but is an agency of the government tasked with governmental functions, and is therefore not liable for the tortious act of its driver Hugo Garcia, who was not its special agent.‖ Although the majority opinion in the cited case of Angat System declares that the Angat System (like the NIA) exercised a governmental function because the nature of the powers and functions of said agency does not show that it was intended to bring to the Government any special corporate benefit or pecuniary profit, there is a strong dissenting opinion penned by then Associate Justice and later Chief Justice Roberto Concepcion and concurred in by then Associate Justice J.B.L. Reyes which held the contrary view that the Angat River System is a government entity exercising proprietary functions. Quoting from said dissenting opinion which cited McQuillin‘s The Law of Municipal Corporations, ―In undertaking to supply water at price, municipality is not performing governmental function but is engaged in trade, and is liable first as private company would be for any negligence in laying out of its pipes, in keeping them in repair, or in furnishing potable water through them.‖ ―Municipality in contracting to provide water supply acts under its proprietary power and not under its legislative, public or governmental powers.‖ In this connection, the opinion is that irrigation districts in the US are basically identical to our irrigation systems under Act No. 2152. Because of such similarity, it is found appropriate to consider certain doctrines from American jurisprudence, which are as follows, to wit: ―An irrigation district is a public quasi corporation, organized, however, to conduct a business for the private benefit of the owners of land within its limits. They are members of the corporation, control its affairs, and alone are benefited by its operations. It is, in the administration of its business, the owner of its system in a proprietary rather than a public capacity, and must assume and bear the burdens of proprietary ownership.‖ The court, after a careful review of the authorities defining an irrigation district, conceded that such a quasi public corporation possessed some governmental powers and exercised some governmental functions, but held that the construction and operation of its irrigation canals and ditches was a proprietary rather than a governmental function, and hence the district was responsible in damages for the negligent construction or operation of its canal system.‖ Functions of government have been classified into governmental or constituent and proprietary or ministrant. The former involves the exercise of sovereignty and considered as compulsory; the latter connotes merely the exercise of proprietary functions and thus considered as optional. We agree with the former Chief Justice Concepcion in saying that the same purpose such as public benefit and public welfare may be found in the operation of certain enterprises (those engaged in the supply of electric power, or in supplying telegraphic, telephonic, and radio communication, or in the production and distribution of prime necessities, etc.) yet it is certain that the functions performed by such enterprises are basically PROPRIETARY IN NATURE. Primarily, a water improvement district is in no better position than a city is when exercising its purely local powers and duties. Its general purposes are not essentially public in their nature, but are only incidentally so; those purposes may be likened to those of a city which is operating a waterworks system, or an irrigation system. A water improvement district can do nothing, it has and furnishes no facilities, for the administration of the sovereign government. 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have no power or authority to exercise any of the functions of the general government, or to enforce any of the laws of the state or any of its other subdivisions, or collect taxes other than those assessed by the district. They have no more power or authority than that of the officers of a private corporation organized for like purposes. The primary objects and purposes of such district are of a purely local nature, for the district is created and operated for the sole benefit of its own members, and an analysis of those objects and purposes discloses that they directly benefit only the landowners who reside within and whose lands form a part of the district, to the exclusion of all other residents therein. The state and the general public are greatly benefited by the proper operation of the district, and to that extent its objects and accomplishments are public in their nature, but this characteristic is only incidental to the primary and chief object of the corporation, which is the irrigation of lands forming a part of the district. It is obvious, then, that the purposes and duties of such districts do not come within the definition of public rights, purposes, and duties which would entitle the district to the exemption raised by the common law as a protection to corporations having a purely public purpose and performing essentially public duties. In NAWASA vs. NWSA Consolidated Unions, which propounds the thesis that ―the NAWASA is not an agency performing governmental functions; rather it performs proprietary functions. Providing water supply and sewerage service are regarded as mere optional functions of government even though the service rendered caters to the community as a whole and the goal is for the general interest of society. Like the NAWASA, the NIA was not created for purposes of local government. While it may be true that the NIA was essentially a service agency of the government aimed at promoting public interest and public welfare, such fact does not make the NIA essentially and purely a ―government- function‖ corporation. NIA was created for the purpose of ―constructing, improving, rehabilitating, and administering all national irrigation systems in the Philippines, including all communal and pump irrigation projects.‖ These functions are only incidental to the principal aim of the agency, which is the irrigation of lands. NIA is a government agency invested with a corporate personality separate and distinct from the government, thus is governed by the Corporation Law. NIA may also sue and be sued in court. It has its own assets and liabilities. It also has corporate powers to be exercised by a Board of Directors. It is therefore concluded that NIA is a government agency with a juridical personality separate and distinct from the government. It is not a mere agency of the government but a corporate body performing proprietary functions. Therefore, it may be held liable for the damages caused by the negligent act of its driver who was not its special agent. D.

Teachers and Heads of Establishments

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Family Code o Articles 218 and 219

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Cases

1. Mercado v. Court of Appeals, 108 Phil. 414 (1960) Facts: Manuel Quisumbing and Augusto Mercado were classmates in the Lourdes Catholic School on Kanlaon, Quezon City. They quarreled over a ―pitogo‖ (piggybank made from an empty nutshell) which resulted to Augusto Mercado wounding Manuel Quisumbing on the right cheek with a piece of razor. The story was narrated thus: ―it was Augusto Mercado who started the aggression. Undeniably, the "pitogo" belonged to Augusto Mercado but he lent it to Benedicto P. Lim and in turn Benedicto lent it to Renato Legaspi. Renato was not aware that the "pitogo" belonged to Augusto, because right after Benedicto gave it to him, Benedicto ran away to get a basket ball with which they could play. Manuel Quisumbing, Jr. was likewise unaware that the "pitogo" belonged to Augusto. He thought it was the "pitogo" of Benedicto P. Lim, so that when Augusto attempted to get the "pitogo" from Renato, Manuel, Jr. told him not to do so because Renato was better at putting the chain into the holes of the "pitogo". However, Augusto resented Manuel, Jr.'s remark and he aggresively pushed the latter. The fight started then. After Augusto gave successive blows to Manuel, Jr., and the latter was clutching his stomach which bore the brunt of Augusto's anger, Augusto seeing that Manuel, Jr. was in a helpless position, cut him on the right check with a piece of razor.‖ Quisumbing was awarded damages. Mercado challenged the award of damages. Additionally, they argue that since the incident of the inflicting of the wound on respondent occurred in a Catholic School (during recess time), through no fault of the father, petitioner herein, the teacher or head of the school should be held responsible instead of the latter. Issue: Whether Lourdes Catholic School is liable. 169

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Held: NO. The last paragraph of Article 2180 of the Civil Code, upon which petitioner rests his claim that the school where his son was studying should be made liable, is as follows: ART. 2180: 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. It would be seem that the clause "so long as they remain in their custody," contemplates a situation where the pupil lives and boards with the teacher, such that the control, direction and influence on the pupil supersedes those of the parents. In these circumstances the control or influence over the conduct and actions of the pupil would pass from the father and mother to the teacher; and so would the responsibility for the torts of the pupil. Such a situation does not appear in the case at bar; the pupils appear to go to school during school hours and go back to their homes with their parents after school is over. The situation contemplated in the last paragraph of Article 2180 does not apply, nor does paragraph 2 of said article, which makes father or mother responsible for the damages caused by their minor children. The claim of petitioner that responsibility should pass to the school must, therefore, be held to be without merit. In Exconde, it was held that: ―It is true that under the law above-quoted, ‗teachers or directors of arts and trades are liable for any damage 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.‖ It is possible that the CA may have considered Augusto Mercado responsible for or guilty, of a quasi-delict causing physical injuries, within the meaning of paragraph 2 of Article 2219. Even if we assume that said court considered Mercado guilty of a quasi-delict when it imposed the moral damages, yet the facts found by said court indicate that Augusto's resentment, which motivated the assault, was occasioned by the fact that Manuel, Jr. had tried to intervene in or interfere with the attempt of Mercado to get "his pitogo from Renato." This is, according to the decision appealed from, the reason why Mercado was incensed and pushed Quisumbing who, in turn, also pushed Mercado. It is, therefore, apparent that the proximate cause of the injury caused to Quisumbing was Quisumbing's own fault or negligence for having interfered with Mercado while trying to get the pitogo from another boy. However, none of the cases mentioned in Article 2219 of the Civil Code, which authorizes the grant of moral damages, was shown to have existed. 2. Palisoc v. Brillantes, 41 SCRA 557 (1971) Facts: Palisoc, Daffon, and Cruz were classmates at the Manila Technical Institute. They were taking up automotive mechanics. On March 1966 at around 2-3PM, they went to the laboratory room located at the 2nd floor of the school. During recess, Cruz and Daffon were working on a machine while Palisoc was merely looking at them. Thereafter, Daffon remarked to the effect that Palisoc was acting like a foreman. Offended by said remark, Palisoc slapped Daffon on the face. The latter retaliated by giving him fist blows to the face and stomach. While exchanging blows, Palisoc stumbled on an engine block causing him to fall face downward. As a result, he became pale and fainted. He never regained consciousness and finally died. Cause of death was found to be hemorrhage of internal organs (pancreas, stomach, brain) due to the fistblows and the fall. Parents of 16 year old Palisoc sued Daffon, Brillantes (members of the school‘s Board), Valenton (head of school), and Quibule (teacher) for quasi delict. Trial court held Daffon liable under Art. 2176 but absolved Brillantes et al. for liability under Art. 2180 because, using the case of Mercado v. CA as basis, it claimed that what the provision contemplated was a situation wherein the pupil lives or boards with the teacher such that control or influence on the former supersedes those of the parents‘. Issue: Whether the school‘s Board Member, head, and teacher is liable under Art. 2180 and whether the interpration of the court of said provision was correct. Held: ONLY THE HEAD and TEACHER are liable. The case at bar was instituted directly against the school officials and squarely raises the issue of liability of teachers and heads of schools under Article 2180 for damages caused by their pupils and students against fellow students on the school premises. Here, the parents of the student at fault, Daffon, are not involved, since Daffon was already of age at the time of the tragic incident. There is no question, either, that the school involved is a non-academic school, the Manila Technical Institute being admittedly a technical vocational and industrial school. The Court holds that under Art. 2180, defendants head and teacher of the Manila Technical Institute are liable jointly and severally for damages to Palisoc‘s parents for the death of their minor son at the hands of afellow student within the laboratory of said school. 170

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No liability attaches to Brillantes as a mere member of the school‘s board of directors. The school itself cannot be held similarly liable, since it has not been properly impleaded as party defendant. While plaintiffs sought to so implead it, by impleading improperly defendant Brillantes, its former single proprietor, the lower court found that it had been incorporated since August 1962, and therefore the school itself, as thus incorporated, should have been brought in as party defendant. Plaintiffs failed to do so, notwithstanding that Brillantes and his co-defendants in their reply to plaintiffs‘ request for admission had expressly manifested and made of record that ―defendant Antonio C. Brillantes is not the registered owner/head of the ‗Manila Technical Institute‘ which is now a corporation and is not owned by any individual person. The rationale of such liability of school heads and teachers for the tortious acts of their pupils and students, so long as they remain in their custody, is that they stand, to a certain extent, as to their pupils and students, in loco parentis and are called upon to ―exercise reasonable supervision over the conduct of the child.‖ In the law of torts, the governing principle is that the protective custody of the school heads and teachers is mandatorily substituted for that of the parents, and hence, it becomes their obligation as well as that of the school itself to provide proper supervision of the students‟ activities during the whole time that they are at attendance in the school, including recess time, as well as to take the necessary precautions to protect the students in their custody from dangers and hazards that would reasonably be anticipated, including injuries that some student themselves may inflict willfully or through negligence on their fellow students. As tersely summarized by Mr. Justice J.B.L. Reyes in his dissenting opinion in Exconde, ―the basis of the presumption of negligence of Art. 1903 [now 2180] is some culpa in vigilando that the parents, teachers, etc. are supposed to have incurred in the exercise of their authority‖ and ―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.‖ The school itself, likewise, has to respond for the fault or negligence of its school head and teachers under the same cited article. Tolentino expresses a similar opinion: “Teachers:—In order to be within this provision, a teacher must not only be charged with teaching but also vigilance over their students or pupils. They include teachers in educational institutions of all kinds, whether for the intellect, the spirit, or the body; teachers who give instruction in classes or by individuals, even in their own homes; teachers in institutions for deficient or abandoned children, and those in correctional institutions.‖ There is nothing in the law that requires that for such liability to attach, the pupil or student who commits the tortious act must live and board in the school, as erroneously held by the lower court, and the dicta in Mercado (as well as in Exconde) on which it relied, must now be deemed to have been set aside by the present decision. Valenton and Quibulue as president and teacher-in-charge of the school must therefore be held jointly and severally liable for the quasi-delict of their co-defendant Daffon in the latter‘s having caused the death of his classmate, the deceased Palisoc. The unfortunate death resulting from the fight between the protagonists-students could have been avoided, had said defendants but complied with their duty of providing adequate supervision over the activities of the students in the school premises to protect their students from harm, whether at the hands of fellow students or other parties. At any rate, the law holds them liable unless they relieve themselves of such liability, in compliance with the last paragraph of Article 2180 by “(proving) that they observed all the diligence of a good father of a family to prevent damage.‖ In the light of the factual findings of the lower court‘s decision, said defendants failed to prove such exemption from liability. 3. Amadora v. Court of Appeals, 160 SCRA 315 (1988) Facts: On April 13, 1972, while they were in the auditorium of their school, the Colegio de San Jose-Recoletos, a classmate, Pablito Damon, fired a gun that mortally hit Alfredo Amadora (a graduating student). Daffon was convicted of homicide thru reckless imprudence. Additionally, the herein petitioners, as the victim's parents, filed a civil action for damages under Article 2180 of the Civil Code against the Colegio de San Jose-Recoletos, its rector the high school principal, the dean of boys, and the physics teacher, together with Daffon and two other students, through their respective parents. The complaint against the students was later dropped. Disputed facts: (1) On the CUSTODY OF THE SCHOOL OVER THE VICTIM: The petitioners contend that their son was in the school to show his physics experiment as a prerequisite to his graduation; hence, he was then under the custody of the private respondents. The private respondents submit that Alfredo Amadora had gone to the school only for the purpose of submitting his physics report and that he was no longer in their custody because the semester had already ended. (2) IDENTITY OF THE GUN: It is not denied by the respondents that on April 7, 1972, Sergio Damaso, Jr., the dean of boys, confiscated from Jose Gumban an unlicensed pistol but later returned it to him without making a 171 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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report to the principal or taking any further action . As Gumban was one of the companions of Daffon when the latter fired the gun that killed Alfredo, the petitioners contend that this was the same pistol that had been confiscated from Gumban and that their son would not have been killed if it had not been returned by Damaso. The respondents say, however, that there is no proof that the gun was the same firearm that killed Alfredo. The RTC held: respondent court found that Article 2180 was not applicable because (1) Colegio de San Jose-Recoletos was not a school of arts and trades but an academic institution of learning; (2) it also held that the students were not in the custody of the school at the time of the incident as the semester had already ended; and (3) that there was no clear identification of the fatal gun and (4) finally, that in any event the defendant, had exercised the necessary diligence in preventing the injury. This decision now is being appealed in this case. Issue: May a student be under the custody of a school even though school hasn‘t started yet/has already ended and whether Art. 2180 is applicable. Held: YES. Resolution of all these disagreements will depend on the interpretation of Article 2180 which, as it happens, is invoked by both parties in support of their conflicting positions. The pertinent part of this article reads as follows: 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. (1) Discussion on past jurisprudence on the matter. Three cases have so far been decided by the Court in connection with the above-quoted provision, to wit: Exconde , Mercado , and Palisoc . (a) Exconde case (1957) This decision exculpated the school in an obiter dictum (as it was not a party to the case) on the ground that it was riot a school of arts and trades. Justice JBL Reyes dissented arguing that it was the school authorities who should be held liable Liability under this rule, he said, was imposed on (1) teachers in general; and (2) heads of schools of arts and trades in particular. The modifying clause "of establishments of arts and trades" should apply only to "heads" and not "teachers." (b) Mercado case (1960) The Court declared in another obiter (as the school itself had also not been sued that the school was not liable because it was not an establishment of arts and trades. Moreover, the custody requirement had not been proved as this "contemplates a situation where the student lives and boards with the teacher, such that the control, direction and influences on the pupil supersede those of the parents." (c) Palisoc case Although the wrongdoer — who was already of age — was not boarding in the school, the head thereof and the teacher in charge were held solidarily liable with him. Justice Teehankee reasoned that the phrase used in the cited article — "so long as (the students) remain in their custody" — means the protective and supervisory custody that the school and its heads and teachers exercise over the pupils and students for as long as they are at attendance in the school, including recess time. There is nothing in the law that requires that for such liability to attach, the pupil or student who commits the tortious act must live and board in the school, as erroneously held by the lower court, and the dicta in Mercado (as well as in Exconde) on which it relied, must now be deemed to have been set aside by the present decision. In Palisoc, in a footnote, Justice Teehankee said he agreed with Justice Reyes' dissent in the Exconde Case but added that "since the school involved at bar is a non-academic school, the question as to the applicability of the cited codal provision to academic institutions will have to await another case wherein it may properly be raised." And this is the case. Unlike in Exconde and Mercado, the Colegio de San Jose-Recoletos has been directly impleaded and is sought to be held liable under Article 2180; and unlike in Palisoc, it is not a school of arts and trades but an academic institution of learning. The parties herein have also directly raised the question of whether or not Article 2180 covers even establishments which are technically not schools of arts and trades, and, if so, when the offending student is supposed to be "in its custody." (2) Based on the foregoing, Art. 2180 applies to ALL schools. After an exhaustive examination of the problem, the Court has come to the conclusion that the provision in question should apply to ALL SCHOOLS, academic as well as non-academic. Where the school is academic rather than technical or vocational in nature, responsibility for the tort committed by the student will attach to the teacher in charge of such student, following the first part of the provision. This is the general rule. In the case of establishments of arts and trades, it is the head thereof, and only he, who shall be held liable as an exception to the general rule. In other words, teachers in general shall be liable for the acts of their students except where the school is technical in nature, in which case it is the head thereof who shall be answerable. Following the canon of 172

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reddendo singula singulis "teachers" should apply to the words "pupils and students" and "heads of establishments of arts and trades" to the word "apprentices." The Court thus conforms to the dissenting opinion expressed by Justice J.B.L. Reyes in Exconde. There is really no substantial distinction between the academic and the non-academic schools insofar as torts committed by their students are concerned. The same vigilance is expected from the teacher over the students under his control and supervision, whatever the nature of the school where he is teaching. (3) The Court explained why in schools of arts and letters, only the head is held liable, while in ordinary schools, any teacher may be held liable. If the teacher of the academic school is to be held answerable for the torts committed by his students, why is it the head of the school only who is held liable where the injury is caused in a school of arts and trades? And in the case of the academic or non- technical school, why not apply the rule also to the head thereof instead of imposing the liability only on the teacher? The reason for the disparity can be traced to the fact that historically the head of the school of arts and trades exercised a closer tutelage over his pupils than the head of the academic school. The old schools of arts and trades were engaged in the training of artisans apprenticed to their master who personally and directly instructed them on the technique and secrets of their craft. The head of the school of arts and trades was such a master and so was personally involved in the task of teaching his students, who usually even boarded with him and so came under his constant control, supervision and influence. By contrast, the head of the academic school was not as involved with his students and exercised only administrative duties over the teachers who were the persons directly dealing with the students. The head of the academic school had then (as now) only a vicarious relationship with the students. Consequently, while he could not be directly faulted for the acts of the students, the head of the school of arts and trades, because of his closer ties with them, could be so blamed. It is conceded that the DISTINCTION NO LONGER OBTAINS AT PRESENT in view of the expansion of the schools of arts and trades, the consequent increase in their enrollment, and the corresponding diminution of the direct and personal contract of their heads with the students. Article 2180, however, remains unchanged. In its present state, the provision must be interpreted by the Court according to its clear and original mandate until the legislature, taking into account the charges in the situation subject to be regulated, sees fit to enact the necessary amendment. (4) The student is under the custody of the teacher as long as the student is under the control and influence of the school within its premises. From a reading of the provision under examination, it is clear that while the custody requirement, does not mean that the student must be boarding with the school authorities, it does signify that the student should be within the control and under the influence of the school authorities at the time of the occurrence of the injury. This does not necessarily mean that such, custody be co-terminous with the semester, beginning with the start of classes and ending upon the close thereof, and excluding the time before or after such period, such as the period of registration, and in the case of graduating students, the period before the commencement exercises. In the view of the Court, the student is in the custody of the school authorities as long as he is under the control and influence of the school and within its premises, whether the semester has not yet begun or has already ended. As long as it can be shown that the student is in the school premises in pursuance of a legitimate student objective, in the exercise of a legitimate student right, and even in the enjoyment of a legitimate student right, and even in the enjoyment of a legitimate student privilege, the responsibility of the school authorities over the student continues. Indeed, even if the student should be doing nothing more than relaxing in the campus in the company of his classmates and friends and enjoying the ambience and atmosphere of the school, he is still within the custody and subject to the discipline of the school authorities under the provisions of Article 2180. (5) In any case, the defense of due diligence is available to the teacher; but the diligence they have to prove is LESS than that of parents. In this connection, it should be observed that the teacher will be held liable not only when he is acting in loco parentis for the law does not require that the offending student be of minority age. Unlike the parent, who will be liable only if his child is still a minor, the teacher is held answerable by the law for the act of the student under him regardless of the student's age. Thus, in the Palisoc Case, liability attached to the teacher and the head of the technical school although the wrongdoer was already of age. In this sense, Article 2180 treats the parent more favorably than the teacher. The Court is not unmindful of the apprehensions expressed by Justice Makalintal in his dissenting opinion in Palisoc that the school may be unduly exposed to liability under this article in view of the increasing activism among the students that is likely to cause violence. Nevertheless, it should be repeated that, under the present ruling, it is not the school that will be held directly liable. Moreover, the defense of due diligence is available to it in case it is sought to be held answerable as principal for the acts or omission of its head or the teacher in its employ. 173 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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The teacher himself may invoke this defense as it would otherwise be unfair to hold him directly answerable for the damage caused by his students as long as they are in the school premises and presumably under his influence. In this respect, the Court is disposed not to expect from the teacher the same measure of responsibility imposed on the parent for their influence over the child is not equal in degree. Obviously, the parent can expect more obedience from the child because the latter's dependence on him is greater than on the teacher. The parent can instill more discipline on the child than the teacher and so should be held to a greater accountability than the teacher for a tort committed by the child. And if it is also considered that under the article in question, the teacher or the head of the school of arts and trades is responsible for the damage caused by the student or apprentice even if he is already of age — and therefore less tractable than the minor — then there should all the more be justification to require from the school authorities less accountability as long as they can prove reasonable diligence in preventing the injury. After all, if the parent himself is no longer liable for the student's acts because he has reached majority age and so is no longer under the former's control, there is then all the more reason for leniency in assessing the teacher's responsibility for the acts of the student. (6) Conclusions: At the time Alfredo Amadora was fatally shot, he was still in the custody of the authorities of Colegio de San JoseRecoletos notwithstanding that the fourth year classes had formally ended. It was immaterial if he was in the school auditorium to finish his physics experiment or merely to submit his physics report for what is important is that he was there for a legitimate purpose. As previously observed, even the mere savoring of the company of his friends in the premises of the school is a legitimate purpose that would have also brought him in the custody of the school authorities. The rector, the high school principal and the dean of boys cannot be held liable because none of them was the teacher-in-charge as previously defined. Each of them was exercising only a general authority over the student body and not the direct control and influence exerted by the teacher placed in charge of particular classes or sections and thus immediately involved in its discipline. The mere fact that Alfredo Amadora had gone to school that day in connection with his physics report did not necessarily make the physics teacher, Celestino Dicon, the teacher-in-charge of Alfredo's killer. At any rate, assuming that he was the teacher-in-charge, there is no showing that Dicon was negligent in enforcing discipline upon Daffon or that he (a) had waived observance of the rules and regulations of the school; or (b) their non-observance. His absence when the tragedy happened cannot be considered against him because he was not supposed or required to report to school on that day. And while it is true that the offending student was still in the custody of the teacher-in-charge even if the latter was physically absent when the tort was committed, it has not been established that it was caused by his laxness in enforcing discipline upon the student. On the contrary, the private respondents have proved that they had exercised due diligence, through the enforcement of the school regulations, in maintaining that discipline. In the absence of a teacher-in-charge, it is probably the dean of boys who should be held liable especially in view of the unrefuted evidence that he had earlier confiscated an unlicensed gun from one of the students and returned the same later to him without taking disciplinary action or reporting the matter to higher authorities. While this was clearly negligence on his part, for which he deserves sanctions from the school, it does not necessarily link him to the shooting of Amador as it has not been shown that he confiscated and returned pistol was the gun that killed the petitioners' son. Finally, as previously observed, the Colegio de San Jose-Recoletos cannot be held directly liable under the article because only the TEACHER or the HEAD OF THE SCHOOL OF ARTS AND TRADES is made responsible for the damage caused by the student or apprentice. Neither can it be held to answer for the tort committed by any of the other private respondents for none of them has been found to have been charged with the custody of the offending student or has been remiss in the discharge of his duties in connection with such custody. In sum, the Court finds under the facts as disclosed by the record and in the light of the principles herein announced that none of the respondents is liable for the injury inflicted by Pablito Damon on Alfredo Amadora that resulted in the latter's death at the auditorium of the Colegio de San Jose-Recoletos on April 13, 1972. While we deeply sympathize with the petitioners over the loss of their son under the tragic circumstances here related, we nevertheless are unable to extend them the material relief they seek, as a balm to their grief, under the law they have invoked. 4. Cuadra v. Monfort, G.R. No. L-24101, September 30, 1970 Facts: Cuadra (12 y/o) and Monfort (13 y/o) were Grade 6 classmates at the Mabini Elementary School. They were assigned with 3 other classmates to weed out grass. While weeding, Monfort found a plastic headband. She joked aloud that she found an earthworm, and tossed it to Cuadra. At that moment, Cuadra turned, and the object hit her right eye. She rubbed her eye and treated it with powder; the next day, it became swollen. She underwent surgery twice, spending 23 days in the hospital. She nevertheless lost sight in her right eye.

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Cuadra‘s parents then filed suit based on quasi-delict against Monfort‘s father, which resulted in a favorable award; hence, this appeal by Monfort. Issue: Whether or not Mr. Monfort is liable for the act of his minor child. Held: NO. 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. 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. 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. 5. Ylarde v. Aquino, G.R. No. L-33722, July 29, 1988 Facts: Private respondent Mariano Soriano was the principal of the Gabaldon Primary School, a public educational institution located in Tayug, Pangasinan. Private respondent Edgardo Aquino was a teacher therein. At that time, the school was littered with several concrete blocks which were remnants of the old school shop that was destroyed in World War II. Realizing that the huge stones were serious hazards to the schoolchildren, another teacher by the name of Sergio Banez started burying them one by one. He was able to bury ten of these blocks all by himself. Deciding to help his colleague, Edgardo Aquino gathered 18 of his male pupils, aged 10-11, after class dismissal. Being their teacher-in-charge, he ordered them to dig beside a one-ton concrete block in order to make a hole wherein the stone can be buried. The work was left unfinished. The following day, also after classes, Aquino called 4 of the original 18 pupils to continue the digging. These 4 pupils—Reynaldo Alonso, Francisco Alcantara, Ismael Abaga and Novelito Ylarde, dug until the excavation was one meter and 40 centimeters deep. At this point, Aquino alone continued digging while the pupils remained inside the pit throwing out the loose soil that was brought about by the digging. 175

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When the depth was right enough to accommodate the concrete block, Aquino and his four pupils got out of the hole. Then, said Aquino left the children to level the loose soil around the open hole while he went to the school workroom where he could get some rope. Before leaving, Aquino allegedly told the children "not to touch the stone." A few minutes after Aquino left, 3 of the 4 kids, Alonso, Alcantara and Ylarde, playfully jumped into the pit. Then, without any warning at all, the remaining Abaga jumped on top of the concrete block causing it to slide down towards the opening. Alonso and Alcantara were able to scramble out of the excavation on time but unfortunately for Ylarde, the concrete block caught him before he could get out, pinning him to the wall in a standing position. Three days later, Novelito Ylarde died. Ylarde's parents, petitioners in this case, filed a suit for damages against both Aquino and Soriano. The lower court dismissed the complaint. On appeal, the CA affirmed the Decision of the lower court. Petitioners base their action against private respondent Aquino on Article 2176 for his alleged negligence that caused their son's death while the complaint against respondent Soriano as the head of school is founded on Article 2180. The applicable provision of Article 2180 states: "Art. 2180. Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or 3 apprentices, so long as they remain in their custody." Issue: Whether or not under the cited provisions, both private respondents can be held liable for damages. Held: ONLY AQUINO (TEACHER) IS LIABLE. As regards the principal, he cannot be made responsible for the death of the child Ylarde, he being the head of an academic school and not a school of arts and trades. Teachers in general shall be liable for the acts of their students except where the school is technical in nature, in which case it is the head thereof who shall be answerable. Soriano, as principal, cannot be held liable for the reason that the school he heads is an academic school and not a school of arts and trades. Also, as clearly admitted by private respondent Aquino, private respondent Soriano did not give any instruction regarding the digging. Aquino can be held liable under Article 2180 of the Civil Code as the teacher-in-charge of the children for being negligent in his supervision over them and his failure to take the necessary precautions to prevent any injury on their persons. However, Ylarde base the alleged liability of Aquino on Article 2176 which is separate and distinct from that provided for in Article 2180. On Art. 2176, were there acts and omissions on the part of Aquino amounting to fault or negligence which have direct causal relation to the death of his pupil Ylarde? Yes. He is liable for damages. Aquino acted with fault and gross negligence when he: (1) failed to avail himself of services of adult manual laborers and instead utilized his pupils aged ten to eleven to make an excavation near the one-ton concrete stone which he knew to be a very hazardous task; (2) required the children to remain inside the pit even after they had finished digging, knowing that the huge block was lying nearby and could be easily pushed or kicked aside by any pupil who by chance may go to the perilous area; (3) ordered them to level the soil around the excavation when it was so apparent that the huge stone was at the brink of falling; (4) went to a place where he would not be able to check on the children's safety; and (5) left the children close to the excavation, an obviously attractive nuisance. The negligent act of Aquino in leaving his pupils in such a dangerous site has a direct causal connection to the death of the child Ylarde. Left by themselves, it was but natural for the children to play around. Tired from the strenuous digging, they just had to amuse themselves with whatever they found. Driven by their playful and adventurous instincts and not knowing the risk they were facing, 3 of them jumped into the hole while the other one jumped on the stone. Since the stone was so heavy and the soil was loose from the digging, it was also a natural consequence that the stone would fall into the hole beside it, causing injury on the unfortunate child caught by its heavy weight. Everything that occurred was the natural and probable effect of the negligent acts of Aquino. The child Ylarde would not have died were it not for the unsafe situation created by Aquino which exposed the lives of all the pupils coneerned to real danger. We cannot agree with the finding of the lower court that the injuries which resulted in the death of the child Ylarde were caused by his own reckless imprudence. It should be remembered that he was only 10 years old at the time of the incident. As such, he is expected to be playful and daring. His actuations were natural to a boy his age. Going back to the facts, it was not only him but the 3 of them who jumped into the hole while the remaining boy jumped on the block. He only did what any other ten-year old child would do in the same situation. A minor should not be held to the same degree of care as an adult, but his conduct should be judged according to the average conduct of persons of his age and experience.

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The court is not persuaded that the digging done by the pupils can pass as part of their Work Education. A single glance at the picture showing the excavation and the huge concrete block would reveal a dangerous site requiring the attendance of strong, mature laborers and not ten-year old grade-four pupils. There were no instructions from the principal requiring what the pupils were told to do. Nor was there any showing that it was included in the lesson plan for their Work Education. Aquino decided all by himself to help his co-teacher Banez bury the concrete remnants of the old school shop. Furthermore, the excavation should not be placed in the category of school gardening, planting trees, and the like as these undertakings do not expose the children to any risk that could result in death or physical injuries. The contention that Aquino exercised the utmost diligence of a very cautious person is certainly without cogent basis. A reasonably prudent person would have foreseen that bringing children to an excavation site, and more so, leaving them there all by themselves, may result in an accident. An ordinarily careful human being would not assume that a simple warning "not to touch the stone" is sufficient to cast away all the serious danger that a huge concrete block adjacent to an excavation would present to the children. Moreover, a teacher who stands in loco parentis to his pupils would have made sure that the children are protected from all harm in his company. 6. Salvosa v. Intermediate Appellate Court, G.R. No. 70458, October 5, 1988 Facts: Baguio Colleges Foundation (―BCF‖) is an academic institution with aspects of arts and trade, as it has a technical-vocational department. In its premises is the BCF ROTC unit, under the fifth control of the AFP. It has an office and an armory at the basement of the main building. Jimmy B. Abon was the Armorer duly-appointed by the AFP. He was not an employee of the BCF, but he was a commerce student thereat. He got his orders from Cpt. Ungos, the Commandant of the BCF ROTC Unit, an officer of the AFP. At 8PM., 3 March 1977, Jimmy shot Napoleon Castro, a student, at the parking space of BCF with an unlicensed firearm taken from the armory. He died. Jimmy was convicted of Homicide by the Military Commission No. 30. The heirs then sued for damages, impleading Jimmy, Ungos, Salvosa (EVP of BCF), Quetolio (Dean and Executive Trustee of BCF_, and BCF. The RTC found Jimmy, Salvosa, and BCF solidarily liable for damages. The CA modified the decision by reducing the damages. Issue: Whether Salvosa et al can be held solidarily liable with Jimmy Abon for damages. Held: NO. Under the penultimate paragraph of Art. 2180, teachers or heads of establishments of arts and trades are liable for "damages caused by their pupils and students or apprentices, so long as they remain in their custody." The rationale of such liability is that so long as the student remains in the custody of a teacher, the latter "stands, to a certain extent, in loco parentis [as to the student] and [is] called upon to exercise reasonable supervision over the conduct of the [student]." Likewise, "the phrase used in [Art. 2180 — 'so long as (the students) remain in their custody means the protective and supervisory custody that the school and its heads and teachers exercise over the pupils and students for as long as they are at attendance in the school, including recess time." In the case at bar, in holding that Jimmy B. Abon was stin (No idea, I cannot even. Probably meant “was not in” or something) in the protective and supervisory custody of the Baguio Colleges Foundation when he shot Napoleon Castro, the respondent Court ruled that: It is true that Abon was not attending any class or school function at the time of the shooting incident, which was at about 8 o'clock in the evening; but considering that Abon was employed as an armorer and property custodian of the BCF ROTC unit, he must have been attending night classes and therefore that hour in the evening was just about dismissal time for him or soon thereafter. The time interval is safely within the "recess time" that the trial court spoke of and envisioned by the Palisoc case. In line with the case of Palisoc, a student not "at attendance in the school" cannot be in "recess" thereat. A " RECESS," as the concept is embraced in the phrase "at attendance in the school," contemplates a situation of temporary adjournment of school activities where the student still remains within call of his mentor and is not permitted to leave the school premises, or the area within which the school activity is conducted. Recess by its nature does not include dismissal. Likewise, the mere fact of being enrolled or being in the premises of a school without more does not constitute "attending school" or being in the "protective and supervisory custody' of the school, as contemplated in the law. Upon the foregoing considerations, we hold that Jimmy B. Abon CANNOT be considered to have been "at attendance in the school," or in the custody of BCF, when he shot Napoleon Castro. Logically, therefore, petitioners cannot under Art. 2180 of the Civil Code be held solidarity liable with Jimmy B. Abon for damages resulting from his acts. Besides, the record shows that before the shooting incident, Roberto B. Ungos ROTC Unit Commandant, AFP, had instructed Jimmy B. Abon "not to leave the office and [to keep the armory] well guarded." Apart from negating a finding 177 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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that Jimmy B. Abon was under the custody of the school when he committed the act for which the petitioners are sought to be held liable, this circumstance shows that Jimmy B. Abon was supposed to be working in the armory with definite instructions from his superior, the ROTC Commandant, when he shot Napoleon Castro. Petitioners also raise the issue that, under Art. 2180, a school which offers both academic and technical/vocational courses cannot be held liable for a tort committed by a student enrolled only in its academic program; however, considering that Jimmy B. Abon was not in the custody of BCF when he shot Napoleon Castro, the Court deems it unnecessary to pass upon such other issue. 7. Philippine School of Business Administration v. Court of Appeals, 205 SCRA 729 (1992) Facts: A stabbing incident on 30 August 1985 which caused the death of Carlitos Bautista while on the 2nd-floor premises of the PSBA prompted the parents of the deceased to file suit for damages against the said PSBA and its corporate officers. At the time of his death, Carlitos was enrolled in the 3rd year commerce course at the PSBA. It was established that his assailants were not members of the school's academic community but were elements from outside the school. The suit impleaded the PSBA and its authorities. Substantially, the plaintiffs (now private respondents) sought to adjudge them liable for the victim's untimely demise due to their alleged negligence, recklessness and lack of security precautions, means and methods before, during and after the attack on the victim. Defendants a quo (now petitioners) sought to have the suit dismissed, alleging that academic institutions, such as the PSBA, are beyond the ambit of the rule in the aforestated article. Respondent trial court, however, overruled petitioners' contention and denied their motion to dismiss. CA affirmed. Hence, this petition. CA primarily anchored its decision on the law of quasi delicts, as enunciated in Articles 2176 and 2180. The CA liberally applied 2180. Pertinent portions of the appellate court's now assailed ruling state: Construed in the light of modern day educational systems, Article 2180 cannot be construed in its narrow concept as held in the old case of Exconde vs. Capuno and Mercado vs. Court of Appeals; hence, the ruling in the Palisoc case that it should apply to all kinds of educational institutions, academic or vocational. At any rate, the law holds the teachers and heads of the school staff liable unless they relieve themselves of such liability pursuant to the last paragraph of Article 2180 by 'proving that they observed all the diligence to prevent damage. Issue: Whether or not Art. 2180 applies in this case. Held. NO. While we agree with the CA that the motion to dismiss the complaint was correctly denied and the complaint should be tried on the merits, we do not however agree with the premises of the appellate court's ruling. Article 2180, in conjunction with Article 2176, establishes the rule of in loco parentis. This Court discussed this doctrine in the aforecited cases of Exconde, Mendoza, Palisoc and, more recently, in Amadora. In all such cases, it had been stressed that the law (Article 2180) plainly provides that the damage should have been caused or inflicted by pupils or students of the educational institution sought to be held liable for the acts of its pupils or students while in its custody. However, this material situation does not exist in the present case for, as earlier indicated, the assailants of Carlitos were not students of the PSBA, for whose acts the school could be made liable. However, the CA‘s failure to consider such material facts does not mean that the petitioners are free from liability. When an academic institution accepts students for enrollment, there is established a contract between them, resulting in bilateral obligations which both parties are bound to comply with. For its part, the school undertakes to provide the student with an education that would presumably suffice to equip him with the necessary tools and skills to pursue higher education or a profession. On the other hand, the student covenants to abide by the school's academic requirements and observe its rules and regulations. Institutions of learning must also meet the implicit or "built in" obligation of providing their students with an atmosphere that promotes or assists in attaining its primary undertaking of imparting knowledge. Certainly, no student can absorb the intricacies of physics or higher mathematics or explore the realm of the arts and other sciences when bullets are flying or grenades exploding in the air or where there looms around the school premises a constant threat to life and limb. Necessarily, the school must ensure that adequate steps are taken to maintain peace and order within the campus premises and to prevent the breakdown thereof. Because the circumstances of the present case evince a CONTRACTUAL relation between the PSBA and Carlitos Bautista, the rules on quasi-delict do not really govern. A perusal of Article 2176 shows that obligations arising from quasi-delicts or tort, also known as extra-contractual obligations, arise only between parties not otherwise bound by contract, whether express or implied. However, this impression has not prevented this Court from determining the existence of a tort even when there obtains a contract, as seen in the case of Air France and Cangco. 178

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Immediately what comes to mind is the chapter of the Civil Code on Human Relations, particularly Article 21, which provides: "Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage." It can be concluded that should the act which breaches a contract be done in bad faith and be violative of Article 21, then there is a cause to view the act as constituting a quasi-delict. In the circumstances obtaining in the case at bar, however, there is, as yet, no finding that the contract between the school and Bautista had been breached thru the former's negligence in providing proper security measures. This would be for the trial court to determine. And, even if there be a finding of negligence, the same could give rise generally to a breach of contractual obligation only. Following the case of Cangco, the negligence of the school would not be relevant absent a contract. In fact, that negligence becomes material only because of the contractual relation between PSBA and Bautista. In other words, a contractual relation is a condition sine qua non to the school's liability. The negligence of the school cannot exist independently on the contract, unless the negligence occurs under the circumstances set out in Article 21. This Court is not unmindful of the attendant difficulties posed by the obligation of schools, above-mentioned for conceptually a school, like a common carrier, cannot be an insurer of its students against all risks. This is specially true in the populous student communities of the so-called "university belt" in Manila where there have been reported several incidents ranging from gang wars to other forms of hooliganism. It would not be equitable to expect of schools to anticipate all types of violent trespass upon their premises, for notwithstanding the security measures installed, the same may still fail against an individual or group determined to carry out a nefarious deed inside school premises and environs. Should this be the case, the school may still avoid liability by proving that the breach of its contractual obligation to the students was not due to its negligence, here statutorily defined to be the omission of that degree of diligence which is required by the nature of the obligation and corresponding to the circumstances of persons, time and place. As the proceedings have yet to commence on the substance of the private respondents' complaint, the record is bereft of all the material facts. Obviously, at this stage, only the trial court can make such a determination from the evidence still to unfold. Therefore, the petition is denied and the Court of origin is ordered to continue proceedings consistent with this ruling of the Court. 8. Saludaga v. Far Eastern University, G.R. No. 179337, April 30, 2008 Facts: Joseph Saludaga was a sophomore law student of FEU when he was shot by Alejandro Rosete (Rosete), one of the security guards on duty at the school premises. Rosete explained at the police station that the shooting was accidental. Saludaga thereafter filed a complaint for damages against respondents (FEU and De Jesus as President) on the ground that they breached their obligation to provide students with a safe and secure environment and an atmosphere conducive to learning. Respondents filed a Third-Party Complaint against Galaxy Development and Management Corporation (Galaxy), the agency contracted by FEU to provide security services within its premises and Mariano D. Imperial (Imperial), Galaxy‘s President, to indemnify them for whatever would be adjudged in favor of petitioner. Galaxy and Imperial filed a FourthParty Complaint against AFP General Insurance. Trial court held FEU and de Jesus, in his capacity as president of FEU jointly and severally liable to pay damages. Respondents appealed to CA; appeal was granted. Petitioner is suing respondents for damages based on the alleged breach of student-school contract for a safe learning environment. Issue: Whether FEU is liable. Held: FEU: LIABLE FOR BREACH OF CONTRACT. not Art. 2180; De Jesus: NOT SOLIDARILY LIABLE. On FEU‟s liability Petitioner was enrolled as a sophomore law student in respondent FEU. As such, there was created a contractual obligation between the two parties. On petitioner‘s part, he was obliged to comply with the rules and regulations of the school. On the other hand, respondent FEU, as a learning institution is mandated to impart knowledge and equip its students with the necessary skills to pursue higher education or a profession. At the same time, it is obliged to ensure and take adequate steps to maintain peace and order within the campus. When petitioner was shot inside the campus by no less the security guard who was hired to maintain peace and secure the premises, there is a prima facie showing that respondents failed to comply with its obligation to provide a safe and secure environment to its students. 179

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In order to avoid liability, however, respondents aver that the shooting incident was a fortuitous event because they could not have reasonably foreseen nor avoided the accident caused by Rosete as he was not their employee; and that they complied with their obligation to ensure a safe learning environment for their students by having exercised due diligence in selecting the security services of Galaxy. However, respondents failed to discharge the burden of proving that they exercised due diligence in providing a safe learning environment for their students. They failed to prove that they ensured that the guards assigned in the campus met the requirements stipulated in the Security Service Agreement. Certain documents about Galaxy were presented during trial; however, no evidence as to the qualifications of Rosete as a security guard for the university was offered. They failed to show that they undertook steps to ascertain and confirm that the security guards assigned to them actually possess the qualifications required in the Security Service Agreement. It was not proven that they examined the clearances, psychiatric test results, files, and other vital documents enumerated in its contract with Galaxy. Total reliance on the security agency about these matters or failure to check the papers stating the qualifications of the guards is negligence on the part of respondents. A learning institution should not be allowed to completely relinquish or abdicate security matters in its premises to the security agency it hired. To do so would result to contracting away its inherent obligation to ensure a safe learning environment for its students. FEU‘s defense of force majeure must fail. In order for force majeure to be considered, respondents must show that no negligence or misconduct was committed that may have occasioned the loss. One‘s negligence may have concurred with an act of God in producing damage and injury to another; nonetheless, showing that the immediate or proximate cause of the damage or injury was a fortuitous event would not exempt one from liability. When the effect is found to be partly the result of a person‘s participation—whether by active intervention, neglect or failure to act—the whole occurrence is humanized and removed from the rules applicable to acts of God. For breach of contract due to negligence in providing a safe learning environment, respondent FEU is liable to petitioner for damages. On the FEU president‟s liability In Powton Conglomerate, Inc. v. Agcolicol, we held that: ―[A] corporation is invested by law with a personality separate and distinct from those of the persons composing it, such that, save for certain exceptions, corporate officers who entered into contracts in behalf of the corporation cannot be held personally liable for the liabilities of the latter. PERSONAL LIABILITY of a corporate director, trustee or officer along (although not necessarily) with the corporation may so validly attach, as a rule, only when—(1) he assents to a patently unlawful act of the corporation, or when he is guilty of bad faith or gross negligence in directing its affairs, or when there is a conflict of interest resulting in damages to the corporation, its stockholders or other persons; (2) he consents to the issuance of watered down stocks or who, having knowledge thereof, does not forthwith file with the corporate secretary his written objection thereto; (3) he agrees to hold himself personally and solidarily liable with the corporation; or (4) he is made by a specific provision of law personally answerable for his corporate action.‖ None of the foregoing exceptions was established in the instant case; hence, respondent De Jesus should not be held solidarily liable with respondent FEU.

On the applicability of Art. 2180 Although the main cause of action in the instant case is the breach of the school-student contract, petitioner, in the alternative, also holds respondents vicariously liable under Article 2180 of the Civil Code. However, Respondents cannot be held liable for damages under Art. 2180 of the Civil Code because respondents are not the employers of Rosete. Rosete was employed by Galaxy. The instructions issued by respondents‘ Security Consultant to Galaxy and its security guards are ordinarily no more than requests commonly envisaged in the contract for services entered into by a principal and a security agency. They cannot be construed as the element of control as to treat respondents as the employers of Rosete. On the liability of Galaxy and its president It is settled in our jurisdiction that where the security agency, as here, recruits, hires and assigns the work of its watchmen or security guards, the agency is the employer of such guards or watchmen. Liability for illegal or harmful acts committed by the security guards attaches to the employer agency, and not to the clients or customers of such agency. As a general rule, a client or customer of a security agency has no hand in selecting who among the pool of security guards or watchmen employed by the agency shall be assigned to it; the duty to observe the diligence of a good father of a family in the selection of the guards cannot, in the ordinary course of events, be demanded from the client whose premises or property are protected by the security guards.

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The fact that a client company may give instructions or directions to the security guards assigned to it, does not, by itself, render the client responsible as an employer of the security guards concerned and liable for their wrongful acts or omissions. Galaxy is negligent not only in the selection of its employees but also in their supervision. Indeed, no administrative sanction was imposed against Rosete despite the shooting incident; moreover, he was even allowed to go on leave of absence which led eventually to his disappearance. Moreoever, Galaxy and Imperial failed to make good their pledge to reimburse Saludaga‘s medical expenses. For these acts of negligence and for having supplied respondent FEU with an unqualified security guard, which resulted to the latter‘s breach of obligation to petitioner, it is proper to hold Galaxy liable to respondent FEU for such damages equivalent to the amounts awarded to petitioner. Unlike De Jesus, we deem Imperial (Galaxy‘s president) to be solidarily liable with Galaxy for being grossly negligent in directing the affairs of the security agency. It was Imperial who assured petitioner that his medical expenses will be shouldered by Galaxy but said representations were not fulfilled because they presumed that petitioner and his family were no longer interested in filing a formal complaint against them. E.

Right to Reimbursement

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Case

1. Philippine Rabbit Bus Lines v. Intermediate Appellate Court, G.R. No. 66102-04, August 30, 1990 Facts: Respondents boarded the jeepney owned by spouses Mangune and Carreon and driven by Manalo. The jeepney was bound for Carmen, Rosales, Pangasinan. Upon reaching San Manuel, Tarlac, the right wheel of the jeepney was detached so it was running in an unbalanced position. In response, Manalo stepped on the brake which caused the jeepney (which was running on the eastern lane) to make a sudden U-turn, invading and stopping on the western lane of the road. Basically what happened is that the jeepney blocked the western lane of the road, which is the right of way of vehicles coming from the opposite direction, one of which was the Bus of petitioner Philippine Rabbit Bus Lines, driven by Tomas delos Reyes. At the time the jeepney made a sudden U-turn, the bus bumped from behind the right rear portion of the jeepney, which resulted into the death of 3 of its passengers and rendering the others injured. Criminal complaints were filed against the driver of the jeepney and the bus driver. The bus driver (delos Reyes) was exculpated due to insufficiency of evidence however the jeepney driver (Manalo) was convicted. Complaints for recovery of damages were filed by the heirs of those who died against Spouses Mangune and Carreon, Manalo, Philippine Rabbit Bus Lines Inc., and delos Reyes. They anchor their claims against Spouses Mangune and Carreon and Manalo on contractual liability while for Philippine Rabbit Bus Lines Inc. and delos Reyes, for quasidelict. The trial court held Manalo and spouses Mangune and Carreon negligent. It ruled that spouses Mangune and Carreon are jointly and severally liable with Manalo to pay the heirs the indemnity and damages. The appellate court however reversed, and held that Philippine Rabbit Bus Lines Inc. and delos Reyes are liable jointly and severally to the heirs of the deceased. Issue: Whether Sps. Mangune & Carreon can be solidarily liable with the jeep driver, Manalo Held: YES. The Supreme Court reversed the holding of the respondent court. The respondent court, applying primarily (1) the doctrine of last clear chance, (2) the presumption that drivers who bump the rear of another vehicle guilty and the cause of the accident unless contradicted by other evidence, and (3) the substantial factor test, concluded that delos Reyes was negligent. ―The principle about "the last clear" chance, would call for application in a suit between the owners and drivers of the two colliding vehicles. It does not arise where a passenger demands responsibility from the carrier to enforce its contractual obligations. For it would be inequitable to exempt the negligent driver of the jeepney and its owners on the ground that the other driver was likewise guilty of negligence. On the presumption that drivers who bump the rear of another vehicle guilty and the cause of the accident, unless contradicted by other evidence, the same would have applied were it not for the abrupt U-turn made by the jeepney. As for the SUBSTANTIAL FACTOR TEST, the respondent court held that it is the rule under the substantial factor test that if the actor's conduct is a substantial factor in bringing about harm to another, the fact that the actor neither foresaw nor should have foreseen the extent of the harm or the manner in which it occurred does not prevent him from being liable. 181

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Torts & Damages 2013

Atty. Jess Lopez

It cannot be said that the bus was travelling at a fast speed when the accident occurred because the speed of 80 to 90 kilometers per hour, assuming such calculation to be correct, is yet within the speed limit allowed in highways. The court cannot even fault delos Reyes for not having avoided the collision. As found, the jeepney left a skid mark of about 45 meters, measured from the time its right rear wheel was detached up to the point of collision. Delos Reyes must have noticed the perilous condition of the jeepney from the time its right rear wheel was detached or some 90 meters away, considering that the road was straight and points 200 meters north and south of the point of collision, visible and unobstructed. Verily, he had little time to react to the situation. To require delos Reyes to avoid the collision is to ask too much from him. Aside from the time element involved, there were no options available to him. After considering all the evidence, the court found that the proximate cause of the accident was the negligence of Manalo and spouses Mangune and Carreon. They all failed to exercise the precautions that are needed precisely pro hac vice. In culpa contractual, the moment a passenger dies or is injured, the carrier is presumed to have been at fault or to have acted negligently, and this disputable presumption may only be overcome by evidence that he had observed extra-ordinary diligence as prescribed in Articles 1733, 1755 and 1756 of the New Civil Code or that the death or injury of the passenger was due to a fortuitous event. In an action for damages against the carrier for his failure to safely carry his passenger to his destination, an accident caused either by defects in the automobile or through the negligence of its driver, is not a caso fortuito which would avoid the carriers liability for damages. **Topic related to Right to Reimbursment – NO, Spouses Mangune and Carreon cannot be held jointly and severally liable with the driver, Manalo. Manalo‘s negligence was substantially proven by testimonies. The same can be said of the spouses Mangune and Carreon. However, the trial court‘s ruling that spouses Mangune and Carreon are jointly and severally liable with Manalo is erroneous. The driver cannot be held jointly and severally liable with the carrier in case of breach of the contract of carriage. The rationale behind this is readily discernible. FIRSTLY, the contract of carriage is between the carrier and the passenger, and in the event of contractual liability, the carrier is exclusively responsible therefore to the passenger, even if such breach be due to the negligence of his driver. The carrier can neither shift his liability on the contract to his driver nor share it with him, for his driver's negligence is his. SECONDLY, if the court were to make the driver jointly and severally liable with the carrier, that would make the carrier's liability personal instead of merely vicarious and consequently, entitled to recover only the share which corresponds to the driver, contradictory to the explicit provision of Article 2181 of the New Civil Code. Article 2181 of the New Civil Code provides: ART. 2181. Whoever pays for the damage caused by his dependents or employees may recover from the latter what he has paid or delivered in satisfaction of the claim. Therefore, the court held spouses Mangune and Carreon liable to the victims or their heirs for the amount of indemnity for loss of life (P30,000.00). F.

Distinguished from subsidiary liability under the Revised Penal Code

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Revised Penal Code o Articles 102 and 103

1. Carpio v. Doroja, 180 SCRA 1 (1989) Facts: On October 23, 1985, Ramirez, while driving a passenger Fuso Jitney owned and operated by Toribio, bumped Carpio, a pedestrian crossing the street, as a consequence of which the latter suffered from a fractured left clavicle as reflected in the medicolegal certificate and sustained injuries which required medical attention for a period of 3 months. Ramirez was charged with Reckless Imprudence. During the trial, the private prosecutor presented evidence to establish civil liability of either Ramirez or Toribio (operator). Ramirez‘s counsel then moved that the court summon Toribio to court for the reason that, because Ramirez was an indigent, any liability that may be adjudged against him cannot be satisfied. The private prosecutor, however, did not move to summon Toribio. Thereafter, Ramirez was convicted for Reckless Imprudence Resulting to Less Physical Injuries. Additionally, civil liability in the form of indemnity was awarded (i.e. P45 for the value of ½ can of tomatoes lost, P200 hospital fees; P1,500 costs). Ramirez later applied for probation.

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Torts & Damages 2013

Atty. Jess Lopez

Private prosecutor appealed to the RTC the civil indemnity and prayed to be awarded more damages (10K moral, 6K compensatory, 5K atty‘s fees). As a result, the court rendered a decision awarding 5K moral damages and affirmed the other civil liabilities (not quoted in the case). Due to the insolvency of Ramirez, the writ of execution was returned unsatisfied on May 1988. Thus, Carpio moved for a subsidiary writ of execution against the subsidiary liability of Toribio as owner-operator. Said motion was denied based on the fact that (1) the dispositive portion of the RTC (as appellate court) did not mention any subsidiary liability of Toribio; and (2) the nature of the accident falls under culpa contractual and not culpa aquiliana. Hence, this petition. Carpio hinges his petition on the authority of Pajarito v. Seneris which declared that ―the subsidiary liability of the owneroperator is fixed by the judgment, because if a case were to be filed against said operator, the court called upon to act thereto has no other function than to render a decision based on the indemnity award in the criminal case without power to amend or modify it even if in his opinion an error has been committed in the decision.‖ Caprio claims that the tenor of the RTC decision implies that the subsidiary liability of the owner-operator may be enforced in the same proceeding and a separate action is no longer necessary in order to avoid undue delay, notwithstanding the fact that said employer was not made a party in the criminal action. On the other hand, Toribio claims that the owner-operator cannot be validly held subsidiarily liable for the following reasons, namely: (a) the matter of subsidiary liability was not raised on appeal; (b) contrary to the case of Pajarito, the injuries sustained by the complainant did not arise from the so-called ―culpa-contractual‖ but from ―culpaaquiliana‖; (c) the judgments of appellate courts may not be altered, modified, or changed by the court of origin; and (d) said owner was never made a party to the criminal proceedings. Issue: Whether or not the subsidiary liability of Toribio may be enforced in the same criminal proceeding against the driver where the award was given. Held: The law involved in the instant case is Article 103 in relation to Article 100 of the RPC. The subsidiary liability in Art. 103 should be distinguished from the primary liability of employers, which is quasi-delictual in character as provided in Art. 2180. Under Art. 103, the liability emanated from a delict. On the other hand, the liability under Art. 2180 is founded on culpa aquiliana. The present case is neither an action for culpacontractual nor for culpa-aquiliana. This is basically an action to enforce the civil liability arising from crime under Art. 100 of the RPC. In order that an employer may be held subsidiarily liable for the employee‘s civil liability in the criminal action, it should be shown: (1) that the employer, etc. is engaged in any kind of industry, (2) that the employee committed the offense in the discharge of his duties; and (3) that he is insolvent. The subsidiary liability of the employer, however, arises only after conviction of the employee in the criminal action. All these requisites present, the Toribio becomes ipso facto subsidiarily liable upon the Ramirez‘s conviction and upon proof of the latter‘s insolvency (unsatisfied writ of execution). Moreover, we are not convinced that Toribio has been deprived of his day in court, because the case before us is NOT one wherein the operator is sued for a primary liability under the Civil Code but one in which the subsidiary civil liability incident to and dependent upon his employee‘s criminal negligence is sought to be enforced. Considering the subsidiary liability imposed upon the employer by law, he is in substance and in effect a party to the criminal case. Ergo, the employer‘s subsidiary liability may be determined and enforced in the criminal case as part of the execution proceedings against the employee. The argument that the owner-operator cannot be held subsidiarily liable because the matter of subsidiary liability was not raised on appeal and in like manner, the appellate court‘s decision made no mention of such subsidiary liability is of no moment. As already discussed, the filing of a separate complaint against the operator for recovery of subsidiary liability is not necessary since his liability is clear from the decision against the accused. Such being the case, it is not indispensable for the question of subsidiary liability to be passed upon by the appellate court. Such subsidiary liability is already implied from the appellate court‘s decision. A separate and independent action is, therefore, unnecessary and would only unduly prolong the agony of the heirs of the victim. Also, Compelling Toribio to pay on the basis of his subsidiary liability does not constitute an amendment of the judgment because in an action under Art. 103 of the RPC, once all the requisites are met, the employer becomes ipso facto subsidiarily liable, without need of a separate action

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Torts & Damages 2013

Atty. Jess Lopez

Such being the case, the subsidiary liability can be enforced in the same case where the award was given, and this does not constitute an act of amending the decision. It becomes incumbent upon the court to grant a motion for subsidiary writ of execution (but only after the employer has been heard), upon conviction of the employee and after execution is returned unsatisfied due to the employee‘s insolvency. 2. Bantoto v. Bobis, 18 SCRA 690 (1966)  See p. 813 of textbook Facts: Appellant Crispin Vallejo was the registered owner of a "jeepney" named "Jovil 11", with plate TPU-20948, that was operated by him in Bacolod City through driver Salvador Bobis. On 24 October 1948, through the driver's negligence, the "jeepney" struck a 3-year old girl, Damiana Bantoto, a daughter of appellees, inflicting serious injuries that led to her death a few days later. Bobis was charged with homicide through reckless imprudence, to which Bobis pleaded guilty. Bantoto et al for themselves and their other children, instituted the present action against Salvador Bobis, Juan Maceda (later absolved) and Crispin Vallejo in the CFI, seeking to have the 3 defendants declared solidarily responsible for damages, consisting of the civil indemnity required of the driver Bobis in the judgment of conviction, plus moral and exemplary damages and attorneys' fees and costs. Vallejo moved to dismiss on the ground of failure to state a cause of action against him, for the reason that the amended complaint did not aver that the driver, Bobis, was insolvent. The court overruled the motion to dismiss. Thus, Vallejo filed an answer setting up as defenses that his liability was only subsidiary, and that the liability had been satisfied. Bobis was declared in default. At the trial, the CFI admitted the following exhibits: (1) the writ of execution against the driver, Salvador Bobis, issued in the criminal case, and (2) the sheriff's return nulla bona. Vallejo maintains that his liability is only subsidiary, and thus the lack of averment in the complaint that Bobis was insolvent is fatal. Issue: (1) Whether Bobis has to be insolvent to make Vallejo subsidiarily liable. (2) Whether the writ of execution + sheriff‘s return are admissible. (3) Whether the employer (based on his subsidiary liability) maybe held liable for exemplary damages despite its absence in the original judgment. Held: (1) NO NEED TO BE INSOLVENT. The master's liability, under the RPC, for the crimes committed by his servants and employees in the discharge of their duties, is not predicated upon the insolvency of the latter. Article 103 of the Penal Code prescribes that: ART. 103. Subsidiary civil liability of other persons. — The subsidiary liability established in the next preceding article shall also apply to employees, teachers, persons, and corporations engaged in any kind of industry for felonies committed by their servants, pupils, workmen, apprentices, or employees in the discharge of their duties. The insolvency of the servant or employee is nowhere mentioned in said article as a condition precedent. In truth, such insolvency is required only when the liability of the master is being made effective by execution levy, but not for the rendition of judgment against the master. The SUBSIDIARY CHARACTER of the employer's responsibility merely imports that the latter's property is not be seized without first exhausting that of the servant. And by analogy to a regular guarantor (who is the prototype of persons subsidiarily responsible), the master may not demand prior exhaustion of the servant's (principal obligor's) properties if he cannot "point out to the creditor available property of the debtor within Philippine territory, sufficient to cover the amount of the debt" (Civil Code). This rule is logical, for as between the offended party (as creditor) and the culprit's master or employer, it is the latter who is in a better position to determine the resources and solvency of the servant or employee. (2) YES. It is well to move here that this Court has ruled that in the absence of collusion the judgment convicting and sentencing the servant to pay indemnity is conclusive in an action to enforce the subsidiary liability of the master or employer. Anyway, since Bobis, the driver, was also a defendant, the writ of execution issued in the criminal case to enforce the civil indemnity, and its return without satisfaction, are not irrelevant evidence in the action against him and his employer. (3) NO. As the case was predicated upon the sentence of conviction in the criminal case, the award of exemplary damages was improper. No such damages were imposed on the driver, and the master, as person subsidiarily liable, cannot incur greater civil liability than his convicted employee, any more than a guarantor can be held responsible for more than the principal debtor 184

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Torts & Damages 2013

Atty. Jess Lopez

But we do not agree that the award of attorney's fees should be disallowed. Appellant had reason to know that his driver could not pay the P3,000.00 indemnity imposed in the criminal case, because if he could, or if he had money or leviable property worth that much, Bobis would be operating his own jeepney instead of another's. In fact, Article 2208, paragraph 9, authorizes the award of counsel's fees "in a separate civil action to recover the civil liability arising from a crime. 3. Yonaha v. Court of Appeals, 255 SCRA 397 (1996)  See p. 814 Facts: In a Criminal Case, Elmer Ouano was charged with the crime of ―Reckless Imprudence Resulting In Homicide.‖ It was alleged that the accused, while driving a Toyota Tamaraw did then and there unlawfully and feloniously maneuver and operate it in a negligent and reckless manner, as a result thereof the motor vehicle he was then driving bumped and hit Hector Cañete , which caused the latter‘s instantaneous death. When arraigned, the accused pleaded ―guilty.‖ The trial court found the accused guilty beyond reasonable doubt and ordered imprisonment (1 year&1 day to 1 year&8 months) and to pay the heirs of the victim P50,000.00 for the death of the victim; P30,000.00 for actual damages and P10,000.00 as attorney‘s 3 fees. A WRIT OF EXECUTION was issued for the satisfaction of the monetary award. In his Return of Service, Sheriff stated that he had served the writ on accused Elmer Ouano but that the latter had manifested his inability to pay. Private respondents then presented a ―MOTION FOR SUBSIDIARY EXECUTION‖ with neither a notice of hearing nor notice to petitioner (Ouano‘s employer). Acting on the motion, the trial court issued an order directing the issuance of a writ of subsidiary execution. The sheriff went to petitioner‘s residence to enforce the writ, and it was then, allegedly for the first time, that petitioner was informed of Ouano‘s conviction. Petitioner filed a motion to stay and to recall the subsidiary writ of execution principally anchored on the lack of prior notice to her and on the fact that the employer‘s liability had yet to be established. TC denied petitioner‘s motion. CA dismissed the petition. Hence this petition. Respondent‘s contention: Even assuming that issuance of writ of subsidiary execution requires notice and hearing, a hearing in the present case would be sheer rigmarole, an unnecessary formality, because, as employer, petitioner became subsidiarily liable upon the conviction of her accused driver, Elmer Ouano, and proof of the latter‘s insolvency. And if she had any defense to free herself from such subsidiary liability, she could have ventilated and substantiated the same in connection with her (petitioner‘s) motion to stay and recall the writ of subsidiary execution in question. Except for the protestation of violation of due process, and absence of notice, petitioner intimated no defense which could absolve her of subsidiary liability under the premises. Issue: Whether or not Subsidiary Execution should automatically issue against the one subsidiarily liable (employer) Held: NO. The statutory basis for an employer‘s subsidiary liability is found in Article 103 of the RPC. This Court has since sanctioned the enforcement of this subsidiary liability in the same criminal proceedings in which the employee is adjudged guilty, on the thesis that it really is a part of, and merely an incident in, the execution process of the judgment. But, execution against the employer MUST NOT ISSUE as just a matter of course, and it behooves the court, as a measure of due process to the employer, to determine and resolve a priori, in a hearing set for the purpose, the legal applicability and propriety of the employer‟s liability. The requirement is mandatory even when it appears prima facie that execution against the convicted employee cannot be satisfied. The court must convince itself that: (a) the convicted employee is in truth in the employ of the employer; (b) that the latter is engaged in an industry of some kind; (c) that the employee has committed the crime to which civil liability attaches while in the performance of his duties as such; and (d) that execution against the employee is unsuccessful by reason of insolvency. The assumption that, since petitioner in this case did not aver any exculpatory facts in her ―motion to stay and recall,‖ which could save her from liability, a hearing would be a futile and a sheer rigmarole is unacceptable. The employer must be given his full day in court. Subsidiary liability of an employer under Article 103 of the RPC requires: (a) the existence of an employer-employee relationship; (b) that the employer is engaged in some kind of industry; (c) that the employee is adjudged guilty of the wrongful act and found to have committed the offense in the discharge of his duties (not necessarily any offense he commits ―while‖ in the discharge of such duties); and (d) that said employee is insolvent. 185

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Torts & Damages 2013

Atty. Jess Lopez

The judgment of conviction of the employee, of course, concludes the employer and the subsidiary liability may be enforced in the same criminal case, but to afford the employer due process, the court should hear and decide that liability on the basis of the conditions required therefor by law. Petitioner shall be given the right to a hearing on the motion for the issuance of a writ of subsidiary execution filed by private respondents, and the case is REMANDED to the trial court for further proceedings V.

PRIMARY LIABILITY -

Civil Code o Articles 2183 to 2193 (Memorize)

A.

Possessors/users of animals

1.Vestil v. Intermediate Appellate Court, 179 SCRA 47 (1989) Facts: 3 year old Theness Tan Uy, was bitten by a dog while she was playing with a child of the Vestils in the house of the late Vicente Miranda, the father of Purita Vestil, at F. Ramos Street in Cebu City. She was rushed to the Cebu General Hospital, where she was treated for ―multiple lacerated wounds on the forehead‖ and administered an anti-rabies vaccine by Dr. Antonio Tautjo. She was discharged after 9 days but was re-admitted one week later due to ―vomiting of saliva.‖ The following day, the child died. The cause of death was certified as broncho-pneumonia. 7 months later, the Uys sued for damages, alleging that the Vestils were liable to them as the possessors of “Andoy,” the dog that bit and eventually killed their daughter. The Vestils rejected the charge, insisting that the dog belonged to the deceased Vicente Miranda, that it was a tame animal, and that in any case no one had witnessed it bit Theness. After trial, the CFI of Cebu sustained the Vestils and dismissed the complaint. The IAC reversed and found that the Vestils were in possession of the house and the dog and so should be responsible under Article 2183 of the Civil Code for the injuries caused by the dog. It also held that the child had died as a result of the dog bites and not for causes independent thereof as submitted by the appellees. Hence, this petition. Issue: Whether the Vestils are liable for the death of Theness Uy Purita Vestil insists that she is not the owner of the house or of the dog left by her father as his estate has not yet been partitioned and there are other heirs to the property. Pursuing the logic of the Uys, she claims, even her sister living in Canada would be held responsible for the acts of the dog simply because she is one of Miranda‟s heirs. However, that is hardly the point. What must be determined is the possession of the dog that admittedly was staying in the house in question, regardless of the ownership of the dog or of the house. Article 2183 reads as follows: The possessor of an animal or whoever may make use of the same is responsible for the damage which it may cause, although it may escape or be lost. This responsibility shall cease only in case the damage should come from force majeure or from the fault of the person who has suffered damage. Purita Vestil‟s testimony that she was not in possession of Miranda‟s house is hardly credible. She said that the occupants of the house left by her father were related to him (“one way or the other”) and maintained themselves out of a common fund or by some kind of arrangement (on which, however, she did not elaborate). She mentioned as many as 10 of such relatives who had stayed in the house at one time or another although they did not appear to be close kin. She at least implied that they did not pay any rent, presumably because of their relation with Vicente Miranda notwithstanding that she herself did not seem to know them very well. There is contrary evidence that the occupants of the house were boarders who paid the Vestils for providing them with meals and accommodations. It also appears that Purita Vestil had hired a maid, Dolores Jumaoas, who did the cooking and cleaning in the said house for its occupants. Her mother, Pacita, who was a nursemaid of Purita herself, categorically declared that the Vestils were maintaining boarders in the house where Theness was bitten by a dog. Another witness, Marcial Lao, testified that he was indeed a boarder and that the Vestils were maintaining the house for business purposes. And although Purita denied paying the water bills for the house, the Uys submitted documentary evidence of her application for water connection with the Cebu Water District, which strongly suggested that she was administering the house in question. While it is true that she is not really the owner of the house, which was still part of Vicente Miranda‘s estate, there is no doubt that she and her husband were its possessors at the time of the incident in question. She was the only heir residing in Cebu City and the most logical person to take care of the property, which was only 6 km from her own 186

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Atty. Jess Lopez

house. Moreover, there is evidence showing that she and her family regularly went to the house, once or twice weekly, according to at least one witness, and used it virtually as a second house. Interestingly, her own daughter was playing in the house with Theness when the little girl was bitten by the dog. The dog itself remained in the house even after the death of Vicente Miranda in until 1975, when the incident in question occurred. It is also noteworthy that the Vestils offered to assist the Uys with their hospitalization expenses although Purita said she knew them only casually. The Vestils also argue that even assuming that they were the possessors of the dog that bit Theness, there was no clear showing that she died as a result thereof. On the contrary, the death certificate declared that she died of bronchopneumonia, which had nothing to do with the dog bites for which she had been previously hospitalized. We do not agree. Theness developed hydrophobia, a symptom of rabies, as a result of the dog bites, and second, that asphyxia broncho-pneumonia, which ultimately caused her death, was a complication of rabies. That Theness became afraid of water after she was bitten by the dog is established by the testimony of Dr. Tautjo. As for the link between rabies and broncho-pneumonia, the doctor stated under oath that ―broncho-pneumonia can be a complication of rabies.‖ The death certificate is not conclusive proof of the cause of death but only of the fact of death. Indeed, the evidence of the child‘s hydrophobia is sufficient to convince us that she died because she was bitten by the dog even if the death certificate stated a different cause of death. The Vestils‘ contention that they could not be expected to exercise remote control of the dog is not acceptable. In fact, Article 2183 holds the possessor liable even if the animal should ―escape or be lost‖ and so be removed from his control. And it does not matter either that, as the Vestils also contend, the dog was tame and was merely provoked by the child into biting her. The law does not speak only of vicious animals but covers even tame ones as long as they cause injury. As for the alleged provocation, the Vestils forget that Theness was only 3 years old at the time she was attacked and can hardly be faulted for whatever she might have done to the animal. It is worth observing that the above defenses of the Vestils are an implied rejection of their original posture that there was no proof that it was the dog in their father‘s house that bit Theness. According to Manresa, the obligation imposed by Article 2183 of the Civil Code is not based on the negligence or on the presumed lack of vigilance of the possessor or user of the animal causing the damage. It is based on natural equity and on the principle of social interest that he who possesses animals for his utility, pleasure or service must answer for the damage which such animal may cause. B.

Owners of Motor Vehicles

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See Section III(D)(iii)(a) above.

C.

Manufacturers and Processors

1. Coca-Cola Bottlers v. Court of Appeals, G.R. No. 110295, October 18, 1993. Facts: Lydia Geronimo was the proprietress of Kindergarten Wonderland Canteen in Dagupan City; she was engaged in the sale of softdrinks i.e. Coke and Sprite to students thereat and to the public. On 12 August 1989, some parents complained that some of the drinks contained fiber-like matter and other foreign things. She checked her stock and discovered the same, along with some plastic matter in an unopened Sprite bottle. She brought samples to the Regional Health Office of the DOH, and was informed that they were adulterated. Her sales plummeted from 10 cases per day to merely 2 or 3 per day. She had to close shop soon after, becoming jobless. She thus filed a complaint for damages on 7 May 1990. Coke moved to dismiss on grounds of failure to exhaust administrative remedies and prescription. It claimed prescription since the complaint is a breach of warranty under Art. 1561, and should have been filed within 6 months. The RTC ruled that the existing administrative remedy was inadequate (no mention of what), but granted dismissal on the latter ground. The CA ruled that it was based on quasi-delict, and was thus timely filed; the mere existence of a contract does not bar an action for quasi-delict. Hence, this petition. The Coke insists that a cursory reading of the complaint will reveal that the primary legal basis for private respondent's cause of action is not Article 2176 of the Civil Code on quasi-delict — for the complaint does not ascribe any tortious or wrongful conduct on its part — but Articles 1561 and 1562 thereof on breach of a seller's implied warranties under the law on sales. It contends the existence of a contractual relation between the parties (arising from the contract of sale) bars the application of the law on quasi-delicts and that since Geronimo's cause of action arose from the breach of implied warranties, the complaint should have been filed within si6x months room delivery of the soft drinks pursuant to Article 171 of the Civil Code.

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In her Comment, Geronimo argues that in case of breach of the seller's implied warranties, the vendee may, under Article 1567 of the Civil Code, elect between withdrawing from the contract or demanding a proportionate reduction of the price, with damages in either case. She asserts that Civil Case No. D-9629 is neither an action for rescission nor for proportionate reduction of the price, but for damages arising from a quasi-delict and that the public respondent was correct in ruling that the existence of a contract did not preclude the action for quasi-delict. As to the issue of prescription, the private respondent insists that since her cause of action is based on quasi-delict, the prescriptive period therefore is 4 years in accordance with Article 1144 of the Civil Code and thus the filing of the complaint was well within the said period. Issue: Whether the action was a breach of implied warranty or quasi-delict. Held: QUASI-DELICT. We find no merit in the petition. Geronimo‘s conclusion that the cause of action in Civil Case No. D-9629 is found on quasi-delict and that, therefore, pursuant to Article 1146 of the Civil Code, it prescribes in 4 years is supported by the allegations in the complaint, more particularly paragraph thereof, which makes reference to the reckless and negligent manufacture of "adulterated food items intended to be sold for public consumption." The vendee's remedies against a vendor with respect to the warranties against hidden defects of or encumbrances upon the thing sold are not limited to those prescribed in Article 1567 which provides: Art. 1567. In the case of Articles 1561, 1562, 1564, 1565 and 1566, the vendee may elect between withdrawing from the contract and demanding a proportionate reduction of the price, with damages either case. The vendee may also ask for the ANNULMENT OF THE CONTRACT upon proof of error or fraud, in which case the ordinary rule on obligations shall be applicable. Under the law on obligations, responsibility arising from fraud is demandable in all obligations and any waiver of an action for future fraud is void. Responsibility arising from negligence is also demandable in any obligation, but such liability may be regulated by the courts, according to the circumstances. Those guilty of fraud, negligence, or delay in the performance of their obligations and those who in any manner contravene the tenor thereof are liable for damages. The vendor could likewise be liable for quasi-delict under Article 2176 and an action based thereon may be brought by the vendee. While it may be true that the pre-existing contract between the parties may, as a general rule, bar the applicability of the law on quasi-delict, the liability may itself be deemed to arise from quasi-delict, i.e., the acts which breaks the contract may also be a quasi-delict. Thus, in Singson vs. Bank of the Philippine Islands, this Court stated: We have repeatedly held, however, that the existence of a contract between the parties does not bar the commission of a tort by the one against the other and the consequent recovery of damages therefor. Indeed, this view has been, in effect, reiterated in a comparatively recent case. Thus, in Air France vs. Carrascoso, involving an airplane passenger who, despite hi first-class ticket, had been illegally ousted from his first-class accommodation and compelled to take a seat in the tourist compartment, was held entitled to recover damages from the air-carrier, upon the ground of tort on the latter's part, for, although the relation between the passenger and a carrier is "contractual both in origin and nature ... the act that breaks the contract may also be a tort. Otherwise put, liability for quasi-delict may still exist despite the presence of contractual relations. Under American law, the liabilities of a manufacturer or seller of injury-causing products may be based on negligence, breach of warranty, tort, or other grounds such as fraud, deceit, or misrepresentation. Quasi-delict, as defined in Article 2176 of the Civil Code, (which is known in Spanish legal treaties as culpa aquiliana, culpa extracontractual or cuasi-delitos) is homologous but not identical to tort under the common law, which includes not only negligence, but also intentional criminal acts, such as assault and battery, false imprisonment and deceit. It must be made clear that our affirmance of the decision of the CA should by no means be understood as suggesting that the Generoso‟s claims for moral damages have sufficient factual and legal basis. D.

Municipal Corporations

Republic Act No. 7160, Section 24 Section 24. Liability for Damages. - Local government units and their officials are not exempt from liability for death or injury to persons or damage to property.

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Atty. Jess Lopez

1.City of Manila v. Teotico, 22 SCRA 267 (1968) Facts: On January 27, 1958, at about 8PM., Genaro N. Teotico was at the corner of the Old Luneta and P. Burgos Avenue within a ―loading and unloading‖ zone, waiting for a jeepney to take him down town. After waiting for about 5 minutes, he managed to hail a jeepney that came along to a stop. As he stepped down from the curb to board the jeepney, and took a few steps, he fell inside an uncovered and unlighted catchbasin or manhole on P. Burgos Avenue. Due to the fall, his head hit the rim of the manhole breaking his eyeglasses and causing broken pieces thereof to pierce his left eyelid. As blood flowed therefrom, impairing his vision, several persons came to his assistance and pulled him out of the manhole. Teotico was brought to the PGH. In addition to the lacerated wound in his left upper eyelid, Teotico suffered contusions on the left thigh, the left upper arm, the right leg and the upper lip, apart from an abrasion on the right infra-patella region. These injuries and the allergic eruptions caused by anti-tetanus injections administered to him in the hospital, required further medical treatment and expenses. Teotico filed, with the CFI of Manila, a complaint for damages against the City of Manila, its mayor, city engineer, city health officer, city treasurer and chief of police. At the time of the incident, plaintiff was a practicing public accountant, a businessman and a professor at the University of the East. He held responsible positions in various business firms (Philippine Merchandising Co., the A.U. Valencia and Co., the Silver Swan Manufacturing Company and the Sincere Packing Corporation) and was associated with several civic organizations (Wack Wack Golf Club, the Chamber of Commerce of the Philippines, Y's Men Club of Manila and the Knights of Rizal) As a result of the incident, plaintiff was prevented from engaging in his customary occupation for 20 days and was subjected to humiliation and ridicule by his business associates and friends. The defense presented evidence, oral and documentary, to prove that the Office of the City Engineer of Manila, received a report of the uncovered condition of a catchbasin at the corner of P. Burgos and Old Luneta Streets, Manila, on January 24, 1958, but the same was covered on the same day; That again the iron cover of the same catchbasin was reported missing on January 30, 1958, but the said cover was replaced the next day; and that the Office of the City Engineer never received any report to the effect that the catchbasin in question was not covered between January 25 and 29, 1968; that it has always been a policy of the said office, which is charged with the duty of installation, repair and care of storm drains in the City of Manila, and that whenever a report is received from whatever source of the loss of a catchbasin cover, the matter is immediately attended to, either by immediately replacing the missing cover or covering the catchbasin with steel matting. They also noted that because of the lucrative scrap iron business then prevailing, stealing of iron catchbasin covers was rampant and in order to prevent such thefts, the city government has changed the position and layout of catchbasins in the City by constructing them under the sidewalks with concrete cement covers and openings on the side of the gutter CFI of Manila rendered the aforementioned decision sustaining the theory of the defendants and dismissing the amended complaint. CA affirmed except insofar as the City of Manila is concerned which was sentenced to pay damages in the aggregate sum of P6,750.00. City of Manila appealed. Issue: (1) Whether or not, in determining liability, the Charter of Manila is the applicable law. (2) Whether the City of Manila is liable for damages sustained by Teotico. Held: (1) NO. Section 4 of Republic Act No. 409 (Charter of the City of Manila) provides that: The city shall not be liable or held for damages or injuries to persons or property arising from the failure of the Mayor, the Municipal Board, or any other city officer, to enforce the provisions of this chapter, or any other law or ordinance, or from negligence of said Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions. Article 2189 of the Civil Code provides that: Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any person by reason of defective conditions of roads, streets, bridges, public buildings, and other public works under their control or supervision. Manila maintains that the former provision should prevail over the latter, because Republic Act 409 is a special law, intended exclusively for the City of Manila, whereas the Civil Code is a general law. The CA, however, applied the Civil Code, and, we think, correctly. It is true that, insofar as its TERRITORIAL APPLICATION is concerned, RA No. 409 is a special law and the Civil Code a general legislation; but, as regards the SUBJECT-MATTER of the provisions above quoted, Section 4 of RA 409 establishes a general rule regulating the liability of the City of Manila for "damages or injury to persons or property 189 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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arising from the failure of" city officers "to enforce the provisions of" said Act "or any other law or ordinance, or from negligence" of the city "Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions." Upon the other hand, Article 2189 of the Civil Code constitutes a particular prescription making "provinces, cities and municipalities x x x liable for damages for the death of, or injury suffered by, an by reason"—specifically—"of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision." In other words, said section 4 refers to liability arising from negligence, in general, regardless of the object thereof, whereas Article 2189 governs liability due to "defective streets," IN PARTICULAR. Since the present action is based upon the alleged defective condition of a road, said Article 2189 is decisive thereon. (2) YES. The City of Manila may be held liable for damages as the street where the accident happened was under the supervision and control of the City. It is urged that the City of Manila cannot be held liable to Teotico for damages: 1) because the accident involving him took place in a national highway; and 2) because the City of Manila has not been negligent in connection therewith. Teotico alleged in his complaint, as well as in his amended complaint, that his injuries were due to the defective condition of a street which is "under the supervision and control" of the City. In its answer to the amended complaint, the City, in turn, alleged that "the streets aforementioned were and have been constantly kept in good condition and regularly inspected and the storm drains and manholes thereof covered by the defendant City and the officers concerned" who "have been ever viligant and zealous in the performance of their respective functions and duties as imposed upon them by law." Thus, the City had, in effect, admitted that P. Burgos Avenue was and is under its control and supervision. Moreover, the assertion to the effect that said Avenue is a national highway was made, for the first time, in its motion for reconsideration of the decision of the CA. Such assertion raised, therefore, a question of fact, which had not been put in issue in the trial court, and cannot be set up for the first time on appeal, much less after the rendition of the decision of the appellate court in a motion for the reconsideration thereof. At any rate, under Article 2189, it is not necessary for the liability therein established to attach that the defective roads or streets belong to the province, city or municipality from which responsibility is exacted. What said article requires is that the province, city or municipality have either " CONTROL or SUPERVISION" over said street or road. Even if P. Burgos Avenue were, therefore, a national highway, this circumstance would not necessarily detract from its "control or supervision" by the City of Manila, under RA 409. This authority has been neither withdrawn nor restricted by Republic Act No. 917 and Executive Order No. 113, dated May 2, 1955, upon which the City relies. Said Act governs the disposition or appropriation of the highway funds and the giving of aid to provinces, chartered cities and municipalities in the construction of roads and streets within their respective boundaries, and Executive Order No. 113 merely implements the provisions of said Republic Act No. 917, concerning the disposition and appropriation of the highway funds. Moreover, it provides that "the construction, maintenance and improvement of national primary, national secondary and national aid provincial and city roads shall be accomplished by the Highway District Engineers and Highway City Engineers under the supervision of the Commissioner of Public Highways and shall be financed from such appropriations as may be authorized by the Republic of the Philippines in annual or special appropriation Acts. Notably, the determination of whether or not P. Burgos Avenue is under the control or supervision of the City of Manila and whether the latter is guilty of negligence, in connection .with the maintenance of said road, which were decided by the CA in the affirmative, is one of fact, and the findings of said Court thereon are not subject to our review. 2.Jimenez v. City of Manila, 150 SCRA 510 (1987) Facts: Jimenez shows that in the morning of August 15, 1974 he, together with his neighbors, went to Sta. Ana public market to buy "bagoong" at the time when the public market was flooded with ankle deep rainwater. After purchasing the "bagoong" he turned around to return home but he stepped on an uncovered opening which could not be seen because of the dirty rainwater, causing a dirty and rusty 4-inch nail, stuck inside the uncovered opening, to pierce the left leg of plaintiff-petitioner penetrating to a depth of about one and a half inches. After administering first aid treatment at a nearby drugstore, his companions helped him hobble home. He developed fever and he had to be carried to Dr. Juanita Mascardo. His left leg swelled with great pain and was subsequently rushed to the Veterans Memorial Hospital where he was confined for 20 days due to high fever and severe pain. He walked around with crutches for 15 days. His injury prevented him from attending to the school buses he is operating. He had to engage the services of one Bienvenido Valdez to supervise his business for an aggregate compensation of P900.00.

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Petitioner sued for damages the City of Manila and the Asiatic Integrated Corporation under whose administration the Sta. Ana Public Market had been placed by virtue of a Management and Operating Contract. Defendants do not deny that plaintiff was in fact injured although the Asiatic Integrated Corporation tries to minimize the extent of the injuries, claiming that it was only a small puncture and that as a war veteran, plaintiff‘s hospitalization at the War Veteran's Hospital was free. City of Manila maintains that it cannot be held liable for the injuries sustained by the petitioner because under the Management and Operating Contract, Asiatic Integrated Corporation assumed all responsibility for damages which may be suffered by third persons for any cause attributable to it. It has also been argued that the City of Manila cannot be held liable under Article I, Section 4 of Republic Act No. 409 as amended (Revised Charter of Manila) which provides: The City shall not be liable or held for damages or injuries to persons or property arising from the failure of the Mayor, the Municipal Board, or any other City Officer, to enforce the provisions of this chapter, or any other law or ordinance, or from negligence of said Mayor, Municipal Board, or any other officers while enforcing or attempting to enforce said provisions. The lower court decided in favor of respondents. The IAC held the Asiatic Integrated Corporation liable for damages but absolved City of Manila. Issue: Whether Manila should be jointly and severally liable with Asiatic Integrated Corporation for the injuries petitioner suffered. Held: YES. There is no doubt that the plaintiff suffered injuries when he fell into a drainage opening without any cover in the Sta. Ana Public Market. In the case of Teotico, Supreme Court squarely ruled that Republic Act No. 409 establishes a GENERAL RULE regulating the liability of the City of Manila for damages or injury to persons or property arising from the failure of city officers to enforce the provisions of said Act, or any other law or ordinance or from negligence of the City Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions. Upon the other hand, Article 2189 constitutes a PARTICULAR PRESCRIPTION making "provinces, cities and municipalities liable for damages for the death of, or injury suffered by any person by reason— specifically—of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision. In other words, Art. 1, sec. 4, R.A. No. 409 refers to liability arising from negligence, in general, regardless of the object, thereof, while Article 2189 governs liability due to "defective streets, public buildings and other public works" in particular and is therefore decisive on this specific case. Supreme Court clarified further that under Article 2189, it is not necessary for the liability therein established to attach, that the defective public works belong to the province, city or municipality from which responsibility is exacted. What said article requires is that the province, city or municipality has either "CONTROL OR SUPERVISION" over the public building in question. There is no question that the Sta. Ana Public Market, despite the Management and Operating Contract between respondent City and Asiatic Integrated Corporation, remained under the control of the former. Said contract is explicit in this regard, when it provides: That immediately after the execution of this contract, the SECOND PARTY shall start the painting, cleaning, sanitizing and repair of the public markets and talipapas and within ninety (90) days thereof, the SECOND PARTY shall submit a program of improvement, development, rehabilitation and reconstruction of the city public markets and talipapas subject to prior approval of the FIRST PARTY. That all present personnel of the City public markets and talipapas shall be retained by the SECOND PARTY as long as their services remain satisfactory and they shall be extended the same rights and privileges as heretofore enjoyed by them. Provided, however, that the SECOND PARTY shall have the right, subject to prior approval of the FIRST PARTY to discharge any of the present employees for cause. That the SECOND PARTY may from time to time be required by the FIRST PARTY, or his duly authorized representative or representatives, to report on the activities and operation of the City public markets and talipapas and the facilities and conveniences installed therein, particularly as to their cost of construction, operation and maintenance in connection with the stipulations contained in this Contract.

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The fact of supervision and control of the City over subject public market was admitted by Mayor Ramon Bagatsing in his letter to Secretary of Finance: These cases arose from the controversy over the Management and Operating Contract entered into on December 28, 1972 by and between the City of Manila and the Asiatic Integrated Corporation, whereby in consideration of a fixed service fee, the City hired the services of the said corporation to undertake the physical management, maintenance, rehabilitation and development of the City's public markets and 'Talipapas' subject to the control and supervision of the City. It is believed that there is nothing incongruous in the exercise of these powers vis-a-vis the existence of the contract, inasmuch as the City retains the power of supervision and control over its public markets and talipapas under the terms of the contract. City of Manila employed a market master for the Sta. Ana Public Market whose primary duty is to take direct supervision and control of that particular market, more specifically, to check the safety of the place for the public Moreover, Section 30 (g) of the Local Tax Code provides: "The TREASURER shall exercise direct and immediate supervision, administration and control over public markets and the personnel thereof, including those whose duties concern the maintenance and upkeep of the market and ordinances and other pertinent rules and regulations." The contention of City of Manila that petitioner should not have ventured to go to Sta. Ana Public Market during a stormy weather is indeed untenable. It is an error for the trial court to attribute the negligence to herein petitioner. A customer in a store has the right to assume that the owner will comply with his duty to keep the premises safe for customers. If he ventures to the store on the basis of such assumption and is injured because the owner did not comply with his duty, no negligence can be imputed to the customer. As a defense against liability on the basis of a quasi-delict, one must have exercised the diligence of a good father of a family. There is no argument that it is the duty of the City of Manila to exercise reasonable care to keep the public market reasonably safe for people frequenting the place for their marketing needs. While it may be conceded that the fulfillment of such duties is extremely difficult during storms and floods, it must however, be admitted that ordinary precautions could have been taken during good weather to minimize the dangers to life and limb under those difficult circumstances. The drainage hole could have been placed under the stalls instead of on the passageways. The city should have seen to it that the openings were covered. Evidence indicates that long before petitioner fell into the opening, it was already uncovered, and 5 months after the incident happened, the opening was still uncovered. While there are findings that during floods the vendors remove the iron grills to hasten the flow of water there is no showing that such practice has ever been prohibited, much less penalized by the City of Manila. Neither was it shown that any sign had been placed thereabouts to warn passers-by of the impending danger. It is evident that the City of Manila is likewise liable for damages under Article 2189, respondent City having retained control and supervision over the Sta. Ana Public Market and as tort-feasor under Article 2176 of the Civil Code on quasi-delicts. Petitioner had the right to assume that there were no openings in the middle of the passageways and if any, that they were adequately covered. Had the opening been covered, petitioner could not have fallen into it. Thus the negligence of the City of Manila is the PROXIMATE CAUSE of the injury suffered, the City is therefore liable for the injury suffered by the petitioner. Respondent City of Manila and Asiatic Integrated Corporation being joint tort-feasors, are solidarily liable under Article 2194 of the Civil Code. 3.Municipality of San Juan, Metro Manila v. Court of Appeals, G.R. No. 121920, August 9, 2005 Facts: The Municipality of San Juan engaged the services of MWSS and Kwok Cheung as the sole proprietor of KC Waterworks System Construction for the installation of water service connections. 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, a national road, for the laying of water pipes and tapping of water to the respective houses of water concessionaires. The workers dug a hole 1 meter wide and 1.5 meters deep, after which they refilled the excavated portion of the road with the same gravel and stone excavated from the area. At that time, 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. On the evening of the same day, Priscilla Chan, along with Prosecutor Laura Biglang-awa was driving her Toyota Crown Car at a speed of 30 kph along the same road. The road was flooded as it was then raining hard. Suddenly, the 192 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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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. She was rushed to Cardinal Santos where she was treated. Biglang-awa filed before the RTCt at Pasig, Metro Manila a complaint for damages against MWSS, the Municipality of San Juan and a number of San Juan municipal officials. Later, Biglang-awa amended her complaint twice. In her second amended complaint, she included KC as one of the defendants. Petitioner maintains that under Section 149, [1][z] of the Local Government Code, it is obliged to provide for the construction, improvement, repair and maintenance of only municipal streets, avenues, alleys, sidewalks, bridges, parks and other public places. Ergo, since Santolan Road is concededly a national and not a municipal road, it cannot be held liable for the injuries suffered by Biglang-awa on account of the accident that occurred on said road. Additionally, petitioner contends that under Section 8, Ordinance No. 82-01, of the Metropolitan Manila Commission, only the Project Engineer of KC and MWSS can be held liable for the same accident. Issue: Whether Municapility of San Juan is liable. Held: YES. The court rules against these contentions. Teotico teaches that for liability to arise under Article 2189 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 thereof. Also under Section 149 of the LGC, it provides inter alia: The sangguniang bayan shall: (bb) Regulate the drilling and excavation of the ground for the laying of gas, water, sewer, and other pipes; the building and repair of tunnels, sewers, drains and other similar structures; erecting of poles and the use of crosswalks, curbs and gutters therein, and adopt measures to ensure public safety against open canals, manholes, live wires and other similar hazards to life and property, and provide just compensation or relief for persons suffering from them; Clear it is from the above that the Municipality of San Juan can ―regulate‖ the drilling and excavation of the ground for the laying of gas, water, sewer, and other pipes within its territorial jurisdiction. Doubtless, the term ―REGULATE‖ found in the aforequoted provision of Section 149 can only mean that petitioner municipality exercises the power of control, or, at the very least, supervision over all excavations for the laying of gas, water, sewer and other pipes within its territory. It must be emphasized that under paragraph [1][bb] of Section 149, supra, of the LGC, 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 the court‘s 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. Concededly, Section 8 of the Ordinance makes the permittee/excavator liable for death, injury and/or damages caused by the non-completion of works and/or failure of the one undertaking the works to adopt the required precautionary measures for the protection of the general public. Significantly, however, nowhere can it be found in said Ordinance any provision exempting municipalities in Metro Manila from liabilities caused by their own negligent acts. 4.Guilatco v. City of Dagupan, 171 SCRA 382 (1989) Facts: Florentina Guilatco was a Court Interpreter of Br. 3 CFI Dagupan City. As she was about to board a motorized tricycle (not ―tray-si-kol‖) at a sidewalk along Perez Blvd. (a National Road under the control and supervision of the city) accidentally fell into a manhole on the sidewalk. Description of Manhole: It was on the sidewalk, partially covered by a concrete flower pot, there was a gaping hole about 2 ft long x 1.5 ft wide OR 42 cm wide, 75 cm long, 150 cm deep. Effects of Accident: Her leg was fractured; she had to be hospitalized (Pangasinan Provincial Hospital and then Med City General Hospital), operated on, and confined; incurred medical expenses; suffered excruciating pain in all parts of her 193 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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body. Despite her discharge from the hospital, she still wore crutches and had difficulty in locomotion. Thus, she was not able to report for duty and was not able to earn income. Her accrued leaves had already been consumed; lost several pounds; no longer her jovial self. All these were confirmed by Drs. Felix, Manzano, and Sison. Defendant Engr. Alfredo Tangco (City Engineer of Public Works and ex-officio Highway Engineer, Building Official of City) admitted the existence of said manhole. Also admitted that the manhole was owned by the National Government. As City Engineer, he supervises and maintains them and sees to it they are properly covered. Such job is specifically done by his subordinates De Vera (Maintenance Foreman) and Engr. Solermo (Maintenance Engineer). As ex-officio Highway Engineer, he admits to having supervision & control over National roads including Perez Blvd. Guilatco sued Dagupan City for recovery of damages pursuant to Art. 2189. Lower court ruled for Guilatco. On appeal, appellate court reversed on the ground that no evidence that Dagupan had supervision and control over Perez Blvd was presented. Thus, as a national road, it was not under Dagupan‘s supervision. Issue: Whether or not control or supervision over a national road by the City of Dagupan exists, in effect binding the city to answer for damages in accordance with article 2189 of the Civil Code. Held: YES. DAGUPAN IS LIABLE. The liability of public corporations for damages arising from injuries suffered by pedestrians from the defective condition of roads is expressed in the Civil Code as follows: Article 2189. Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any person by reason of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision. It is not even necessary for the defective road or street to belong to the province, city or municipality for liability to attach. The article only requires that either control or supervision is exercised over the defective road or street. In the case at bar, this control or supervision is provided for in the charter of Dagupan and is exercised through the City Engineer who has the following duties: Sec. 22. The City Engineer — His powers, duties and compensation — There shall be a city engineer, who shall be in charge of the department of Engineering and Public Works. He shall receive a salary of not exceeding three thousand pesos per annum. He shall have the following duties: (j) He shall have the care and custody of the public system of waterworks and sewers, and all sources of water supply, and shall control, maintain and regulate the use of the same, in accordance with the ordinance relating thereto; shall inspect and regulate the use of all private systems for supplying water to the city and its inhabitants, and all private sewers, and their connection with the public sewer system. The same charter of Dagupan also provides that the laying out, construction and improvement of streets, avenues and alleys and sidewalks, and regulation of the use thereof, may be legislated by the Municipal Board. Thus the charter clearly indicates that the city indeed has supervision and control over the sidewalk where the open drainage hole is located. The express provision in the charter holding the city not liable for damages or injuries sustained by persons or property due to the failure of any city officer to enforce the provisions of the charter, cannot be used to exempt the city. The charter only lays down general rules regulating the liability of the city. On the other hand Art. 2189 applies IN PARTICULAR to the liability arising from ―defective streets, public buildings and other public works.‖ Tangco, in his official capacity as City Engineer of Dagupan, as Ex-Officio Highway Engineer, as Ex-Officio City Engineer of the Bureau of Public Works, and, last but not the least, as Building Official for Dagupan City, receives the following monthly compensation: (1) (2) (3) (4)

P1,810.66 from Dagupan City; P200.00 from the Ministry of Public Highways; P100.00 from the Bureau of Public Works; and P500.00 by virtue of P.D. 1096, respectively.

This function of supervision over streets, public buildings, and other public works pertaining to the City Engineer is coursed through a Maintenance Foreman and a Maintenance Engineer. Although these last 2 officials are employees of the National Government, they are detailed with the City of Dagupan and hence receive instruction and supervision 194 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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from the city through the City Engineer. There is, therefore, no doubt that the City Engineer exercises control or supervision over the public works in question. Hence, the liability of the city to the petitioner under article 2198 of the Civil Code is clear. *Discussion on damages omitted E.

Building Proprietors

1.De Roy v. Court of Appeals, 157 SCRA 757 (1988) Facts: The firewall of a burned-out building owned by De Roy collapsed and destroyed the tailoring shop occupied by the family of private respondents Bernal, resulting in injuries to private respondents and the death of Marissa Bernal, a daughter. Bernals had been warned by De Roy to vacate their shop in view of its proximity to the weakened wall but the former failed to do so. RTC: rendered judgment finding De Roy guilty of gross negligence and awarding damages to Bernal. CA: affirmed. On September 9, 1987, the last day of the 15-day period to file an appeal, petitioners filed a motion for extension of time to file a motion for reconsideration, which was eventually denied by the CA. Issue: Whether CA gravely abused its discretion in holding De Roy liable. Held: NO. DE ROY IS LIABLE. The owner of the building is liable under Art. 2190 which provides that— The proprietor of a building or structure is responsible for the damages resulting from its total or partial collapse, if it should be due to the lack of necessary repairs. This Court likewise finds that the CA committed no grave abuse of discretion in affirming the trial court's decision holding De Roy liable under Article 2190 of the Civil Code. Nor was there error in rejecting De Roy argument that Bernals had the "last clear chance" to avoid the accident if only they heeded the warning to vacate the tailoring shop and, therefore, petitioners prior negligence should be disregarded, since the doctrine of "last clear chance," which has been applied to vehicular accidents, is inapplicable to this case. 2.Cinco v. Canonoy, G.R. No. L-33171, May 31, 1979 (NO MENTION IN THIS CASE OF BUILDING PROPRIETORS) Facts: Petitioner filed for recovery of damages due to a vehicular accident involving his automobile and a jeepney driven by Romeo Hilot and operated by Valeriana Pepito and Carlos Pepito. A criminal case was filed against the driver, Romeo Hilot, arising from the same accident. At the pre-trial in the civil case, private respondents moved to suspend the civil action pending the final determination of the criminal suit The Court ordered the suspension of the civil case. Motion for Reconsideration was denied. Certiorari was filed alleging that the City Judge had acted with grave abuse of discretion in suspending the civil action but was likewise dismissed. Hence, this Petition for Review. Issue: Whether there can be an independent civil action for damage to property during the pendency of the criminal action. Held: YES. From the complaint filed by petitioner, it is evident that his action was quasi-delictual based on Articles 2176 and 2180 of the Civil Code. Plaintiff made the essential averments that it was the fault or negligence of the driver, Romeo Hilot, in the operation of the jeepney owned by the Pepitos which caused the collision between his automobile and said jeepney; that damages were sustained by petitioner because of the collision; that there was a direct causal connection between the damages he suffered and the fault and negligence of private respondents. In the Answer, private respondents contended that defendant, Valeriana Pepito, observed due diligence in the selection and supervision of her employees, particularly of her co-defendant Romeo Hilot, a defense peculiar to actions based on quasi-delict. Being predicated on quasi-delict, the civil case may proceed as a separate and independent civil action. Art. 2177. Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant 195

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The crucial distinction between criminal negligence and quasi-delict has been expounded in Barredo vs. Garcia: FIRSTLY, the Revised Penal Code in article 365 punishes not only reckless but also simple imprudence. If we were to hold that articles 1902 to 1910 of the Civil Code refer only to fault or negligence not punished by law, the legal institution of culpa aquiliana would have very little scope and application in actual life. Death or injury to persons and damage to property through any degree of negligence —even the slightest would have to be indemnified only through the principle of civil liability arising from crime. We are loath to impute to the lawmaker any intention to bring about a situation so absurd and anomalous. SECONDLY, to find the accused guilty in a criminal case, proof of guilt beyond reasonable doubt is required, while in a civil case, preponderance of evidence is sufficient. There are numerous cases of criminal negligence which cannot be shown beyond reasonable doubt, but can be proved by a preponderance of evidence. In such cases, the defendant can and should be made responsible in a civil action under articles 1902 to 1910 of the Civil Code, otherwise, there would be many instances of unvindicated civil wrongs. THIRDLY, to hold that there is only one way to make defendants liability effective, and that is, to sue the driver and exhaust his (the latter‘s) property first, would be tantamount to compelling the plaintiff to follow a devious and cumbersome method of obtaining a relief. There is also a more expeditious way, which is based on the primary and direct responsibility of the defendant. The procedure indicated by the defendant is wasteful and productive of delay, it being a matter of common knowledge that professional drivers of taxis and similar public conveyances usually do not have sufficient means with which to pay damages. Why, then, should the plaintiff be required in all cases to go through this roundabout, unnecessary, and probably useless procedure? The primary and direct responsibility of employers and their presumed negligence are principles calculated to protect society. Workmen and employees should be carefully chosen and supervised in order to avoid injury to the public. It is the masters or employers who principally reap the profits resulting from the services of these servants and employees. They should guarantee the latter‘s careful conduct for the personnel and patrimonial safety of others. As Theilhard has said, ‗they should reproach themselves, at least, some for their weakness, others for their poor selection and all for their negligence.‘ And according to Manresa, ‗It is much more equitable and just that such responsibility should fail upon the principal or director who could have chosen a careful and prudent employee, and not upon the such employee because of his confidence in the principal or director.‘ Many jurists also base this primary responsibility of the employer on the principle of representation of the principal by the agent. Oyuelos says that before third persons the employer and employee become as one personality by the merging of the person of the employee in that of him who employs and utilizes him. All these observations acquire a peculiar force and significance when it comes to motor accidents, and there is need of stressing and accentuating the responsibility of owners of motor vehicles. FOURTHLY, there has grown up a common practice to seek damages only by virtue of the Civil responsibility arising from crime, forgetting that there is another remedy, which is by invoking articles 1902-1910 of the Civil Code. Although this habitual method is allowed by our laws, it has nevertheless rendered practically useless and nugatory the more expeditious and effective remedy based on culpa aquiliana or culpa extra-contractual. It is high time we cause the stream of quasi-delict or culpa aquiliana to flow on its own natural channel, so that its waters may no longer be diverted into that of a crime under the Penal Code. This will make for the better safeguarding of private rights because it reestablishes an ancient and additional remedy, and for the further reason that an independent civil action, not depending on the issues, limitations and results of a criminal prosecution, and entirely directed by the party wronged or his counsel, is more likely to secure adequate and efficacious redress. Separate and independent civil action for a quasi-delict is also clearly recognized in section 2, Rule 111 of the Rules of Court Sec. 2. Independent civil action.—In the cases provided for in Articles 31, 32, 33, 34 and 2177 of the Civil Code of the Philippines, an independent civil action entirely separate and distinct from the criminal action, may be brought by the injured party during the pendency of the criminal case, provided the right is reserved as required in the preceding section. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence. The City Court, in suspending the civil action, erred in relying on section 3 (b) of Rule 111 of the Rules of Court which refers to ―other civil actions arising from cases not included in the section just cited‖ (i.e. Section 2, Rule 111 above quoted), in which case ―once the criminal action has being commenced, no civil action arising from the same offense can be prosecuted and the same shall be suspended in whatever stage it may be found, until final judgment in the criminal proceeding has been rendered.‖ The civil action referred to in Secs. 3(a) and 3(b) of Rule 111 of the Rules of Court, which should be suspended after the criminal action has been instituted is that arising from the criminal offense not the civil action based on quasi-delict.

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Art. 31. When the civil action is based on an obligation not arising from the act or omission complained of as a felony, such civil action may proceed independently of the criminal proceedings and regardless of the result of the latter. Quasi-delict is that of an independent source of obligation ―not arising from the act or omission complained of as a felony.‖ Petitioner‘s cause of action is based on quasi-delict. Article 2176 includes not only injuries to persons but also damage to property. It makes no distinction between ―damage to persons‖ on the one hand and ―damage to property. The word ―damage‖ is used in two concepts: the ―harm‖ done and ―reparation‖ for the harm done. ―Harm‖ includes both injuries to person and property since ―harm‖ is not limited to personal but also to property injuries. The examples of quasi-delict in the law itself include damage to property. An instance is Article 2191(2) of the Civil Code which holds proprietors responsible for damages caused by excessive smoke which may be harmful ―to persons or property.‖ Respondent Judge gravely abused his discretion in upholding the Decision of the City Court of Mandaue City, Cebu, suspending the civil action based on a quasi-delict until after‘the criminal case is finally terminated. F.

Engineers/Architects/Contractors

1. Nakpil & Sons v. Court of Appeals, G.R. No. L-47851, October 3, 1986 Facts: The plaintiff, Philippine Bar Association, a civic-non- profit association, decided to construct an office building at the corner of Aduana and Arzobispo Streets, Intramuros, Manila. The construction was undertaken by the United Construction, Inc. on an ―administration‖ basis, on the suggestion of Juan J. Carlos, the president and general manager of said corporation. The proposal was approved by plaintiff‘s board of directors and signed by its president Roman Ozaeta, a third-party defendant in this case. The PLANS and SPECIFICATIONS for the building were prepared by the other thirdparty defendants Juan F. Nakpil & Sons. The building was completed in June, 1966. 2 years later an unusually strong earthquake hit Manila and the building in question sustained major damage. The front columns of the building buckled, causing the building to tilt forward dangerously. The tenants vacated the building in view of its precarious condition. As a temporary remedial measure, the building was shored up by United Construction, Inc. The plaintiff commenced this action for the recovery of damages arising from the partial collapse of the building against United Construction, Inc. and its President and General Manager Juan J. Carlos as defendants. Plaintiff alleges that the collapse of the building was accused by defects in the construction, the failure of the contractors to follow plans and specifications and violations by the defendants of the terms of the contract. Defendants in turn filed a third-party complaint against the architects who prepared the plans and specifications, alleging in essence that the collapse of the building was due to the defects in the said plans and specifications. Roman Ozaeta, the then president of the plaintiff Bar Association was included as a third-party defendant for damages for having included Juan J. Carlos, President of the United Construction Co., Inc. as party defendant. The issues of this case were divided into technical issues and non-technical issues. The technical issues were referred to the Commissioner. The non-technical issues were tried by the Court. Plaintiff moved twice for the demolition of the building on the ground that it may topple down in case of a strong earthquake. The motions were opposed by the defendants and the matter was referred to the Commissioner. The building was authorized to be demolished at the expense of the plaintiff, but another earthquake of high intensity on April 7, 1970 followed by other strong earthquakes on April 9, and 12, 1970, caused further damage to the property. The actual demolition was undertaken by the buyer of the damaged building. After the protracted hearings, COMMISSIONER HIZON (a lawyer and structural engineer) eventually submitted his report with the findings that while the damage sustained by the PBA building was caused directly by the August 2, 1968 earthquake whose magnitude was estimated at 7.3 they were also caused by the defects in the plans and specifications prepared by the third-party defendants‟ architects, deviations from said plans and specifications by the defendant contractors and failure of the latter to observe the requisite workmanship in the construction of the building and of the contractors, architects and even the owners to exercise the requisite degree of supervision in the construction of subject building. The trial court agreed with the findings of the Commissioner except as to the holding that the owner is charged with full time supervision of the construction. The lower court rendered the assailed decision which was modified by the IAC. The United Architects of the Philippines, the Association of Civil Engineers, and the Philippine Institute of Architects filed with the Court a motion to intervene as amicus curiae. The amicus curiae gave the opinion that the plans and 197 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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specifications of the Nakpils were not defective. But the Commissioner, when asked by Us to comment, reiterated his conclusion that the defects in the plans and specifications indeed existed. Using the same authorities availed of by the amicus curiae such as the Manila Code and the 1966 Asep Code, the Commissioner added that even if it can be proved that the defects in the construction alone (and not in the plans and design) caused the damage to the building, still the deficiency in the original design and lack of specific provisions against torsion in the original plans and the overload on the ground floor columns (found by all the experts including the original designer) certainly contributed to the damage which occurred. Issue: Whether an act of god — strong earthquake — which caused the failure of the building, exempts from liability, parties who are otherwise liable because of their negligence. Held: NO. LIABLE. The applicable law governing the rights and liabilities of the parties herein is Article 1723 of the New Civil Code, which provides: Art. 1723. The ENGINEER or ARCHITECT who drew up the plans and specifications for a building is liable for damages if within fifteen years from the completion of the structure the same should collapse by reason of a defect in those plans and specifications, or due to the defects in the ground. The CONTRACTOR is likewise responsible for the damage if the edifice falls within the same period on account of defects in the construction or the use of materials of inferior quality furnished by him, or due to any violation of the terms of the contract. If the engineer or architect supervises the construction, he shall be solidarity liable with the contractor. Acceptance of the building, after completion, does not imply waiver of any of the causes of action by reason of any defect mentioned in the preceding paragraph. The action must be brought within ten years following the collapse of the building. On the other hand, the general rule is that no person shall be responsible for events which could not be foreseen or which, though foreseen, were inevitable (Article 1174, New Civil Code). An ACT OF GOD has been defined as an accident, due directly and exclusively to natural causes without human intervention, which by no amount of foresight, pains or care, reasonably to have been expected, could have been prevented. The earthquake of August 2, 1968 is a fortuitous event or an act of God. To exempt the obligor from liability under Article 1174 of the Civil Code, for a breach of an obligation due to an ―act of God,‖ the following must concur: (a) the cause of the breach of the obligation must be independent of the will of the debtor; (b) the event must be either unforseeable or unavoidable; (c) the event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (d) the debtor must be free from any participation in, or aggravation of the injury to the creditor. Thus, if upon the happening of a fortuitous event or an act of God, there concurs a corresponding fraud, negligence, delay or violation or contravention in any manner of the tenor of the obligation as provided for in Article 1170 of the Civil Code, which results in loss or damage, the obligor cannot escape liability. The principle embodied in the act of God doctrine strictly requires that the act must be one occasioned exclusively by the violence of nature and all human agencies are to be excluded from creating or entering into the cause of the mischief. When the effect, the cause of which is to be considered, is found to be in part the result of the participation of man, whether it be from active intervention or neglect, or failure to act, the whole occurrence is thereby humanized, as it were, and removed from the rules applicable to the acts of God. When the negligence of a person concurs with an act of God in producing a loss, such person is not exempt from liability by showing that the immediate cause of the damage was the act of God. To be exempt from liability for loss because of an act of God, he must be free from any previous negligence or misconduct by which that loss or damage may have been occasioned. The negligence of the defendant and the third-party defendants petitioners was established beyond dispute. UNITED CONSTRUCTION CO., INC. was found to have made substantial deviations from the plans and specifications, and to have failed to observe the requisite workmanship in the construction as well as to exercise the requisite degree of supervision; while the third-party defendants were found to have inadequacies or defects in the plans and specifications prepared by them. 198

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The DEFECTS IN THE CONSTRUCTION and in the PLANS AND SPECIFICATIONS were the proximate causes that rendered the PBA building unable to withstand the earthquake of August 2, 1968. For this reason the defendant and third-party defendants cannot claim exemption from liability. In any event, the relevant and logical observations of the trial court as affirmed by the Court of Appeals that ―while it is not possible to state with certainty that the building would not have collapsed were those defects not present, the fact remains that several buildings in the same area withstood the earthquake to which the building of the plaintiff was similarly subjected,‖ cannot be ignored. 2. Nakpil & Sons v. Court of Appeals, G.R. No. L-47851, April 15, 1988 RESOLUTION: PRIOR JUDGMENT AFFIRMED. 1. Whether the findings of the Commissioner, as adopted by the trial court, and affirmed by both the CA and the SC negate the premise that the subject building collapsed United Construction Co., Inc. (UNITED for short), gave considerable emphasis on the fact that the PBA building did not collapse as found by the trial court and affirmed by the Court of Appeals. Otherwise stated, UNITED wishes to stress that subject building did not disintegrate completely as the term "collapse" is supposed to connote. Be that as it may, it will be observed that in the assailed decision, this Court is in complete accord with the findings of the trial court and affirmed by the CA, that after the April 2, 1968 earthquake the building in question was not totally lost, the collapse was only partial and the building could still be restored at the expense of P900,000.00. But after the subsequent earthquake on April 7, 9, and 12, 1970 there was no question that further damage was caused to the property resulting in an eventual and unavoidable collapse or demolition (compete collapse). In fact, on April 30, 1970 the building was authorized by the trial court to be demolished at the expense of the plaintiff. Note that a needed demolition is in fact a form of "collapse". The bone of contention is therefore, not on the fact of collapse but on who should shoulder the damages resulting from the partial and eventual collapse. As ruled by this Court in said decision, there should be no question that the NAKPILS and UNITED are liable for the damage. Citing the case of Tucker v. Milan (49 O.G. 4379, 4380) as the case in point, the pertinent portion of the decision reads: One who negligently creates a dangerous condition cannot escape liability for the natural and probable consequences thereof, although the act of a third person, or an act of God for which he is not responsible, intervenes to precipitate the loss. 2. Whether PBA has a duty of fulltime and active supervision in the construction of the building as imposed by public interest, usage, and custom, failure in which requires that it share in the liability UNITED argues that it is the legal duty of PBA to provide full-time and active supervision in the construction of the subject building. Failing to cite any provision of law to support its arguments, UNITED insists on the inherent legal duty of the owner, reinforced by practice, usage and custom, to exercise such supervision. Apart from the fact that UNITED seems to have completely contradicted its own view that this construction involves highly technical matters and therefore beyond the ambit of ordinary understanding and experience, the contrary appears to be more in accord with ordinary practice, which is to avail oneself of the services of architects and engineers whose training and expertise make them more qualified to provide effective supervision of the construction. In fact, it was on the suggestion of Juan F. Nakpil, one of the petitioners herein, that the construction was undertaken on an administration basis (Decision, p. 3). Thus, the trial court did not err in holding that charging the owner with fun time supervision of the construction has no legal or contractual basis. 3. Whether liability must be borne by all the parties UNITED points out that bad faith is a question of fact which was not established. The Commissioner, the trial court and the Court of Appeals, all of which are triers of fact, allegedly concede that there was negligence but not bad faith. A careful study of the decision will show that there is no contradiction between the above finding of negligence by the trial court which was formed by the Court of Appeals and the ruling of this Court. On the contrary, on the basis of such finding, it was held that such wanton negligence of both the defendant and the third-party defendants in effecting the plans, designs, specifications, and construction of the PBA building is equivalent to bad faith in the performance of their respective tasks. 4. Whether there is bad faith & whether damages are warranted

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UNITED takes exception to the five (5) fold increase in the award of damages from P1,189,335.00 to P5 million pesos. It is claimed that the report of the Commissioner speaks of only P1,100,000.00 so that there is no basis for such award. It will be recalled that the estimate of the Commissioner was limited to P1,100,000.00 for cost of repairs after the partial collapse of the building on April 2, 1968 but not after its total collapse resulting from the subsequent earthquakes. It is therefore evident that the actual cost of total reconstruction of the building him question was not considered by the commissioner in the computation. Considering further the present cost of reconstruction, the new amount (arrived at almost 20 years later) is far from being excessive. It is indeed a very conservative estimate. Any allegation that PBA could have mitigated its loss by executing an offer to purchase the building prior to its complete demolition loses sight of the fact, that the offer was very low, considering the combined value of the building and the lot. In addition, there is merit in the PBA claim that the unrealized rental income awarded to it should not be limited to a period of one-half year but should be computed on a continuing basis at the rate of P178,671.76 a year until judgment for the principal amount shag have been satisfied. Thus, this Court awarded an "indemnity in favor of the Philippine Bar Assodation of FIVE MILLION (P5,000,000.00) Pesos to cover damages (with the exception of attorney's fees) occasioned by the loss of the building (including interest charges and lost rentals) ... As for the award of attorney's fees, there is no question that the size of attorney's fees as well as the amount of damages, is subject to the sound discretion of the court (Magbanua v. IAC, 137 SCRA 332 [1985]). Earlier, this Court has ruled that an award of 10% of the amount of total recovery, for attomey's fees, is reasonable.

VI.

G.

Strict liability torts

-

Liability is imposed even without fault or negligence.

SPECIAL TORTS (HUMAN RELATIONS) A.

Abuse of Rights

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Civil Code o Article 19 (Memorize)

1. Velayo v. Shell, G.R. No. L-7817, October 31, 1956 Facts: Commercial Air Lines, Inc (CALI) is a corporation duly organized and existing in accordance with the Philippines laws with offices in the City of Manila and previously engaged in air transportation business. Shell Company of the P.I., Ltd., which will be designated as the defendant, is on the other hand, a corporation organized under the laws of England and duly licensed to do business in the Philippines, with principal offices at the Hongkong and Shanghai Bank building in the City of Manila. Since the start of Commercial Air Lines, Inc.‘s (CALI) operations, its fuel needs were all supplied by the Shell Company. Mr. Desmond Fitzgerald, its Credit Manager who extended credit to CALI, was in charge of the collection thereof. On August 6, 1948, the management of CALI informally convened its principal creditors who were invited to a luncheon and informed them that CALI was in a state of insolvency and had to stop operation. In that meeting, out of the 194 creditors in all, 15 were listed as principal creditors having big balances. Mr. Alexander Sycip, Secretary of the Board of Directors of the CALI, informed the creditors present that the corporation was insolvent and had to stop operations. He explained the memorandum agreement executed by the CALI with the Philippine Air Lines regarding the proposed sale to the latter of the aviation equipments of the former. Mr. Alexander Sycip was assisted in the explanation by CPA Alfredo Velayo of Washington, Sycip & Company, Auditors of the CALI, who discussed the balance sheets and distributed copies thereof to the creditors present. The said balance sheet made mention of a C54 plane in the United States, the property now involved in this suit. There was a general understanding among all the creditors present on the desirability of consummating the sale in favor of the Philippine Air Lines Inc. There was also a discussion on the payment of claims of creditors and the preferences. After the creditors present knew the balance sheet and heard the explanations of the officers of the CALI, it was their unanimous opinion that it would be advantageous not to present suits against this corporation but to strive for a fair pro-rata division of its assets, although the management of the CALI announced that in case of non-agreement of the creditors on a pro-rata division of the assets, it would file insolvency proceedings Atty. Pacifico Agcaoili promised to refer the arguments adduced at the second meeting to the General Manager of the National Airports Corporations and to obtain the advice of the Corporate Counsel, so the negotiation with respect to the division of assets of the CALI among the creditors was left pending or under advice when,h owever, on that very day of the meeting of the working committee, August 9, 1948, which Mr. Fitzgerald attended, Defendant effected a telegraphic 200

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transfer of its credit against the CALI to the American corporation Shell Oil Company, Inc., assigning its credit, amounting to $79,440.00, which was subsequently followed by a deed of assignment of credit dated August 10, 1948, the credit amounting this time to the sum of $85,081.29. American corporation Shell Oil Company, Inc., filed a complaint against the CALI in the Superior Court of the State of California, U.S.A. for the collection of an assigned credit of $79,440.00 and a writ of attachment was applied for and issued on the same date against a C-54 plane. Unaware of Dedendant‟s assignments of credit and attachment suit, the stockholders of CALI resolved in a special meeting of August 12, 1948, to approve the memorandum agreement of sale to the Philippine Air Lines, Inc. and noted ―that the Board had been trying to reach an agreement with the creditors of the corporation to prevent insolvency proceedings, but so ex ar no definite agreement had been reached‖ By the first week of September, 1948, the National Airports Corporation learned of Defendant‘s action in the United States and hastened to file its own complaint with attachment against the CALI in the Court of First Instance of Manila. CALI, also prompted by Defendant‘s action in getting the alleged undue preference over the other creditors by attaching the C-54 plane in the United States, beyond the jurisdiction of the Philippines, filed on October 7, 1948, a petition for voluntary insolvency. On this date, an order of insolvency was issued by the court which necessarily stayed the National Airports Corporation‘s action against the CALI and dissolved its thus compelling the National Airports Corporation to file its claims with the insolvency court The Court confirmed the appointment of Mr. Alfredo M. Velayo, who was unanimously elected by the creditors as Assignee in the proceedings. After properly qualifying as Assignee, Alfredo M. Velayo instituted this case on December 17, 1948, against the Shell Company of P.I., Ltd., for the purpose of securing a writ of injunction against Defendant from prosecuting the aforementioned Civil Case against the insolvent Commercial Air Lines, Inc., begun by it in the name of the American corporation Shell Oil Company, Inc. Issue: Whether or not Shell is liable for damages for taking advantage of the knowledge it acquired from the luncheon meeting (Insolvency and the existence of the C-54 plane) by assigning its credit, to the prejudice of the other creditors. Held:YES. The mere enunciation of the first proposition can lead to no other conclusion than that Shell, upon learning the precarious economic situation of CALI and that with all probability, it could not get much of its outstanding credit because of the preferred claims of certain other creditors, forgot that ―Man does not live by bread alone‖ and entirely disregarded all moral inhibitory tenets. So, on the very day its Credit Manager attended the meeting of the Working Committee on August 9, 1948, it hastily made a telegraphic assignment of its credit against the CALI to its sister Amercian Corporation, the Shell Oil Company, Inc., and by what is stated in the preceding pages hereof, We know that were the damaging effects of said assignment upon the right of other creditors of the CALI to participate in the proceeds of said CALI‘s plane C-54. Defendants endeavor to extricate itself from any liability caused by such evident misdeed of its part, alleging that Mr. Fitzgerald had no authority from his principal to commit the latter on any agreement; that the assignment of its credit in favor of its sister corporation, Shell Oil Company, Inc., was for a valuable consideration and in accordance with the established commercial practices; that there is no law prohibiting a creditor from assigning his credit to another; and that the Shell Oil Company Inc., of the United States is a corporation different and independent from the Defendant. But all these defenses are entirely immaterial and have no bearing on the main question at issue in this appeal. Moreover, we might say that Shell could not have accomplished the transfer of its credit to its sister corporation if all the Shell companies throughout the world would not have a sort of union, relation or understanding among themselves to come to the aid of each other. The TELEGRAPHIC TRANSFER made without knowledge and at the back of the other creditors of CALI may be a shrewd and surprise move that enabled Defendant to collect almost all if not the entire amount of its credit, but the Court of Justice cannot countenance such attitude at all, and much less from a foreign corporation to the detriment of our Government and local business. To justify its actions, Shell may also claim that Mr. Fitzgerald, based on his feeling of distrust and apprehension, entertained the conviction that intervenors Alfonso Sycip and Yek Hua Trading Corporation tried to take undue advantage by infiltrating their credits.

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APPLYING THE INSOLVENCY LAW But it must not be forgotten that in accordance with the Insolvency Law and with the provisions of Chapter V thereof which deal with the powers and duties of a receiver, the assignee represents the insolvent as well as the creditors in voluntary and involuntary proceedings. Therefore plaintiff, as Assignee of the Insolvent CALI, had personality and authority to institute this case for damages, and the only question that remains determination is whether the payment of damages sought to be recovered from Defendant may be ordered under the Law and the evidence of record. The same Insolvency Law also provides that IF ANY PERSON, before the assignment is made, having notice of the commencement of the procedings in insolvency, or having reason to believe that insolvency proceedings are about to be commenced, embezzles or disposes of any money, goods, chattels, or effects of the insolvent, he is chargeable therewith, and liable to an action by the assignee for double the value of the property sought to be embezzled or disposed of, to be recieved for the benefit of the insolvent estate. The writer of this decision does not entertain any doubt that the Defendant — taking advantage of his knowledge that insolvency proceedings were to be institued by CALI if the creditors did not come to an understanding as to the manner of distribution of the insolvent asset among them, and believing it most probable that they would not arrive at such understanding as it was really the case — schemed and effected the transfer of its sister corporation in the United States, where CALI‘s plane C-54 was by that swift and unsuspected operation efficaciously disposed of said insolvent‘s property depriving the latter and the Assignee that was latter appointed, of the opportunity to recover said plane. APPLYING ABUSE OF RIGHT DOCTRINE In addition to the aforementioned Section 37, Chapter 2 of the PRELIMINARY TITLE of the Civil Code, dealing on Human Relations, provides the following: ―Art 19. Any person must, in the exercise of his rights and in the performances of his duties, act with justice, give everyone his due and observe honesty and good faith‖. It maybe said that this article only contains a mere declarations of principles and while such statement may be is essentially correct, yet We find that such declaration is implemented by Article 21 and sequence of the same Chapter which prescribe the following: Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. The Code Commission commenting on this article, says that in the last analysis, every good law draws its breath of life from morals, from those principles which are written with words of fire in the conscience of man. A moral wrong or injury, even if it does not constitute a violation of a statute law, should be compensated by damages. Moral damages (Art. 2217) may be recovered (Art. 2219). In Article 20, the liability for damages arises from a willful or negligent act contrary to law. In this article, the act is contrary to morals, good customs or public policy. Now, if Article 23 of the Civil Code goes as far as to provide that: ―Even if an act or event causing damage to another‘s property was not due to the fault or negligence of the defendant, the latter shall be liable for indemnity if through the act or event he was benefited.‖, with mere much more reason the Defendant should be liable for indemnity for acts it committed in bad faith and with betrayal of confidence. ON RETROACTIVITY OF THE CIVIL CODE PROVISION ON ABUSE OF RIGHT It may be argued that the aforequoted provisions of the Civil Code only came into effect on August 30, 1950, and that they cannot be applicable to acts that took place in 1948, prior to its effectivety. But Article 2252 of the Civil Code, though providing that: Changes made and new provisions and rules laid down by this Code which may be prejudice or impair vested or acquired rights in accordance with the old legislation, shall have no retroactive effect. This implies that when the new provisions of the Code does nor prejudice or impair vested or acquired rights in accordance with the old legislation — and it cannot be alleged that in the case at bar Defendant had any vested or acquired right to betray the confidence of the insolvent CALI or of its creditors-said new provisions, like those on Human Relations, can be given retroactive effect. Moreover, Article 2253 of the Civil Code further provides:

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But if a right should be declared for the first time in this Code, it shall be effective at once, even though the act or event which may give rise thereto may have ben done or may have occurred under the prior legislation, provided said new right does not prejudice or impair any vested or acquired right, of the same origin. Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Morover, according to Article 2254, ―no vested or acquired right can arise from acts or omissions which are against the law or which infringe upon the right of others.‖ The writer of this decision does not see any reason for not applying the provisions of Section 37 of the Insolvency Law to the case at bar, especially if we take into consideration that the term ―any person‖ used therein cannot be limited to the officers or employee of the insolvent, as no such limitation exist in the wording of the section and that, as stated before, the Defendant schemed and affected the transfer of its credits (from which it could derive practically nothing) to its sister company in the U.S. where CALI‘s plane C-54 was then situated, succeeding by such swift and unsuspected operation in disposing of said insolvent‘s property by removing it from the possession and ownership of the insolvent. However, some members of this Court entertain doubt as to the applicability of said section 37 because in their opinion what Defendant in reality disposed of was its own credit and not the insolvent‟s property, although this was practically the effect and result of the scheme. Having in mind this objection and that the provisions of sec. 37 making the person coming within its purview liable for double the value of the property sought to be disposed of constitute a sort of penal clause which shall be strictly construed, and considering further that the same result may be obtained, by applying only the provisions of the Civil Code, the writer of this decision yields to the objection aforementioned. Wherefore, and on the strength of the foregoing considerations, the decision appealed from is reversed and Shell Company of the Philippine Islands, Ltd., is hereby sentenced to pay to Plaintiff-Appellant, as Assignee of the insolvent CALI, damages in a sum double the amount of the value of the insolvent‟s airplane C-54 at the time Defendant‟s credit against the CALI was assigned to its sister corporation in the United States, which value shall be determined in the corresponding incident in the lower court after this decision becomes final. 2. Far East Bank and Trust Company v. Pacilan, G.R. No. 157314, July 29, 2005 Facts: Pacilan opened a current account with petitioner bank‘s Bacolod Branch on May 23, 1980. Respondent had since then issued several postdated checks to different payees drawn against the said account. Sometime in March 1988, the respondent issued Check No. 2434886 in the amount of P680.00 and the same was presented for payment to FEBTC on April 4, 1988. Upon its presentment on the said date, Check No. 2434886 was dishonored. The next day, or on April 5, 1988, the respondent deposited to his current account the amount of P800.00. The said amount was accepted by petitioner bank; hence, increasing the balance of the respondent‘s deposit to P1,051.43. When the respondent verified with petitioner bank about the dishonor of Check No. 2434866, he discovered that his current account was closed on the ground that it was “improperly handled.” Records of petitioner bank disclosed that between the period of March 30, 1988 and April 5, 1988, the respondent issued 4 checks or a total amount of P7,410.00. At the time, however, the respondent‟s current account with petitioner bank only had a deposit of P6,981.43. The total amount of the checks presented for payment on April 4, 1988 exceeded the balance of the respondent‘s deposit in his account. Petitioner bank, through its branch accountant, Villadelgado, closed the respondent‟s current account and as a consequence of the overdraft, Check No. 2434886 was dishonored. Respondent wrote to petitioner bank complaining that the closure of his account was unjustified. When he did not receive a reply from FEBTC, the respondent filed with the RTC a complaint for damages against FEBTC and Villadelgado. Respondent, as complainant therein, alleged that the closure of his current account by petitioner bank was unjustified because on the first banking hour of April 5, 1988, he already deposited an amount sufficient to fund his checks. Respondent pointed out that Check No. 2434886, in particular, was delivered to FEBTC at the close of banking hours on April 4, 1988 and, following normal banking procedure, it (petitioner bank) had until the last clearing hour of the following day, or on April 5, 1988, to honor the check or return it, if not funded. In disregard of this banking procedure and practice, however, FEBTC hastily closed the respondent‟s current account and dishonored his Check No. 2434886. Respondent further alleged that prior to the closure of his current account, he had issued several other postdated checks. He claims that the bank‘s act of closing his current account allegedly preempted the deposits that he intended to make to fund those checks and thus petitioner bank‘s act exposed him to criminal prosecution for violation of Batas Pambansa Blg. 22. According to the respondent, the indecent haste that attended the closure of his account was patently malicious and intended to embarrass him. He claimed that he is a Cashier of Prudential Bank and Trust Company, whose branch office is located just across that of petitioner bank, and a prominent and respected leader both in the civic and banking communities. It was alleged that the malicious acts of FEBTC besmirched the respondent‘s reputation and caused him ―social humiliation, wounded feelings, insurmountable worries and sleepless nights‖ entitling him to an award of damages. 203

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FEBTC and Villadelgado maintained that the respondent‘s current account was subject to petitioner bank‘s Rules and Regulations Governing the Establishment and Operation of Regular Demand Deposits which provide that ―the Bank reserves the right to close an account if the depositor frequently draws checks against insufficient funds and/or uncollected deposits‖ and that ―the Bank reserves the right at any time to return checks of the depositor which are drawn against insufficient funds or for any reason. The bank showed that the respondent had improperly and irregularly handled his current account. For example, in 1986, the respondent‘s account was overdrawn 156 times, in 1987, 117 times and in 1988, 26 times. In all these instances, the account was overdrawn due to the issuance of checks against insufficient funds. The bank averred that respondent also signed several checks with a different signature from the specimen on file for dubious reasons. When his Check No. 2434886 was presented for payment on April 4, 1988, he had already incurred an overdraft; hence, petitioner bank rightfully dishonored the same for insufficiency of funds. RTC Ruling Bank is liable for damages. According to the RTC, following these rules and regulations, the respondent, as depositor, had the right to put up sufficient funds for a check that was taken as a returned item for insufficient funds the day following the receipt of said check from the clearing office. In fact, the said check could still be recleared for one more time. Petitioner bank thus acted unjustifiably when it immediately closed the respondent‘s account on April 4, 1988 and deprived him of the opportunity to reclear his check or deposit sufficient funds therefor the following day. As a result of the closure of his current account, several of the respondent‘s checks were subsequently dishonored and he was humiliated, embarrassed and lost his credit standing in the business community. The RTC further ratiocinated that even granting arguendo that petitioner bank had the right to close the respondent‘s account, the manner which attended the closure constituted an abuse of the said right. Citing Article 19 of the Civil Code and Article 20 RTC adjudged petitioner bank of acting in bad faith. CA ruling The appellate court substantially affirmed the factual findings of the RTC as it held that petitioner bank unjustifiably closed the respondent‘s account notwithstanding that its own rules and regulations allow that a check returned for insufficiency of funds or any reason of similar import, may be subsequently recleared for one more time, subject to standard charges. Even when they had already closed his account on April 4, 1988, FEBTC still accepted the deposit that the respondent made on April 5, 1988, supposedly to cover his checks. Even as it may be conceded that petitioner bank had reserved the right to close an account for repeated overdrafts by the respondent, the exercise of that right must never be despotic or arbitrary. That petitioner bank chose to close the account outright and return the check, even after accepting a deposit sufficient to cover the said check, is contrary to its duty to handle the respondent‘s account with utmost fidelity. The exercise of the right is not absolute and good faith, at least, is required. The manner by which petitioner bank closed the account of the respondent runs afoul of Article 19 of the Civil Code which enjoins every person, in the exercise of his rights, ―to give every one his due, and observe honesty and good faith. Petitioner Bank‟s defense FEBTC maintains that, in closing the account of the respondent in the evening of April 4, 1988, it acted in good faith and in accordance with the rules and regulations governing the operation of a regular demand deposit which reserves to the bank ―the right to close an account if the depositor frequently draws checks against insufficient funds and/or uncollected deposits.‖ The same rules and regulations also provide that ―the depositor is not entitled, as a matter of right, to overdraw on this deposit and the bank reserves the right at any time to return checks of the depositor which are drawn against insufficient funds or for any reason.‖ Petitioner bank further posits that there is no law or rule which gives the respondent a legal right to make good his check or to deposit the corresponding amount to cover said check within 24 hours after the same is dishonored or returned by the bank for having been drawn against insufficient funds. The bank vigorously denies having violated Article 19 of the Civil Code as it insists that it acted in good faith Issue: Whether FEBTC violated Art. 19 of the Civil Code. Held: NO.. The award of damages in the respondent‘s favor was anchored mainly on Article 19: Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. The ELEMENTS OF ABUSE OF RIGHTS are the following: (a) the existence of a legal right or duty; (b) which is exercised in bad faith; and (c) for the sole intent of prejudicing or injuring another. Malice or bad faith is at the core of the said provision. The law always presumes good faith and any person who seeks to be awarded damages due to acts of another has the burden of proving that the latter acted in bad faith or with ill204 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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motive. GOOD FAITH refers to the state of the mind which is manifested by the acts of the individual concerned. It consists of the intention to abstain from taking an unconscionable and unscrupulous advantage of another. BAD FAITH does not simply connote bad judgment or simple negligence, dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of known duty due to some motives or interest or ill-will that partakes of the nature of fraud. Malice connotes ill-will or spite and speaks not in response to duty. It implies an intention to do ulterior and unjustifiable harm. Malice is bad faith or bad motive. FEBTC has the right to close the account of the respondent based on the following provisions of its Rules and Regulations Governing the Establishment and Operation of Regular Demand Deposits: 10) The Bank reserves the right to close an account if the depositor frequently draws checks against insufficient funds and/or uncollected deposits. 12) However, it is clearly understood that the depositor is not entitled, as a matter of right, to overdraw on this deposit and the bank reserves the right at any time to return checks of the depositor which are drawn against insufficient funds or for any other reason. The facts, as found by the RTC and the CA, do not establish that, in the exercise of this right, petitioner bank committed an abuse thereof. The second and third elements for abuse of rights are not attendant in the present case. The evidence presented by FEBTC negates the existence of bad faith or malice on its part in closing the respondent‟s account on April 4, 1988 because on the said date the same was already overdrawn. The respondent issued 4 checks, all due on April 4, 1988, amounting to P7,410.00 when the balance of his current account deposit was only P6,981.43. Thus, he incurred an overdraft of P428.57 which resulted in the dishonor of his Check No. 2434886. In 1986, current account of the respondent was overdrawn 156 times due to his issuance of checks against insufficient funds. In 1987, the said account was overdrawn 117 times for the same reason and in 1988, 26 times. There were also several instances when the respondent issued checks deliberately using a signature different from his specimen signature on file with petitioner bank. All these circumstances taken together justified the petitioner bank‘s closure of the respondent‘s account on April 4, 1988 for ―improper handling.‖ Nowhere under its rules and regulations is petitioner bank required to notify the respondent, or any depositor for that matter, of the closure of the account for frequently drawing checks against insufficient funds. No malice or bad faith could be imputed on FEBTC for so acting since the records bear out that the respondent had indeed been improperly and irregularly handling his account not just a few times but hundreds of times. Upon the opening of his account, the respondent had agreed to be bound by these terms and conditions. Neither the fact that FEBTC accepted the deposit made by the respondent the day following the closure of his account constitutes bad faith or malice. The same could be characterized as SIMPLE NEGLIGENCE by its personnel. Said act, by itself, is not constitutive of bad faith. Respondent had thus failed to discharge his burden of proving bad faith on the part of FEBTC or that it was motivated by ill-will. It has not been shown that these acts were done by petitioner bank with the sole intention of prejudicing and injuring the respondent. It is conceded that the respondent may have suffered damages as a result of the closure of his current account. However, there is a material distinction between damages and injury. INJURY is the illegal invasion of a legal right; DAMAGE is the loss, hurt or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. In such cases, the consequences must be borne by the injured person alone, the law affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong. These situations are often called damnum absque injuria. In order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted from a breach of duty which the defendant owed to the plaintiff — a concurrence of injury to the plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort damages is the premise that the individual was injured in contemplation of law. Thus, there must first be a breach of some duty and the imposition of liability for that breach before damages may be awarded; and the breach of such duty should be the proximate cause of the injury. Whatever damages the respondent may have suffered as a consequence, e.g., dishonor of his other insufficiently funded checks, would have to be borne by him alone. It was the respondent‟s repeated improper and irregular handling of his account which constrained FEBTC to close the same in accordance with the rules and regulations governing its depositors‟ current accounts. The respondent‘s case is clearly one of damnum absque injuria

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3. Rellosa v. Pellosis, G.R. No. 138964, August 9, 2001 Facts: Pellosis et al. were lessees of a parcel of land, owned by one Marta Reyes in Manila, where they built a house, which, over the years, underwent continuous improvements. After the demise of Marta, the land was inherited by her son Victor Reyes. Sometime later, Victor informed respondents that, for being lessees of the land for more than 20 years, they would have a right of first refusal to buy the land. However, without the knowledge of respondents, the land occupied by them was sold to petitioner Cynthia Ortega who was able to ultimately secure title to the property in her name. Cynthia Ortega filed a petition for condemnation of the structures on the land. Respondents filed with the RTC of Manila a suit for the declaration of nullity of the sale upon which the same was predicated upon their right of first refusal which was claimed to have been impinged upon the sale of the land to petitioner Ortega without their knowledge. After due hearing in the condemnation case, the Office of the Building Official issued a resolution, ordering the demolition of the houses of respondents. The following day Cynthia Ortega, together with her father and co-petitioner, Vicente Rellosa, hired workers to commence the demolition of respondents' houses. Due to the timely intervention of the police, the intended demolition did not take place following talks between petitioner Rellosa and counsel who pleaded that the demolition be suspended since the order sought to be implemented was not yet final and executory. Respondents appealed. Petitioners once again hired workers to continue the demolition. Respondents filed a complaint for damages with the RTC. The RTC dismissed the same. The CA reversed and ordered petitioners to pay moral and exemplary damages. The appellate court ruled: x x x, by the clear provisions of paragraph 23 of the Implementing Rules and Regulations of PD 1096 above, appellants, being the parties adversely affected by the November 27, 1989 Resolution of the Office of the Building Official, had fifteen (15) days from receipt of a copy of the same within which to perfect an administrative appeal. Thus, since appellants received a copy of the Resolution on December 7, 1989, they had until December 22, 1989 within which to perfect an administrative appeal and until such time, the said Resolution was not yet final and executory." Issue: Whether Rellosa et al are liable for damages. Held: YES. A RIGHT is a power, privilege, or immunity guaranteed under a constitution, statute or decisional law, or recognized as a result of long usage, constitutive of a legally enforceable claim of one person against another. Petitioner might verily be the owner of the land, with the right to enjoy and to exclude any person from the enjoyment and disposal thereof, but the exercise of these rights is not without limitations. The ABUSE OF RIGHTS RULE established in Article 19 requires every person to act with justice, to give everyone his due; and to observe honesty and good faith. When a right is exercised in a manner which discards these norms resulting in damage to another, a legal wrong is committed for which the actor can be held accountable. In this instance, the issue is not so much about the existence of the right or validity of the order of demolition as the question of whether or not petitioners have acted in conformity with, and not in disregard of, the standard set by Article 19 of the Civil Code. At the time petitioners implemented the order of demolition, barely 5 days after respondents received a copy thereof, the same was NOT YET FINAL AND EXECUTORY. The law provided for a 15-day appeal period in favor of a party aggrieved by an adverse ruling of the Office of the Building Official but by the precipitate action of petitioners in demolishing the houses of respondents (prior to the expiration of the period to appeal), the latter were effectively deprived of this recourse. The fact that the order of demolition was later affirmed by the Department of Public Works and Highways was of no moment. The action of petitioners up to the point where they were able to secure an order of demolition was not condemnable but implementing the order unmindful of the right of respondents to contest the ruling was a different matter and could only be held utterly indefensible. 4. Cebu Country Club, Inc., (CCCI) v. Elizagaque, G.R. No. 160273, January 18, 2008 Facts: CCCI is non-stock non-profit private membership club in Banilad, Cebu. Co-petitioners Dapat, Almendras, Neri, Luym, Libi, Garcia, and Sala are members of CCCI‘s Board of Directors (BOARD). In 1987, San Mig Corp (SMC), a special company proprietary member of CCCI designated Ricardo Elizagaque as a special non-proprietary member. Elizagaque was SMC‘s SVP and Operations Manager for VisMin. This designation was approved by the BOARD. In 1996, Elizagaque applied for a proprietary membership. The application was endorsed by 2 other proprietary members of CCCI. 206

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Elizagaque was able to purchase the proprietary share of a certain Dr. Butalid for only 3M (the current price of the share was 5M, so nakatipid siya). Thereafter, CCCI issued a Proprietary Ownership Certificate in his favor on Sept 6, 1996. The BOARD met on Apr 4 and May 30 1997 wherein the action on the application of Elizagaque was deferred. In July, his application was voted upon. Then on Aug, Elizagaque received a letter from CCCI‘s corporate secretary (Neri) informing him that his application for proprietary membership was disapproved. A letter for reconsideration was sent in the same month but CCCI did not reply. Subsequent letters for reconsideration were sent to CCCI in Oct and November but CCCI never replied to any of Elizagaque‘s requests. On Dec 23 1998, Elizagaque filed a complaint for damages against CCCI and its abovementioned Board. RTC Pasic ruled for Elizagaque and ordered CCCI and BOARD to jointly and severally pay compensatory, moral, exemplary damages each in the millions as well as litigation expenses. On appeal, CA affirmed but removed compensatory damages. MR denied. Hence, we are here. CCCI & BOARD contend that CA erred in making them liable because no evidence was presented showing they acted in bad faith and in disregarding damnum absque injuria as a defense. Issue: Whether in disapproving Elizagaque‘s application for proprietary membership, CCCI is liable to the former for damages. Held: YES. LIABLE. CCCI‘s Articles of Incorporation provide that: SEVENTH: That this is a non-stock corporation and membership therein as well as the right of participation in its assets shall be limited to qualified persons who are duly accredited owners of Proprietary Ownership Certificates issued by the corporation inaccordance with its By-Laws. In connection, the amended by-laws (amended in 1978) provide that: SECTION 3. HOW MEMBERS ARE ELECTED.—The procedure for the admission of new members of the Club shall be as follows: (c) After the expiration of the aforesaid 30 days, the Board may, by unanimous vote of all directors present at a regular or special meeting, approve the inclusion of the candidate in the ―Eligible-for-Membership List.‖ The Board adopted a secret balloting known as the ―black ball system‖ of voting wherein each member will drop a ball in the ballot box. A white ball represents conformity to the admission of an applicant, while a black ball means disapproval. Pursuant to by-law provision above, a unanimous vote of the directors is required. When Elizagaque‘s application for proprietary membership was voted upon during the Board meeting on July 30, 1997, the ballot box contained 1 black ball. Thus, for lack of unanimity, his application was disapproved. The CCCI Board of Directors, under its Articles of Incorporation, has the right to approve or disapprove an application for proprietary membership. But such right should not be exercised arbitrarily and must always be in accordance with Articles 19 and 21 of the Civil Code, to wit: Article 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. Article 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. In GF Equity v. Valenzona, it was held that a right, though by itself legal because recognized or granted by law as such, may nevertheless become the source of some illegality. When a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be held responsible. In rejecting Elizagaque‘s application for proprietary membership, we find that CCCI violated the rules governing human relations, the basic principles to be observed for the rightful relationship between human beings and for the stability of social order. The trial court and the CA aptly held that CCCI committed fraud and evident bad faith in disapproving the applications. This is contrary to morals, good custom or public policy.

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It bears stressing that the amendment to Section 3(c) requiring the unanimous vote of the directors present at a special or regular meeting was NOT PRINTED on the application form Elizagaque filled and submitted to CCCI. What was printed thereon was the original provision of Section 3(c) which was silent on the required number of votes needed for admission of an applicant as a proprietary member. The original provision stated that: After the expiration of the aforesaid thirty (30) days, if no objections have been filed or if there are, the Board considers the objections unmeritorious, the candidate shall be qualified for inclusion in the ―Eligible-for-Membership List‖ CCCI explained that the amendment was not printed on the application form due to economic reasons. We find this excuse flimsy and unconvincing. Such amendment, aside from being extremely significant, was introduced way back in 1978 or almost 20 years before the filing of the application. We cannot fathom why such a prestigious and exclusive golf country club, like the CCCI, whose members are all affluent, did not have enough money to cause the printing of an updated application form. It is thus clear that Elizagaque was left groping in the dark wondering why his application was disapproved. He was not even informed that a unanimous vote of the Board members was required. When he sent a letter for reconsideration and an inquiry whether there was an objection to his application, CCCI apparently ignored him. Certainly, he did not deserve this kind of treatment. Having been designated by San Miguel Corporation as a special non-proprietary member of CCCI, he should have been treated by CCCI with courtesy and civility. At the very least, they should have informed him why his application was disapproved. The exercise of a right, though legal by itself, must nonetheless be in accordance with the proper norm. When the right is exercised arbitrarily, unjustly or excessively and results in damage to another, a legal wrong is committed for which the wrongdoer must be held responsible. Such is the case here. Damnum Absque Injuria not applicable In Amonoy v. Gutierrez, we held that this principle does not apply when there is an abuseof a person‘s right, as in this case. Joint and Several Liability CCCI‘s argument that they could not be held jointly and severally liable for damages because only 1 voted for the disapproval of respondent‘s application lacks merit pursuant to § 31 of the Corporation Code which provides that — SEC. 31. Liability of directors, trustees or officers.—Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors, or trustees shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation, its stockholders or members and other persons. 5. Nikko Hotel Manila Garden v. Reyes, G.R. No. 154259, February 28, 2005 Facts: The CAUSE OF ACTION before the trial court was one for damages brought under the human relations provisions of the New Civil Code. Reyes, more popularly known by the screen name ―Amay Bisaya,‖ alleged that at around 6:00PM of 13 October 1994, while he was having coffee at the lobby of Hotel Nikko, he was spotted by Dr. Violeta Filart, who then approached him. Mrs. Filart invited him to join her in a party at the hotel‘s penthouse in celebration of the natal day of the hotel‘s manager, Mr. Masakazu Tsuruoka. Mr. Reyes asked if she could vouch for him for which she replied: ―of course.‖ After a couple of hours, when the buffet dinner was ready, Mr. Reyes lined-up at the buffet table but, to his great shock, shame and embarrassment, he was stopped by petitioner herein, Ruby Lim (Executive Secretary of Hotel Nikko). In a loud voice and within the presence and hearing of the other guests who were making a queue at the buffet table, Ruby Lim told him to leave the party (―huwag ka nang kumain, hindi ka imbitado, bumaba ka na lang‖). Dr. Filart, who was within hearing distance, however, completely ignored him thus adding to his shame and humiliation. Like a common criminal, he was escorted out of the party by the policeman. Claiming damages, Mr. Reyes asked for 1M actual damages, 1M moral and/or exemplary damages and 200k attorney‘s fees. Ruby Lim, for her part, admitted having asked Mr. Reyes to leave the party but not under the ignominious circumstance painted by the latter. The guest list was limited to Mr. Tsuruoka‟s closest friends and some hotel employees and that Mr. Reyes was not one of those invited. There were TWO INSTANCES when Lim attempted to inform Reyes to step out. But when Ms. Lim spotted Mr. Reyes by the buffet table, she decided to speak to him herself as there were no other guests in the immediate vicinity. However, as Mr. Reyes was already helping himself to the food, she decided to wait. When Mr. Reyes went to a corner and started to eat, Ms. Lim approached him and said: ―alam ninyo, hindo ho kayo dapat nandito. Pero total nakakuha na ho kayo ng 208 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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pagkain, ubusin na lang ninyo at pagkatapos kung pwede lang po umalis na kayo.‖ She then turned around trusting that Mr. Reyes would show enough decency to leave, but to her surprise, he began screaming and making a big scene, and even threatened to dump food on her. Dr. Violeta Filart, the third defendant in the complaint before the lower court, also gave her version of the story to the effect that she never invited Mr. Reyes to the party. According to her, it was Mr. Reyes who volunteered to carry the basket of fruits intended for the celebrant as he was likewise going to take the elevator, not to the penthouse but to Altitude 49. When they reached the penthouse, she reminded Mr. Reyes to go down as he was not properly dressed and was not invited. Then there was a commotion and she saw Mr. Reyes shouting. She was embarrassed and did not want the celebrant to think that she invited him, After trial on the merits, trial court dismissed the complaint, giving more credence to the testimony of Ms. Lim that she was discreet in asking Mr. Reyes to leave the party. Thus, no recovery can be had against defendants Nikko Hotel and Ruby Lim because he himself was at fault. He knew that it was not the party of Violeta Filart even if she allowed him to join her and took responsibility for his attendance at the party. His action against defendants Nikko Hotel and Ruby Lim must therefore fail. On appeal, the CA reversed the ruling of the trial court as it found more commanding of belief the testimony of Mr. Reyes that Ms. Lim ordered him to leave in a loud voice within hearing distance of several guests. It likewise ruled that the actuation of Ms. Lim in approaching several people to inquire into the presence of Mr. Reyes exposed the latter to ridicule and was uncalled for as she should have approached Dr. Filart first and both of them should have talked to Mr. Reyes in private. Were it not for Mrs. Filart‘s invitation, appellant could not have suffered such humiliation. For that, appellee Filart is equally liable. Under Article 20 of the Civil Code, every person who violates this duty becomes liable for damages, especially if said acts were attended by malice or bad faith. Bad faith does not simply connote bad judgment or simple negligence. It imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of a known duty to some motive or interest or ill-will that partakes of the nature of fraud. Issue: (1) Whether Ruby Lim acted abusively in asking Reyes to leave the party where he was not invited such as to make her liable under Art. 19 and 21 of the Civil Code. (2) Whether Hotel Nikko can be held solidarily liable with Lim. Held: (1) VOLENTI NON FIT INJURIA (Assumption of Risk) DOES NOT APPLY Despite the argument of Lim and Hotel Nikko contend that they cannot be made liable for damages as Reyes assumed the risk of being asked to leave (and being embarrassed and humiliated in the process) as he was a ―gate-crasher.‖ The doctrine of volenti non fit injuria (―to which a person assents is not esteemed in law as injury‖) refers to self-inflicted injury or to the consent to injury which precludes the recovery of damages by one who has knowingly and voluntarily exposed himself to danger, even if he is not negligent in doing so. This doctrine does not find application to the case at bar because even if Reyes assumed the risk of being asked to leave the party, petitioners, under Articles 19 and 21 of the New Civil Code, were still under obligation to treat him fairly in order not to expose him to unnecessary ridicule and shame. (2) According to the trial court: We are dealing with a formal party in a posh, five-star hotel, for-invitation-only, thrown for the hotel‘s former Manager, a Japanese national. Then came a person who was clearly uninvited (by the celebrant) and who could not just disappear into the crowd as his face is known by many, being an actor. To unnecessarily call attention to the presence of Mr. Reyes would certainly reflect badly on Ms. Lim‟s ability to follow the instructions of the celebrant to invite only his close friends and some of the hotel‟s personnel. Mr. Reyes, upon whom the burden rests to prove that indeed Ms. Lim loudly and rudely ordered him to leave, could not offer any satisfactory explanation why Ms. Lim would do that and risk ruining a formal and intimate affair. On the contrary, Mr. Reyes, on cross-examination, had unwittingly sealed his fate by admitting that when Ms. Lim talked to him, she was very close. Mr. Reyes, however, had not presented any witness to back his story up. All his witnesses – Danny Rodinas, Pepito Guerrero and Alexander Silva - proved only that it was Dr. Filart who invited him to the party. Ms. Lim, not having abused her right to ask Mr. Reyes to leave the party to which he was not invited, cannot be made liable to pay for damages under Articles 19 and 21 of the Civil Code. Article 19, known to contain what is commonly referred to as the principle of abuse of rights, is not a panacea for all human hurts and social grievances. Article 19 states: every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. 209 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

The object of this article, therefore, is to set certain standards which must be observed not only in the exercise of one‘s rights but also in the performance of one‘s duties. These standards are the following: act with justice, give everyone his due and observe honesty and good faith. Its antithesis, necessarily, is any act evincing bad faith or intent to injure. Its elements are the following: (1) There is a legal right or duty; (2) Which is exercised in bad faith; and (3) For the sole intent of prejudicing or injuring another. When Article 19 is violated, an action for damages is proper under Articles 20 or 21 of the Civil Code. ARTICLE 20 pertains to damages arising from a violation of law which does not obtain herein as Ms. Lim was perfectly within her right to ask Mr. Reyes to leave. ARTICLE 21 refers to acts contra bonus mores and has the following ELEMENTS: (1) There is an act which is legal; (2) But which is contrary to morals, good custom, public order, or public policy; and (3) It is done with intent to injure. The manner by which Ms. Lim asked Mr. Reyes to leave was likewise acceptable and humane under the circumstances. Without proof of any ill-motive on her part, Ms. Lim‟s act of by-passing Mrs. Filart cannot amount to abusive conduct especially because she did inquire from Mrs. Filart‟s companion who told her that Mrs. Filart did not invite Mr. Reyes. If at all, Ms. Lim is guilty only of bad judgment which, if done with good intentions, cannot amount to bad faith. 6. Calatagan Golf Club, Inc., v. Clemente, G.R. No. 165443, April 16, 2009 Facts: Clemente applied to purchase one share of stock of Calatagan, indicating in his application for membership his mailing address at Phimco Industries, Inc. Calatagan issued to him the Certificate of Stock. Calatagan charges monthly dues on its members. The provision on monthly dues is incorporated in Calatagan‘s Articles of Incorporation and By-Laws. It is also reproduced at the back of each certificate of stock. When Clemente became a member the monthly charge stood at P400.00. He paid P3,000.00 for his monthly dues on 21 March 1991 and another P5,400.00 on 9 December 1991. Then he ceased paying the dues. At that point, his balance amounted to P400.00. 10 months later Calatagan sought to collect Clemente‟s back accounts by sending a demand letter; it was followed by a second letter. Both letters were sent to Clemente‘s mailing address as indicated in his membership application but were sent back to sender with the postal note that the address had been closed. Calatagan declared Clemente delinquent for having failed to pay his monthly dues for more than sixty (60) days, specifically P5,600.00. Calatagan‘s board of directors adopted a resolution authorizing the foreclosure of shares of delinquent members, including Clemente‘s; and the public auction of these shares. Calatagan sent a third and final letter to Clemente, this time signed by its Corporate Secretary which contained a warning that unless Clemente settles his outstanding dues, his share would be included among the delinquent shares to be sold at public auction. The letter was sent to Clemente‘s mailing address that had already been closed. A notice of auction sale was posted on the Club‘s bulletin board, as well as on the club‘s premises. The auction sale took place as scheduled on 15 January 1993 and Clemente‘s share sold for P64,000. At the time of the sale, Clemente‘s accrued monthly dues amounted to P5,200.00. A notice of foreclosure of Clemente‘s share was published in the Business World. Clemente learned of the sale of his share only in November of 1997. He filed a claim with the SEC seeking the restoration of his shareholding in Calatagan with damages. SEC dismissed citing Section 69 of the Corporation Code which provides that the sale of shares at an auction sale can only be questioned within 6 months from the date of sale. Clemente‘s claim, filed four 4 years after the sale, had already prescribed. Clemente failed to inform Calatagan that the address he had earlier supplied was no longer his address. CA reversing the SEC, restored Clemente‟s one share with a directive to Calatagan to issue in his a new share, and awarded to Clemente damages. CA also pointed out that since that Calatagan‟s first two demand letters had been returned to it as sender with the notation about the closure of the mailing address, it very well knew that its third and final demand letter also sent to the same mailing address would not be received by Clemente. ―a person who is in danger of the imminent loss of his property has the right to be notified and be given the chance to prevent the loss.‖ Hence, the present appeal. 210

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Issue: Whether the action has prescribed and whether Calatagan Golf complied with its by-laws when it sold Clemente‘s share. Held: (1) NO. What applies is Art. 1140 which gives 8 years for the recovery of movables which includes shares of stock. (2) NO. Calatagan is liable for damages. Calatagan‘s Articles of Incorporation states that the ―dues, together with all other obligations of members to the club, shall constitute a first lien on the shares in the event of delinquency such shares may be ordered sold in the manner provided in the By-Laws. There are several provisions in the By-laws that govern the payment of dues, the lapse into delinquency of the member, and the constitution and execution on the lien. ARTICLE XII – MEMBER‘S ACCOUNT SEC. 31. (a) Billing Members, Posting of Delinquent Members.—The Treasurer shall bill all members monthly. If the bill of any member remains unpaid by the 20th of the month, the Treasurer shall notify him that if his bill is not paid in full by the end of the succeeding month his name will be posted as delinquent the following day at the Clubhouse bulletin board. While posted, a member, the immediate members of his family, and his guests, may not avail of the facilities of the Club. (b) Members on the delinquent list for more than 60 days shall be reported to the Board and their shares or the shares of the juridical entities they represent shall thereafter be ordered sold by the Board at auction to satisfy the claims of the Club as provided for in Section 32 hereon. A member may pay his overdue account at any time before the auction sale. Sec. 32. Lien on Shares; Sale of Share at Auction.—The club shall have a first lien on every share of stock to secure debts of the members to the Club. This lien shall be annotated on the certificates of stock and may be enforced by the Club in the following manner: (a) Within ten (10) days after the Board has ordered the sale at auction of a member‘s share of stock for indebtedness under Section 31(b) hereof, the Secretary shall notify the owner thereof, and shall advise the Membership Committee of such fact. (b) The Membership Committee shall then notify all applicants on the Waiting List and all registered stockholders of the availability of a share of stock for sale at auction at a specified date, time and place, and shall post a notice to that effect in the Club bulletin board for at least ten (10) days prior to the auction sale. (c) On the date and hour fixed, the Membership Committee shall proceed with the auction by viva voce bidding and award the sale of the share of stock to the highest bidder. (d) The purchase price shall be paid by the winning bidder to the Club within twenty-four (24) hours after the bidding. The winning bidder or the representative in the case of a juridical entity shall become a Regular Member upon payment of the purchase price and issuance of a new stock certificate in his name or in the name of the juridical entity he represents. The proceeds of the sale shall be paid by the Club to the selling stockholder after deducting his obligations to the Club. (e) If no bids be received or if the winning bidder fails to pay the amount of this bid within twenty-four (24) hours after the bidding, the auction procedures may be repeated from time to time at the discretion of the Membership Committee until the share of stock be sold. (f) If the proceeds from the sale of the share of stock are not sufficient to pay in full the indebtedness of the member, the member shall continue to be obligated to the Club for the unpaid balance. If the member whose share of stock is sold fails or refuse to surrender the stock certificate for cancellation, cancellation shall be effected in the books of the Club based on a record of the proceedings. Such cancellation shall render the unsurrendered stock certificate null and void and notice to this effect shall be duly published. It is plain that Calatagan had endeavored to install a clear and comprehensive procedure to govern the payment of monthly dues, the declaration of a member as delinquent, and the constitution of a lien on the shares and its eventual public sale to answer for the member‘s debts. Section 91 of the Corporation Code, membership in a non-stock corporation ―shall be terminated in the manner and for the causes provided in the articles of incorporation or the by- laws.‖ The By-law provisions are elaborate in explaining the manner and the causes for the termination of membership in Calatagan, through the execution on the lien of the share. The Court is satisfied that the By-Laws, as written, affords due protection to the member by assuring that the member should be notified by the Secretary of the looming execution sale. If followed to the letter, the termination of membership under this procedure outlined in the By-Laws would accord with substantial justice. 211

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Did Calatagan actually comply with the by-law provisions when it sold Clemente‘s share? Calatagan sent the third and final demand letter to Clemente on December 7, 1992. The letter states that if the amount of delinquency is not paid, the share will be included among the delinquent shares to be sold at public auction. This letter was signed by Atty. Benjamin Tanedo, Jr., Calatagan Golf‘s Corporate Secretary. It was again sent to Clemente‟s mailing address — Phimco Industries Inc., P.O. Box 240, MCC Makati. As expected, it was returned because the post office box had been closed. Under the By-Laws, the Corporate Secretary is tasked to ―give or cause to be given, all notices required. Sec. 32 (a) of the By-Laws further provides that ―within ten (10) days after the Board has ordered the sale at auction of a member‘s share of stock for indebtedness under Section 31 (b) hereof, the Secretary shall notify the owner thereof and shall advise the Membership Committee of such fact.,‖ The records do not disclose what report the Corporate Secretary transmitted to the Membership Committee to comply with Section 32(a). The reason for this mandatory requirement is to give the Membership Committee the opportunity to find out, before the share is sold, if proper notice has been made to the shareholder member. We presume that the Corporate Secretary, as a lawyer is knowledgeable on the law and on the standards of good faith and fairness that the law requires. As custodian of corporate records, he should also have known that the first two letters sent to Clemente were returned because the P.O. Box had been closed. Thus, we are surprised — given his knowledge of the law and of corporate records — that he would send the third and final letter — Clemente‘s last chance before his share is sold and his membership lost — to the same P.O. Box that had been closed. Calatagan argues that it ―exercised due diligence before the foreclosure sale‖ and ―sent several notices to Clemente‘s specified mailing address.‖ We do not agree; we cannot label as due diligence Calatagan‘s act of sending the December 7, 1992 letter to Clemente‘s mailing address knowing fully well that the P.O. Box had been closed. Due diligence or good faith imposes upon the Corporate Secretary—the chief repository of all corporate records — the obligation to check Clemente‘s other address which, under the By-Laws, have to be kept on file and are in fact on file. One obvious purpose of giving the Corporate Secretary the duty to keep the addresses of members on file is specifically for matters of this kind, when the member cannot be reached through his or her mailing address. One telephone call to Clemente‘s phone numbers on file would have alerted him of his impending loss.‖ Ultimately, the petition must fail because Calatagan had failed to duly observe both the spirit and letter of its own bylaws. The by-law provisions was clearly conceived to afford due notice to the delinquent member of the impending sale , and not just to provide an intricate façade that would facilitate Calatagan‘s sale of the share . The bad faith on Calatagan‘s part is palpable. Calatagan very well knew that Clemente‟s postal box to which it sent its previous letters had already been closed, yet it persisted in sending that final letter to the same postal box. What for? Just for the exercise, it appears, as it had known very well that the letter would never actually reach Clemente. Clemente in his membership application had provided his residential address along with his residence and office telephone numbers. Nothing in Section 32 of Calatagan‘s By­Laws requires that the final notice prior to the sale be made solely through the member‘s mailing address. A simple telephone call and an ounce of good faith could have prevented this present controversy. Calatagan‘s bad faith and failure to observe its own By-Laws had resulted not merely in the loss of Clemente‘s privilege to play golf at its golf course and avail of its amenities, but also in significant pecuniary damage to him. The only blame that could be thrown Clemente‘s way was his failure to notify Calatagan of the closure of the P.O. Box. But knowing as he did that Calatagan was in possession of his home address as well as residence and office telephone numbers, he had every reason to assume that the club would not be at a loss should it need to contact him. According to Clemente, he was not even aware of the closure of the postal box, the maintenance of which was not his responsibility but his employer Phimco‘s. The utter bad faith exhibited by Calatagan brings into operation Articles 19, 20 and 21 of the Civil Code. These provisions enunciate a general obligation under law for every person to act fairly and in good faith towards one another. A non-stock corporation like Calatagan is not exempt from that obligation in its treatment of its members. The obligation of a corporation to treat every person honestly and in good faith extends even to its shareholders or members, even if the latter find themselves contractually bound to perform certain obligations to the corporation. A certificate of stock cannot be a charter of dehumanization. The award of actual damages is of course warranted since Clemente has sustained pecuniary injury by reason of Calatagan‘s wrongful violation of its own By-Laws. It would not be feasible to deliver Clemente‘s original Certificate of Stock because it had already been cancelled and a new one issued in its place in the name of the purchases at the auction. 212

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

CA instead directed that Calatagan to issue to Clemente a new certificate of stock. That sufficiently redresses the actual damages sustained by Clemente. After all, the certificate of stock is simply the evidence of the share. The Court of Appeals cited Calatagan for violation of Article 32 of the Civil Code, which allows recovery of damages from any private individual ―who directly or indirectly obstructs, defeats, violates or in any manner impedes or impairs‖ the right ―against deprivation of property without due process of laws.‖ But even without Article 32, Calatagan will still be bound to pay moral and exemplary damages to Clemente. The latter was able to duly prove that he had sustained mental anguish, serious anxiety and wounded feelings by reason of Calatagan‘s acts, thereby entitling him to moral damages under Article 2217 of the Civil Code. Calatagan‘s bad faith is evident in the course of its corporate actions and warrants correction for the public good, thereby justifying exemplary damages under Article 2229 of the Civil Code. 7. University of the East v. Jader, G.R. No. 132344, February 17, 2000 Facts: May an educational institution be held liable for damages for misleading a student into believing that the latter had satisfied all the requirements for graduation when such is not the case? Jader was enrolled in the UE College of Law from 1984 up to 1988. In the first semester of his last year he failed to take the regular final examination in Practice Court I for which he was given an incomplete grade. He then enrolled for the second semester as fourth year law student. He filed an application for the removal of the incomplete grade given him by Professor Carlos Ortega, which was approved by Dean Celedonio Tiongson after payment of the required fee. He took the examination and Professor Carlos Ortega submitted his grade. It was a grade of 5. In the meantime, the Dean and the Faculty Members of the College of Law met to deliberate on who among the fourth year students should be allowed to graduate. The plaintiff‘s name appeared in the Tentative list of Candidates for graduation for the Degree of Bachelor of Laws (LL.B) as of Second Semester (19871988) with the following annotation:

The 35th Investitures & Commencement Ceremonies for the candidates of Bachelor of Laws was scheduled on the 16th of April 1988 at 3PM, and in the invitation for that occasion the name of the plaintiff appeared as one of the candidates. At the foot of the list of the names of the candidates there appeared however the following annotation: ―This is a tentative list. Degrees will be conferred upon these candidates who satisfactorily complete requirements as stated in the University Bulletin and as approved of the Department of Education, Culture and Sports.‖ The plaintiff attended the investiture ceremonies at F. dela Cruz Quadrangle, U.E., Recto Campus, during the program of which he went up the stage when his name was called, escorted by his mother and his eldest brother who assisted in placing the Hood, and his Tassel was turned from left to right, and he was thereafter handed by Dean Celedonio a rolled white sheet of paper symbolical of the Law Diploma. His relatives took pictures of the occasion. He tendered a blow-out that evening which was attended by neighbors, friends and relatives who wished him good luck in the forthcoming bar examination. There were pictures taken too during the blow-out. He thereafter prepared himself for the bar examination. He took a leave of absence without pay from his job and enrolled at the pre-bar review class in Far Eastern University. Having learned of the deficiency he dropped his review class and was not able to take the bar examination. Consequently, respondent sued petitioner for damages alleging that he suffered moral shock, mental anguish, serious anxiety, besmirched reputation, wounded feelings and sleepless nights when he was not able to take the 1988 bar examinations arising from the latter‘s negligence. He prayed for an award of moral and exemplary damages, unrealized income, attorney‘s fees, and costs of suit. In its ANSWER with counterclaim, UE denied liability arguing mainly that it never led respondent to believe that he completed the requirements for a Bachelor of Laws degree when his name was included in the tentative list of graduating students. UE elevated the case to this Court on a petition for review arguing that it has no liability to respondent Romeo A. Jader, considering that the proximate and immediate cause of the alleged damages incurred by the latter arose out of his own negligence in not verifying from the professor concerned the result of his removal exam. Issue: Whether UE College of Law can be held liable for damages. 213

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Held: YES. When a student is enrolled in any educational or learning institution, a CONTRACT OF EDUCATION is entered into between said institution and the student. The professors, teachers or instructors hired by the school are considered merely as agents and administrators tasked to perform the school‘s commitment under the contract. Since the contracting parties are the school and the student, the latter is not duty-bound to deal with the former‟s agents, such as the professors with respect to the status or result of his grades, although nothing prevents either professors or students from sharing with each other such information. The Court takes judicial notice of the traditional practice in educational institutions wherein the professor directly furnishes his/her students their grades. It is the contractual obligation of the school to timely inform and furnish sufficient notice and information to each and every student as to whether he or she had already complied with all the requirements for the conferment of a degree or whether they would be included among those who will graduate. Although commencement exercises are but a formal ceremony, it nonetheless is not an ordinary occasion, since such ceremony is the educational institution‘s way of announcing to the whole world that the students included in the list of those who will be conferred a degree during the baccalaureate ceremony have satisfied all the requirements for such degree. Prior or subsequent to the ceremony, the school has the obligation to PROMPTLY INFORM the student of any problem involving the latter‘s grades and performance and also most importantly, of the procedures for remedying the same. UE, in belatedly informing respondent of the result of the removal examination, particularly at a time when he had already commenced preparing for the bar exams, cannot be said to have acted in good faith. Absence of good faith must be sufficiently established for a successful prosecution by the aggrieved party in a suit for abuse of right under Article 19 of the Civil Code. GOOD FAITH connotes an honest intention to abstain from taking undue advantage of another, even though the forms and technicalities of the law, together with the absence of all information or belief of facts, would render the transaction unconscientious. It is the school that has access to those informations and it is only the school that can compel its professors to act and comply with its rules, regulations and policies with respect to the computation and the prompt submission of grades. Students do not exercise control, much less influence, over the way an educational institution should run its affairs, particularly in disciplining its professors and teachers and ensuring their compliance with the school‘s rules and orders. Being the party that hired them, it is the school that exercises general supervision and exclusive control over the professors with respect to the submission of reports involving the students‟ standing. Exclusive control means that no other person or entity had any control over the instrumentality which caused the damage or injury. The COLLEGE DEAN is the senior officer responsible for the operation of an academic program, enforcement of rules and regulations, and the supervision of faculty and student services. He must see to it that his own professors and teachers, regardless of their status or position outside of the university, must comply with the rules set by the latter. The negligent act of a professor who fails to observe the rules of the school, for instance by not promptly submitting a student‟s grade, is not only imputable to the professor but is an act of the school, being his employer. Considering further, that the institution of learning involved herein is a university which is engaged in legal education, it should have practiced what it inculcates in its students, more specifically the principle of good dealings enshrined in Articles 19 and 20 of the Civil Code which states: Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same. Article 19 was intended to expand the concept of torts by granting adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to provide specifically in statutory law. In civilized society, men must be able to assume that others will do them no intended injury that others will commit no internal aggressions upon them; that their fellowmen, when they act affirmatively will do so with due care which the ordinary understanding and moral sense of the community exacts and that those with whom they deal in the general course of society will act in good faith. The ultimate thing in the theory of liability is justifiable reliance under conditions of civilized society. Schools and professors cannot just take students for granted and be indifferent to them, for without the latter, the former are useless. Educational institutions are duty-bound to inform the students of their academic status and not wait for the latter to inquire from the former.

214

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

The conscious indifference of a person to the rights or welfare of the person/persons who may be affected by his act or omission can support a claim for damages. Want of care to the conscious disregard of civil obligations coupled with a conscious knowledge of the cause naturally calculated to produce them would make the erring party liable. Petitioner ought to have known that time was of the essence in the performance of its obligation to inform respondent of his grade. It cannot feign ignorance that respondent will not prepare himself for the bar exams since that is precisely the immediate concern after graduation of an LL.B. graduate. It failed to act seasonably. Petitioner cannot just give out its student‘s grades at any time because a student has to comply with certain deadlines set by the Supreme Court on the submission of requirements for taking the bar. Petitioner‘s liability arose from its failure to promptly inform respondent of the result of an examination and in misleading the latter into believing that he had satisfied all requirements for the course. Petitioner cannot pass on its blame to the professors to justify its own negligence that led to the delayed relay of information to respondent. When one of two innocent parties must suffer, he through whose agency the loss occurred must bear it. The modern tendency is to grant indemnity for damages in cases where there is abuse of right, even when the act is not illicit. If mere fault or negligence in one‟s acts can make him liable for damages for injury caused thereby, with more reason should abuse or bad faith make him liable. A person should be protected only when he acts in the legitimate exercise of his right, that is, when he acts with prudence and in good faith, but not when he acts with negligence or abuse. However, while petitioner was guilty of negligence and thus liable to respondent for the latter‘s actual damages, we hold that respondent should not have been awarded moral damages. We do not agree with the Court of Appeals‘ findings that respondent suffered shock, trauma and pain when he was informed that he could not graduate and will not be allowed to take the bar examinations. At the very least, it behooved on respondent to verify for himself whether he has completed all necessary requirements to be eligible for the bar examinations. As a senior law student, respondent should have been responsible enough to ensure that all his affairs, specifically those pertaining to his academic achievement, are in order. Given these considerations, we fail to see how respondent could have suffered untold embarrassment in attending the graduation rites, enrolling in the bar review classes and not being able to take the bar exams. If respondent was indeed humiliated by his failure to take the bar, he brought this upon himself by not verifying if he has satisfied all the requirements including his school records, before preparing himself for the bar examination. Certainly, taking the bar examinations do not only entail a mental preparation on the subjects thereof; there are also prerequisites of documentation and submission of requirements which the prospective examinee must meet. 8. Manaloto v. Veloso, G.R. No. 171365, October 6, 2010 Facts: Manaloto and 7 others filed an unlawful detainer case against Veloso. They alleged that they were lessors of a house in Horshoe Village, QC, with Veloso as lessee for P17,000/mo. Veloso failed to pay from May 1997 to December 1998 despite demands. Veloso denied this, alleging and advance payment of P825,000 when he paid for repairs done thereon. The MeTC ordered Veloso to vacate the property. The RTC reversed, giving him the choice over either staying or leaving, with the right to remove the improvements if the petitioners refused to pay therefor. After successive appeals, the decision became final and executory. However, while the abovementioned case was pending with the RTC, Veloso filed with the RTC a complaint for Breach of Contract and Damages based on TWO CAUSES OF ACTION – (1) damages due to embarrassment and humiliation when petitioners distributed copies of the MeTC decision to other homeowners, and (2) breach of contract, since they failed to preserve the property in a tenantable condition. Petitioners filed an Omnibus Motion including a prayer for dismissal, since the decision was a matter of public record, and they violated no law or legal right; further, the action for breach of contract was barred by prior judgment since it was the same as the counterclaim in the above case. The RTC dismissed the case. The CA agreed in dismissing the second COA (breach), but went on to hear the first COA (damages). The CA held petitioners liable, finding bad faith. Issue: (1) Whether the appeal to CA was filed on time. (2) Whether Veloso is entitled to damages. Held: We answer the first issue on the timeliness of respondent‘s appeal affirmatively. Jurisprudence has settled the ―fresh period rule,‖ according to which, an ordinary appeal from the RTC to the Court of Appeals, under Section 3 of Rule 41 of the Rules of Court, shall be taken within 15 days either from receipt of the original judgment of the trial court or from receipt of the final order of the trial court dismissing or denying the motion for new trial or motion for reconsideration. 215

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

We likewise agree with the CA that the RTC-Branch 227 should not have dismissed respondent‘s complaint for damages on the ground of failure to state a cause of action. According to Rule 2, Section 2 of the Rules of Court, a cause of action is the act or omission by which a party violates a right of another. When the ground for dismissal is that the complaint states no cause of action, such fact can be determined only from the facts alleged in the complaint and from no other, and the court cannot consider other matters aliunde. The test, therefore, is whether, assuming the allegations of fact in the complaint to be true, a valid judgment could be rendered in accordance with the prayer stated therein. Respondent made the following allegations in support of his claim for damages against petitioners: FIRST CAUSE OF ACTION 28. After the promulgation of the Metropolitan Trial Court of its Decision dated August 3, 1999, ordering the [herein respondent] and all person claiming rights under him to – (a) Vacate the leased premises; (b) pay the [herein petitioners] the sum of P306,000.00 as unpaid rentals from May 23, 1997 to November 22, 1998; and (c) pay the sum of P5,000.00 as attorneys fees; But while said Decision was still pending appeal with the Regional Trial Court, the [petitioners], through [petitioner] Manaloto, already distributed copies of said Decision to some of the homeowners of Horseshoe Village, who personally know the [respondent]. This act is a direct assault or character assassination on the part of the [respondent] because as stated in the said decision, [respondent] has been staying in the premises but did not or refused to pay his monthly rentals for a long period of time when in truth and in fact was untrue. 29. That from the time the said decision was distributed to said members homeowners, the [respondent] became the subject of conversation or talk of the town and by virtue of which [respondent‘s] good name within the community or society where he belongs was greatly damaged; his reputation was besmirched; [respondent] suffered sleepless night and serious anxiety. [Respondent], who is the grandson of the late Senator Jose Veloso and Congressman Ismael Veloso, was deprived of political career and to start with was to run as candidate for Barangay Chairman within their area which was being offered to him by the homeowners but this offer has started to fade and ultimately totally vanished after the distribution of said Decision. Damages to his good names and reputations and other damages which he suffered as a consequence thereof, may be reasonably compensated for at least P1,500,000.00 as moral and consequential damages. 30. In order to deter [petitioners] and others from doing as abovementioned, [petitioners] should likewise be assessed exemplary damages in the amount of P500,000.00. A cause of action (for damages) exists if the following elements are present: (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of defendant to the plaintiff for which the latter may maintain an action for recovery of damages. We find that all three elements exist in the case at bar. Respondent may not have specifically identified each element, but it may be sufficiently determined from the allegations in his complaint. First, respondent filed the complaint to protect his good character, name, and reputation. Every man has a right to build, keep, and be favored with a good name. This right is protected by law with the recognition of slander and libel as actionable wrongs, whether as criminal offenses or tortuous conduct. Second, petitioners are obliged to respect respondent‘s good name even though they are opposing parties in the unlawful detainer case. As Article 19 of the Civil Code requires, ―[e]very person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.‖ A violation of such principle constitutes an abuse of rights, a tortuous conduct. Petitioners are also expected to respect respondent‘s ―dignity, personality, privacy and peace of mind‖ under Article 26 of the Civil Code, which provides: 216 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

ART. 26. Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention and other relief: (1) (2) (3) (4)

Prying into the privacy of another‘s residence; Meddling with or disturbing the private life or family relations of another; Intriguing to cause another to be alienated from his friends; Vexing or humiliating another on account of his religious beliefs, lowly station in life, place of birth, physical defect, or other personal condition.

Thus, Article 2219(10) of the Civil Code allows the recovery of moral damages for acts and actions referred to in Article 26, among other provisions, of the Civil Code. In Concepcion v. Court of Appeals, we explained that: The philosophy behind Art. 26 underscores the necessity for its inclusion in our civil law. The Code Commission stressed in no uncertain terms that the human personality must be exalted. The sacredness of human personality is a concomitant consideration of every plan for human amelioration. The touchstone of every system of law, of the culture and civilization of every country, is how far it dignifies man. If the statutes insufficiently protect a person from being unjustly humiliated, in short, if human personality is not exalted - then the laws are indeed defective. Thus, under this article, the rights of persons are amply protected, and damages are provided for violations of a person‘s dignity, personality, privacy and peace of mind. It is petitioner‘s position that the act imputed to him does not constitute any of those enumerated in Arts. 26 and 2219. In this respect, the law is clear. The violations mentioned in the codal provisions are not exclusive but are merely examples and do not preclude other similar or analogous acts. Damages therefore are allowable for actions against a person‘s dignity, such as profane, insulting, humiliating, scandalous or abusive language. Under Art. 2217 of the Civil Code, moral damages which include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury, although incapable of pecuniary computation, may be recovered if they are the proximate result of the defendant‘s wrongful act or omission. And THIRD, respondent alleged that the distribution by petitioners to Horseshoe Village homeowners of copies of the MeTC decision in the unlawful detainer case, which was adverse to respondent and still on appeal before the RTC-Branch 88, had no apparent lawful or just purpose except to humiliate respondent or assault his character. As a result, respondent suffered damages – becoming the talk of the town and being deprived of his political career. Petitioners reason that respondent has no cause of action against them since the MeTC decision in the unlawful detainer case was part of public records. It is already settled that the public has a right to see and copy judicial records and documents. However, this is not a case of the public seeking and being denied access to judicial records and documents. The controversy is rooted in the dissemination by petitioners of the MeTC judgment against respondent to Horseshoe Village homeowners, who were not involved at all in the unlawful detainer case, thus, purportedly affecting negatively respondent‘s good name and reputation among said homeowners. The unlawful detainer case was a private dispute between petitioners and respondent, and the MeTC decision against respondent was then still pending appeal before the RTC-Branch 88, rendering suspect petitioners‘ intentions for distributing copies of said MeTC decision to non-parties in the case. While petitioners were free to copy and distribute such copies of the MeTC judgment to the public, the question is whether they did so with the intent of humiliating respondent and destroying the latter‘s good name and reputation in the community. Nevertheless, we further declare that the CA erred in already awarding moral and exemplary damages in respondent‘s favor when the parties have not yet had the chance to present any evidence before the RTC-Branch 227. In civil cases, he who alleges a fact has the burden of proving it by a preponderance of evidence. It is incumbent upon the party claiming affirmative relief from the court to convincingly prove its claim. Bare allegations, unsubstantiated by evidence are not equivalent to proof under our Rules. In short, mere allegations are not evidence.

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Torts & Damages 2013

Atty. Jess Lopez

At this point, the finding of the CA of bad faith and malice on the part of petitioners has no factual basis. Good faith is presumed and he who alleges bad faith has the duty to prove the same. Good faith refers to the state of the mind which is manifested by the acts of the individual concerned. It consists of the intention to abstain from taking an unconscionable and unscrupulous advantage of another. Bad faith, on the other hand, does not simply connote bad judgment to simple negligence. It imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of known duty due to some motive or interest or ill will that partakes of the nature of fraud. Malice connotes ill will or spite and speaks not in response to duty. It implies an intention to do ulterior and unjustifiable harm. We cannot subscribe to respondent‘s argument that there is no more need for the presentation of evidence by the parties since petitioners, in moving for the dismissal of respondent‘s complaint for damages, hypothetically admitted respondent‘s allegations. The hypothetical admission of respondent‘s allegations in the complaint only goes so far as determining whether said complaint should be dismissed on the ground of failure to state a cause of action. A finding that the complaint sufficiently states a cause of action does not necessarily mean that the complaint is meritorious; it shall only result in the reinstatement of the complaint and the hearing of the case for presentation of evidence by the parties. WHEREFORE, in view of all the foregoing, the petition is PARTIALLY GRANTED. The Decision dated January 31, 2006 of the Court of Appeals in CA-G.R. CV No. 82610 is AFFIRMED WITH MODIFICATIONS. The award of moral and exemplary damages made by the Court of Appeals in favor of respondent Ismael Veloso III is DELETED. The complaint of respondent Ismael Veloso III in Civil Case No. Q-02-48341 is hereby REINSTATED before Branch 227 of the Regional Trial Court of Quezon City only in so far as the first cause of action is concerned. The said court is DIRECTED to hear and dispose of the case with dispatch. B.

Contrary to Law and Morals

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Civil Code o Articles 20 and 21 (Memorize)

1.Hermosisima v. Court of Appeals, 109 Phil. 628 (1960) Facts: On October 4, 1954, Soledad Cagigas, hereinafter referred to as complainant, filed with said CFI a complaint for the acknowledgment of her child, Chris Hermosisima, as natural child of said petitioner, as well as for support of said child and moral damages for alleged breach of promise to marry. Francisco Hermosisima (petitioner) admitted the paternity of child and expressed willingness to support the later, but denied having ever promised to marry the complainant. Complainant Soledad Cagigas was born in 1917. Since 1950, complainant (33 years old) who was then a teacher in the Sibonga Provincial High School in Cebu, and Francisco, who was almost 10 years younger than she, used to go around together and were regarded as engaged, although he had made no promise of marriage prior thereto. In 1951, she gave up teaching and became a life insurance underwriter - in the City of Cebu, where intimacy developed among her and the Francisco, since one evening, in 1953, when after coming from the movies, they had sexual intercourse in his cabin on board M/V " Escaño," to which he was then attached as apprentice pilot. In February, 1954, Soledad advised Francisco that she was in the family way, whereupon he promised to marry her. Their child, Chris Hermosisima, was born on June 17, 1954, in a private maternity and clinic. However, subsequently, or on July 24, 1954, defendant married one Romanita Perez. Hence, the present action, which was commenced on or about October 4, 1954. Issue: Whether or not moral damages are recoverable, under our laws, for breach of promise to marry. Held: NO. It will be noted that the Civil Code of Spain permitted the recovery of damages for breach of promise to marry. ART. 44. If, the promise has been in a public or private instrument by an adult, or by a minor with the concurrence of the person whose consent is necessary for the celebration of the marriage, or if the banns have been published, the one who without just cause refuses to marry shall be obliged to reimburse the other for the expenses which he or she may have incurred by reason of the promised marriage. The action for reimbursement of expenses to which the foregoing article refers must be brought within one year, computed from the day of the refusal to celebrate the marriage.

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Torts & Damages 2013

Atty. Jess Lopez

Inasmuch as these articles were never in force in the Philippines, the Court ruled in De Jesus vs. Syquia that the action for breach of promise to marry has no standing in the civil law, apart from the right to recover money or property advanced upon the faith of such promise. Based on the Report of the Code Commission on the Proposed Civil Code, provisions regarding breach of promise to marry were inserted in said Proposed Civil Code, under Chapter I, Title III, Book I thereof. However, these were eliminated in Congress. The reason was set forth in the report of the corresponding Senate Committee: The elimination of this Chapter is proposed. That breach of promise to marry is not actionable has been definitely decided in the case of De Jesus vs. Syquia. The history of breach of promise suits in the United States and in England has shown that no other action lends itself more readily to abuse by designing women and unscrupulous men. It is this experience which has led to the abolition of rights of action in the so-called Balm suits in many of the American States. The Commission perhaps thought that it has followed the more progressive trend in legislation when it provided for breach of promise to marry suits. But it is clear that the creation of such causes of action at a time when so many States, in consequence of years of experience are doing away with them, may well prove to be a step in the wrong direction. The views thus expressed were accepted by both houses of Congress. In the light of the clear and manifest intent of our law making body not to sanction actions for breach of promise to marry, the award of moral damages made by the lower court is, accordingly, untenable. In justifying the award, the CA said that: Moreover, it appearing that because of defendant-appellant's seductive powers, plaintiff-appellee, overwhelmed by her love for him finally yielded to his sexual desires in spite of her age and selfcontrol, she being a woman after all (LOOOOL), we hold that said defendant- appellant is liable for seduction and, therefore, moral damages may be recovered from him under the provisions of Article 2219, paragraph 3, of the new Civil Code. Apart from the fact that the general tenor of said Article 2219, particularly the paragraphs preceding and those following the one cited by the Court of Appeals, and the language used in said paragraph strongly indicates that the "seduction" therein contemplated is the crime punished as such in Articles 337 and 338 of the Revised Penal Code, which admittedly does not exist in the present case, we find ourselves unable to say that Francisco is morally guilty of seduction, not only because he is approximately 10 years younger than the complainant — who was around 36 years of age, and as highly enlightened as a former high school teacher and a life insurance agent are supposed to be — when she became intimate with Francisco, then a mere apprentice pilot, but, also, because, the CFI found that, complainant "surrendered herself" to petitioner because, "overwhelmed by her love" for him, she "wanted to bind" him "by having a fruit of their engagement even before they had the benefit of clergy" CFI: awarded monthly pension for child support, unearned income, attorney‘s fees, and award for moral damages CA: Increased award for moral damages With the elimination of this award for moral damages, the decision of the CA is hereby affirmed, therefore, in all other respects, without special pronouncement as to costs in this instance. 2.Wassmer v. Velez, 12 SCRA 648 (1964) Facts: “The facts that culminated in this case started with dreams and hopes, followed by appropriate planning and serious endeavors, but terminated in frustration and, what is worse, complete public humiliation.” Francisco X. Velez and Beatriz P. Wassmer, following their mutual promise of love, decided to get married on September 4, 1954. On September 2, 1954 Velez left this note for his bride-to-be: Dear Bet— “Will have to postpone wedding —My mother opposes it. Am leaving on the Convair today. Please do not ask too many people about the reason why — That would only create a scandal. Paquing But the next day, September 3, he sent her the following telegram:

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Atty. Jess Lopez

NOTHING CHANGED REST ASSURED RETURNING VERY SOON APOLOGIZE MAMA PAPA LOVE PAKING Thereafter Velez did not appear nor was he heard from again. Sued by Beatriz for damages, Velez filed no answer and was declared in default. Plaintiff adduced evidence before the clerk of court as commissioner. Judgment was rendered ordering Velez to pay plaintiff P2,000.00 as actual damages; P25,000.00 as moral and exemplary damages; P2,500.00 as attorney‘s fees; and the costs. Velez filed a petition for relief from orders, judgment and proceedings and motion for new trial and reconsideration. The court, on August 2, 1955, ordered the parties and their attorneys to appear before it on August 23, 1955 ―to explore at this stage of the proceedings the possibility of arriving at an amicable settlement and should any of them fail to appear, ―the petition for relief and the opposition thereto will be deemed submitted for resolution.‖ Velez failed to appear before court. The following day his counsel filed a motion to defer for 2 weeks the resolution on defendant‘s petition for relief. His counsel stated that he would confer with Velez in Cagayan de Oro City — the latter‘s residence — on the possibility of an amicable settlement. The court granted 2 weeks. Plaintiff manifested on June 15, 1956 that the 2 weeks given by the court had expired on September 8, 1955 but that Velez and his counsel had failed to appear. Another chance for amicable settlement was given. Velez‘s counsel informed the court that chances of settling the case amicably were nil. The court issued an order denying Velez aforesaid petition. Velez has appealed to this Court. He alleged excusable negligence as ground to set aside the judgment by default. It was stated that defendant filed no answer in the belief that an amicable settlement was being negotiated. Issue: Whether Velez is liable for damages. Held: YES. A petition for relief from judgment on grounds of fraud, accident, mistake or excusable negligence, must be duly supported by an affidavit of merits stating facts constituting a valid defense. Velez‘s affidavit of merits attached to his petition of June 21, 1955 stated: ―That he has a good and valid defense against plaintiff‘s cause of action, his failure to marry the plaintiff as scheduled having been due to fortuitous event and/or circumstances beyond his control.‖ An affidavit of merits like this stating mere conclusions or opinions instead of facts is not valid. Velez, however, would contend that the affidavit of merits was in fact unnecessary, or a mere surplusage, because the judgment sought to be set aside was null and void, it having been based on evidence adduced before the clerk of court. In Province of Pangasinan vs. Palisoc, this Court pointed out that the procedure of designating the clerk of court as commissioner to receive evidence is sanctioned by Rule 34 (now Rule 33) of the Rules of Court. Now as to defendant‘s consent to said procedure, the same did not have to be obtained for he was declared in default and thus had no standing in court. ON BREACH OF PROMISE TO MARRY Velez also asserts that the judgment is contrary to law. The reason given is that ―there is no provision of the Civil Code authorizing‖ an action for breach of promise to marry. In Hermosisima, as reiterated in Estopa vs. Biansay the SC held that— Mere breach of a promise to marry is not an actionable wrong. We pointed out that Congress deliberately eliminated from the draft of the new Civil Code the provisions that would have it so. It must not be overlooked, however, that the extent to which acts not contrary to law may be perpetrated with impunity, is not limitless for Article 21 of said Code provides that ―any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. Record reveals that on August 23, 1954 Wassmer and Velez applied for a license to contract marriage, which was subsequently issued. The wedding was set for September 4, 1954. Invitations were printed and distributed to relatives, friends and acquaintances. The bride-to-be‘s trousseau, party dresses and other apparel for the important occasion were purchased. Dresses for the maid of honor and the flower girl were prepared. A matrimonial bed, with accessories, was bought. Bridal showers were given and gifts received. With but 2 days before the wedding, Velez, who was then 28 years old, simply left a note the above note. He enplaned to his home city in Mindanao, and the next day, the day before the wedding, he wired plaintiff saying that nothing changed rest assured returning soon. But he never returned and was never heard from again. 220

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Surely this is NOT A CASE OF MERE BREACH OF PROMISE TO MARRY. As stated, mere breach of promise to marry is not an actionable wrong. But to formally set a wedding and go through all the above-described preparation and publicity, only to walk out of it when the matrimony is about to be solemnized, is quite different. This is palpably and unjustifiably CONTRARY TO GOOD CUSTOMS for which defendant must be held answerable in damages in accordance with Article 21. Per express provision of Article 2219(10) of the New Civil Code, moral damages are recoverable in the cases mentioned in Article 21 of said Code. As to exemplary damages, defendant contends that the same could not be adjudged against him because under Article 2232 of the New Civil Code the condition precedent is that ―the def endant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.‖ The argument is devoid of merit as under the above-narrated circumstances of this case defendant clearly acted in a ―wanton x x x, reckless [and] oppressive manner.‖ This Court‘s opinion, however, is that considering the particular circumstances of this case, P15,000.00 as moral and exemplary damages is deemed to be a reasonable award. 3.Baksh v. Court of Appeals, G.R. No. 97336, February 19, 1993 Facts: Private respondent Marilou Gonzales filed a complaint against Baksh, claiming damages against petitioner for the alleged violation of their agreement to get married. Gonzales is a 22 year old, single, Filipino and a pretty lass of good moral character and reputation duly respected in her community. Baksh, meanwhile, is an Iranian citizen residing at the Lozano Apartments, Dagupan City, and is an exchange student taking a medical course at the Lyceum Northwestern Colleges in Dagupan City; Before 20 August 1987, the latter courted and proposed to marry her. Gonzales accepted his love on the condition that they would get married. They agreed to do so at the end of the semester. They eventually visited their parents to secure their approval. Sometime in 20 August 1987, the Baksh forced her to live with him in the Lozano Apartments. Apparently she was a virgin before she began living with him. However, a week before the filing of the complaint, Baksh‟s attitude towards her started to change. He maltreated and threatened to kill her, which as a result of such maltreatment, she sustained injuries. During a confrontation with a representative of the barangay captain of Guilig a day before the filing of the complaint, Baksh repudiated their marriage agreement and asked her not to live with him anymore and claimed that he is already married to someone living in Bacolod City. Gonzales then prayed for judgment ordering the petitioner to pay her damages. Baksh countered, claiming that he never proposed marriage to or agreed to be married with the private respondent; he neither sought the consent and approval of her parents nor forced her to live in his apartment; he did not maltreat her, but only told her to stop coming to his place because he discovered that she had deceived him by stealing his money and passport; and finally, no confrontation took place with a representative of the barangay captain. The trial court ruled in favor of Gonzales. The CA affirmed. Issue: Whether Baksh can be held liable under Art. 21. Held: YES. The existing rule is that a breach of promise to marry per se is NOT an actionable wrong. Congress deliberately eliminated from the draft of the New Civil Code the provisions that would have made it so. The reason has been set forth in the report of the Senate Committees thus: The elimination of this chapter is proposed. That breach of promise to marry is not actionable has been definitely decided in the case of De Jesus vs. Syquia. The history of breach of promise suits in the United States and in England has shown that no other action lends itself more readily to abuse by designing women and unscrupulous men. It is this experience which has led to the abolition of rights of action in the so-called Heart Balm suits in many of the American states This notwithstanding, the said Code contains a provision, Article 21, which is designed to expand the concept of torts or quasi-delict in this jurisdiction by granting adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to specifically enumerate and punish in the statute books. This was explained by the Code Commission in its report: But the Code Commission had gone farther than the sphere of wrongs defined or determined by positive law. Fully sensible that there are countless gaps in the statutes, which leave so many victims of moral wrongs helpless, even though they have actually suffered material and moral injury, the Commission has deemed it necessary, in the interest of justice, to incorporate in the proposed Civil Code the following rule:

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Atty. Jess Lopez

Art. 23. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. An example will illustrate the purview of the foregoing norm: "A" seduces the nineteenyear old daughter of "X". A promise of marriage either has not been made, or cannot be proved. The girl becomes pregnant. Under the present laws, there is no crime, as the girl is above nineteen years of age. Neither can any civil action for breach of promise of marriage be filed. Therefore, though the grievous moral wrong has been committed, and though the girl and family have suffered incalculable moral damage, she and her parents cannot bring action for damages. But under the proposed article, she and her parents would have such a right of action. The court holds that where a man's promise to marry is in fact the proximate cause of the acceptance of his love by a woman and his representation to fulfill that promise thereafter becomes the proximate cause of the giving of herself unto him in a sexual congress, proof that he had, in reality, no intention of marrying her and that the promise was only a subtle scheme or deceptive device to entice or inveigle her to accept him and to obtain her consent to the sexual act, could justify the award of damages pursuant to Article 21 NOT BECAUSE OF SUCH PROMISE TO MARRY BUT BECAUSE OF THE FRAUD AND DECEIT BEHIND IT and THE WILLFUL INJURY TO HER HONOR AND REPUTATION WHICH FOLLOWED THEREAFTER. It is essential, however, that such injury should have been committed in a manner contrary to morals, good customs or public policy. It was the Baksh‘s "fraudulent and deceptive protestations of love for and promise to marry plaintiff that made her surrender her virtue and womanhood to him and to live with him on the honest and sincere belief that he would keep said promise, and it was likewise these fraud and deception on appellant's part that made plaintiff's parents agree to their daughter's living-in with him preparatory to their supposed marriage." In short, the Gonzales surrendered her virginity, the cherished possession of every single Filipina, not because of lust but because of moral seduction — the kind illustrated by the Code Commission in its example earlier adverted to. Baksh‘s claim that Gonzales is in pari delicto must also fail. The pari delicto rule does not apply in this case for while indeed, the Gonzales may not have been impelled by the purest of intentions, she eventually submitted to the petitioner in sexual congress not out of lust, but because of moral seduction. In fact, it is apparent that she had qualms of conscience about the entire episode for as soon as she found out that the Baksh was not going to marry her after all, she left him. She is not, therefore, in pari delicto with the petitioner. Pari delicto means "in equal fault; in a similar offense or crime; equal in guilt or in legal fault." At most, it could be conceded that she is merely in delicto. ADDED DISCUSSION: Associate Justice Edgardo L. Paras, opined that in a breach of promise to marry where there had been carnal knowledge, moral damages may be recovered together with actual damages, should there be any, such as the expenses for the wedding presentations. Senator Tolentino also takes the same view. C.

Unjust Enrichment

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Civil Code o Articles 22 and 23 (Memorize)

1. Security Bank & Trust Company v. Court of Appeals, G.R. No. 117009, October 11, 1995 Facts: Ysmael Ferrer was contracted by the Bank and Rosito Manhit to construct a building in Davao City for 1.76M. The contract dated Feb 4, 1980 provided that the construction should be completed within 200 working days. Ferrer was able to do complete the construction on Aug 15, 1980 which was within the prescribed period. However, Ferrer was compelled by a drastic increase in the cost of construction materials to incur expenses of 300,000 on top of the original cost. These additional expenses were made known to the Bank through its VP as early as March 1980. Ferrer also made timely demands for payment of the increased cost which were supported by receipts, invoices, payrolls, etc. In March 1981, AVP Guanio and a representative of an architectural firm consulted by the Bank verified Ferrer‘s claims for additional cost. From this, a recommendation was made to settle the claim but only to the extent of 200,000. However, instead of paying for the recommended amount, the Bank denied having authorized the payment of any account beyond the original contract price. It likewise denied payment of the additional cost based on Article IX of their contract which provides:

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Torts & Damages 2013

Atty. Jess Lopez

If at any time prior to the completion of the work to be performed hereunder, increase in prices of construction materials and/or labor shall supervene through no fault on the part of the contractor whatsoever or any act of the government and its instrumentalities which directly or indirectly affects the increase of the cost of the project, OWNER shall equitably make the appropriate adjustment on mutual agreement of both parties. Thus, Ferrer filed a complaint for breach of contract with damages. TC ruled for Ferrer ordering Bank and Manhit to pay 260K for the increase of cost of labor and materials plus damages. On appeal, CA affirmed. Hence, this petition. Bank argues that based on the quoted provision of the contract, since there was no mutual agreement between the parties, the obligation to pay amounts above the original contract price never materialized. Ferrer opposed. (It is worthy to note, however, that the pleadings it filed hardly refute the Bank‟s arguments as the pleadings merely quoted portions of the CA decision. Thus, the Court apprised Ferrer‟s lawyer to exert more diligence and legal know-how.) Issue: Whether the Bank is liable to pay the costs above the original contract price incurred by Ferrer. Held: YES. Article 22 of the Civil Code which embodies the maxim, Nemo ex alterius incommodo debet lecupletari (no man ought to be made rich out of another‘s injury) states: Art. 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him. The above-quoted article is part of the chapter on Human Relations, the provisions of which were formulated as ―basic principles to be observed for the rightful relationship between human beings and for the stability of the social order, x x x designed to indicate certain norms that spring from the fountain of good conscience, x x x guides for human conduct [that] should run as golden threads through society to the end that law may approach its supreme ideal which is the sway and dominance of justice. Under the previously quoted Article IX of the construction contract, the Bank would make the appropriate adjustment to the contract price in case the cost of the project increases through no fault of Ferrer. Ferrer informed the Bank of the drastic increase in construction cost as early as March 1980. The Bank in turn had the increased cost evaluated and audited. When Ferrer demanded payment of P259,417.23, the Bank‘s VP Rosito Manhit and the bank‘s architectural consultant were directed by the bank to verify and compute private respondent‘s claims of increased cost. A recommendation was then made to settle Ferrer‘s claim for P200,000.00. Despite this recommendation and several demands, the Bank failed to make payment. It denied authorizing anyone to make a settlement of the claim and likewise denied any liability, contending that the absence of a mutual agreement made Ferrer‟s demand premature and baseless. It is not denied that Ferrer incurred additional expenses in constructing the Bank‘s building due to a drastic and unexpected increase in construction cost. In fact, the Bank admitted liability for increased cost when a recommendation was made to settle the claim for P200,000.00. Ferrer‘s claim for the increased amount was adequately proven during the trial by receipts, invoices and other supporting documents. Under Article 1182, a conditional obligation shall be void if its fulfillment depends upon the sole will of the debtor (potestative). In the present case, the mutual agreement, the absence of which the Bank relies upon to support its nonliability for the increased construction cost, is in effect a condition dependent on the Bank‟s sole will, since Ferrer would naturally and logically give consent to such an agreement which would allow him recovery of the increased cost. Also, it cannot be denied that the Bank derived benefits when Ferrer completed the construction even at an increased cost. To allow the Bank to acquire the constructed building at a price far below its actual construction cost would undoubtedly constitute unjust enrichment for the bank to the prejudice of Ferrer. Such unjust enrichment, as previously discussed, is not allowed by law. *Discussion on damages omitted

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2. Car Cool Philippines, Inc., v. Ushio Realty and Development Corporation, G.R. No. 138088, January 23, 2006 Facts: USHIO Realty alleges that the former owners of the property, ―Spouses Lopez‖, leased the property to CAR COOL since 1972. In 1990, the Spouses Lopez and CAR COOL executed a written lease agreement over the property for 2 years. On 16 August 1992, on the expiration of the written lease agreement, the Spouses Lopez allowed CAR COOL to continue occupying the property upon payment of monthly rentals. Later, a verbal month-to-month lease agreement continued until 31 August 1995. On 15 June 1995, Hector Lopez wrote CAR COOL to inform it of his intention to sell the property. Hector Lopez gave CAR COOL the option to buy the property before offering the same to other prospective buyers. CAR COOL failed to respond to the offer. On 28 June 1995, Hector Lopez terminated the verbal lease agreement and gave CAR COOL until 31 August 1995 to vacate the property. In his subsequent letters dated 22 July, 1 August and 12 August 1995, Hector Lopez reiterated his demand for CAR COOL to vacate the property. CAR COOL allegedly ignored the demands to vacate the property and continued to occupy the same. In a letter dated 31 August 1995, USHIO Realty informed CAR COOL that it had purchased the property from the Spouses Lopez. USHIO Realty gave CAR COOL another 30 days from 31 August 1995 to vacate the property. CAR COOL failed to respond to the demand letter and continued to occupy the property. On 3 December 1995, USHIO Realty sent a final demand to CAR COOL, giving it a non-extendible 15 days within which to vacate the property. CAR COOL refused to vacate the property, prompting USHIO Realty to file the complaint for ejectment on 19 December 1995. CAR Cool‘s contentions:  USHIO Realty was aware of the lease agreement between CAR COOL and the former owner, Hector Lopez.  Hector Lopez agreed to renew the lease for another two years; and upon his receipt of the advance rentals and security deposit, Hector Lopez allegedly promised to execute a written contract of lease for two years covering the period from 1 January 1995 to 31 December 1996.  On 1 October 1995, USHIO Realty allegedly broke into the leased premises, demolished the improvements on the premises, and threatened and inflicted bodily injuries upon two employees of CAR COOL. CAR COOL later amended the complaint-affidavit to include the charge of grave coercion. Thus on 21 November 1995, CAR COOL filed a complaint for specific performance and damages with the RTC of Quezon City. The complaint sought to compel Hector Lopez to execute a written lease contract for the 2-year extension. CA: affirmed the RTC decision (in favor of Ushio) and added that the payment of P18,000 monthly rental should start from 19 December 1995 until CAR COOL finally vacates the property. The CA held that CAR COOL‘s possession of the property became unlawful only on 19 December 1995, upon receipt of the demand to vacate the property and CAR COOL‟s refusal to surrender possession. CAR COOL asserts that to award damages to USHIO Realty would constitute unjust enrichment at the expense of CAR COOL. CAR COOL claims that it never benefited from its occupation of the property after USHIO Realty‘s agents entered the property on 1 October 1995 and unlawfully destroyed CAR COOL‘s office, equipment and spare parts. Because of the destruction of the equipment and spare parts needed to operate its business, CAR COOL asserts that it was no longer possible to continue its business operations. Issue: Whether the award of rentals in favor of Ushio was proper Held: PROPER. However, the Court rules in favor of Ushio, for the following reasons: (1) USHIO IS THE LAWFUL OWNER OF THE PROPERTY. In this case, there is no dispute on the ownership of the property. An Absolute Deed of Sale dated 14 September 1995 shows that the Spouses Lopez sold the property to USHIO Realty. On 19 September 1995, the Registry of Deeds of Quezon City issued a Transfer Certificate of Title for the property in the name of USHIO Realty. On 3 December 1995, USHIO Realty sent a final demand to CAR COOL, giving it a non-extendible 15 days within which to vacate the property. When CAR COOL still refused to vacate the property, USHIO Realty filed the complaint for ejectment on 19 December 1995. USHIO Realty, as the new owner of the property, has a right to physical possession of the property. Since CAR COOL deprived USHIO Realty of its property, CAR COOL should pay USHIO Realty rentals as reasonable compensation for the use and occupation of the property.

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(2) Thus, THERE WOULD BE NO UNJUST ENRICHMENT. There is NO UNJUST ENRICHMENT WHEN THE PERSON WHO WILL BENEFIT HAS A VALID CLAIM TO SUCH BENEFIt. We have held that ―there is unjust enrichment when a person unjustly retains a benefit to the loss of another, or when a person retains money or property of another against the fundamental principles of justice, equity and good conscience.‖ Article 22 of the Civil Code provides that ―every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him.‖ The PRINCIPLE OF UNJUST ENRICHMENT under Article 22 requires 2 conditions: (1) that a person is benefited without a valid basis or justification, and (2) that such benefit is derived at another‘s expense or damage. There is no unjust enrichment when the person who will benefit has a valid claim to such benefit. Under Section 17 of Rule 70 of the Rules of Civil Procedure, USHIO Realty has the legal right to receive some amount as reasonable compensation for CAR COOL‟s occupation of the property. Thus, in Benitez v. Court of Appeals, we held that: Damages are recoverable in ejectment cases under Section 8, Rule 70 of the Revised Rules of Court. These damages arise from the loss of the use and occupation of the property, and not the damages which private respondents may have suffered but which have no direct relation to their loss of material possession. Damages in the context of Section 8, Rule 70 is limited to ―rent‖ or ―fair market value‖ for the use and occupation of the property. (3) PERIOD DURING WHICH CAR COOL MUST PAY RENT: Dec 19 1995-Nov 18 1996. The records show that CAR COOL already vacated the property on 18 November 1996. The Sheriff of the RTC of Quezon City certified that on 18 November 1996, he turned over the possession of the property to USHIO Realty. Thus, the P18,000 monthly rental for the use of the property should run from 19 December 1995 until 18 November 1996 or a period of 11 months. Therefore, the total amount due as reasonable compensation for the use of the property is P198,000. The trial court established this amount with reasonable accuracy or certainty because the trial court based this amount on the latest monthly rental CAR COOL paid the previous owner of the property. Accordingly, this amount should earn interest at 6 percent per annum from 19 November 1996 until finality of this decision, after which the accrued interest, together with the P198,000, shall earn interest at 12 percent per annum until full payment. (4) However, the award of ATTORNEY‘S FEES WAS NOT PROPER. We cannot sustain the award of attorney‘s fees. CA failed to state explicitly in its decision the basis for the award of attorney‟s fees. The award of attorney‘s fees is the exception rather than the rule and the court must state explicitly the legal reason for the award of attorney‘s fees. 3. Uy v. Public Estates Authority, G.R. No. 147925-26, July 7, 2010 Facts: Uy and PEA seek a reconsideration of our decision: WHEREFORE, the petition is PARTIALLY GRANTED. The assailed Joint Decision and Joint Resolution of the Court of Appeals in CA-G.R. SP Nos. 59308 and 59849 are AFFIRMED with MODIFICATIONS. Respondent Public Estates Authority is ordered to pay Elpidio S. Uy, doing business under the name and style Edison Development and Construction, P55,680,492.38 for equipment rentals on standby; P2,275,721.00 for the cost of idle manpower; and P6,050,165.05 for the construction of the nursery shade net area; plus interest at 6% per annum to be computed fromthe date of the filing of the complaint until finality of this Decision and 12% per annum thereafter until full payment. Respondent PEA is further ordered to pay petitioner Uy 10% of the total award as attorney‘s fees. Uy objects to the factor rate used in the computation of the award for standby equipment costs. He points out that the actual number of equipment deployed and which remained on standby, occasioned by the delay in delivery of work areas, has not been considered in the computation. The Association of Carriers and Equipment Lessors rate or the factor rate used was only the total average rate, without regard to the actual number of equipment deployed. He, therefore, insists that an increase be made. Issue: Whether the award in favor of Uy should be increased.

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Held: YES. These equipment remained in the project site on the days that EDC was waiting for the turnover of additional work areas. We agree with Uy that the actual number of equipment mobilized should be included in computing the award for standby equipment cost. The award must, therefore, be modified using the following formula: Actual period of delay (18.2 months) x average rate per ACEL x number of equipment The records show that not all of the equipment were operational; several were under repair. We find it necessary to remand the records of the case to the Construction Industry Arbitration Commission for the proper computation of the award of standby equipment cost. On the claim for costs for additional hauling distance of topsoil and for mobilization of water truck, we maintain our ruling that a written approval of PEA‟s general manager was indispensable before the claim for additional cost can be granted. The additional costs were incurred without the written approval of PEA. The denial of Uy‘s claims was, therefore, appropriate. We CANNOT SUSTAIN this claim that is premised mainly on the principle of unjust enrichment. The principle of unjust enrichment cannot be validly invoked by a party who, through his own act or omission, took the risk of being denied payment for additional costs by not giving the other party prior notice of such costs and/or by not securing their written consent thereto, as required by law and their contract. PEA insists that our Decision in this case transgresses the principle of res judicata. This Court was very explicit in its declaration that its Decision was independent of, and without prejudice to, the appeal filed by Uy. This Court‘s Decision in G.R. Nos. 147933-34 will not bar the grant of additional award to Uy. 4. Almario v. Philippine Airlines, Inc., G.R. No. 170928, September 11, 2007 Facts: Almario, then about 39 years of age and a Boeing 737 First Officer at PAL, successfully bid for the higher position of Airbus 300 First Officer. Since said higher position required additional training, he underwent, at PAL‘s expense, more than 5 months of training consisting of ground schooling in Manila and flight simulation in Melbourne, Australia. After completing the training course, Almario served as A300 First Officer of PAL, but after 8 months of service as such, he tendered his resignation, for ―personal reasons,‖ PAL‘s Vice President for Flight Operations sent Almario a letter, the pertinent portions of which read: As you are aware the Company invested heavily on your professional training in the estimated amount of P786,713.00 on the basis that you continue to serve the Company for a definite period of time which is approximately 3 years or 36 months. We urge you to reconsider your proposed resignation otherwise you will be required to reimburse the Company an amount equivalent to the cost of your professional training and the damages caused to the Company. Despite receipt of the letter, Almario pushed through with his resignation. PAL filed a Complaint against Almario before the Makati RTC, for reimbursement of P851,107 worth of training costs, attorney‘s fees equivalent to 20% of the said amount, and costs of litigation. Issue: Whether Almario should reimburse PAL. Held: YES. UNJUST ENRICHMENT. PAL invoked the existence of an innominate contract of do ut facias (I give that you may do) with Almario in that by spending for his training, he would render service to it until the costs of training were recovered in at least 3 years. Almario having resigned before the 3-year period, PAL prayed that he should be ordered to reimburse the costs for his training. Almario denied the existence of any agreement with PAL that he would have to render service to it for 3 years after his training failing which he would reimburse the training costs. He pointed out that the 1991-1994 CBA between PAL and the Airline Pilot‘s Association of the Philippines (ALPAP), of which he was a member, carried no such agreement. The CBA is the law between the contracting parties — the collective bargaining representative and the employercompany. Compliance with a CBA is mandated by the expressed policy to give protection to labor. In the same vein, CBA provisions should be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve. This is founded on the dictum that a CBA is not an ordinary contract but one impressed with public interest. It goes without saying, however, that only provisions embodied in the CBA should be so interpreted and 226

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complied with. Where a proposal raised by a contracting party does not find print in the CBA, it is not a part thereof and the proponent has no claim whatsoever to its implementation. Section 1, Article XXIII of the 1985-1987 CBA provides: Pilots 55 years of age or over who have not previously qualified in any Company turbojet aircraft shall not be permitted to bid into the Company‟s turbo-jet operations. Pilots 55 years of age or over who have previously qualified in the Company‟s turbo-jet operations may be by-passed at Company option, however, any such pilot shall be paid the by-pass pay effective upon the date a junior pilot starts to occupy the bidded position. PAL proposed to amend the provision in this wise: The compulsory retirement age for all pilots is 60 years. Pilots who reach the age of 55 years and over without having previously qualified in any Company turbo-jet aircraft shall not be permitted to occupy any position in the Company‟s turbo-jet fleet. Pilots 54 years of age and over are ineligible for promotion to any position in Group I. Pilots reaching the age of 55 shall be frozen in the position they currently occupy at that time and shall be ineligible for any further movement to any other positions. PAL‘s contention is basically premised on prohibitive training costs. The return on this investment in the form of the pilot promoted is allegedly five years. Considering the pilot‘s age, the chances of full recovery are asserted to be quite slim. ALPAP opposed the proposal and argued that the training cost is offset by the pilot‘s maturity, expertise and experience. By way of compromise, we rule that a pilot should remain in the position where he is upon reaching age 57 irrespective of whether or not he has previously qualified in the Company‘s turbo-jet operations. The rationale behind this is that a pilot who will be compulsorily retired at age 60 should no longer be burdened with training for a new position. But if a pilot is only at age 55, and promotional positions are available, he should still be considered and promoted if qualified, provided he has previously qualified in any company turbo-jet aircraft. In the latter case, the prohibitive training costs are more than offset by the maturity, expertise, and experience of the pilot. Thus, the provision on age limit should now read: Pilots 57 years of age shall be frozen in their positions. Pilots 55 years of age provided they have previously qualified in any company turbo-jet aircraft shall be permitted to occupy any position in the company‟s turbo-jet fleet. The above-quoted provision of the 1985-1987 CBA, as construed by the DOLE Secretary, was substantially incorporated in the 1991-1994 CBA between PAL and ALPAP as follows: Pilots 57 years of age shall be frozen in their position. Pilots who are less than 57 years of age provided they have previously qualified in any company‟s turbo-jet aircraft shall be permitted to occupy any position in the company‟s turbo-jet 30 fleet. The same section of Article XXIII of the 1991-1994 CBA was reproduced in the 1994-2000 CBA. PAL‘s Senior Vice President for Flight Operations, testifying on PAL‘s ―policy or practice‖ on under-writing the training costs of its pilots at the time Almario was trained, with the ―expectation‖ of benefiting therefrom ―in order to recover the cost of training.‖ It bears noting that when Almario took the training course, he was about 39 years old, 21 years away from the retirement age of 60. Hence, with the maturity, expertise, and experience he gained from the training course, he was expected to serve PAL for at least 3 years to offset ―the prohibitive costs‖ thereof. UNJUST ENRICHMENT The pertinent provision of the CBA and its rationale aside, contrary to Almario‘s claim, Article 22 of the Civil Code which reads: ―Art. 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him,‖ applies. This provision on unjust enrichment recognizes the principle that one may not enrich himself at the expense of another. An authority on Civil Law writes on the subject, viz: Enrichment of the defendant consists in every patrimonial, physical, or moral advantage, so long as it is appreciable in money. It may consist of some positive pecuniary value incorporated into the patrimony of the defendant, such as: 227 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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the enjoyment of a thing belonging to the plaintiff; the benefits from service rendered by the plaintiff to the defendant; the acquisition of a right, whether real or personal; the increase of value of property of the defendant; the improvement of a right of the defendant, such as the acquisition of a right of preference; the recognition of the existence of a right in the defendant; and the improvement of the conditions of life of the defendant.

The enrichment of the defendant must have a correlative prejudice, disadvantage, or injury to the plaintiff. This prejudice may consist, not only of the loss of property or the deprivation of its enjoyment, but also of non-payment of compensation for a prestation or service rendered to the defendant without intent to donate on the part of the plaintiff, or the failure to acquire something which the latter would have obtained. The injury to the plaintiff, however, need not be the cause of the enrichment of the defendant. It is enough that there be some relation between them, that the enrichment of the defendant would not have been produced had it not been for the fact from which the injury to the plaintiff is derived. Admittedly, PAL invested for the training of Almario to enable him to acquire a higher level of skill, proficiency, or technical competence so that he could efficiently discharge the position of A-300 First Officer. Given that, PAL expected to recover the training costs by availing of Almario‟s services for at least three years. The expectation of PAL was not fully realized, however, due to Almario‘s resignation after only 8 months of service following the completion of his training course. He cannot, therefore, refuse to reimburse the costs of training without violating the principle of unjust enrichment. 5. Grandteq Industrial Steel Products, Inc., v. Margallo, G.R. No. 181393, July 28, 2009 Facts: Grandteq is engaged in the selling and welding of electrodes and alloys of steel, aluminum, and copper. Gonzales is its President/Owner. Margallo was a Sales Engineer. Margallo claims that she got a car loan program offered to her since she was ―Salesman of the Year‖, paying the downpayment of P201,000 on a new Toyota from her own pocket. The monthly amortization was to be shared. She then received a letter From Gonzales and De Leon, the VP for Administration, accusing her of diverting steel tools, moonlighting with JVM Industrial Supply and Allied Services, sabotage, and breach of trust and confidence. She was placed under preventative suspension. She explained that she was only doing what she was told by her superior as an ordinary employee. De Leon asked her to resign, promising that she would still be paid her commissions, benefits, and she would be reimbursed her car loan payments. Relying on this, she tendered her irrevocable resignation. She alleged that she was never paid her claims or commissions. Grandteq sold her car to another employee for P550,000. She filed a complaint with the LA for recovery of sales commissions, incentives, payments, and damages. The LA dismissed her complaint. The NLRC reversed. The CA affirmed this. Hence, this petition. Grandteq and Gonzales assert that the CA erred in declaring the car loan agreement between Grandteq and Margallo, particularly the provision therein on the forfeiture of car loan payments in favor of Grandteq should Margallo resign from the company, as null and void. Issue: Whether Margallo is entitled to the recovery of the monetary claims. Held: YES. The Court is in agreement with the CA and the NLRC. Generally speaking, contracts are respected as the law between the contracting parties. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order or public policy. The questionable provision in the car loan agreement between Grandteq and Margallo provides: ―In case of resignation, of the personnel from the company, all payments made by the personnel shall be forfeited in favor of the company.‖ Connected thereto is the provision in the same car loan agreement, which reads: 1. The COMPANY shall have the right to regain the possession of the car before the expiration of the term of the loan in the event of any of the following: a. The PERSONNEL resigns from the COMPANY during the effectivity of this agreement. Said provisions plainly are contrary to the fundamental principles of justice and fairness. It must be remembered that Margallo herself paid for the down payment and her share in the monthly amortization of the car. However, she did not get to leave with the car when she resigned from Grandteq. In effect, Margallo parted with her hard-earned money for nothing, being left, as she is, with an empty bag.The inequitableness in the conduct of Grandteq and Gonzales is 228

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heightened by the fact that after they regained possession of the car, they resold the same to another employee under a similar contract bearing the same terms and conditions signed by Margallo. The principle that no person may unjustly enrich oneself at the expense of another (Nemo cum alteris detrimento locupletari potest) is embodied in Article 22 of the New Civil Code, to wit: ART. 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him. The above-quoted article is part of the chapter of the Civil Code on Human Relations, the provisions of which were formulated as ―basic principles to be observed for the rightful relationship between human beings and for the stability of the social order; designed to indicate certain norms that spring from the fountain of good conscience; [are] guides for human conduct that should run as golden threads through society to the end that law may approach its supreme ideal, which is the sway and dominance of justice.‖ There is UNJUST ENRICHMENT when a person unjustly retains a benefit at the loss of another, or when a person retains the money or property of another against the fundamental principles of justice, equity and good conscience. As can be gleaned from the foregoing, there is unjust enrichment when (1) a person is unjustly benefited, and (2) such benefit is derived at the expense of or with damages to another. The main objective of the principle of unjust enrichment is to prevent one from enriching oneself at the expense of another. It is commonly accepted that this doctrine simply means that a person shall not be allowed to profit or enrich himself inequitably at another‘s expense. One condition for invoking this principle is that the aggrieved party has no other action based on a contract, quasi-contract, crime, quasi-delict, or any other provision of law. This is NOT A CASE OF EQUITY overruling or supplanting a positive provision of law or judicial rule. Rather, equity is exercised in this case ―as the complement of legal jurisdiction [that] seeks to reach and to complete justice where courts of law, through the inflexibility of their rules and want of power to adapt their judgments to the special circumstances of cases, are incompetent to do so.‖ The principle against unjust enrichment obliges Grandteq and Gonzales to refund to Margallo the car loan payments she had made, since she has not actually acquired the car. To relieve Grandteq and Gonzales of their obligation to reimburse Margallo would, indeed, be to sanction unjust enrichment in favor of the first two and cause unjust poverty to the latter. The Court rigorously disapproves contracts that demonstrate a clear attempt to exploit the employee and deprive him of the protection sanctioned by both the Constitution and the Labor Code. The Constitution and the Labor Code mandate the protection of labor. Hence, as a matter of judicial policy, this Court has, in a number of instances, leaned backwards to protect labor and the working class against the machinations and incursions of their more financially entrenched employers. Although not strictly a labor contract, the CAR LOAN AGREEMENT herein involves a benefit extended by the employers, Grandteq and Gonzales, to their employee, Margallo. It should benefit, and not unduly burden, Margallo. The Court cannot, in any way, uphold a car loan agreement that threatens the employee with the forfeiture of all the car loan payments he/she had previously made, plus loss of the possession of the car, should the employee wish to resign; otherwise, said agreement can then be used by the employer as an instrument to either hold said employee hostage to the job or punish him/her for resigning. The Court further finds no error in the grant by the A and the NLRC of Margallo‘s claim for sales commission. In cases involving money claims of employees, the employer has the burden of proving that the employees did receive their wages and benefits and that the same were paid in accordance with law. It is settled that once the employee has set out with particularity in his complaint, position paper, affidavits and other documents the labor standard benefits he is entitled to, and which the employer allegedly failed to pay him, it becomes the employer‟s burden to prove that it has paid these money claims. One who pleads payment has the burden of proving it; and even where the employees must allege nonpayment, the general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove nonpayment. Under the terms and conditions of Margallo‘s employment with Grandteq, it is provided that she ―will do field sales with commission on sales made after a month‘s training.‖ On this basis, Margallo‘s entitlement to sales commission is unrebutted. Hence, it was actually the Labor Arbiter who erred in denying Margallo‘s claim for sales commission ―for failure to state the particulars to substantiate the same.‖ Grandteq and Gonzales have the burden of proof to show, by substantial 229 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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evidence, their claim that Margallo was not entitled to sales commissions because the sales made by the latter remained outstanding and unpaid, rendering these sales as bad debts and thus nullifying Margallo‘s right to this monetary benefit. Grandteq and Gonzales could have presented pertinent company records to prove this claim. It is a rule that failure of employers to submit the necessary documents that are in their possession as employers gives rise to the presumption that the presentation thereof is prejudicial to its cause. D.

Judicial Vigilance

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Civil Code o Article 24 (Memorize)

1. Everett Steamship Corporation v. Court of Appeals, G.R. No. 122494, October 8, 1998 Facts: Petitioner Everett Steamship Corporation, through this petition for review, seeks the reversal of the decision of the CA which affirmed the decision of the RTC of Kalookan City finding petitioner liable to private respondent Hernandez Trading Co., Inc. for the value of the lost cargo. Hernandez imported 3 crates of bus spare parts (marked as MARCO C/No. 12, MARCO C/No. 13 and MARCO C/No. 14) from its supplier, Maruman Trading Company, Ltd. (Maruman Trading), a foreign corporation based in Japan. The crates were shipped from Japan to Manila on board ―ADELFA EVERETTE,‖ a vessel owned by petitioner‘s principal, Everett Orient Lines. The said crates were covered by Bill of Lading No. NGO53MN. Upon arrival of the port of Manila, it was discovered that the crate marked MARCO C/No. 14 was missing. This was confirmed and admitted by petitioner in its letter addressed to private respondent, which thereafter made a formal claim upon petitioner for the value of the lost cargo amounting to ¥1,552,500. However, petitioner offered to pay ¥100,000, the maximum amount stipulated under Clause 18 of the covering bill of lading which limits the liability of petitioner. Hernandez rejected the offer and thereafter instituted a suit for collection against petitioner. Trial court rendered judgment in favor of Hernandez. The fact that those conditions are printed at the back of the bill of lading in letters so small that they are hard to read would not warrant the presumption that the plaintiff or its supplier was aware of these conditions such that he had ―fairly and freely agreed‖ to these conditions. CA deleted the award of attorney‘s fees but affirmed the trial court‘s findings with the additional observation that private respondent can not be bound by the terms and conditions of the bill of lading because it was not privy to the contract of carriage. The shipper named in the Bill of Lading is Maruman Trading Co., Ltd. whom the appellant (Everett Steamship Corp.) contracted with for the transportation of the lost goods. Petitioner now comes to us arguing that the CA erred (1) in ruling that the consent of the consignee to the terms and conditions of the bill of lading is necessary to make such stipulations binding upon it; (2) in holding that the carrier‘s limited package liability as stipulated in the bill of lading does not apply in the instant case; and (3) in allowing private respondent to fully recover the full alleged value of its lost cargo. Issue: Whether Clause 18 limiting carrier‘s liability is valid. Held: YES. A stipulation in the bill of lading limiting the common carrier‘s liability for loss or destruction of a cargo to a certain sum, unless the shipper or owner declares a greater value, is sanctioned by law, particularly Articles 1749 and 1750 of the Civil Code which provide: ART. 1749. A stipulation that the common carrier‟s liability is limited to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding. ART. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction, or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been freely and fairly agreed upon. Pursuant to the afore-quoted provisions of law, it is required that the stipulation limiting the common carrier‘s liability for loss must be ―reasonable and just under the circumstances, and has been freely and fairly agreed upon.‖ The bill of lading subject of the present controversy specifically provides, among others: 18. All claims for which the carrier may be liable shall be adjusted and settled on the basis of the shipper‘s net invoice cost plus freight and insurance premiums, if paid, and in no event shall the carrier be liable for any loss of possible profits or any consequential loss. The carrier shall not be liable for any loss of or any damage to or in any 230

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connection with, goods in an amount exceeding One Hundred Thousand Yen in Japanese Currency (¥100,000.00) or its equivalent in any other currency per package or customary freight unit (whichever is least) unless the value of the goods higher than this amount is declared in writing by the shipper before receipt of the goods by the carrier and inserted in the Bill of Lading and extra freight is paid as required. The above stipulations are, to our mind, reasonable and just. In the bill of lading, the carrier made it clear that its liability would only be up to ¥100,000.00 Yen. However, the shipper, Maruman Trading, had the option to declare a higher valuation if the value of its cargo was higher than the limited liability of the carrier. Considering that the shipper did not declare a higher valuation, it had itself to blame for not complying with the stipulations. The trial court‘s ratiocination that Hernandez could not have ‗‗fairly and freely‘‘ agreed to the limited liability clause in the bill of lading because the said conditions were printed in small letters does not make the bill of lading invalid. We ruled in PAL, Inc. vs. CA that the ―jurisprudence on the matter reveals the consistent holding of the court that contracts of adhesion are not invalid per se and that it has on numerous occasions upheld the binding effect thereof.‖ In Ong Yiu vs. CA, the Court held that the one who adheres to the contract is in reality free to reject it entirely; if he adheres he gives his consent.‘ In the present case, not even an allegation of ignorance of a party excuses noncompliance with the contractual stipulations since the responsibility for ensuring full comprehension of the provisions of a contract of carriage devolves not on the carrier but on the owner, shipper, or consignee as the case may be.‖ Stipulations in contracts of adhesion are valid and binding. A contract limiting liability upon an agreed valuation does not offend against the policy of the law forbidding one from contracting against his own negligence. JUDICIAL VIGILANCE GREATER VIGILANCE, however, is required of the courts when dealing with contracts of adhesion in that the said contracts must be carefully scrutinized ―in order to shield the unwary (or weaker party) from deceptive schemes contained in ready-made covenants,‖ such as the bill of lading in question. The stringent requirement which the courts are enjoined to observe is in recognition of Article 24 of the Civil Code which mandates that ―(i)n all contractual, property or other relations, when one of the parties is at a disadvantage on account of his moral dependence, ignorance, indigence, mental weakness, tender age or other handicap, the courts must be vigilant for his protection. The shipper, Maruman Trading, we assume, has been extensively engaged in the trading business. It cannot be said to be ignorant of the business transactions it entered into involving the shipment of its goods to its customers. The shipper could not have known, or should know the stipulations in the bill of lading and there it should have declared a higher valuation of the goods shipped. Moreover, Maruman Trading has not been heard to complain that it has been deceived or rushed into agreeing to ship the cargo in petitioner‘s vessel. In fact, it was not even impleaded in this case. WHETHER CONSIGNEE IS BOUND BY THE BILL OF LADING The next issue to be resolved is whether or not Hernandez, as consignee, who is not a signatory to the bill of lading is bound by the stipulations thereof. In Sea-Land Service, Inc. vs. IAC, we held that even if the consignee was not a signatory to the contract of carriage between the shipper and the carrier, the consignee can still be bound by the contract. There can, therefore, be no doubt or equivocation about the validity and enforceability of freely-agreed-upon stipulations in a contract of carriage or bill of lading limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and inserts it into said contract or bill. When Hernandez formally claimed reimbursement for the missing goods from petitioner and subsequently filed a case against the latter based on the very same bill of lading, Hernandez accepted the provisions of the contract and thereby made itself a party thereto, or at least has come to court to enforce it. Thus, he cannot now reject or disregard the carrier‘s limited liability stipulation in the bill of lading. In other words, Hernandez is bound by the whole stipulations in the bill of lading and must respect the same. Hernandez, however, insists that the carrier should be liable for the full value of the lost cargo in the amount of ¥1,552,500.00, considering that the shipper, Maruman Trading, had ―fully declared the shipment, the contents of each crate, the dimensions, weight and value of the contents,‖ as shown in the commercial Invoice No. MTM-941. This claim was denied by petitioner, contending that it did not know of the contents, quantity and value of ―the shipment which consisted of three pre-packed crates described in Bill of Lading No. NGO-53MN merely as ‗3 CASES SPARE PARTS.‘ ‖ The bill of lading in question confirms petitioner‘s contention. To defeat the carrier‟s limited liability, the aforecited Clause 18 of the bill of lading requires that the shipper should have declared in writing a higher valuation of 231 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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its goods before receipt thereof by the carrier and insert the said declaration in the bill of lading, with the extra freight paid. These requirements in the bill of lading were never complied with by the shipper, hence, the liability of the carrier under the limited liability clause stands. The commercial Invoice No. MTM-941 does not in itself sufficiently and convincingly show that petitioner has knowledge of the value of the cargo as contended by private respondent. No other evidence was proffered by private respondent to support its contention. Thus, we are convinced that petitioner should be liable for the full value of the lost cargo. In fine, the liability of petitioner for the loss of the cargo is limited to ¥100,000.00 Yen, pursuant to Clause 18 of the bill of lading. E.

Thoughtless Extravagance

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Civil Code o Article 25 (Memorize)

F.

Disrespect of Persons

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Civil Code o Article 26 (Memorize)

1. St. Louis Realty Corporation v. Court of Appeals, G.R. No. L-46061, November 14, 1984 Facts: St. Louis Realty caused to be published with the permission of Arcadio S. Arcadio (but without permission of Doctor Aramil) in the issue of the Sunday Times of December 15, 1968 an advertisement with the heading ―WHERE THE HEART IS‖. Below that heading was the photograph of the residence of Doctor Aramil and the Arcadio family and then below the photograph was the following write-up: Home is where the heart is. And the hearts of MR. AND MRS. ARCADIO S. ARCADIO and their family have been captured by BROOKSIDE HILLS. They used to rent a small 2-bedroom house in a cramped neighborhood, sadly inadequate and unwholesome for the needs of a large family. They dream(ed) of a more pleasant place free from the din and dust of city life yet near all facilities. Plans took shape when they heard of BROOKSIDE HILLS. With thrift and determination, they bought a lot and built their dream house for P31,000. The Arcadios are now part of the friendly, thriving community of BROOKSIDE HILLS, a beautiful first-class subdivision planned for wholesome family living. The same advertisement appeared in the Sunday Times dated January 5, 1969. Doctor Aramil, a neuropsychiatrist and a member of the faculty of the U. E. Ramon Magsaysay Memorial Hospital, noticed the mistake. He wrote St. Louis Realty the following letter of protest: This is anent to your advertisements appearing in the December 15, 1968 and January 5, 1969 issues of the Sunday Times which boldly depicted my house at the abovementioned address and implying that it belonged to another person. I am not aware of any permission or authority on my part for the use of my house for such publicity. This unauthorized use of my house for your promotional gain and much more the apparent distortions therein are I believe not only transgression to my private property but also damaging to my prestige in the medical profession, I have had invited in several occasions numerous medical colleagues, medical students and friends to my house and after reading your December 15 advertisement, some of them have uttered some remarks purporting doubts as to my professional and personal integrity. Such sly remarks although in light vein as ‗it looks like your house,‘ ‗how much are you renting from the Arcadios?‘, ‗like your wife portrayed in the papers as belonging to another husband‘, etc., have resulted in no little menial anguish on my part. ―I have referred this matter to the Legal Panel of the Philippine Medical Association and their final advice is pending upon my submission of supporting ownership papers. I will therefore be constrained to pursue court action against your corporation unless you could satisfactorily explain this matter within a week upon receipt of this letter. The letter was received by Ernesto Magtoto, an officer of St. Louis Realty in charge of advertising. He stopped publication of the advertisement and contacted Doctor Aramil and offered his apologies. However, no rectification or apology was published. Aramil‘s counsel demanded from St. Louis Realty actual, moral and exemplary damages of P110,000. In its answer dated March 10, St. Louis Realty claimed that there was an honest mistake and that if Aramil so desired, rectification would be published in the Manila Times. They published in the issue of the Manila Times of March 18, 1969 a new advertisement with the Arcadio family and their real house however, they did not publish any apology to Doctor Aramil and an explanation of the error. 232

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Aramil filed his complaint for damages. St. Louis Realty published in the issue of the Manila Times of April 15, 1969 the following ―NOTICE OF RECTIFICATION‖ in a space 4 by 3 inches: This will serve as a notice that our print ad ‗Where the Heart is‘ which appeared in the Manila Times issue of March 18, 1969 is a rectification of the same ad that appeared in the Manila Times issues of December 15, 1968 and January 5, 1969 wherein a photo of the house of another Brookside Homeowner (Dr. Aramil) was mistakenly used as a background for the featured homeowner‘s the Arcadio family. The ad of March 18, 1969 shows the Arcadio family with their real house in the background, as was intended all along. Judge Jose M. Leuterio observed that St. Louis Realty should have immediately published a rectification and apology. It was found that as a result of St. Louis Realty‟s mistake, magnified by its utter lack of sincerity, Doctor Aramil suffered mental anguish and his income was reduced by about P1,000 to P1,500 a month. There was violation of Aramil‟s right to privacy (Art. 26, Civil Code). Hence, trial court awarded Aramil P8,000 as actual damages, P20,000 as moral damages and P2,000 as attorney‘s fees. CA affirmed. Appellate Court reasoned out that St. Louis Realty committed an actionable quasi-delict under articles 21 and 26 of the Civil Code because the questioned advertisements pictured a beautiful house, which did not belong to Arcadio but to Doctor Aramil who, naturally, was annoyed by that contretemps. St. Louis Realty argues that the case is not covered by article 26 which provides that ―every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons‖. ―Prying into the privacy of another‘s residence‖ and ―meddling with or disturbing the private life or family relations of another‖ and ―similar acts‖, ―though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention and other relief‖. Issue: Whether St. Louis should be liable for damages under Art. 26. Held: YES. The damages fixed by Judge Leuterio are sanctioned by articles 2200, 2208 and 2219 of the Civil Code. Article 2219 allows moral damages for acts and actions mentioned in article 26. As lengthily explained by Justice Gatmaitan, the acts and omissions of the firm fall under article 26. St. Louis Realty‟s employee was grossly negligent in mixing up the Aramil and Arcadio residences in a widely circulated publication like the Sunday Times. To suit its purpose, it never made any written apology and explanation of the mixup. It just contented itself with a cavalier ―rectification.‖ Persons who know the residence of Doctor Aramil were confused by the distorted, lingering impression that he was renting his residence from Arcadio or that Arcadio had leased it from him. Either way, HIS PRIVATE LIFE WAS MISTAKENLY AND UNNECESSARILY EXPOSED. He suffered diminution of income and mental anguish. Judgment of the Appellate Court is affirmed. The publication of the plaintiff‘s photograph without his consent and for the purely commercial purposes of the defendant, has been held to be a ground for damages. A private individual has the right to be protected in the representation of his picture of another without the latter‘s consent, causes moral damages. Many decisions of Italian and French courts have protected the right to one‘s picture or likeness. A picture within the meaning of this principle is not necessarily a photograph of the living person, but includes any representation of such person. (Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol. 1, 1983 Ed., p. 113.) 2. Gregorio v. Court of Appeals, G.R. No. 179799, September 11, 2009 Facts: The present case arose from the filing of a BP 22 case by respondent Datuin (OIC of the Accounts Receivables Department of Sansio Philippines) against petitioner Gregorio and Belarmino, as proprietors of Alvi Marketing for delivering insufficiently funded bank checks as payment for the numerous appliances bought by Alvi Marketing. Gregorio was subsequently indicted for 3 counts of violation of BP 22. Gregorio was detained eventually. She was able to secure temporary liberty when her husband posted bail. Thereafter, Gregorio filed a Motion for Deferment of Arraignment and Reinvestigation, alleging that she could not have issued the bounced checks, since she did not even have a checking account with the bank on which the checks were drawn, as certified by the branch manager of the Philippine National Bank, Sorsogon Branch. She also alleged that her signature was patently and radically different from the signatures appearing on the bounced checks. The MeTC granted the motion and a reinvestigation was conducted. During the course of the reinvestigation, Datuin submitted an Affidavit of Desistance, stating among others that Gregorio was not one of the signatories of the bounced checks subject of prosecution. The cases were eventually dismissed.

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Gregorio filed a complaint for damages against Sansio and Datuin before the RTC for damages suffered due to the filing of the BP 22 Cases by Sansio and Datuin. Sansio and Datuin filed a Motion to Dismiss on the ground that the complaint, being one for damages arising from malicious prosecution, failed to state a cause of action, as the ultimate facts constituting the elements thereof were not alleged in the complaint. The RTC ruled in favor of Gregorio. The CA reversed. Issue: Whether the civil suit filed by Gregorio is based on quasi-delict or malicious prosectution. Held: QUASI DELICT. A perusal of the allegations of Gregorio‘s complaint for damages readily shows that she filed a civil suit against Sansio and Datuin for filing against her criminal charges for violation of B.P. Blg. 22. Respondents did not exercise diligent efforts to ascertain the true identity of the person who delivered to them insufficiently funded checks as payment for the various appliances purchased; and that respondents never gave her the opportunity to controvert the charges against her, because they stated an incorrect address in the criminal complaint. Gregorio claimed damages for the EMBARRASSMENT and HUMILIATION she suffered when she was suddenly arrested at her city residence in Quezon City while visiting her family. She was, at the time of her arrest, a respected Kagawad in Oas, Albay. Gregorio anchored her civil complaint on Articles 26, 2176, and 2180 of the Civil Code. Noticeably, despite alleging either fault or negligence on the part of Sansio and Datuin, Gregorio never imputed to them any bad faith in her complaint. Basic is the legal principle that the nature of an action is determined by the material averments in the complaint and the character of the relief sought. Undeniably, Gregorio‘s civil complaint, read in its entirety, is a complaint based on QUASI-DELICT under Article 2176, in relation to Article 26, rather than on malicious prosecution. In every tort case filed under Article 2176 of the Civil Code, the plaintiff has to prove by a preponderance of evidence: (1) the damages suffered by him; (2) the fault or negligence of the defendant or some other person to whose act he must respond; (3) the connection of cause and effect between the fault or negligence and the damages incurred; and (4) that there must be no preexisting contractual relation between the parties. On the other hand, Article 26 of the Civil Code grants a cause of action for damages, prevention, and other relief in cases of breach, though not necessarily constituting a criminal offense, of the following rights: (1) (2) (3) (4) (5) (6)

right to personal dignity; right to personal security; right to family relations; right to social intercourse; right to privacy; and right to peace of mind.

A scrutiny of Gregorio‘s civil complaint reveals that the averments thereof, taken together, fulfill the elements of Article 2176, in relation to Article 26 of the Civil Code. It appears that Gregorio‘s rights to personal dignity, personal security, privacy, and peace of mind were infringed by Sansio and Datuin when they failed to exercise the REQUISITE DILIGENCE IN DETERMINING THE IDENTITY OF THE PERSON they should rightfully accuse of tendering insufficiently funded checks. This fault was compounded when they failed to ascertain the correct address of petitioner, thus depriving her of the opportunity to controvert the charges, because she was not given proper notice. Because she was not able to refute the charges against her, petitioner was falsely indicted for 3 counts of violation of B.P. Blg. 22. She suffered embarrassment and humiliation over her sudden arrest and detention and she had to spend time, effort, and money to clear her tarnished name and reputation, considering that she had held several honorable positions in different organizations and offices in the public service. There exists no contractual relation between Gregorio and Sansio. On the other hand, Gregorio is prosecuting Sansio, under Article 2180 of the Civil Code, for its VICARIOUS LIABILITY, as employer, arising from the act or omission of its employee Datuin. Sansio and Datuin are in error when they insist that Gregorio‘s complaint is based on malicious prosecution. In an action to recover damages for malicious prosecution, it must be alleged and established that Sansio and Datuin were impelled by legal malice or bad faith in deliberately initiating an action against Gregorio, knowing that the charges were false and groundless, intending to vex and humiliate her. As previously mentioned, Gregorio did not allege this in her complaint. Moreover, the fact that she prayed for moral damages did not change the nature of her action based on quasi-delict. She might have acted on the mistaken notion that she was entitled to moral damages, considering that she suffered physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, and social humiliation on account of her indictment and her sudden arrest. G. 234

Dereliction of Duty Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Civil Code o Article 27 (Memorize)

1. Philippine Match Co., Ltd., v. City of Cebu, G.R. No. L-30745, January 18, 1978 Facts: Phil Match, whose principal office is in Manila, manufactures matches. It ships cartons of matches to its branch office in Cebu for storage, sale, and distribution within the VisMin region. In March 1960, the Mayor of Cebu approved an Ordinance 279 which imposed a quarterly tax on gross sales or receipts of merchants, dealers, importers and manufacturers of any commodity doing business in Cebu. It imposes a sales tax of 1% on the gross sales, receipts or value of commodities sold, bartered, exchanged or manufactured in the city in excess of P2,000 a quarter. Section 9 thereof provides that, for purposes of the tax, all deliveries of goods or commodities stored in the City of Cebu, or if not stored are sold in that city, shall be considered as sales in the city and shall be taxable. From this, it would seem that sales of matches consummated outside of the city are taxable as long as the matches sold are taken from the company‘s stock stored in Cebu. The company does not question the tax on the sales of matches consummated in Cebu, meaning matches sold and delivered within the city. It assails the legality of the tax which the CITY TREASURER collected on out-of-town deliveries of matches, to wit: (1) sales of matches booked and paid for in Cebu City but shipped directly to customers outside of the city;  Refers to orders by personal/phone calls for which invoices are issued and then the matches are shipped from the bodega in the city where the matches are stored to the place of the customers outside of Cebu. (2) transfers of matches to salesmen assigned to different agencies outside of the city; and  Embraces shipments of matches from the branch office in Cebu to salesmen who sell within their assigned territories (3) shipments of matches to provincial customers pursuant to salesmen‘s instructions.  Embraces orders sent to the branch office by salesmen assigned outside Cebu Despite the the opinion of the city fiscal that out-of-town deliveries are not subject to sales tax, the company paid under protest to the city treasurer the sum of P12,844.61 as 1% sales tax on those 3 classes of out-of-town deliveries of matches for the second quarter of 1961 to the second quarter of 1963. Phil Match sought from the City Treasurer the refund of the sales tax paid for out-of-town deliveries. The request was denied on the basis of the aforementioned § 9. As a result, on Aug 1963, Phil Match filed a complaint praying that (a) the ordinace be declared void insofar as it taxed delivieries of matches outside Cebu; (b) the city pay the refund; and (c) the city treasurer pay damages. TC invalidated the tax paid on #2 and #3 and ordered the refund of 8,923 to Phil Match as they were not considered sales tax but more of a storage tax. However, it upheld taxes on #1 because said sales were consummated within Cebu. Cebu did not appeal. Phil Match appealed with respect to #1. Issue: (1) Whether Cebu can tax sales of matches which were perfected and paid for in Cebu but the matches were delivered outside. (2) Whether the city treasurer is liable to pay exemplary damages predicated on Arts. 19, 20, 21, and 27. Held: (1) YES. APPEAL IS DEVOID OF MERIT. The municipal board of Cebu is empowered ―to provide for the levy and collection of taxes for general and special purposes in accordance with law.‖ Thus, the city can validly tax the sales of matches to customers outside of the city as long as the orders were booked and paid for in the company‘s branch office in the city. Those matches are regarded as sold in the city in accordance with Ordinace 279. The sales in the instant case were finalized in the city and the matches sold were stored in the city. The fact that the matches were delivered to customers, whose places of business were outside of the city, would not place those sales beyond the city‘s taxing power. Those sales formed part of the merchandising business being carried on by the company in the city. In essence, they are the same as sales of matches fully consummated in the city. (2) NO. It is argued that the city treasurer refused and neglected without just cause to perform his duty and to act with justice and good faith. The company faults the city treasurer for not following the opinion of the city fiscal, as legal adviser of the city, that all out-of-town deliveries of matches are not subject to sales tax because such transactions were effected outside of the city‘s territorial limits.

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City Treasurer argues that in enforcing the tax ordinance in question, he was simply complying with his duty as collector of taxes. Moreover, he had no choice but to enforce the ordinance because according to section 357 of the Revised Manual of Instructions to Treasurer‘s, ―a tax ordinance will be enforced in accordance with its provisions‖ until declared illegal or void by a competent court, or otherwise revoked by the council or board from which it originated. Furthermore, the Secretary of Finance had reminded the city treasurer that a tax ordinance approved by the provincial board is operative and must be enforced without prejudice to the right of any affected taxpayer to assail its legality in the judicial forum. The fiscal‟s opinion on the legality of an ordinance is merely advisory and has no binding effect. Article 27 of the provides that ―any person suffering material or moral loss because a public servant or employee refuses or neglects, without just cause, to perform his official duty may file an action for damages and other relief against the latter, without prejudice to any disciplinary administrative action that may be taken.‖ Article 27 presupposes that the refusal or omission of a public official is attributable to MALICE or INEXCUSABLE NEGLIGENCE. In this case, it cannot be said that the city treasurer acted wilfully or was grossly negligent in not refunding to the plaintiff the taxes which it paid under protest on out-of-town sales of matches. The record clearly reveals that the city treasurer honestly believed that he was justified under section 9 of the tax ordinance in collecting the sales tax on out-of-town deliveries, considering that the company‘s branch office was located in Cebu and that all out-of-town purchase orders for matches were filled up by the branch office and the sales were duly reported to it. The city treasurer acted within the scope of his authority and in consonance with his bona fide interpretation of the tax ordinance. The fact that his action was not completely sustained by the courts would not render him liable for damages. Where an officer is invested with discretion and is empowered to exercise his judgment in matters brought before him, he is sometimes called a quasi-judicial officer, and when so acting he is usually given immunity from liability to persons who may be injured as the result of an erroneous or mistaken decision, however erroneous his judgment may be, provided the acts complained of are done within the scope of the officer‘s authority, and without wilfulness, malice, or corruption. It has been held that an erroneous interpretation of an ordinance does not constitute nor does it amount to bad faith that would entitle an aggrieved party to an award for damages. 2. Tuzon v. Court of Appeals, G.R. No. 90107, August 21, 1992 Facts: On 14 March 1977, Sangguniang Bayan of Camalaniugan, Cagayan, adopted Resolution No.9. Its pertinent provisions include:   

A fundraising scheme of soliciting a 1% donation from the thresher operators who will apply for a permit to thresh within the jurisdiction of this municipality, of all the palay threshed by them to help finance the continuation of the construction of the Sports and Nutrition Center Building. The proceeds will fund the construction of the Sports and Nutrition Center Bldg of the municipality. To implement Resolution no.9, Petitioner Lope Mapagu (municipal treasurer) prepared a document for signature of all thresher/ owner/ operators who applied for a mayor‘s permit.

Soon thereafter, private respondent Saturnino T. Jurado sent his agent to the municipal treasurer‘s office to pay the license fee of P285.00 for thresher operators. Mapagu (municipal treasurer) refused to accept the payment and required him to first secure a mayor‟s permit. For his part, Mayor Domingo Tuzon, the herein other petitioner, said that Jurado should first comply with Resolution No. 9 and sign the agreement before the permit could be issued. Jurado ignored the requirement. Instead, he sent the P285.00 license fee by postal money order to the office of the municipal treasurer who, however, returned the said amount. The reason given was the failure of the respondent to comply with Resolution No. 9. Thus, Jurado filed for an action for mandamus with the CFI in Aparri, Cagayan to compel the issuance of the mayor‟s permit and license. He filed another petition for declaratory judgment against resolution no.9 for being illegal either as a donation or as a tax measure. Named defendants were the same respondents and all the members of the Sangguniang Bayan of Camalaniugan. The trial court upheld the challenged measure. Jurado appealed to the CA; but the CA affirmed the validity of Resolution No. 9 and the implementing agreement. 236

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Nevertheless, it found Tuzon and Mapagu liable to pay actual and moral damages for acting maliciously and in bad faith when they denied Jurado's application for the mayor's permit and license. As for the Resolution, it was passed by the Sanggunian in the lawful exercise of its legislative powers granted the Constitution which provided that each LGU shall have the power to create its own source revenue and to levy taxes, subject to such limitation as may be provided by law. And also under Article 4, Sec. 29, PD 231: The barrio council may solicit money, materials, and other contributions from private agencies and individuals. Issue: (1) Whether Res. No. 9 is a valid exercise of the taxing power of an LGU. (2) Whether Mayor Tuzon and Treasurer Mapagu are liable for damages to Jurado for withholding the permit and license for non-compliance with Res. No. 9. Held: (1) NO. The implementing agency made the ―donation‖ obligatory. Although again the validity of the resolution was not in issue, the SC observed that: it ―seems to make the donation obligatory and a condition precedent to the issuance of the mayor's permit. This goes against the nature of a donation, which is an act of liberality and is never obligatory. If it is to be considered as a tax ordinance, it must be shown: 1. to have been enacted in accordance with the requirements of the Local Tax Code; 2. it would include the holding of a public hearing on the measure; and 3. its subsequent approval by the Secretary of Finance, in addition to the requisites for publication of ordinances in general. (2) NO. The private respondent anchors his claim for damages on Article 27 of the New Civil Code, which reads: Art. 27. Any person suffering material or moral loss because a public servant or employee refuses or neglects, without just cause, to perform his official duty may file an action for damages and other relief against the latter, without prejudice to any disciplinary administrative action that may be taken. It has been remarked that one purpose of this article is to end the ―bribery system, where the public official, for some flimsy excuse, delays or refuses the performance of his duty until he gets some kind of pabagsak.‖ Official inaction may also be due to plain indolence or a cynical indifference to the responsibilities of public service. It is no less significant that no evidence has been offered to show that the petitioners singled out the private respondent for persecution. Neither does it appear that the petitioners stood to gain personally from refusing to issue to Jurado the mayor‘s permit and license he needed. The petitioners were not Jurado‘s business competitors nor has it been established that they intended to favor his competitors. On the contrary, the record discloses that the resolution was uniformly applied to all the threshers in the municipality without discrimination or preference. The Court is convinced that the petitioners acted within the scope of their authority and in consonance with their honest interpretation of the resolution in question. We agree that it was not for them to rule on its validity. In the absence of a judicial decision declaring it invalid, its legality would have to be presumed (in fact, both the trial court and the appellate court said there was nothing wrong with it). As executive officials of the municipality, they had the duty to enforce it as long as it had not been repealed by the Sangguniang Bayan or annulled by the courts. As a rule, a public officer, whether judicial, quasi-judicial or executive, is not personally liable to one injured in consequence of an act performed within the scope of his official authority, and in line of his official duty.It has been held that an erroneous interpretation of an ordinance does not constitute nor does it amount to bad faith, that would entitle an aggrieved party to an award for damages. The private respondent complains that as a result of the petitioners‘ acts, he was prevented from operating his business all this time and earning substantial profit therefrom, as he had in previous years. But as the petitioners correctly observed, he could have taken the prudent course of signing the agreement under protest and later challenging it in court to relieve him of the obligation to ―donate.‖ Pendente lite, he could have continued to operate his threshing business and thus avoided the lucro cesante that he now says was the consequence of the petitioners‘ wrongful act. He could have opted for the less obstinate but still dissentient action, without loss of face, or principle, or profit. In view of the foregoing, we find that the petitioners, having acted in good faith in the discharge of their official functions, should be absolved from liability. 3. Vital-Gozon v. Court of Appeals, G.R. No. 129132, July 8, 1998 Facts: EO No. 119 was issued on January 30, 1987 by President Aquino on the reorganization of the various offices of the Ministry of Health; existing offices were abolished, transfers of personnel effected. At the time of the reorganization, Dr. Alejandro S. de la Fuente was the Chief of Clinics of the National Children‟s Hospital. Dr. de la Fuente received notice from the DOH that he would be re­appointed ―Medical Specialist II.‖ Considering this to be a demotion by no less than two ranks from his post as Chief of Clinics, Dr. de la Fuente filed a protest with the DOH Reorganization Board. When his protest was ignored, he brought his case to the Civil Service 237

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Commission. In the meantime ―the duties and responsibilities pertaining to the position of Chief of Clinics were turned over to and were allowed to be exercised by Dr. Jose D. Merencilla, Jr. The CSC in a Resolution declared the demotion/transfer of appellant to Specialist II as null and void: hence, illegal. Appellant dela Fuente, Jr.was ordered to be retained or considered as never having relinquished his position and paid back salaries, transportation, representation and housing allowances and such other benefits withheld. De la Fuente sent 2 letters to Dr. Vital-Gozon, the Medical Center Chief of the National Children‘s Hospital, demanding implementation of the Commission‟s decision. Dr. Vital- Gozon referred ―de la Fuente‘s claims to the DOH Assistant Secretary for Legal Affairs for appropriate advice and/or action x x (She did this allegedly because, according to the Solicitor General, she was) unaware when and how a CSC Resolution becomes final and executory. She did not answer Dr. de la Fuente‘s letters, but chose simply to await ―legal guidance from the DOH Legal Department.‖ On the other hand, no one in the DOH Legal Department bothered to reply to Dr. de la Fuente, or to take steps to comply or otherwise advise compliance, with the final and executory Resolution of the Civil Service Commission. In fact, de la Fuente claims that Vital-Gozon had ―actually threatened to stop paying x x (his) salary and allowances on the pretext that he has as yet no ‗approved‘ appointment even as ‗Medical Specialist II‘ 3 months having elapsed without any word, Dr. de la Fuente repaired to the CSC and asked it to enforce its judgment. He was however ―told to file in court a petition for mandamus. So he instituted in the CA an action of ―mandamus and damages with preliminary injunction‖ to compel Vital-Gozon, and the Administrative Officer, Budget Officer and Cashier of the NCH to comply with the final and executory resolution of the CSC; to revert the funds of the NCH corresponding to the amounts necessary to implement the final resolution. About a month afterwards, de la Fuente filed a second petition described as one for ―quo warranto‖ and alleged inter alia that he (de la Fuente) had ―clear title‖ to the position in question [by] virtue of the final and executory judgment of the CSC; that even after the Commission‘s judgment had become final and executory and been communicated to Vital-Gozon, the latter allowed ―Dr. Merencilla, Jr. as ‗OIC Professional Service‘ to further usurp, CA declared that CSC Case No. 4 became final and declared petitioner as the lawful and de jure Chief of Clinics; that Dr. Jose D. Merencilla, Jr. is not legally entitled to the office; Dr. Isabelita Vital-Gozon, had no discretion or choice on the matter; the resolution had to be complied with. It ordered Dr. Isabelita Vital-Gozon to forthwith comply with, obey and implement the resolution in CSC Case; Dr. Jose D. Merencilla, Jr., who is not entitled to the office, x x to immediately cease and desist from further performing and acting as OIC Professional Service. But de la Fuente‘s prayer for damages—founded essentially on the refusal of Gozon, et al. to obey the final and executory judgment of the CSC, which thus compelled him to litigate anew in a different forum—was denied on the ground that the ―petitions (for mandamus) are not the vehicle nor is the Court the forum for x x (said) claim of damages.‖ Neither Vital-Gozon nor her co-party, Dr. Merencilla, Jr., moved for reconsideration of, or attempted to appeal. De la Fuente sought to enforce the judgment CA issued a writ of execution. The writ of execution notwithstanding, compliance with the June 9, 1989 judgment was not effected. Consequently, de la Fuente filed an ―Urgent Ex Parte Manifestation with Prayer to Cite Respondents for Contempt,‖ complaining that although Gozon and her co-parties had been served with the writ of execution on July 14, they had not complied therewith. At the hearing Gozon and Merencilla duly presented themselves, and explained that they had no intention to defy the Court, they had simply referred the matter to their superiors in good faith; and they were perfectly willing to comply with the judgment, undertaking to do so ―even in the after-noon‖ of that same day. The Court consequently ordered them ―to comply with their undertaking x x without any further delay. Gozon, as ―Medical Center Chief,‖ sent a letter to Associate Justice Pedro A. Ramirez, advising that under Hospital Special Order No. 31 dated August 3, 1989, de la Fuente had been directed to assume the position of Chief of the Medical Professional Staff, and that a voucher for the payment of his allowances had been prepared and was being processed. More than a month later, CA promulgated another Resolution, this time resolving de la Fuente‘s motion for reconsideration by (a) deleting its last paragraph (disallowing the claim of damages), (b) consequently describing and treating it as a ―PARTIAL DECISION,‖ and (c) scheduling ―further proceedings for the purpose of receiving evidence (of damages) CA promulgated a Resolution finding petitioner liable for moral and exemplary damages and attorney‘s fees.

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Atty. Jess Lopez

Vital-Gozon was fully aware of the following acts and events: 1) the proceeding commenced by de la Fuente in the Civil Service Commission; 2) the Commission‘s Resolution and direction therein that de la Fuente be reinstated and paid all his back salaries and other monetary benefits otherwise due him; 3) (2) written demands of de la Fuente for implementation of the CSC‘s aforesaid Resolution; 4) the petition filed by de la Fuente in the Court of Appeals for enforcement of the CSC Resolution; 6) the ―supplemental/amended petition‖ subsequently presented by de la Fuente; 7) the Decision and Amendatory Decision sent to her counsel To all these, her reaction, and that of the officials of the DOH concerned, was a regrettably cavalier one. Neither she nor the Health officials concerned accorded said acts and events any importance. She never bothered to find out what was being done to contest or negate de la Fuente‘s petitions and actions, notwithstanding that as time went by, de la Fuente‘s efforts were being met with success.. Nothing in the record even remotely suggests that Vital-Gozon merits relief from the final and executory Resolution of the CSC. CA then considered the evidence for private respondent and the applicable law Upon respondent‘s continued refusal without justifiable cause to implement the final resolution of the Civil Service Commission, petitioner is entitled to the damages he claims. Petitioner declared that he was greatly disturbed, shocked and frustrated during the three months preceding the filing of his petition; that he had sleepless nights and suffered from mental anxiety, mental anguish, worry, tension and humiliation when respondent ignored and disregarded the final resolution of the Civil Service Commission; that he felt harassed by her refusal because he had to go to court to obtain relief and had to incur additional expenses for litigation which he could hardly afford All these respondent has not successfully rebutted by her evidence since she adduced none in her behalf. Petitioner, therefore, is entitled to recover moral damages from Vital-Gozon for her refusal and neglect without just cause to perform her official duty to reinstate de la Fuente to the position he was entitled, as ordered by the CSC in its decision. While he was reinstated to his position, petitioner had to seek the aid of the courts for that purpose. Such award of exemplary damages is by way of example or correction for the public good, in addition to moral damages. Hence, this instant petition for review on certiorari. Issue: (1) Whether Vita-Gozon was denied due process when her answer to the petition was not admitted. (2) Whether the award of damages were proper. Held: (1) NO. Petitioner‘s failure to file the answer to the petition was due to her fault or negligence. She was, by formal resolutions of the Court of Appeals, required to file answers to both the original petition and the Supplemental/Amended Petition; yet, she failed to heed both resolutions. Petitioner could have negated private respondent‘s claims by showing the absence of legal or factual basis therefor. Court of Appeals explicitly allowed petitioner to present her evidence against the claim for damages. However, petitioner again failed to take the opportunity to have herself heard. (2) YES. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. They may be recovered if they are the proximate result of the defendant‘s wrongful act or omission. The instances when moral damages may be recovered are, inter alia, ―acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35 of the Civil Code,‖33 which, in turn, are found in the Chapter on Human Relations ART. 27. Any person suffering material or moral loss because a public servant or employee refuses or neglects, without just cause, to perform his official duty may file an action for damages and other relief against the latter, without prejudice to any disciplinary administrative action that may be taken. Section 1 of Article XI (Accountability of Public Officers) of the Constitution Section 1. Public office is a public trust. Public officers and employees must at all times be accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency, act with patriotism and justice, and lead modest lives. It is thus evident that under Article 27, in relation to Articles 2219 and 2217 of the Civil Code, a public officer, like petitioner herein, may be liable for moral damages for as long as the moral damages suffered by private respondent were the proximate result of petitioner‟s wrongful act or omission, i.e., refusal to perform an official duty or neglect in the performance thereof. In fact, if only to underscore the vulnerability of public officials and employees to suits for damages to answer for any form or degree of misfeasance, malfeasance or nonfeasance, this Court has had occasion to rule that under Articles 19 and 27 of the Civil Code, a public official may be made to pay damages for performing a perfectly legal act, albeit with bad faith or in violation of the ―abuse of right‖ doctrine embodied in the preliminary articles of the Civil Code concerning Human Relations. 239

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Atty. Jess Lopez

Exemplary damages may be imposed by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages. Attorney‘s fees and other expenses of litigation 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 plainly 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. de la Fuente was entitled to be restored to his position as Chief of Clinics by virtue of the final and executory decision of the CSC. Petitioner, as head or chief of the National Children‘s Hospital, then had the duty to see to it that the decision be obeyed and implemented. This she failed to do and private respondent‟s two official demands for compliance with the CSC decision were merely referred by petitioner to the Legal Department of the Department of Health. She did not answer [private respondent‘s] letters not even to inform him of the referral thereof to the Assistant Secretary [for Legal Affairs]. She chose simply to await ‗legal guidance from the DOH Legal Department. Petitioner‘s reaction, and that of the officials of the DOH concerned, was a regrettably cavalier one, to say the least. Neither she nor the Health Department officials concerned accorded said acts and events any importance. She never bothered to find out what was being done to contest or negate [private respondent‟s] petitions and actions, notwithstanding that as time went by, [private respondent‘s] efforts were being met with success. That petitioner then committed an actionable wrong for unjustifiably refusing or neglecting to perform an official duty is undeniable. Private respondent declared that by reason of the ―unjust action‖ or ―refusal‖ of petitioner when she did not recognize, ignored and disregarded the final and executory Civil Service Resolution, he: ―[W]as actually greatly disturbed, shocked and frustrated during those three . . . months. [He] had sleepless nights and . . . suffered from mental anxiety, worry, tension and humiliation . . .‖ Private respondent‘s anguish even continued during the 5­ month period while the case was pending with the Court of Appeals: ―During this period my sleepless nights and my moral sufferings continued. As a matter of fact, even worsened. I just could not understand, actually I could not understand the action here of Dr. Gozon for having not followed the decision of the Court of Appeals. And that is why I felt very much aggrieved during this period. I could not sleep at all and this has weakened me.‖ While private respondent did not quantify the extent of his MORAL DAMAGES, the CA fixed the same at P50,000.00. Since moral damages are incapable of pecuniary estimation,‖ courts have the discretion to fix the corresponding amount, not being bound by any self-serving assessment by the claimants. On the other hand, a claimant‘s failure to state the monetary value of moral damages suffered presents no legal obstacle to a court‘s determination thereof, as long as there is factual basis for the award such as the claimant‘s testimony as to his sufferings. As a matter of fact, it is not unusual for claimants to leave the determination of the amount of the award to the discretion of the court. EXEMPLARY DAMAGES cannot be recovered as a matter of right; the court will decide whether or not they should be adjudicated. Considering that a public official is the culprit here, the propriety of such an award cannot be questioned. It serves as an example or deterrent so that other public officials be always reminded that they are public servants bound to adhere faithfully to the constitutional injunction that a public office is a public trust. That the aggrieved party happened to be another public official will not serve to mitigate the effects of petitioner‘s having failed to observe the required degree of accountability and responsibility. As to attorney‘s fees as actual damages, the CA determination of its propriety in this case and the extent thereof were well within its discretion. The agreement between private respondent and his counsel as to the amount does not control. Whether petitioner was impleaded as respondent in an official capacity, i.e., solely in her capacity as Chief of the National Children‘s Hospital, is best determined from the Petition as well as the Supplemental/Amended Petition. For one, in the captions in both, she is named as one of the respondents without any express mention that she was so sued in her ―capacity, as Chief of the National Children‘s Hospital.‖ The allegations in the body of the Petition clearly show that she was sued in both her official and private capacities. As to the former, paragraphs 1 and 7 respectively allege petitioner‘s position as a public official, and specifically as ―Head of the Children‘s Hospital‖; her duty to restore private respondent to his position by virtue of the final decision of the Civil Service Commission; and her refusal to allow private respondent to perform and discharge his duties and responsibilities as Chief of Clinics. As to the latter, paragraph 16 of the Petition explicitly speaks of petitioner‘s personal liability For causing such mental suffering and anguish, etc. principal respondent [herein petitioner] ought to and must be, in accordance with the Civil Code, held personally answerable and liable to the petitioner 4. Torio v. Fontanilla, G.R. No. L-29993, October 23, 1978 Facts: The Municipal Council of Malasiqui, Pangasinan, passed a RESOLUTION whereby ―it resolved to manage the 1959 Malasiqui town fiesta celebration.‖ ANOTHER RESOLUTION was also passed creating the ―1959 Malasiqui 240 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Town Fiesta Executive Committee‖ which in turn organized a subcommittee on entertainment and stage, with Jose Macaraeg as Chairman. The council appropriated the amount of P100.00 for the construction of two stages, one for the zarzuela and another for the cancionan. Jose Macaraeg supervised the construction of the stage and as constructed the stage for the zarzuela was 5 1/2 meters by eight meters in size, had a wooden floor high at the rear and was supported by 24 bamboo posts (four in a row in front, four in the rear and five on each side) with bamboo braces. The zarzuela entitled ―Midas Extravanganza‖ was donated by an association of Malasiqui employees of the Manila Railroad Company in Caloocan, Rizal. The troupe arrived in the evening for the performance and one of the members of the group was Vicente Fontanilla. The program started at about 10:15 PM with some speeches, and many persons went up the stage. The zarzuela then began but before the dramatic part of the play was reached, the stage collapsed and Vicente Fontanilla who was at the rear of the stage was pinned underneath. Fontanilla was taken to the San Carlos General Hospital where he died in the afternoon of the following day. The heirs of Vicente Fontanilla filed a complaint with the CFI of Manila to recover damages. Named party-defendants were the Municipality of Malasiqui, the Municipal Council of Malasiqui and all the individual members of the Municipal Council in 1959. Answering the complaint the municipality invoked inter alia the principal defense that as a legally and duly organized public corporation it performs sovereign functions and the molding of a town fiesta was an exercise of its governmental functions from which no liability can arise to answer for the negligence of any of its agents. The defendant councilors in turn maintained that they merely acted as agents of the municipality in carrying out the municipal ordinance providing for the management of the town fiesta celebration and as such they are likewise not liable for damages as the undertaking was not one for profit; furthermore, they had exercised due care and diligence in implementing the municipal ordinance. Issue: (1) Was the celebration o the fiesta an exercise of governmental function or proprietary and private in character? (2) Are the councilors liable under Art. 27? NOT LIABLE. Held: 1. Under Philippine laws municipalities are political bodies corporate and as such as endowed with the faculties of municipal corporations to be exercised by and through their respective municipal governments in conformity with law, and in their proper corporate name, they may, inter alia, sue and be sued, and contract and be contracted with. As to when a certain activity is governmental and when proprietary or private, that is generally a difficult matter to determine. The evolution of the municipal law in American Jurisprudence, for instance, has shown that none of the tests which have evolved and are stated in textbooks have set down a conclusive principle or rule, so that each case will have to be determined on the basis of attending circumstances. The powers of a municipality are 2-fold in character – public, governmental, or political on the one hand, and corporate, private, or proprietary on the other. GOVERNMENTAL POWERS are those exercised by the corporation in administering the powers of the state and promoting the public welfare and they include the legislative, judicial, public, and political. MUNICIPAL POWERS on the other hand are exercised for the special benefit and advantage of the community and include those which are ministerial, private and corporate. A MUNICIPAL CORPORATION proper has a public character as regards the state at large insofar as it is its agent in government, and private insofar as it is to promote local necessities and conveniences for its own community. According to Cooley, municipal corporations exist in a dual capacity, and their functions are twofold. In one they exercise the right springing from sovereignty, and while in the performance of the duties pertaining thereto, their acts are political and governmental. Their officers and agents in such capacity, though elected or appointed by them, are nevertheless public functionaries performing a public service, and as such they are officers, agents, and servants of the state. In the other capacity the municipalities exercise a private, proprietary or corporate right, arising from their existence as legal persons and not as public agencies. Their officers and agents in the performance of such functions act in behalf of the municipalities in their corporate or individual capacity, and not for the state or sovereign power. 2. This DISTINCTION OF POWERS BECOMES IMPORTANT for purposes of determining the liability of the municipality for the acts of its agents which result in an injury to third persons. Mendoza v. de Leon classified certain activities of the municipality as GOVERNMENTAL, e.g., regulations against fire, disease, preservation of public peace, maintenance of municipal prisons, establishment of schools, post-offices, etc. while the following are CORPORATE OR PROPRIETARY in character, viz: municipal waterwork, slaughterhouses, markets, 241 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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stables, bathing establishments, wharves, ferries, and fisheries. Maintenance of parks, golf courses, cemeteries and airports among others, are also recognized as municipal or city activities of a proprietary character. If the injury is caused in the course of the performance of a GOVERNMENTAL function or duty no recovery, as a rule, can be had from the municipality unless there is an existing statute on the matter, nor from its officers, so long as they performed their duties honestly and in good faith or that they did not act wantonly and maliciously. In Palafox, et al. v. Province of Ilocos Norte, et al, a truck driver employed by the provincial government of Ilocos Norte ran over Proceto Palafox in the course of his work at the construction of a road. The province could not be made liable because its employee was in the performance of a governmental function – the construction and maintenance of roads – and however tragic and deplorable it may be, the death of Palafox imposed on the province no duty to pay monetary consideration, With respect to PROPRIETARY functions, the settled rule is that a municipal corporation can be held liable to third persons ex contractu or ex delicto. Municipal corporations are subject to be sued upon contracts and in tort. The rule of law is a general one, that the superior or employer must answer civilly for the negligence or want of skill of its agent or servant in the course or line of his employment, by which another, who is free from contributory fault, is injured. Municipal corporations under the conditions herein stated, fall within the operation of this rule of law, and are liable, accordingly, to civil actions for damages when the requisite elements of liability coexist. 3. In this case, the holding of the TOWN FIESTA IN 1959 by the municipality of Malasiqui, Pangasinan, was an exercise of a PRIVATE OR PROPRIETARY FUNCTION OF THE MUNICIPALITY. Section 2282 of the Chapter on Municipal of the Revised Administrative Code on the celebration of fiestas simply gives authority to the municipality to celebrate a yearly fiesta but it does not impose upon it a duty to observe one. Holding a fiesta even if the purpose is to commemorate a religious or historical event of the town is in essence an act for the special benefit of the community and not for the general welfare of the public performed in pursuance of a policy of the state. The mere fact that the celebration, as claimed, was not to secure profit or gain but merely to provide entertainment to the town inhabitants is not a conclusive test. For instance, the maintenance of parks is not a source of income for the town, nonetheless it is private undertaking as distinguished from the maintenance of public schools, jails, and the like which are for public service. As stated earlier, there can be no hard and fast rule for purposes of determining the true nature of an undertaking or function of a municipality; the surrounding circumstances of a particular case are to be considered and will be decisive. The basic element, however beneficial to the public the undertaking may be, is that it is governmental in essence, otherwise, the function becomes private or proprietary in character. Easily, no governmental or public policy of the state is involved in the celebration of a town fiesta. 4. It follows that under the DOCTRINE OF RESPONDENT SUPERIOR, petitioner-municipality is to be held liable for damages for the death of Vicente Fontanilla if that was attributable to the negligence of the municipality‘s officers, employees, or agents. We find that there was negligence. The trial court gave credence to the testimony of Angel Novado, that a member of the extravaganza troupe removed two principal braces located on the front portion of the stage and used them to hang the screen or telon, and that when many people went up the stage the latter collapsed. This testimony was not believed however by respondent appellate court, and rightly so. According to said defendants, those two braces were mother or principal braces located semi-diagonally from the front ends of the stage to the front posts of the ticket booth located at the rear of the stage and were fastened with a bamboo twine. That being the case, it becomes incredible that any person in his right mind would remove those principal braces and leave the front portion of the stage practically unsupported. Moreover, if that did happen, there was indeed negligence as there was lack of supervision over the use of the stage to prevent such an occurrence. At any rate, the guitarist who was pointed to by Novado as the person who removed the two bamboo braces denied having done so. The CA said: ―Amor by himself alone could not have removed the two braces which must be about ten meters long and fastened them on top of the stage for the curtain. The stage was only five and a half meters wide. Surely, it would be impractical and unwieldy to use a ten meter bamboo pole, much more two poles, for the stage curtain.‖ The CA also found that the stage was not strong enough considering that only P100.00 was appropriate for the construction of two stages and while the floor of the zarzuela stage was of wooden planks, the posts and braces used were of bamboo material. We likewise observe that although the stage was described by the petitioners as being supported by 24 posts, nevertheless there were only 4 in front, 4 at the rear, and 5 on each side. The CA thus concluded: ―The court a quo itself attributed the collapse of the stage to the great number of onlookers who mounted the stage. The municipality and/or its agents had the necessary means within its command to prevent such 242 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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an occurrence. Having failed to take the necessary steps to maintain the safety of the stage for the use of the participants in the stage presentation prepared in connection with the celebration of the town fiesta, particularly, in preventing nonparticipants or spectators from mounting and accumulating on the stage which was not constructed to meet the additional weight, the defendants-appellees were negligent and are liable for the death of Vicente Fontanilla.‖ Thus, private respondents argue that the Midas Extravaganza which was to be performed during the town fiesta was a donation offered by an association of Malasiqui employees of the Manila Railroad Co. in Caloocan, and that when the Municipality of Malasiqui accepted the donation of services and constructed precisely a zarzuela stage for the purpose, the participants in the stage show had the right to expect that the Municipality through its Committee on entertainment and stage would build or put up a stage or platform strong enough to sustain the weight or burden of the performance and take the necessary measures to insure the personal safety of the participants. We agree. Sanders v. City of Long Beach was an action against the city for injuries sustained from a fall when plaintiff was descending the steps of the city auditorium. The city was conducting a Know your City Week and one of the features was the showing of a motion picture in the city auditorium to which the general public was invited and plaintiff Sanders was one of those who attended. In sustaining the award for damages in favor of plaintiff, the District Court of Appeal, Second district, California, held inter alia that the Know your City Week was a proprietary activity and not a governmental one of the city, that defendant owed to plaintiff, an invitee, the duty of exercising ordinary care for her safety, and plaintiff was entitled to assume that she would not be exposed to a danger (which in this case consisted of lack of sufficient illumination of the premises) that would come to her through a violation of defendant‘s duty. Fontanilla was similarly situated as Sanders. The Municipality of Malasiqui resolved to celebrate the town fiesta in January of 1959; it created a committee in charge of the entertainment and stage; an association of Malasiqui residents responded to the call for the festivities and volunteered to present a stage show; Vicente Fontanilla was one of the participants who like Sanders had the right to expect that he would be exposed to danger on that occasion. Lastly, petitioner or appellent Municipality cannot evade responsibility and/or liability under the claim that it was Jose Macaraeg who constructed the stage. The municipality acting through its municipal council appointed Macaraeg as chairman of the sub-committee on entertainment and in charge of the construction of the zarzuela stage. Macaraeg acted merely as an agent of the Municipality. Under the doctrine of RESPONDENT SUPERIOR mentioned earlier, petitioner is responsible or liable for the negligence of its agent acting within his assigned tasks. 5. The remaining question to be resolved centers on the LIABILITY OF THE MUNICIPAL COUNCILORS who enacted the ordinance and created the fiesta committee. We agree with petitioners that the CA erred in applying Article 27 of the Civil Code against them, for this particular article covers a case of non-feasance or non- performance by a public officer of his official duty; it does not apply to a case of negligence or misfeasance in carrying out an official duty. The CA in its decision now under review held that the celebration of a town fiesta by the Municipality of Malasiqui was not a governmental function. We upheld that ruling. The legal consequence thereof is that the Municipality stands on the same footing as an ORDINARY PRIVATE CORPORATION with the municipal council acting as its board of directors. It is an elementary principle that a corporation has a personality, separate and distinct from its officers, directors, or persons composing it and the latter are not as a rule co-responsible in an action for damages for tort or negligence (culpa aquiliana) committed by the corporation‟s employees or agents unless there is a showing of BAD FAITH or gross or WANTON NEGLIGENCE on their part. On these principles We absolve the municipal councilors from any liability for the death of Vicente Fontanilla. The records do not show that said petitioners directly participated in the defective construction of the zarzuela stage or that they personally permitted spectators to go up the platform. H.

Unfair Competition

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Civil Code o Article 28 (Memorize)

1. Calamba Medical Center, Inc., v. NLRC, G.R. No. 176484, November 25, 2008 Facts: CMC (petitioner) engaged the services of medical doctors-spouses Ronaldo Lanzanas (Dr. Lanzanas) and Merceditha Lanzanas (Dr. Merceditha) as part of its team of resident physicians. They reported at the hospital twice a week. They were also paid a retainer fee plus percentage shares out of patient treatments, billings, etc. Their work schedules were fixed by the medical director of CMC, Dr. Raul Desipeda (Dr. Desipeda) The doctors were issued identification cards and were enrolled in the SSS.

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A certain Dr. Trinidad (another resident physician) overheard a phone conversation between Dr. Lanzanas with a fellow employee wherein they were talking about the low ―census‖ or admission of patients in the hospital. This called the attention of Dr. Desipeda who issued a memorandum against Dr. Lanzanas asking for an explanation and placing him under preventive suspension while the investigation was on-going. Additionally, Dr. Merceditha (spouse of Dr. Lanzanas) was not given any work schedule after the sending of the memorandum. Dr. Lanzanas admitted talking with a fellow employee, but claimed that their conversation was out of context. Subsequently the rank-and-file employees union of petitioner went on a strike due to unresolved grievances. Dr. Lanzanas filed a case for illegal suspension while her spouse filed a case for illegal dismissal. Meanwhile the Sec. of DOLE issued a return to work order to the striking union officers and employees of petitioner which Dr. Desipeda echoed in a memorandum. Petitioner CMC later sent Dr. Lanzanas a notice of termination for his failure to report for work despite the DOLE order and his supposed role in the striking union. Dr. Lanzanas thus amended his complaint for illegal dismissal. The LA & NLRC ruled against Dr. Lanzanas, holding that it has no jurisdiction since there is no employer-employee relationship. The CA reversed finding that there was an employer-employee relationship. Petitioners argue that respondents only reported to work twice a week, are free to practice their profession elsewhere for the rest of the week, and are only entitled to ½ of other fees charged. Issue: Whether Dr Lanzanas was illegally dismissed. Held: YES. There was an employer-employee relationship. With respect to Article 28: Adding insult to injury was the circulation by petitioner of a ―watchlist‖ or ―watch out list‖ including therein the names of respondents. Consider the following portions of Dr. Merceditha‘s Memorandum of Appeal: 3. Moreover, to top it all, respondents have circulated a so called ―Watch List‖ to other hospitals, one of which [was] procured from Foothills Hospital in Sto. Tomas, Batangas [that] contains her name. The object of the said list is precisely to harass Complainant and malign her good name and reputation. This is not only unprofessional, but runs smack of oppression as CMC is trying permanently deprived [sic] Complainant of her livelihood by ensuring that she is barred from practicing in other hospitals. 4. Other co-professionals and brothers in the profession are fully aware of these ―watch out‖ lists and as such, her reputation was not only besmirched, but was damaged, and she suffered social humiliation as it is of public knowledge that she was dismissed from work. Complainant came from a reputable and respected family, her father being a retired full Colonel in the Army, Col. Romeo A. Vente, and her brothers and sisters are all professionals, her brothers, Arnold and Romeo Jr., being engineers. The Complainant has a family protection [sic] to protect. She likewise has a professional reputation to protect, being a licensed physician. Both her personal and professional reputation were damaged as a result of the unlawful acts of the respondents. While petitioner does not deny the existence of such list, it pointed to the lack of any board action on its part to initiate such listing and to circulate the same, viz: 20. The alleged watchlist or ―watch out list,‖ as termed by complainants, were merely lists obtained by one Dr. Ernesto Naval of PAMANA Hospital. Said list was given by a stockholder of respondent who was at the same time a stockholder of PAMAN[A] Hospital. The giving of the list was not a Board action. (Emphasis and underscoring supplied) The circulation of such list containing names of alleged union members intended to prevent employment of workers for union activities similarly constitutes unfair labor practice, thereby giving a right of action for damages by the employees prejudiced. (Reference by way of footnote at this point was made to Article 28: ―Article 28 of the Civil Code states ―Unfair competition in agricultural, commercial, or industrial enterprises, or in labor through the use of force, intimidation, deceit, machination or any other unjust, oppressive or highhanded method shall give rise to a right of action by the person who thereby suffers damage.‖ I. 244

Violation of Civil/Political Rights Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013 -

Atty. Jess Lopez

Civil Code o Article 32 (Memorize)

1.Lim v. De Leon, 66 SCRA 299 (1975) Facts: On April 29, 1961, plaintiff-appellant Jikil Taha sold to a certain Alberto Timbangcaya of Brooke‘s Point, Palawan a motor launch named M/L ―SAN RAFAEL‖. A year later, Alberto Timbangcaya filed a complaint with the Provincial Fiscal of Palawan alleging that after the sale Jikil Taha forcibly took away the motor launch from him. Fiscal Francisco Ponce de Leon, in his capacity as Acting Provincial Fiscal of Palawan, filed with the CFI of Palawan the corresponding information for Robbery with Force and Intimidation upon Persons against Jikil Taha. The fiscal, upon being informed that the motor launch was in Balabac, Palawan, wrote the Provincial Commander of Palawan requesting him to direct the detachment commander in Balabac to impound and take custody of the motor launch. The fiscal reiterated his request to the Provincial Commander to impound the motor launch, explaining that its subsequent sale to a third party, plaintiff-appellant Delfin Lim, cannot prevent the court from taking custody of the same. Upon order of the Provincial Commander, defendant-appellee Orlando Maddela, Detachment Commander of Balabac, Palawan, seized the motor launch from Delfin Lim and impounded it. Jikil Taha through his counsel made representations with the Fiscal to return the seized property to plaintiff-appellant Delfin Lim but the fiscal refused, on the ground that the same was the subject of a criminal offense. Delfin Lim and Jikil Taha thereafter filed with the CFI of Palawan a complaint for damages against defendants- appellees Fiscal Francisco Ponce de Leon and Orlando Maddela, alleging Orlando Maddela entered the premises of Delfin Lim without a search warrant and then and there took away the hull of the motor launch without his consent; that said motor launch was purchased by Delfin Lim from Jikil Taha; that as a consequence of the unlawful seizure of the motor launch, its sale did not materialize; and that since July 6, 1962, the said motor launch had been moored at the Balabac Bay, Palawan and because of exposure to the elements it had become worthless and beyond repair. For the ALLEGED VIOLATION OF THEIR CONSTITUTIONAL RIGHTS, plaintiffs-appellants prayed for actual, moral and exemplary damages and attorney‘s fees. Defendants-appellees denied the material allegations of the complaint and as affirmative defenses alleged that the motor launch in question which was sold by Jikil Taha to Alberto Timbangcaya and was forcibly taken with violence upon persons and with intent to gain by Jikil Taha from Alfredo Timbangcaya without the latter‘s knowledge and consent, thus giving rise to the filing of a criminal charge of robbery against Jikil Taha. They further alleged that Fiscal Ponce de Leon, in his capacity as Acting Provincial Fiscal of Palawan ordered Orlando Maddela to seize and impound the motor launch for being the corpus delicti of the robbery and that Orlando Maddela merely obeyed the orders of his superior officer to impound said launch. Trial court rendered its decision, upholding the validity of the seizure of the motor launch. Hence, this appeal. Issue: (1) Whether the fiscal has the power to order a search an seizure without a warrant. (2) Whether defendants are civilly liable for the damages allegedly suffered by them granting that the seizure of the motor launch was unlawful. Held: (1) NO. Seizure was illegal. The gravamen of plaintiffs-appellants‘ argument is that the taking of the motor launch was in violation of the constitutional guarantee against unreasonable searches and seizures since it was done without a search warrant. Defendants-appellees admitted that when Orlando Maddela entered the premises of Delfin Lim and impounded the motor launch HE WAS NOT ARMED WITH A SEARCH WARRANT; that he effected the seizure of the motor launch in the absence of and without the consent of Delfin Lim. There can be no question that without the proper search warrant, no public official has the right to enter the premises of another without his consent for the purpose of search and seizure. And since in the present case defendants-appellees seized the motor launch without a warrant, they have violated the constitutional right of plaintiffs-appellants against unreasonable search and seizure. Defendants-appellees however would want to justify the seizure of the motor launch even without a warrant because of Fiscal Ponce de Leon‟s alleged inherent power to order the seizure of a personal property which is the corpus delicti of a crime, he being a quasi judicial officer who has the control of the prosecution and the presentation of the evidence in the criminal case. We cannot agree. Under the old Constitution the power to issue a search warrant is vested in a judge or magistrate and in no other officer and no search and seizure can be made without a proper warrant. At the time the act complained of was committed, there was no law or rule that recognized the authority of Provincial Fiscals to issue a search warrant.

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Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Fiscal Ponce de Leon invoked the provisions of Republic Act No. 732, which amended Sections 1674 and 1687 of the Revised Administrative Code, which has broadened the power of provincial fiscals to conduct preliminary investigations. Nothing in said law which confers upon the provincial fiscals the authority to issue warrants, much less to order without warrant the seizure of a personal property even if it is the corpus delicti of a crime. Said law did not divest the judge or magistrate of its power to determine, before issuing the corresponding warrant, whether or not probable cause exists therefor. Moreover, under Sections 2 and 3 of Rule 122 of the Rules of Court which complement the constitutional provision earlier cited, two principles are made clear, namely: (1) that in the seizure of a stolen property search warrant is still necessary; and (2) that in issuing a search warrant the judge alone determines whether or not there is a probable cause. The fact that a thing is a corpus delicti of a crime does not justify its seizure without a warrant. Defendant-appellee Fiscal Ponce de Leon would also invoke lack of time to procure a search warrant as an excuse for the seizure of the motor launch without one. The claim cannot be sustained. The records show that on June 15, 1962 Fiscal Ponce de Leon made the first request to the Provincial Commander for the impounding of the motor launch; and on June 26, 1962 another request was made. The seizure was not effected until July 6, 1962. In short, Fiscal Ponce de Leon had all the time to procure a search warrant had he wanted to and which he could have taken in less than a day, but he did not. Besides, there is no basis for the apprehension that the motor launch might be moved out of Balabac because even prior to its seizure the motor launch was already without its engine. (2) YES. Even in the absence of bad faith, De Leon is liable. As to whether or not they are entitled to damages, plaintiffs-appellants anchor their claim for damages on Articles 32 and 2219 of the New Civil Code which provide in part as follows: ART. 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages. ―x x x x x ―(9) The rights to be secure in one‟s person, house, papers, and effects against unreasonable searches and seizures. ―x x x x x ―The idemnity shall include moral damages. Exemplary damages may also be adjudicated.‖ ART. 2219. Moral damages may be recovered in the following and analogous cases: (6) Illegal search; ―x x x x x x ―(1) Acts and action referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35. Pursuant to the foregoing provisions, a person whose constitutional rights have been violated or impaired is entitled to ACTUAL and MORAL damages from the public officer or employee responsible therefor. In addition, EXEMPLARY damages may also be awarded. In the instant case, Delfin Lim claimed that he purchased the motor launch from Jikil Taha in consideration of P3,000.00, having given P2,000.00 as advanced payment; that since its seizure on July 6, 1962 the motor launch had been moored at Balabac Bay and because of exposure to the elements it has become worthless at the time of the filing of the present action; that because of the illegality of the seizure of the motor launch, he suffered moral damages in the sum of P1,000.00; and that because of the violation of their constitutional rights they were constrained to engage the services of a lawyer whom they have paid P1,500.00 for attorney‘s fees. We find these claims of Delfin Lim amply supported by the evidence and therefore should be awarded the sum of P3,000.00 as actual damages; P1,000.00 as moral damages and P750.00 for attorney‘s fees. However, with respect to plaintiff Jikil Taha, he is NOT ENTITLED TO RECOVER ANY DAMAGE which he alleged he had suffered from the unlawful seizure of the motor launch inasmuch as he had already transferred the ownership and possession of the motor launch to Delfin Lim at the time it was seized and therefore, he has no legal standing to question the validity of the seizure. Well settled is the rule that the legality of a seizure can be contested only by the party whose rights have been impaired thereby, and that the objection to an unlawful search and seizure is purely personal and cannot be availed of by third parties. Consequently, one who is not the owner, lessee, or lawful occupant of the premises searched cannot raise the question of validity of the search and seizure.18 Jikil Taha is not without recourse though. He can still collect from his co-plaintiff, Delfin Lim the unpaid balance of P1,000.00. Defendant-appellee Fiscal Ponce de Leon wanted to wash his hands of the incident by claiming that he was in good faith. We are not prepared to sustain his defense of good faith. To be liable under Article 32 of the New Civil Code it is enough that there was a violation of the constitutional rights of the plaintiffs and it is not required that defendants 246 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

should have acted with malice or bad faith. Dr. Jorge Bocobo, Chairman of the Code Commission, gave the following reasons during the public hearings of the Joint Senate and House Committees, why good faith on the part of the public officer or employee is immaterial: Attorney Cirilo Paredes proposed that Article 32 be so amended as to make a public official liable for violation of another person‘s constitutional rights only if the public official acted maliciously or in bad faith. The Code Commission opposes this suggestion for these reasons: 1. The very nature of Article 32 is that the wrong may be civil or criminal. It is not necessary therefore that there should be malice or bad faith. To make such a requisite would defeat the main purpose of Article 32 which is the effective protection of individual rights. 2. Public officials in the past have abused their powers on the pretext of justifiable motives or good faith in the performance of their duties. Precisely, the object of the Article is to put an end to official abuse by the plea of good faith, which is in most cases the plea of officials abusing individual rights. In the United States this remedy is in the nature of a tort. 3. This article is firmly one of the fundamental articles introduced in the New Civil Code to implement democracy. There is no real democracy if a public official is abusing, and we made the article so strong and so comprehensive that it concludes an abuse of individual rights even if done in good faith, that official is liable. But Orlando Maddela cannot be held accountable because he impounded the motor launch upon the order of his superior officer. While a subordinate officer may be held liable for executing unlawful orders of his superior officer, there are certain circumstances which would warrant Maddela‘s exculpation from liability. Records show that after Fiscal Ponce de Leon made his first request to the Provincial Commander on June 15, 1962 Maddela was reluctant to impound the motor launch despite repeated orders from his superior officer. It was only after he was furnished a copy of the reply of Fiscal Ponce de Leon, dated June 26, 1962, to the letter of the Provincial Commander, justifying the necessity of the seizure of the motor launch on the ground that the subsequent sale of the launch to Delfin Lim could not prevent the court from taking custody of the same, that he impounded the motor launch on July 6, 1962. With said letter coming from the legal officer of the province, Maddela was led to believe that there was a legal basis and authority to impound the launch. Then came the order of his superior officer to explain for the delay in the seizure of the motor launch. Faced with a possible disciplinary action from his commander, Maddela was left with no alternative but to seize the vessel. 2.MHP Garments, Inc., v. Court of Appeals, 236 SCRA 227 (1994) Facts: The constitutional protection of our people against unreasonable search and seizure is not merely a pleasing platitude. It vouchsafes our right to privacy and dignity against undesirable intrusions committed by any public officer or private individual. An infringement of this right justifies an award for damages. MHP Garments, Inc., was awarded by the Boy Scouts of the Philippines, the exclusive franchise to sell and distribute official Boy Scouts uniforms, supplies, badges, and insignias. In their Memorandum Agreement, MHP Garments was given the authority to ―undertake or cause to be undertaken the prosecution in court of all illegal sources of scout uniforms and other scouting supplies.‖ MHP Garments received information that private respondents Agnes Villa Cruz, Mirasol Lugatiman, and Gertrudes Gonzales were selling Boy Scouts items and paraphernalia without any authority. De Guzman, an employee of MHP Garments, was tasked to undertake the necessary surveillance and to make a report to the Philippine Constabulary (PC). On October 25, 1983, at about 10:30 A.M., petitioner de Guzman , Captain Renato M . Peñafiel, and two (2) other constabulary men went to the stores of respondents at the Marikina Public Market. Without any warrant, they seized the boy and girl scouts pants, dresses, and suits on display at respondents‟ stalls. The seizure caused a commotion and embarrassed private respondents. Receipts were issued for the seized items. The items were then turned over by Captain Peñafiel to MHP Garments for safekeeping. A criminal complaint for unfair competition was then filed against private respondents. During its pendency, petitioner de Guzman exacted from private respondent Lugatiman the sum of (P3,100.00) in order to be dropped from the complaint. After a preliminary investigation, the Provincial Fiscal of Rizal dismissed the complaint against all the private respondents. He also ordered the return of the seized items. The seized items were not immediately returned despite demands. Private respondents had to go personally to petitioners‘ place of business to recover their goods. Even then, not all the seized items were returned. The other items returned were of inferior quality. 247 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Private respondents then filed a civil case against the petitioners for sums of money and damages. Trial court ruled for the private respondents. CA affirmed. Issue: Whether private respondents are entitled to damages. Held: YES. Article III, section 2, of the Constitution protects our people from unreasonable search and seizure.This provision protects not only those who appear to be innocent but also those who appear to be guilty but are nevertheless to be presumed innocent until the contrary is proved. Under the Rules of Court, a warrantless search can only be undertaken under the following circumstance: SEC. 12. Search incident to a lawful arrest.—A person lawfully arrested may be searched for dangerous weapons or anything which may be used as proof of the commission of an offense, without a search warrant. We hold that the evidence did not justify the warrantless search and seizure of private respondents‘ goods. MHP Garments received information that private respondents were illegally selling Boy Scouts items and paraphernalia in October 1983. The specific date and time are not established in the evidence adduced by the parties. Petitioner de Guzman then made a surveillance of the stores of private respondents. They reported to the Philippine Constabulary and on October 25, 1983, the raid was made on the stores of private respondents and the supposed illicit goods were seized. The progression of time between the receipt of the information and the raid of the stores of private respondents shows there was sufficient time for petitioners and the PC raiding party to apply for a judicial warrant. Despite the sufficiency of time, they did not apply for a warrant and seized the goods of private respondents. The search and seizure were clearly illegal. There was no probable cause for the seizure. PROBABLE CAUSE for a search has been defined as ―such facts and circumstances which would lead a reasonably discreet and prudent man to believe that an offense has been committed and that the objects sought in connection with the offense are in the place sought to be searched.‖ Indeed, after a preliminary investigation, the Provincial Fiscal dismissed their complaint for unfair competition and later ordered the return of the seized goods. Petitioners would deflect their liability with the argument that it was the Philippine Constabulary that conducted the raid and their participation was only to report the alleged illegal activity of private respondents. While undoubtedly, the members of the PC raiding team should have been included in the complaint for violation of the private respondents‘ constitutional rights, still, the omission will not exculpate petitioners. In the case of Lim vs. Ponce de Leon, we ruled for the recovery of damages for violation of constitutional rights and liberties from public officer or private individual, to wit: A person whose constitutional rights have been violated or impaired is entitled to actual and moral damages from the public officer or employee responsible therefor. In addition, exemplary damages may also be awarded. The very nature of Article 32 is that the wrong may be civil or criminal. It is not necessary therefore that there should be malice or bad faith. To make such a requisite would defeat the main purpose of Article 32 which is the effective protection of individual rights. Public officials in the past have abused their powers on the pretext of justifiable motives or good faith in the performance of their duties. Precisely, the object of the Article is to put an end to official abuse by plea of the good faith. In the United States this remedy is in the nature of a tort. In Aberca vs. Ver the SC held that the law speaks of an OFFICER or EMPLOYEE or PERSON ―directly or indirectly‖ responsible for the violation of the constitutional rights and liberties of another. Thus, it is not the actor alone (i.e. the one directly responsible) who must answer for damages under Article 32; the person indirectly responsible has also to answer for the damages or injury caused to the aggrieved party. It would certainly be too naive to expect that violators of human rights would easily be deterred by the prospect of facing damage suits, it should nonetheless be made clear in no uncertain terms that Article 32 of the Civil Code makes the persons who are directly, as well as indirectly, responsible for the transgression joint tortfeasors. Article 32 of the Civil Code encompasses within the ambit of its provisions those directly, as well as indirectly, responsible for its violations. Applying the aforecited provisions and leading cases, the respondent court correctly granted damages to private respondents. Petitioners were indirectly involved in transgressing the right of private respondents against unreasonable search and seizure. 248

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Firstly, THEY INSTIGATED THE RAID pursuant to their covenant in the Memorandum Agreement to undertake the prosecution in court of all illegal sources of scouting supplies. The acts committed by the PC soldiers of unlawfully seizing appellees‟ (respondents‟) merchandise and of filing the criminal complaint for unfair competition against appellees (respondents) were for the protection and benefit of appellant (petitioner) corporation. Such being the case, it is, thus, reasonably fair to infer from those acts that it was upon appellant (petitioner) corporation‘s instance that the PC soldiers conducted the raid and effected the illegal seizure. The raid was conducted with the active participation of their employee. Larry de Guzman did not lift a finger to stop the seizure of the boy and girl scouts items. By standing by and apparently assenting thereto, he was liable to the same extent as the officers themselves. MHP Garments even received for safekeeping the goods unreasonably seized by the PC raiding team and de Guzman, and refused to surrender them for quite a time despite the dismissal of its complaint for unfair competition. Secondly, Letter of Instruction No. 1299 was precisely crafted on March 9, 1983 to safeguard not only the privilege of franchise holder of scouting items but also the citizen‘s constitutional rights. It directs all law enforcement agencies of the Republic of the Philippines, to apprehend immediately unauthorized manufacturers and distributors of Scout paraphernalia, upon proper application by the Boy Scouts of the Philippines and/or Girl Scouts of the Philippines for warrant of arrest and/or search warrant with a judge, or such other responsible officer as may be authorized by law; and to impound the said paraphernalia to be used as evidence in court or other appropriate administrative body. Petitioners miserably failed to report the unlawful peddling of scouting goods to the Boy Scouts of the Philippines for the proper application of a warrant. Private respondents‘ rights are immutable and cannot be sacrificed to transient needs. Petitioners did not have the unbridled license to cause the seizure of respondents‘ goods without any warrant. Thirdly, if petitioners did not have a hand in the raid, they should have filed a third-party complaint against the raiding team for contribution or any other relief, in respect of respondents‘ claim for Recovery of Sum of Money with Damages. Again, they did not. Moral damages are not awarded to penalize the defendant but to compensate the plaintiff for the injuries he may have suffered. There can be no doubt that petitioners must have suffered sleepless nights, serious anxiety, and wounded feelings due to the tortious raid caused by petitioners. Private respondents‘ avowals of embarrassment and humiliation during the seizure of their merchandise were supported by their testimonies. Wantonness of the wrongful seizure justifies the award of exemplary damages and to also serve as a stern reminder to all and sundry that the constitutional protection against unreasonable search and seizure is a virile reality and not a mere burst of rhetoric. The all encompassing protection extends against intrusions directly done both by government and indirectly by private entities. 3.Newsweek v. Intermediate Appellate Court, 142 SCRA 141 (1986) Facts: Private respondents filed a civil case in their own behalf and/or as a class suit in behalf of all sugarcane planters in the province of Negros Occidental, against Newsweek and 2 of petitioners' non-resident correspondents/reporters Fred Bruning and Barry Came. They alleged that Newsweek and the other defendants committed libel against them by the publication of the article "AN ISLAND OF FEAR" in the February 23, 1981 issue of petitioner's weekly news magazine Newsweek. The article supposedly portrayed the island province of Negros Occidental as a place dominated by big landowners or sugarcane planters who not only exploited the impoverished and underpaid sugarcane workers/laborers, but also brutalized and killed them with imprunity. They also alleged that said article, taken as a whole, showed a deliberate and malicious use of falsehood, slanted presentation and/or misrepresentation of facts intended to put them (sugarcane planters) in bad light, expose them to public ridicule, discredit and humiliation here in the Philippines and abroad, and make them objects of hatred, contempt and hostility of their agricultural workers and of the public in general. Newsweek filed a motion to dismiss on the grounds that (1) the printed article sued upon is not actionable in fact and in law; and (2) the complaint is bereft of allegations that state, much less support a cause of action. It pointed out the nonlibelous nature of the article and, consequently, the failure of the complaint to state a cause of action. First, petitioner argues that private respondents' complaint failed to state a cause of action because the complaint made no allegation that anything contained in the article complained of regarding sugarcane planters referred specifically to any one of the private respondents; that libel can be committed only against individual reputation; and that in cases where libel is claimed to have been directed at a group, there is actionable defamation only if the libel can be said to reach beyond the mere collectivity to do damage to a specific, individual group member's reputation. The trial court denied the motion to dismiss. The CA affirmed. 249

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Issue: Whether Newsweek‘s publication was libelous. Held: NOT LIBELOUS. In order to maintain a libel suit, it is essential that the victim be identifiable, although it is not necessary that he be named. Defamatory matter which does not reveal the identity of the person upon whom the imputation is cast, affords no ground of action unless it be shown that the readers of the libel could have Identified the personality of the individual defamed. The case of Uy Tioco v. Yang Shu Wen explains that where the defamation is alleged to have been directed at a group or class, it is essential that the statement must be so sweeping or all-embracing as to apply to every individual in that group or class, or sufficiently specific so that each individual in the class or group can prove that the defamatory statement specifically pointed to him, so that he can bring the action separately, if need be. The case at bar is not a class suit. It is not a case where one or more may sue for the benefit of all or where the representation of class interest affected by the judgment or decree is indispensable to make each member of the class an actual party. What is present is a case where each of the plaintiffs has a separate and distinct reputation in the community. They do not have a common or general interest in the subject matter of the controversy. Petitioner's motion to dismiss is based on the ground that the complaint states no cause of action against it by pointing out the non-libelous nature of the article sued upon. There is no need of a trial in view of the conclusion of this Court that the article in question is not libelous. The specific allegation in the complaint, to the effect that the article attributed to the sugarcane planters the deaths and brutalization of sugarcane workers, is not borne out by a perusal of the actual text. The complaint contains a recital of the favorable working conditions of the agricultural workers in the sugar industry and the various foundations and programs supported by planters' associations for the benefit of their workers. Undoubtedly, the statements in the article in question are sweeping and exaggerated; but, paraphrasing the ruling in the Uy Tioco case above quoted, it would be unreasonable and absurd to condemn the majority of the sugarcane planters, who have at heart the welfare of their workers, because of the actions of a part. Nonetheless, articles such as the one in question may also serve to prick the consciences of those who have but are not doing anything or enough for those who do not have. MVRS Publications, Inc., v. Islamic Da‟Wah Council of the Philippines, G.R. No. 135306, January 28, 2003 Facts: MVRS is the publisher of Bulgar, a local tabloid newspaper. One of its articles published in August 1, 1992, said: ALAM BA NINYO? Na ang mga baboy at kahit anong uri ng hayop sa Mindanao ay hindi kinakain ng mga Muslim? Para sa kanila ang mga ito ay isang sagradong bagay. Hindi nila ito kailangang kainin kahit na sila pa ay magutom at mawalan ng ulam sa tuwing sila ay kakain. Ginagawa nila itong Diyos at sinasamba pa nila ito sa tuwing araw ng kanilang pangingilin lalung-lalo na sa araw na tinatawag nilang „Ramadan‟. Thus, Islamic Da‘Wah. a local federation of more than 70 Muslim religious organizations and certain individual Muslims filed a complaint for damages before the RTC of Manila in their own behalf and as a class suit in behalf of Muslims nationwide against MVRS, owner thereof, and author of the article. The complaint alleged that the libelous statement was insulting and damaging to the Muslims; that these words alluding to the pig as the God of the Muslims was not only published out of sheer ignorance but with intent to hurt the feelings, cast insult and disparage the Muslims and Islam, as a religion in this country, in violation of law, public policy, good morals and human relations; that on account of these libelous words Bulgar insulted not only the Muslims in the Philippines but the entire Muslim world, especially every Muslim individual in non-Muslim countries. In its defense, MVRS avers that since the plaintiffs were not specifically identified in the article, they have no cause of action and thus, not entitled to damages. RTC dismissed the case on June 1995. On appeal, CA reversed and said that it was clear that the article was directed against adherents of the Islamic faith. Hence, this petition. Issue: Whether MVRS is liable for damages. Held: NOT LIABLE. In the present case, there was no fairly identifiable person who was allegedly injured by the Bulgar article. Since the persons allegedly defamed could not be identifiable, private respondents have no individual causes of action; hence, they cannot sue for a class allegedly disparaged. Private respondents must have a cause of action in common with the class to which they belong to in order for the case to prosper.

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Torts & Damages 2013

Atty. Jess Lopez

An individual Muslim has a reputation that is personal, separate and distinct in the community. Each Muslim, as part of the larger Muslim community in the Philippines of over 5 million people, belongs to a different trade and profession; each has a varying interest and a divergent political and religious view — some may be conservative, others liberal. A Muslim may find the article dishonorable, even blasphemous; others may find it as an opportunity to strengthen their faith and educate the non-believers and the ―infidels.‖ There is no injury to the reputation of the individual Muslims who constitute this community that can give rise to an action for group libel. Each reputation is personal in character to every person. Together, the Muslims do not have a single common reputation that will give them a common or general interest in the subject matter of the controversy. Philip Wittenberg, in his book ―Dangerous Words: A Guide to the Law of Libel,‖ discusses the inappropriateness of any action for tortious libel involving large groups, and provides a succinct illustration: There are groupings which may be finite enough so that a description of the body is a description of the members. Here the problem is merely one of evaluation. Is the description of the member implicit in the description of the body, or is there a possibility that a description of the body may consist of a variety of persons, those included within the charge, and those excluded from it? A general charge that the lawyers in the city are shysters would obviously not be a charge that all of the lawyers were shysters. A charge that the lawyers in a local point in a great city, such as Times Square in New York City, were shysters would obviously not include all of the lawyers who practiced in that district; but a statement that all of the lawyers who practiced in a particular building in that district were shysters would be a specific charge, so that any lawyer having an office within that building could sue. If the group is a very large one, then the alleged libellous statement is considered to have no application to anyone in particular, since one might as well defame all mankind. Not only does the group as such have no action; the plaintiff does not establish any personal reference to himself. At present, modern societal groups are both numerous and complex. The same principle follows with these groups: as the size of these groups increases, the chances for members of such groups to recover damages on tortious libel become elusive. This principle is said to embrace 2 important public policies: FIRST, where the group referred to is large, the courts presume that no reasonable reader would take the statements as so literally applying to each individual member; and SECOND, the limitation on liability would satisfactorily safeguard freedom of speech and expression, as well as of the press, effecting a sound compromise between the conflicting fundamental interests involved in libel cases. In the instant case, the Muslim community is too vast as to readily ascertain who among the Muslims were particularly defamed. The size of the group renders the reference as indeterminate and generic as a similar attack on Catholics, Protestants, Buddhists or Mormons would do. The word ―Muslim‖ is descriptive of those who are believers of Islam, a religion divided into varying sects, such as the Sunnites, the Shiites, the Kharijites, the Sufis and others based upon political and theological distinctions. ―Muslim‖ is a name which describes only a general segment of the Philippine population, comprising a heterogeneous body whose construction is not so well defined as to render it impossible for any representative identification. The Christian religion in the Philippines is likewise divided into different sects: Catholic, Baptist, Episcopalian, Presbyterian, Lutheran, and other groups the essence of which may lie in an inspired charlatan, whose temple may be a corner house in the fringes of the countryside. As with the Christian religion, so it is with other religions that represent the nation‘s culturally diverse people and minister to each one‘s spiritual needs. The Muslim population may be divided into smaller groups with varying agenda, from the prayerful conservative to the passionately radical. These divisions in the Muslim population may still be too large and ambiguous to provide a reasonable inference to any personality who can bring a case in an action for libel. The foregoing are in essence the same view scholarly expressed by Mr. Justice Reynato S. Puno in the course of the deliberations in this case. We extensively reproduce hereunder his comprehensive and penetrating discussion on group libel — DEFAMATION is made up of the twin torts of libel and slander — the one being, in general, written, while the other in general is oral. In either form, defamation is an invasion of the interest in reputation and good name. This is a ―relational interest‖ since it involves the opinion others in the community may have, or tend to have of the plaintiff.

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Atty. Jess Lopez

The law of defamation protects the interest in reputation — the interest in acquiring, retaining and enjoying one‘s reputation as good as one‘s character and conduct warrant. The mere fact that the plaintiff‟s feelings and sensibilities have been offended is not enough to create a cause of action for defamation. Defamation requires that something be, communicated to a third person that may affect the opinion others may have of the plaintiff. The unprivileged communication must be shown of a statement that would tend to hurt plaintiff‟s reputation, to impair plaintiff‟s standing in the community. Although the gist of an action for defamation is an injury to reputation, the focus of a defamation action is upon the allegedly defamatory statement itself and its predictable effect upon third persons. A statement is ordinarily considered defamatory if it ―tend[s] to expose one to public hatred, shame, obloquy, contumely, odium, contempt, ridicule, aversion, ostracism, degradation or disgrace . . .‖ The Restatement of Torts defines a defamatory statement as one that ―tends to so harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him.‖ Consequently as a prerequisite to recovery, it is necessary for the plaintiff to prove as part of his prima facie case that the defendant (1) published a statement that was (2) defamatory (3) of and concerning the plaintiff. The rule in libel is that the action must be brought by the person against whom the defamatory charge has been made. In the American jurisdiction, no action lies by a third person for damages suffered by reason of defamation of another person, even though the plaintiff suffers some injury therefrom. For recovery in defamation cases, it is necessary that the publication be ―of and concerning the plaintiff.‖ Even when a publication may be clearly defamatory as to somebody, if the words have no personal application to the plaintiff, they are not actionable by him. If no one is identified, there can be no libel because no one‘s reputation has been injured. In fine, in order for one to maintain an action for an alleged defamatory statement, it must appear that the plaintiff is the person with reference to whom the statement was made. This principle is of vital importance in cases where a group or class is defamed since, usually, the larger the collective, the more difficult it is for an individual member to show that he was the person at whom the defamation was directed. If the defamatory statements were directed at a small, restricted group of persons, they applied to any member of the group, and an individual member could maintain an action for defamation. When the defamatory language was used toward a small group or class, including every member, it has been held that the defamatory language referred to each member so that each could maintain an action. This small group or class may be a jury, persons engaged in certain businesses, professions or employments, a restricted subdivision of a particular class, a society, a football team, a family, small groups of union officials, a board of public officers, or engineers of a particular company. In contrast, if defamatory words are used broadly in respect to a large class or group of persons, and there is nothing that points, or by proper colloquium or innuendo can be made to apply, to a particular member of the class or group, no member has a right of action for libel or slander. Where the defamatory matter had no special, personal application and was so general that no individual damages could be presumed, and where the class referred to was so numerous that great vexation and oppression might grow out of the multiplicity of suits, no private action could be maintained. This rule has been applied to defamatory publications concerning groups or classes of persons engaged in a particular business, profession or employment, directed at associations or groups of association officials, and to those directed at miscellaneous groups or classes of persons.

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Distinguishing a small group — which if defamed entitles all its members to sue from a large group — which if defamed entitles no one to sue—is not always so simple. Some authorities have noted that in cases permitting recovery, the group generally has 25 or fewer members. However, there is usually no articulated limit on size. Suits have been permitted by members of fairly large groups when some distinguishing characteristic of the individual or group increases the likelihood that the statement could be interpreted to apply individually. For example, a single player on the 60 to 70 man Oklahoma University football team was permitted to sue when a writer accused the entire team of Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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taking amphetamines to ―hop up‖ its performance; the individual was a full-back, i.e., a significant position on the team and had played in all but two of the team‘s games. A prime consideration, therefore, is the public perception of the size of the group and whether a statement will be interpreted to refer to every member. The more organized and cohesive a group, the easier it is to tar all its members with the same brush and the more likely a court will permit a suit from an individual even if the group includes more than 25 members. At some point, however, increasing size may be seen to dilute the harm to individuals and any resulting injury will fall beneath the threshold for a viable lawsuit. There are many other groupings of men than those that are contained within the foregoing group classifications. There are all the religions of the world, there are all the political and ideological beliefs; there are the many colors of the human race. Group defamation has been a fertile and dangerous weapon of attack on various racial, religious and political minorities. Some states, therefore, have passed statutes to prevent concerted efforts to harass minority groups in the United States by making it a crime to circulate insidious rumors against racial and religious groups. Thus far, any civil remedy for such broadside defamation has been lacking. There have been numerous attempts by individual members to seek redress in the courts for libel on these groups, but very few have succeeded because it felt that the groups are too large and poorly defined to support a finding that the plaintiff was singled out for personal attack. Our conclusion therefore is that the statements published by petitioners in the instant case did not specifically identify nor refer to any particular individuals who were purportedly the subject of the alleged libelous publication. Respondents can scarcely claim to having been singled out for social censure pointedly resulting in damages. REBUTTAL TO THE CONTRARY OPINION (SEE CARPIO‘S DISSENT BELOW) A contrary view is expressed that what is involved in the present case is an intentional tortious act causing mental distress and not an action for libel. That opinion invokes Chaplinsky v. New Hampshire where the U.S. Supreme Court held that words heaping extreme profanity, intended merely to incite hostility, hatred or violence, have no social value and do not enjoy constitutional protection; and Beauharnais v. Illinois where it was also ruled that hate speech which denigrates a group of persons identified by their religion, race or ethnic origin defames that group and the law may validly prohibit such speech on the same. We do not agree to the contrary view articulated in the immediately preceding paragraph. Primarily, an ―emotional distress‖ tort action is personal in nature, i.e., it is a civil action filed by an individual to assuage the injuries to his emotional tranquility due to personal attacks on his character. It has no application in the instant case since no particular individual was identified in the disputed article of Bulgar. Also, the purported damage caused by the article, assuming there was any, falls under the principle of RELATIONAL HARM — which includes harm to social relationships in the community in the form of defamation; as distinguished from the principle of REACTIVE HARM — which includes injuries to individual emotional tranquility in the form of an infliction of emotional distress. In their complaint, respondents clearly asserted an alleged harm to the standing of Muslims in the community, especially to their activities in propagating their faith in Metro Manila and in other non-Muslim communities in the country. It is thus beyond cavil that the present case falls within the application of the relational harm principle of tort actions for defamation, rather than the reactive harm principle on which the concept of emotional distress properly belongs. Moreover, under the Second Restatement of the Law, to recover for the intentional infliction of emotional distress the plaintiff must show that: (a) The conduct of the defendant was intentional or in reckless disregard of the plain; (b) The conduct was extreme and outrageous; (c) There was a causal connection between the defendant‘s conduct and the plaintiff‘s mental distress; and (d) The plaintiff‘s mental distress was extreme and severe. ―EXTREME AND OUTRAGEOUS CONDUCT‖ means conduct that is so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in civilized society. The defendant‘s actions must have been so terrifying as naturally to humiliate, embarrass or frighten the plaintiff. Generally, conduct will be found to be actionable where the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him or her to exclaim, ―Outrageous!‖ as his or her reaction. ―EMOTIONAL DISTRESS‖ means any highly unpleasant mental reaction such as extreme grief, shame, humiliation, embarrassment, anger, disappointment, worry, nausea, mental suffering and anguish, shock, fright, horror, and chagrin. 253

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Atty. Jess Lopez

―SEVERE EMOTIONAL DISTRESS,‖ in some jurisdictions, refers to any type of severe and disabling emotional or mental condition which may be generally recognized and diagnosed by professionals trained to do so, including posttraumatic stress disorder (PTSD), neurosis, psychosis, chronic depression, or phobia. The plaintiff is required to show, among other things, that he or she has suffered emotional distress so severe that no reasonable person could be expected to endure it; severity of the distress is an element of the cause of action, not simply a matter of damages. Any party seeking recovery for mental anguish must prove more than mere worry, anxiety, vexation, embarrassment, or anger. Liability does not arise from mere insults, indignities, threats, annoyances, petty expressions, or other trivialities. In determining whether the tort of outrage had been committed, a plaintiff is necessarily expected and required to be hardened to a certain amount of criticism, rough language, and to occasional acts and words that are definitely inconsiderate and unkind; the mere fact that the actor knows that the other will regard the conduct as insulting, or will have his feelings hurt, is not enough. Hustler Magazine v. Falwell illustrates the test case of a civil action for damages on intentional infliction of emotional distress. A parody appeared in Hustler magazine featuring the American fundamentalist preacher and evangelist Reverend Jerry Falwell depicting him in an inebriated state having an incestuous sexual liaison with his mother in an outhouse. Falwell sued Hustler and its publisher Larry Flynt for damages. The United States District Court for the Western District of Virginia ruled that the parody was not libelous, because no reasonable reader would have understood it as a factual assertion that Falwell engaged in the act described. The jury, however, awarded $200,000 in damages on a separate count of ―intentional infliction of emotional distress,‖ a cause of action that did not require a false statement of fact to be made. The U.S. Supreme Court in a unanimous decision overturned the jury verdict of the Virginia Court and held that Reverend Falwell may not recover for intentional infliction of emotional distress. It was argued that the material might be deemed outrageous and may have been intended to cause severe emotional distress, but these circumstances were not sufficient to overcome the free speech rights guaranteed under the First Amendment of the United States Constitution. Simply stated, an intentional tort causing emotional distress must necessarily give way to the fundamental right to free speech. It must be observed that although Falwell was regarded by the U.S. High Court as a ―public figure,‖ he was an individual particularly singled out or identified in the parody appearing on Hustler magazine. Also, the emotional distress allegedly suffered by Reverend Falwell involved a reactive interest — an emotional response to the parody which supposedly injured his psychological well-being. Verily, our position is clear that the conduct of petitioners was not extreme or outrageous. Neither was the emotional distress allegedly suffered by respondents so severe that no reasonable person could be expected to endure it. There is no evidence on record that points to that result. Even American courts are reluctant to adopt a rule of recovery for emotional harm that would ―open up a wide vista of litigation in the field of bad manners,‖ an area in which a ―toughening of the mental hide‖ was thought to be a more appropriate remedy. Perhaps of greater concern were the questions of causation, proof, and the ability to accurately assess damages for emotional harm, each of which continues to concern courts today. American courts no longer accept the view that speech may be proscribed merely because it is ―lewd,‖ ―profane,‖ ―insulting‖ or otherwise vulgar or offensive. Cohen v. California is illustrative: Paul Robert Cohen wore a jacket bearing the words ―Fuck the Draft‖ in a Los Angeles courthouse in April 1968, which caused his eventual arrest. Cohen was convicted for violating a California statute prohibiting any person from ―disturb[ing] the peace x x x by offensive conduct.‖ The U.S. Supreme Court conceded that Cohen‘s expletive contained in his jacket was ―vulgar,‖ but it concluded that his speech was nonetheless protected by the right to free speech. It was neither considered an ―incitement‖ to illegal action nor ―obscenity.‖ It did not constitute insulting or ―fighting‖ words for it had not been directed at a person who was likely to retaliate or at someone who could not avoid the message. In other words, no one was present in the Los Angeles courthouse who would have regarded Cohen‘s speech as a direct personal insult, nor was their any danger of reactive violence against him. PROPRIETY OF THE CLASS SUIT In any case, respondents‘ lack of cause of action cannot be cured by the filing of a class suit. As correctly pointed out by Mr. Justice Jose C. Vitug during the deliberations, ―an element of a class suit is the adequacy of representation. In determining the question of fair and adequate representation of members of a class, the court must consider (a) whether the interest of the named party is coextensive with the interest of the other members of the class; (b) the proportion of those made parties as it so bears to the total membership of the class; and, (c) any other factor bearing on the ability of the named party to speak for the rest of the class. The rules require that courts must make sure that the persons intervening should be sufficiently numerous to fully protect the interests of all concerned. In the present controversy, Islamic Da‟wah Council of the Philippines, Inc., seeks in effect to assert the interests not only of the Muslims in the Philippines but of the whole Muslim world as well.

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Atty. Jess Lopez

Private respondents obviously lack the sufficiency of numbers to represent such a global group; neither have they been able to demonstrate the identity of their interests with those they seek to represent. Unless it can be shown that there can be a safe guaranty that those absent will be adequately represented by those present, a class suit, given its magnitude in this instance, would be unavailing. **Discussion on damages omitted. CARPIO DISSENT I dissent not because the newspaper article in question is libelous, but because it constitutes an intentional tortuous act causing mental distress to those whom private respondent Islamic Da‟wah Council of the Philippines, Inc. represents. Clearly, the instant case is not about libel which requires the identification of the plaintiff in the libelous statement. If this were a libel case under Article 30 of the Civil Code, which authorizes a separate civil action to recover civil liability arising from a criminal offense, I would agree that the instant case could not prosper for want of identification of the private respondents as the libeled persons. But private respondents do not anchor their action on Article 30 of the Civil Code. Private respondents insist that this case is principally about tortious conduct under Article 26 of the Civil Code. Unlike the action in Article 30 of the Civil Code which must arise from a ―criminal offense,‖ the action under Article 26 ―may not constitute a criminal offense.‖ Article 26, adopted from American jurisprudence, covers several kinds of intentional torts. Paragraph 4 of Article 26, which refers to acts humiliating another for his religious beliefs, is embraced in the tort known as intentional infliction of mental or emotional distress. This case must be decided on the issue of whether there was such tortious conduct, and not whether there was defamation that satisfied the elements of the crime of libel. Private respondents have certainly suffered humiliation and mental distress because of their religious beliefs. The only question is whether the wrongful act committed by petitioners, which does not constitute the crime of libel, is a case of damnum absque injuria or an actionable tort under paragraph 4, Article 26 of the Civil Code. RATIONALE BEHIND ARTICLE 26 ¶ 4 The Code Commission stated that — The penal laws against defamation and unjust vexation are glaringly inadequate. Religious freedom does not authorize anyone to heap obloquy and disrepute upon another by reason of the latter‟s religion. Not a few of the rich people treat the poor with contempt because of the latter‘s lowly station in life. To a certain extent this is inevitable, from the nature of the social make-up, but there ought to be a limit somewhere, even when the penal laws against defamation and unjust vexation are not transgressed. In a democracy, such a limit must be established. The courts will recognize it in each case. Social equality is not sought by the legal provision under consideration, but due regard for decency and propriety. Place of birth, of physical defect and other personal conditions are too often the pretext of humiliation cast upon other persons. Such tampering with human personality, even though the penal laws are not violated, should be the cause of civil action. The article under study denounces ―similar acts‖ which could readily be named, for they occur with unpleasant frequency. The intent of the Code Commission is quite clear: Article 26 specifically applies to intentional acts which fall short of being criminal offenses. Article 26 expressly refers to tortious conduct which ―may not constitute criminal offenses.‖ The purpose is precisely to fill a gap or lacuna in the law where a person who suffers injury because of a wrongful act not constituting a crime is left without any redress. Under Article 26, the person responsible for such act becomes liable for ―damages, prevention and other relief.‖ In short, to preserve peace and harmony in the family and in the community, Article 26 seeks to eliminate cases of damnum absque injuria in human relations. Consequently, the elements that qualify the same acts as criminal offenses do not apply in determining responsibility for tortious conduct under Article 26. Where the tortious act humiliating another because of his religious beliefs is published in a newspaper, the elements of the crime of libel need not be satisfied before the aggrieved person can recover damages under Article 26. In intentional tort under Article 26, the offensive statements may not even be published or broadcasted but merely hurled privately at the offended party. In intentional infliction of mental distress, the gravamen of the tort is not the injury to plaintiff‘s reputation, but the harm to plaintiff‘s mental and emotional state. In libel, the gist of the action is the injury to plaintiff‘s reputation. Reputation is the community‘s opinion of what a person is. In intentional infliction of mental distress, the opinion of the community 255 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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is immaterial to the existence of the action although the court can consider it in awarding damages. What is material is the disturbance on the mental or emotional state of the plaintiff who is entitled to peace of mind. The offensive act or statement need not identify specifically the plaintiff as the object of the humiliation. What is important is that the plaintiff actually suffers mental or emotional distress because he saw the act or read the statement and it alludes to an identifiable group to which he clearly belongs. If one of the petitioners, without specifically naming private respondents, hurled the same statement in private separately to each of the private respondents, the act would be actionable under Article 26 because it would cause mental distress to each private respondent. The fact that the statement was made publicly in fact makes matters worse because the mental or emotional distress caused on private respondents would even be aggravated by the publicity. This merely illustrates that the requirements of libel have no application in intentional torts under Article 26 where the impression of the public is immaterial while the impact on the mind or emotion of the offended party is all important. That is why in American jurisprudence the tort of intentional infliction of mental or emotional distress is completely separate and distinct from the twin torts of libel and slander. Paragraph 4, Article 26 of the Civil Code makes civilly liable any person who humiliates another because of his religious beliefs. This is just a soft prohibition of advocacy of religious hatred that incites discrimination, hostility or violence, the act the International Covenant on Civil and Political Rights (ICCPR) seeks to curb and which the Philippine Government has undertaken to declare unlawful. Other countries that signed the ICCPR have criminalized the acts prohibited under the ICCPR. Since our ratification of the ICCPR in 1986, the Philippines has not enacted any special legislation to enforce the provisions of the ICCPR, on the ground that existing laws are adequate to meet the requirements of the ICCPR. There is no other law, except paragraph 4, Article 26 of the Civil Code, which can provide a sanction against intentional conduct, falling short of a criminal act, advocating religious hatred that incites hostility between Muslims and Christians in this country. Indeed, while democratic societies maintain a deep commitment to the principle that debate on public issues should be uninhibited, robust and wide open, this free debate has never been meant to include libelous, obscene or profane utterances against private individuals. Clearly, the newspaper article in question, dripping with extreme profanity, does not enjoy the protection of the constitutional guarantee of freedom of speech. CARPIO‘S CONCLUSION Applying Article 26 will not undermine freedom of speech since the profane publication in question belongs to the class of speech that clearly does not enjoy constitutional protection. Applying Article 26 demonstrates good faith compliance with our treaty obligations under the ICCPR. Applying Article 26 implements the constitutional policy that the ―State values the dignity of every human person and guarantees full respect for human rights.‖ Applying Article 26 constitutes compliance by the Court of its constitutional duty to protect and enforce constitutional rights. Applying Article 26 will help bind the wounds that mindless profanities inflict on religious minorities in violation of their human rights. 4. Silahis International Hotel v. Soluta, G.R. No. 163087, February 20, 2006 Facts: Petitioner Panlilio was the VP for Finance of his co-petitioner Silahis International Hotel, Inc. (Silahis), while respondents Soluta, Santos, Bernate, Delola, and Matilla were employees of the hotel and officers of the GlowhrainSilahis Union Chapter, the hotel employees union (the union). Petitioners‘ version of the antecedents of the case are as follows: In late 1987, as Maniego, GM of the Rapier Enforcement Professional Investigation and Security Agency, Inc. (REPISA) which the hotel contracted to provide its security force, had been receiving reports that sale and/or use of marijuana, dollar smuggling, and prostitution were going on in the union office at the hotel and that there existed a theft syndicate, he conducted a surveillance, with the approval of Panlilio, of suspected members and officers of the union. In the morning of January 11, 1988, Panlilio, Maniego and REPISA security guard Steve Villanueva (Villanueva) entered the union office located at the hotel basement, with the permission of union officer Henry Babay, who was apprised about the suspected illegal activities, and searched the premises in the course of which Villanueva found a plastic bag under a table. When opened, the plastic bag yielded dry leaves of marijuana. Panlilio thereupon ordered Maniego to investigate and report the matter to the authorities. On the other hand, respondents‘ version follows: 256

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On January 10, 1988, Loida Somacera (Loida), a laundrywoman of the hotel, stayed overnight at the female locker room at the basement of the hotel. At dawn of January 11, 1988, she heard pounding sounds outside, prompting her to open the door of the locker room upon which she saw five men in barong tagalog whom she failed to recognize but she was sure were not employees of the hotel, forcibly opening the door of the union office. She even saw one of the men hid something behind his back. She then closed the door and went back to bed. Soon after she heard the door of the union office opened. In the morning of January 11, 1988, as union officer Soluta was trying in vain to open the door of the union office, Loida narrated to him what she had witnessed at dawn. Soluta thus immediately lodged a complaint before the Security Officer. And he fetched a locksmith, Efren Guevarra, who tried to assist him to open the door. At that instant, men in barong tagalog armed with clubs arrived and started hitting Soluta and his companions, drawing them to run to the female locker room, and to thereafter proceed to the Engineering Office where they called for police assistance. While awaiting the arrival of the police, Babay and Panlilio, on the latter‘s request, met. At the meeting, Panlilio told Babay that they proceed to the union office where they would settle the mauling incident, to which Babay replied that the door of the office could not be opened. Panlilio thereupon instructed Villanueva to force open the door, and the latter did. Once inside, Panlilio and his companions began searching the office, over the objection of Babay who even asked them if they had a search warrant. A plastic bag was found containing marijuana flowering tops. As a result of the discovery of the presence of marijuana in the union office and after the police conducted an investigation of the incident, a complaint against the 13 union officers was filed before the Fiscal‘s Office of Manila, for violation of The Dangerous Drugs Act. After trial, the RTC acquitted the accused: WHEREFORE, with the specimen and/or the marijuana flowering tops allegedly found inside the Union Office occupied by the accused not admissible in evidence, coupled by the suspicious circumstance of confiscation thus they are ACQUITTED of the charge. Soluta and his fellow union officers, together with the union, thereafter filed before the Manila RTC a Complaint against petitioners et al. including prosecuting Fiscal Jose Bautista and Atty. Eduardo Tutaan who assisted in the prosecution of the case against them, for malicious prosecution and violation of their constitutional right against illegal search. After trial the RTC held the hotel, Panlilio, Maniego and Villanueva jointly and severally liable for damages as a result of malicious prosecution and illegal search of the union office. The CA affirmed with modification the trial court‘s decision.(only violation of consti rights against illegal search, but no malicious prosecution). Hence, this case. Petitioners argue:  People v. Aruta does not involve Article 32 as nowhere in the decision is there any reference to Article 32  Being private persons, they are not covered by the standards set forth in Aruta as the constitutional protection against illegal searches and seizures is not meant to be invoked against private individuals.  The search of the union office was reasonable under the circumstances: given that the hotel owns the room where the union holds office, there was probable cause, and it was done with the consent of Babay. Issue: Whether the petitioners, as private persons, are liable under Art. 32 for illegal searches and seizures. Held: YES. (1) Article 32 APPLIES ALSO TO PRIVATE INDIVIDUALS, even in the absence of bad faith. As the Code Commission noted, Direct and open violations of the Penal Code trampling upon the freedoms named are not so frequent as those subtle, clever and indirect ways which do not come within the pale of the penal law. It is in these cunning devices of suppressing or curtailing freedom, which are not criminally punishable, where the greatest danger to democracy lies. The injured citizen will always have, under the new Civil Code, adequate civil remedies before the courts because of the independent civil action, even in those instances where the act or omission complained of does not constitute a criminal offense.

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The Code Commission thus deemed it necessary to hold not only public officers but also private individuals civilly liable for violation of rights enumerated in Article 32 of the Civil Code. That is why it is not even necessary that the defendant under this Article should have acted with malice or bad faith, otherwise, it would defeat its main purpose, which is the effective protection of individual rights. It suffices that there is a violation of the constitutional right of the plaintiff. (2) They had AMPLE TIME TO PROCURE A SEARCH WARRANT, but they failed to do so. In the present case, as prior stated, petitioners had, by their own claim, already received reports in late 1987 of illegal activities allegedly undertaken in the union office and Maniego conducted surveillance of the union officers. Yet, in the morning of January 11, 1988, petitioners and their companions barged into and searched the union office without a search warrant, despite ample time for them to obtain one, and notwithstanding the objection of Babay. The course taken by petitioners and company stinks in illegality, it not falling under any of the exceptional instances when a warrantless search is allowed by law. Petitioners‘ violation of individual respondents‘ constitutional right against unreasonable search thus furnishes the basis for the award of damages under Article 32 of the Civil Code. (3) The ‗Property rights‘ defense – unmeritorious. As for petitioners‘ contention that property rights justified the search of the union office, the same does not lie. For respondents, being the lawful occupants of the office, had the right to raise the question of validity of the search and seizure. Neither does petitioners‘ claim that they were allowed by union officer Babay to enter the union office lie. Babay‘s account of why petitioners and company went to the union office – to consider Panlilio‘s suggestion to settle the mauling incident is more credible, as is his claim that he protested the search, and even asked if they were armed with a search warrant. (4) Respondents DID NOT WAIVE THEIR RIGHT against unreasonable searches and seizures. While it is doctrinal that the right against unreasonable searches and seizures is a personal right which may be waived expressly or impliedly, a waiver by implication cannot be presumed. There must be clear and convincing evidence of an actual intention to relinquish it to constitute a waiver thereof. There must be PROOF OF THE FOLLOWING: (a) that the right exists; (b) that the person involved had knowledge, either actual or constructive, of the existence of such right; and, (c) that the said person had an actual intention to relinquish the right. In other words, the waiver must be VOLUNTARILY, KNOWINGLY and INTELLIGENTLY made. The evidence shows otherwise, however. (5) Soluta and Silahis are liable for actual, moral, and exemplary damages under art. 32. That a violation of one‘s constitutional right against illegal search and seizure can be the basis for the recovery of damages under Article 32 in relation to Article 2219(6) and (10) of the New Civil Code, there is no doubt. Since the complaint filed before the trial court was for damages due to malicious prosecution and violation of constitutional right against illegal search and seizure, the award by the trial court of actual damages to respondent union was correctly set aside by the appellate court. Article 32 speaks of an officer or employee or person "DIRECTLY OR INDIRECTLY" responsible for the violation of the constitutional rights and liberties of another. Hence, it is not the actor alone who must answer for damages under Article 32; the person indirectly responsible has also to answer for the damages or injury caused to the aggrieved party. Such being the case, petitioners, together with Maniego and Villanueva, the ones who orchestrated the illegal search, are jointly and severally liable for actual, moral and exemplary damages to herein individual respondents in accordance with the following: Art. 2219. Moral damages may be recovered in the following and analogous cases: (6) Illegal search; (10) Acts and action referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35. Petitioners assail the applicability of People v. Aruta in this case, citing People v. Marti to support their defense. However:  Aruta was cited by the appellate court, not to justify petitioners‘ liability but to rule out the legality of the search in the union office as the search was not done as an incident of a lawful arrest.  The ruling of this Court in Marti, a criminal case, bears on the issue of whether "an act of a private individual, allegedly in violation of one‘s constitutional rights, may be invoked against the State." In other words, the issue in that case was whether the evidence obtained by a private person, acting in a private capacity without the participation of the State, is admissible. The issue in the present civil case, however, is whether respondent individual can recover damages for violation of constitutional rights. As reflected above, Article 32, in relation to Article 2219(6) and (10) of the Civil Code, allows so. 5. Radio Communications of the Philippines, Inc., v. Verchez, G.R. No. 164349, January 31, 2006 258

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Facts: Editha was confined at the Sorsogon Provincial Hospital due to an ailment. Her daughter Grace immediately went to the Sorsogon Branch of the Radio Communications whose services she engaged to send a telegram to her sister Zenaida reading: “Send check money Mommy hospital.‖ As 3 days after RCPI was engaged to send the telegram to Zenaida no response was received from her, Grace sent a letter to Zenaida, this time thru JRS Delivery reprimanding her for not sending any financial aid. Immediately after she received Grace‘s letter, Zenaida left for Sorsogon and upon arrival she disclaimed having received any telegram. The telegram was finally delivered to Zenaida 25 days later. On inquiry from RCPI why it took that long to deliver it, a messenger of RCPI replied that he had nothing to do with the delivery thereof as it was another messenger who previously was assigned to deliver the same but the address could not be located, hence, the telegram was resent. Editha‘s husband demanded an explanation from the manager of RCPI who replied. Our investigation on this matter disclosed that subject telegram was duly processed in accordance with our standard operating procedure. However, delivery was not immediately effected due to the occurrence of circumstances which were beyond the control and foresight of RCPI. xxx During the transmission process, the radio link connecting the points of communication involved encountered radio noise and interferences such that subject telegram did not initially registered (sic) in the receiving teleprinter machine. Our internal message monitoring led to the discovery of the above. Thus, a repeat transmission was made and subsequent delivery was effected. EDITHA DIED. Verchez, along with his daughters Grace and Zenaida and their respective spouses, filed a complaint against RCPI for damages. Plaintiffs alleged that, inter alia, the delay in delivering the telegram contributed to the early demise of the late Editha for which they prayed for the award of moral and exemplary damages and attorney‟s fees. RCPI filed its answer, alleging that the other plaintiffs had no privity of contract with it; any delay in the sending of the telegram was due to force majeure, ―specifically, but not limited to, radio noise and interferences which adversely affected the transmission and/or reception of the telegraphic message‖; the clause in the Telegram Transmission Form signed by Grace absolved it from liability for any damage arising from the transmission other than the refund of telegram tolls; it observed due diligence in the selection and supervision of its employees; and at all events, any cause of action had been barred by laches. TC ruled out the presence of force majeure. The obligation of the defendant to deliver the telegram to the addressee is of an URGENT NATURE. Its essence is the early delivery of the telegram to the concerned person. Yet, due to the negligence of its employees, the defendant failed to discharge of its obligation on time making it liable for damages under Article 2176. The negligence on the part of the employees gives rise to the presumption of negligence on the part of the employer.‖ CA affirmed Hence, RCPI‘s present petition for review on certiorari Issue: (1) Are moral damages proper even if the trial court found that there was no direct connection between the injury and the alleged negligent acts. (2) Whether the stipulations in the ―Telegram Transmission Form‖ is in the nature of a contract of adhesion. Held: RCPI insists that respondents failed to prove any causal connection between its delay in transmitting the telegram and Editha‘s death. Its liability is anchored on culpa contractual or breach of contract with regard to Grace, and on tort with regard to her co-plaintiffs- herein-co-respondents. RCPI‘s stand fails. BREACH OF CONTRACT Article 1170 of the Civil Code : Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages. In culpa contractual x x x the mere proof of the existence of the contract and the failure of its compliance justify, prima facie, a corresponding right of relief. The law, recognizing the obligatory force of contracts, will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost or suffered. The remedy serves to preserve the interests of the promissee that may include his ―expectation interest,‖ which is his interest in having the benefit of his bargain by being put in as good a position as he would have 259 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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been in had the contract been performed, or his ―reliance interest,‖ which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made; or his ―restitution interest,‖ which is his interest in having restored to him any benefit that he has conferred on the other party. Indeed, agreements can accomplish little, either for their makers or for society, unless they are made the basis for action. The effect of every infraction is to create a new duty, that is, to make recompense to the one who has been injured by the failure of another to observe his contractual obligation unless he can show extenuating circumstances, like proof of his exercise of due diligence x x x or of the attendance of fortuitous event, to excuse him from his ensuing liability. RCPI bound itself to deliver the telegram within the shortest possible time. It took 25 days, however, for RCPI to deliver it. NO FORCE MAJEURE RCPI invokes force majeure, specifically, the alleged radio noise and interferences. Additionally, its messenger claimed he could not locate the address of Zenaida. For the defense of force majeure to prosper, it is necessary that one has committed no negligence or misconduct that may have occasioned the loss. An act of God cannot be invoked to protect a person who has failed to take steps to forestall the possible adverse consequences of such a loss. One‘s negligence may have concurred with an act of God in producing damage and injury to another; nonetheless, showing that the immediate or proximate cause of the damage or injury was a fortuitous event would not exempt one from liability. When the effect is found to be partly the result of a person‘s participation—whether by active intervention, neglect or failure to act—the whole occurrence is humanized. Article 1174 of the Civil Code states that no person shall be responsible for a fortuitous event that could not be foreseen or, though foreseen, was inevitable. In other words, there must be an exclusion of human intervention. Assuming arguendo that fortuitous circumstances prevented RCPI from delivering the telegram at the soonest possible time, it should have at least informed Grace of the non-transmission and the non-delivery so that she could have taken steps to remedy the situation. But it did not. There lies the fault or negligence. Considering the public utility of RCPI‘s business and its contractual obligation to transmit messages, it should exercise due diligence to ascertain that messages are delivered to the persons at the given address and should provide a system whereby in cases of undelivered messages the sender is given notice of non-delivery. Messages sent by cable or wireless means are usually more important and urgent than those which can wait for the mail. People depend on telecommunications companies in times of deep emotional stress or pressing financial needs. Knowing that messages about the illnesses or deaths of loved ones, births or marriages in a family, important business transactions, and notices of conferences or meetings as in this case, are coursed through the petitioner and similar corporations, it is incumbent upon them to exercise a greater amount of care and concern than that shown in this case. Every reasonable effort to inform senders of the non- delivery of messages should be undertaken. RCPI argues, however, against the presence of urgency. It argues that the request to send check as written in the telegraphic text negates the existence of urgency that private respondents‘ allegations that ‗time was of the essence‘ imports. Requesting a check that would take 6 days before it could be withdrawn therefore contradicts plaintiff‟s claim of urgency or need. And that any sense of urgency of the situation was met when Grace was able to communicate to Manila via a letter that she sent to the same addressee in Manila thru JRS. RCPI‘s arguments fail. For it is its breach of contract upon which its liability is, it bears repeating, anchored. Since RCPI breached its contract, the presumption is that it was at fault or negligent. It failed to rebut this presumption. For breach of contract then, RCPI is liable to Grace for damages. And for quasi-delict, RCPI is liable to Grace‘s corespondents following Article 2176 RCPI‘s liability as an employer under Article 2180 could of course be avoided if it could prove that it observed the diligence of a good father of a family to prevent damage. RCPI failed, however, to prove that it observed all the diligence of a good father of a family to prevent damage. ENTITLED TO MORAL DAMAGES As for moral damages, the presence of the following requisites to justify the award is in order: firstly, evidence of besmirched reputation or physical, mental or psychological suffering sustained by the claimant; secondly, a culpable act or omission factually established; thirdly, proof that the wrongful act or omission of the defendant is the proximate cause of damages sustained by the claimant; and fourthly, that the case is predicated on any of the instances expressed or envisioned by Article 2219 and Article 2220 of the Civil Code. First requisite, theres is evidence of suffering. The failure of RCPI to deliver the telegram containing the message of appellees on time, disturbed their filial tranquillity. Family members blamed each other for failing to respond swiftly to an emergency that involved the life of the late Mrs. Verchez, who suffered from diabetes. 260 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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The second and third requisites are present. On the fourth requisite, Article 2220 of the Civil Code provides: Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith. After RCPI‘s first attempt to deliver the telegram failed, it did not inform Grace of the non-delivery thereof and waited for 12 days before trying to deliver it again, knowing—as it should know—that time is of the essence in the delivery of telegrams. When its second long-delayed attempt to deliver the telegram again failed, it, again, waited for another 12 days before making a third attempt. Such nonchalance in performing its urgent obligation indicates gross negligence amounting to bad faith. The fourth requisite is thus also present. In applying the above-quoted Article 2220, this Court has awarded moral damages in cases of breach of contract where the defendant was guilty of gross negligence amounting to bad faith, or in wanton disregard of his contractual obligation. As for RCPI‘s tort-based liability, Article 2219 provides that: Moral damages may be recovered in the following and analogous cases: xxxx (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. Article 26 of the Civil Code, in turn, provides: Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention, and other relief: xxxx (2) Meddling with or disturbing the private life or family relations of another. RCPI‘s negligence in not promptly performing its obligation undoubtedly disturbed the peace of mind not only of Grace but also her co-respondents. It disrupted the ―filial tranquillity‖ among them as they blamed each other ―for failing to respond swiftly to an emergency.‖ The tortious acts and/or omissions complained of in this case are, therefore, analogous to acts mentioned under Article 26 IT WAS A CONTRACT OF ADHESION RCPI insists that the limited liability clause in the ―Telegram Transmission Form‖ is not a contract of adhesion and that the fact that the stipulations were located in a particular space where they can easily be seen, is sufficient notice to any sender (like Grace Verchez-Infante) where she could manifest her disapproval A CONTRACT OF ADHESION is defined as one in which one of the parties imposes a ready-made form of contract, which the other party may accept or reject, but which the latter cannot modify, giving no room for negotiation and depriving the latter of the opportunity to bargain on equal footing. While a contract of adhesion is not necessarily void and unenforceable, since it is construed strictly against the party who drafted it or gave rise to any ambiguity therein, it is stricken down as void and unenforceable or subversive of public policy when the weaker party is imposed upon in dealing with the dominant bargaining party and is reduced to the alternative of taking it or leaving it, completely deprived of the opportunity to bargain on equal footing. This Court holds that the CA finding that the parties‘ contract is one of adhesion which is void is, given the facts and circumstances of the case, thus well- taken.

VII.

TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONS -

Civil Code o Article 1314 (Memorize)

1. Gilchrist v. Cuddy, 29 Phil. 542 (1915) Facts: Cuddy was the owner of the film ZIGOMAR and that on the 24th of April he rented it to C. S. Gilchrist for a week for P125, and it was to be delivered on the 26th of May, the week beginning that day. A few days prior to this Cuddy sent the money back to Gilchrist, which he had forwarded to him in Manila, saying that he had made other arrangements with his film. The other arrangements was the rental to these defendants Espejo and his partner, Zaldarriaga for P350 for the week and the injunction was asked by Gilchrist against these parties from showing it for the week beginning the 26th of May. Issue: Whether the injunction was proper Held: YES. The contract in question had been made. There is in the record not only the positive and detailed testimony of Gilchrist to this effect, but there is also a letter of apology from Cuddy to Gilchrist in which the former enters into a 261

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lengthy explanation of his reasons for leasing the film to another party. The latter could only have been called forth by a broken contract with Gilchrist to lease the film to him. Did the appellants know that they were inducing Cuddy to violate his contract with a third party when they induced him to accept the P350? Espejo admitted that he knew that Cuddy was the owner of the film. He received a letter from his agents in Manila, assuring him that he could not get the film for about six weeks. The arrangements between Cuddy and the appellants for the exhibition of the film by the latter on the 26th of May were perfected after April 26, so that the 6 weeks would include and extend beyond May 26. The appellants must necessarily have known at the time they made their offer to Cuddy that the latter had booked or contracted the film for six weeks from April 26. Therefore, the inevitable conclusion is that the appellants knowingly induced Cuddy to violate his contract with another person. But there is no specific finding that the appellants knew the identity of the other party, so we must assume that they did not know that Gilchrist was the person who had contracted for the film. The right on the part of Gilchrist to enter into a contract with Cuddy for the lease of the film must be fully recognized and admitted by all. That Cuddy was liable in an action for damages for the breach of that contract, there can be no doubt. Were the appellants likewise liable for interfering with the contract between Gilchrist and Cuddy, THEY NOT KNOWING AT THE TIME THE IDENTITY OF ONE OF THE CONTRACTING PARTIES? The appellants claim that they had a right to do what they did. The ground upon which the appellants base this contention is, that there was no valid and binding contract between Cuddy and Gilchrist and that, therefore, they had a right to compete with Gilchrist for the lease of the film, the right to compete being a justification for their acts. If there had been no contract between Cuddy and Gilchrist this defense would be tenable, but the mere right to compete could not justify the appellants in intentionally inducing Cuddy to take away the appellee's contractual rights. In Walker vs. Cronin: ―Everyone has a right to enjoy the fruits and advantages of his own enterprise, industry, skill and credit. He has no right to be protected against competition; but he has a right to be free from malicious and wanton interference, disturbance or annoyance. If disturbance or loss come as a result of competition, or the exercise of like rights by others, it is damnum absque injuria, unless some superior right by contract or otherwise is interfered with.‖ In Read vs. Friendly Society of Operative Stonemasons, ―I think the plaintiff has a cause of action against the defendants, unless the court is satisfied that, when they interfered with the contractual rights of plaintiff, the defendants had a sufficient justification for their interference; for it is not a justification that ‗they acted bona fide in the best interests of the society of masons,‘ i. e., in their own interests. Nor is it enough that ‗they were not actuated by improper motives.‘ I think their sufficient justification for interference with plaintiff's right must be an EQUAL or SUPERIOR right in themselves, and that no one can legally excuse himself to a man, of whose contract he has procured the breach, on the ground that he acted on a wrong understanding of his own rights, or without malice, or bona fide, or in the best interests of himself, or even that he acted as an altruist, seeking only the good of another and careless of his own advantage.‖ It is said that the ground on which the liability of a third party for interfering with a contract between others rests, is that the INTERFERENCE WAS MALICIOUS. The CONTRARY VIEW, however, is taken by the Supreme Court US in the case of Angle vs. Railway Co. The only motive for interference by the third party in that case was the desire to make a profit to the injury of one of the parties of the contract. There was no malice in the case beyond the desire to make an unlawful gain to the detriment of one of the contracting parties. In THE CASE AT BAR the only motive for the interference with the Gilchrist-Cuddy contract on the part of the appellants was a desire to make a profit by exhibiting the film in their theater. There was no malice beyond this desire; but this fact does not relieve them of the legal liability for interfering with that contract and causing its breach. It is, therefore, clear, under the above authorities, that they were liable to Gilchrist for the damages caused by their acts, unless they are relieved from such liability by reason of the fact that they did not know at the time the identity of the original lessee (Gilchrist) of the film. The liability of the appellants arises from UNLAWFUL ACTS and not from contractual obligations, as they were under no such obligations to induce Cuddy to violate his contract with Gilchrist. So that if the action of Gilchrist had been one for damages, it would be governed by [the present Article 2176]. There is nothing in this article which requires as a condition precedent to the liability of a tortfeasor that he must know the identity of a person to whom he causes damage.

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But the fact that the appellants‘ interference with the Gilchrist contract was actionable did not of itself entitle Gilchrist to sue out an injunction against them. The allowance of this remedy must be justified under section 164 of the Code of Civil Procedure, which specifies the circumstances under which an injunction may issue. ON THE PROPRIETY OF THE INJUNCTION Does the fact that the appellants did not know at the time the identity of the original lessee of the film militate against Gilchrist's right to a preliminary injunction, although the appellants incurred civil liability for damages for such interference? There is nothing in section 164 of the Code of Civil Procedure which indicates, even remotely, that before an injunction may issue restraining the wrongful interference with contracts by strangers, the strangers must know the identity of both parties. It would seem that this is not essential, as injunctions frequently issue against municipal corporations, public service corporations, public officers, and others to restrain the commission of acts which would tend to injuriously affect the rights of persons whose identity the respondents could not possibly have known beforehand. In a proper case injunction will issue at the instance of a private citizen to restrain ultra vires acts of public officials. So we proceed to the determination of the main question of whether or not the preliminary injunction ought to have been issued in this case. As a rule, injunctions are denied to those who have an adequate remedy at law. If the injury is irreparable, the ordinary process is inadequate. By 'IRREPARABLE INJURY' is not meant such injury as is beyond the possibility of repair, or beyond possible compensation in damages, nor necessarily great injury or great damage, but that species of injury, whether great or small, that ought not to be submitted to on the one hand or inflicted on the other; and, because it is so large on the one hand, or so small on the other, is of such constant and frequent recurrence that no fair or reasonable redress can be had therefor in a court of law. The case at bar is somewhat novel, as the only contract which was broken was that between Cuddy and Gilchrist, and the profits of the appellee depended upon the patronage of the public, for which it is conceded the appellants were at liberty to compete by all fair and legitimate means. This court takes judicial notice of the general character of a cinematograph or motion-picture theater. It is a quite modern form of the play house, wherein, by means of an apparatus known as a cinematograph or kinematograph, a series of views- representing closely successive phases of a moving object, are exhibited in rapid sequence, giving a picture which, owing to the persistence of vision, appears to the observer to be in continuous motion. The subjects which have lent themselves to the art of the photographer in this manner have increased enormously in recent years, as well as have the places where such exhibitions are given. The attendance, and, consequently, the receipts, at one of these cinematograph or motion-picture theaters depends in no small degree upon the excellence of the photographs, and it is quite common for the proprietor of the theater to secure an especially attractive exhibit as his "feature film" and advertise it as such in order to attract the public. This feature film is depended upon to secure a larger attendance than if its place on the program were filled by other films of mediocre quality. It is evident that the failure to exhibit the feature film will reduce the receipts of the theater. Hence, Gilchrist was facing the Immediate prospect of diminished profits by reason of the fact that the appellants had induced Cuddy to rent to them the film Gilchrist had counted upon as his feature film. It is quite apparent that to estimate with any degree of accuracy the damages which Gilchrist would likely suffer from such an event would be quite difficult if not impossible. If he allowed the appellants to exhibit the film in Iloilo, it would be useless for him to exhibit it again, as the desire of the public to witness the production would have been already satisfied. In this extremity, the appellee applied for and was granted, as we have indicated, a mandatory injunction against Cuddy requiring him to deliver the Zigomar to Gilchrist, and a preliminary injunction against the appellants restraining them from exhibiting that film in their theater during the week he (Gilchrist) had a right to exhibit it, These Injunctions saved the plaintiff harmless from damages due to the unwarranted interference of the defendants, as well as the difficult task which would have been set for the court of estimating them in case the appellants had been allowed to carry out their illegal plans, As to whether or not the mandatory injunction should have been issued, we are not, as we have said, called upon to determine. So far as the preliminary injunction issued against the appellants is concerned, which prohibited them from exhibiting the Zigomar during the week which Gilchrist desired to exhibit it, we are of the opinion that the circumstances justified the issuance of that injunction in the discretion of the court. Kindly take note of the COMMENTARY MADE BY THE SUPREME COURT ON GILCHRIST BY THE NEXT cases: 1. Daywalt v. Recoletos

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It there appeared that one Cuddy, the owner of a cinematographic film, let it under a rental contract to the plaintiff Gilchrist for a specified period of time. In violation of the terms of this agreement, Cuddy proceeded to turn over the film also under a rental contract, to the defendants Espejo and Zaldarriaga. Gilchrist thereupon restored to the Court of First. Instance and procured an injunction restraining the defendants from exhibiting the film in question in their theater during the period specified in the contract of Cuddy with Gilchrist. Upon appeal to this court it was in effect held that the injunction was not improperly granted, although the defendants did not, at the time their contract was made, know the identity of the plaintiff as the person holding the prior contract but did know of the existence of a contract in favor of someone. It was also said arguendo, that the defendants would have been liable in damages under article 1902 of the Civil Code, if the action had been brought by the plaintiff to recover damages. The force of the opinion is, we think, somewhat weakened by the criticism contained in the concurring opinion, wherein it is said that the question of breach of contract by inducement was not really involved in the case. Taking the decision upon the point which was really decided, it is authority for the proposition that one who buys something which he knows has been sold to some other person can be restrained from using that thing to the prejudice of the person having the prior and better right. 2. Tayag v. Lacson, So Ping Bun v. CA, Lagon v. CA, & Go v. Cordero As early as Gilchrist vs. Cuddy, we held that where there was no malice in the interference of a contract, and the impulse behind one‘s conduct lies in a proper business interest rather than in wrongful motives, a party cannot be a malicious interferer. Where the alleged interferer is financially interested, and such interest motivates his conduct, it cannot be said that he is an officious or malicious intermeddler. 2. Daywalt v. Corporacion de PP Agustinos Recoletos, 39 Phil. 587 (1919) Facts: In 1902, Teodorica Endencia executed a contract whereby the obligated herself to convey to Daywalt a tract of land in Mindoro. They agreed that a deed should be executed as soon as a Torrens Title was secured by Endencia. In 1906, Endencia was declared the owner, but a Certificate was not issued until later. The parties met after this decision and made a new contract – a Deed of Conveyance - to carry out the original agreement – 452.5 hectares for P4,000. Since the Certificate was not issued, the contract was not put into effect within the period contemplated therein. In 1908, they entered into another contract, wherein Endencia agreed that upon receipt of the Certificate, she would deliver it to the Hongkong and Shanghai Bank upon payment of P3,100. The Certificate was in time issued, but the survey found the land was about “1.248 of 452 hectares”. She became reluctant to transfer it, since she ―never intended to sell so large an amount of land.‖ Daywalt filed an action for specific performance which was ruled in his favor by the SC in 1914. The 1908 contract was put into effect. Recoletos is a religious corporation which owned a large tract of land called the San Jose Estate, which was immediately adjacent to the one described above. They maintained large herds of cattle thereon, and the farms were managed by Father Sanz. He exerted influence and ascendancy over Endencia as a religious leader and due to their personal friendship. Endencia was a woman of little force, subject to influence, and sought Father Sanz‘s advice on all important business matters. Father Sanz knew of all the above contracts. She delivered her Certificate to the Recoletos for safekeeping until the SC decision ordering its conveyance. The Recoletos in 1909 sold the San Jose Estate to the Government. In order to move its 2,638 heads of cattle, it entered into an arrangement with Endencia whereby said cattle were pastured on the latter‘s land from 1909 to 1914. Daywalt filed a complaint stating TWO CAUSES OF ACTION. (1) damages for the use and occupation of the land by reason of the pasturing. The CFI held the Recoletos liable, and they did not appeal. (2) damages on the ground that the corporation induced Endencia to refrain from performing the contract and from delivering the Certificate. Daywalt submitted the FOLLOWING PROOF: In 1911, it appears, the plaintiff, as the owner of the land which he had bought from Teodorica Endencia entered into a contract with S. B. Wakefield, of San Francisco, for the sale and disposal of said lands to a sugar growing and milling enterprise, the successful launching of which depended on the ability of Daywalt to get possession of the land and the Torrens certificate of title. In order to accomplish this end, the plaintiff returned to the Philippine Islands, communicated his arrangement to the defendant, and made repeated efforts to secure the registered title for delivery in compliance with said agreement with Wakefield. Teodorica Endencia seems to have yielded her consent to the consummation of her contract, but the Torrens title was then in the possession of Padre Juan Labarga in Manila, who refused to deliver the document. Teodorica also was in the end contract with the plaintiff, with the result that the plaintiff was kept out of possession until the Wakefield project for the establishment of a large sugar growing and milling enterprise fell through. In the light of what has happened in recent years in the sugar industry, we feel justified in saying that the project above referred to, if carried into effect, must inevitably have proved a great success. 264 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Atty. Jess Lopez

Issue: (1) Whether a person (Recoletos) not a party to a contract for the sale of land makes himself liable for damages to the vendee beyond the value of the use and occupation, by colluding with the vendor and maintaining him in the effort to resist an action for specific performance. Held: NO. As preliminary to a consideration of the first of these questions, we deem it well it dispose of the contention that the members of the defendants corporation, in advising and prompting Teodorica Endencia not to comply with the contract of sale, were actuated by improper and malicious motives. The trial court found that this contention was not sustained, observing that while it was true that the circumstances pointed to an entire sympathy on the part of the defendant corporation with the efforts of Teodorica Endencia to defeat the plaintiff's claim to the land, the fact that its officials may have advised her not to carry the contract into effect would not constitute actionable interference with such contract. It may be added that when one considers the hardship that the ultimate performance of that contract entailed on the vendor, and the doubt in which the issue was involved — to the extent that the decision of the Court of the First Instance was unfavorable to the plaintiff and the Supreme Court itself was divided — the attitude of the defendant corporation, as exhibited in the conduct of its procurador, Juan Labarga, and other members of the order of the Recollect Fathers, is not difficult to understand. To our mind a fair conclusion on this feature of the case is that father Juan Labarga and his associates believed in good faith that the contract cold not be enforced and that Teodorica would be wronged if it should be carried into effect. Any advice or assistance which they may have given was, therefore, prompted by no mean or improper motive. It is not, in our opinion, to be denied that Teodorica would have surrendered the documents of title and given possession of the land but for the influence and promptings of members of the defendants corporation. But we do not credit the idea that they were in any degree influenced to the giving of such advice by the desire to secure to themselves the paltry privilege of grazing their cattle upon the land in question to the prejudice of the just rights of the plaintiff. The attorney for the plaintiff maintains that, by interfering in the performance of the contract in question and obstructing the plaintiff in his efforts to secure the certificate of title to the land, the defendant corporation made itself a co-participant with Teodorica Endencia in the breach of said contract; and inasmuch as father Juan Labarga, at the time of said unlawful intervention between the contracting parties, was fully aware of the existence of the contract which the plaintiff had made with S. B. Wakefield, of San Francisco, it is insisted that the defendant corporation is liable for the loss consequent upon the failure of the project outlined in said contract. In this connection reliance is placed by the plaintiff upon certain American and English decisions in which it is held that a person who is a stranger to a contract may, by an unjustifiable interference in the performance thereof, render himself liable for the damages consequent upon non-performance. It is said that the doctrine of these cases was recognized by this court in Gilchrist vs. Cuddy and we have been earnestly pressed to extend the rule there enunciated to the situation here presente. Somewhat more than half a century ago the English Court saw its way clear to permit an action for damages to be maintained against a stranger to a contract wrongfully interfering in its performance. The leading case on this subject is Lumley vs. Gye. It there appeared that the plaintiff, as manager of a theatre, had entered into a contract with Miss Johanna Wagner, an opera singer,, whereby she bound herself for a period to sing in the plaintiff's theatre and nowhere else. The defendant, knowing of the existence of this contract, and, as the declaration alleged, "maliciously intending to injure the plaintiff," enticed and produced Miss Wagner to leave the plaintiff's employment. It was held that the plaintiff was entitled to recover damages. The right which was here recognized had its origin in a rule, long familiar to the courts of the common law, to the effect that any person who entices a servant from his employment is liable in damages to the master. The master's interest in the service rendered by his employee is here considered as a distinct subject of juridical right. It being thus accepted that it is a legal wrong to break up a relation of personal service, the question now arose whether it is illegal for one person to interfere with any contract relation subsisting between others. Prior to the decision of Lumley vs. Gye [supra] it had been supposed that the liability here under consideration was limited to the cases of the enticement of menial servants, apprentices, and others to whom the English Statutes of Laborers were applicable. But in the case cited the majority of the judges concurred in the opinion that the principle extended to all cases of hiring. This doctrine was followed by the Court of Appeal in Bowen vs. Hall and in Temperton vs. Russell , it was held that the right of action for maliciously procuring a breach of contract is not confined to contracts for personal services, but EXTENDS TO CONTRACTS IN GENERAL. In that case the contract which the defendant had procured to be breached was a contract for the supply of building material. Malice in some form is generally supposed to be an essential ingredient in cases of interference with contract relations. But upon the authorities it is enough if the wrong-doer, having knowledge of the existence of the contract relations, in bad faith sets about to break it up. Whether his motive is to benefit himself or gratify his spite by working mischief to the employer is immaterial. Malice in the sense of ill-will or spite is not essential. Upon the question as to what constitutes legal justification, a good illustration was put in the leading case. If a party enters into contract to go for another upon a journey to a remote and unhealthful climate, and a third person, with a bona fide 265 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Atty. Jess Lopez

purpose of benefiting the one who is under contract to go, dissuades him from the step, no action will lie. But if the advice is not disinterested and the persuasion is used for "the indirect purpose of benefiting the defendant at the expense of the plaintiff," the intermedler is liable if his advice is taken and the contract broken. The doctrine embodied in the cases just cited has sometimes been found useful, in the complicated relations of modern industry, as a means of restraining the activities of labor unions and industrial societies when improperly engaged in the promotion of strikes. An illustration of the application of the doctrine in question in a case of this kind is found in South Wales Miners Federation vs. Glamorgan Coal Co. It there appeared that certain miners employed in the plaintiff's collieries, acting under the order of the executive council of the defendant federation, violated their contract with the plaintiff by abstaining from work on certain days. The federation and council acted without any actual malice or ill-will towards the plaintiff, and the only object of the order in question was that the price of coal might thereby be kept up, a factor which affected the miner's wage scale. It was held that no sufficient justification was shown and that the federation was liable. It should be observed in this connection that, according to the English and American authorities, no question can be made as to the liability to one who interferes with a contract existing between others by means which, under known legal cannons, can be denominated an unlawful means. Thus, if performance is prevented by force, intimidation, coercion, or threats, or by false or defamatory statements, or by nuisance or riot, the person using such unlawful means is, under all the authorities, liable for the damage which ensues. And in jurisdictions where the doctrine of Lumley vs. Gye [supra] is rejected, no liability can arise from a meddlesome and malicious interference with a contract relation unless some such unlawful means as those just indicated are used. GILCHRIST V. CUDDY This brings us to the decision made by this court in Gilchrist. It there appeared that one Cuddy, the owner of a cinematographic film, let it under a rental contract to the plaintiff Gilchrist for a specified period of time. In violation of the terms of this agreement, Cuddy proceeded to turn over the film also under a rental contract, to the defendants Espejo and Zaldarriaga. Gilchrist thereupon restored to the Court of First Instance and produced an injunction restraining the defendants from exhibiting the film in question in their theater during the period specified in the contract of Cuddy with Gilchrist. Upon appeal to this court it was in effect held that the injunction was not improperly granted, although the defendants did not, at the time their contract was made, know the identity of the plaintiff as the person holding the prior contract but did know of the existence of a contract in favor of someone. It was also said arguendo, that the defendants would have been liable in damages under article 1902 of the Civil Code, if the action had been brought by the plaintiff to recover damages. The force of the opinion is, we think, somewhat weakened by the criticism contain in the concurring opinion, where it is said that the question of breach of contract by inducement was not really involved in the case. Taking the decision upon the point which was really decided, it is authority for the proposition that one who buys something which he knows has been sold to some other person can be restrained from using that thing to the prejudice of the person having the prior and better right. Translated into terms applicable to the case at bar, the decision in Gilchrist, indicates that the corporation, having notice of the sale of the land in question to Daywalt, might have been enjoined by the latter from using the property for grazing its cattle thereon. That the defendant corporation is also liable in this action for the damage resulting to the plaintiff from the wrongful use and occupation of the property has also been already determined. But it will be observed that in order to sustain this liability it is not necessary to resort to any subtle exegesis relative to the liability of a stranger to a contract for unlawful interference in the performance thereof. It is enough that defendant use the property with notice that the plaintiff had a prior and better right. Article 1902 of the Civil Code declares that any person who by an act or omission, characterized by fault or negligence, causes damage to another shall be liable for the damage so done. Ignoring so much of this article as relates to liability for negligence, we take the rule to be that a person is liable for damage done to another by any culpable act; and by "culpable act" we mean any act which is blameworthy when judged by accepted legal standards. The idea thus expressed is undoubtedly broad enough to include any rational conception of liability for the tortious acts likely to be developed in any society. Thus considered, it cannot be said that the doctrine of Lumley vs. Gye and related cases is repugnant to the principles of the civil law. Nevertheless, it must be admitted that the codes and jurisprudence of the civil law furnish a somewhat uncongenial field in which to propagate the idea that a stranger to a contract may sued for the breach thereof. Article 1257 of the Civil Code declares that contracts are binding only between the parties and their privies. If the two antagonistic ideas which we have just brought into juxtaposition are capable of reconciliation, the process must be accomplished by distinguishing clearly between the right of action arising from the improper interference with the contract by a stranger thereto, considered as an independent act generate of civil liability, and the right of action ex contractu against a party to the contract resulting from the breach thereof. However, we do not propose here to pursue the matter further, inasmuch as, for reasons presently to be stated, we are of the opinion that neither the doctrine of Lumley vs. Gye nor the application made of it by this court in Gilchrist vs. Cuddy, affords any basis for the recovery of 266

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the damages which the plaintiff is supposed to have suffered by reason of his inability to comply with the terms of the Wakefield contract. Whatever may be the character of the liability which a stranger to a contract may incur by advising or assisting one of the parties to evade performance, there is one proposition upon which all must agree. This is, that the stranger cannot become more extensively liable in damages for the nonperformance of the contract than the party in whose behalf he intermeddles. To hold the stranger liable for damages in excess of those that could be recovered against the immediate party to the contract would lead to results at once grotesque and unjust. In the case at bar, as Teodorica Endencia was the party directly bound by the contract, it is obvious that the liability of the defendant corporation, even admitting that it has made itself coparticipant in the breach of the contract, can in no even exceed hers. This leads us to consider at this point the extent of the liability of Teodorica Endencia to the plaintiff by reason of her failure to surrender the certificate of title and to place the plaintiff in possession. It should in the first place be noted that the liability of Teodorica Endencia for damages resulting from the breach of her contract with Daywalt was a proper subject for adjudication in the action for specific performance which Daywalt instituted against her in 1909 and which was litigated by him to a successful conclusion in this court, but without obtaining any special adjudication with reference to damages. Indemnification for damages resulting from the breach of a contract is a right inseparably annexed to every action for the fulfillment of the obligation (art. 1124, Civil Code); and its is clear that if damages are not sought or recovered in the action to enforce performance they cannot be recovered in an independent action. As to Teodorica Endencia, therefore, it should be considered that the right of action to recover damages for the breach of the contract in question was exhausted in the prior suit. However, her attorneys have not seen fit to interpose the defense of res judicata in her behalf; and as the defendant corporation was not a party to that action, and such defense could not in any event be of any avail to it, we proceed to consider the question of the liability of Teodorica Endencia for damages without refernce to this point. The most that can be said with refernce to the conduct of Teodorica Endencia is that she refused to carry out a contract for the sale of certain land and resisted to the last an action for specific performance in court. The result was that the plaintiff was prevented during a period of several years from exerting that control over the property which he was entitled to exert and was meanwhile unable to dispose of the property advantageously. Now, what is the measure of damages for the wrongful detention of real property by the vender after the time has come for him to place the purchaser in possession? The damages ordinarily and normally recoverable against a vendor for failure to deliver land which he has contracted to deliver is the value of the use and occupation of the land for the time during which it is wrongfully withheld. And of course where the purchaser has not paid the purchaser money, a deduction may be made in respect to the interest on the money which constitutes the purchase price. Substantially the same rule holds with respect to the liability of a landlord who fails to put his tenant in possession pursuant to contract of lease. The measure of damages is the value of the leasehold interest, or use and occupation, less the stipulated rent, where this has not been paid. The rule that the measure of damages for the wrongful detention of land is normally to be found in the value of use and occupation is, we believe, one of the things that may be considered certain in the law (39 cyc., 1630; 24 Cyc., 1052 Sedgewick on Damages, Ninth ed., sec. 185.) — almost as wellsettled, indeed, as the rule that the measure of damages for the wrongful detention of money is to be found in the interest. We recognize the possibility that more extensive damages may be recovered where, at the time of the creation of the contractual obligation, the vendor, or lessor, is aware of the use to which the purchaser or lessee desires to put the property which is the subject of the contract, and the contract is made with the eyes of the vendor or lessor open to the possibility of the damage which may result to the other party from his own failure to give possession. The case before us is not this character, inasmuch as at the time when the rights of the parties under the contract were determined, nothing was known to any to them about the San Francisco capitalist who would be willing to back the project portrayed in Exhibit C. The extent of the liability for the breach of a contract must be determined in the light of the situation in existence at the time the contract is made; and the damages ordinarily recoverable are in all events limited to such as might be reasonable are in all events limited to such as might be reasonably foreseen in the light of the facts then known to the contracting parties. Where the purchaser desires to protect himself, in the contingency of the failure of the vendor promptly to give possession, from the possibility of incurring other damages than such as the incident to the normal value of the use and occupation, he should cause to be inserted in the contract a clause providing for stipulated amount to the paid upon failure of the vendor to give possession; and not case has been called to our attention where, in the absence of such a stipulation, damages have been held to be recoverable by the purchaser in excess of the normal value of use and occupation. On the contrary, the most fundamental conceptions of the law relative to the assessment of damages are inconsistent with such idea. In the preceding discussion we have considered the plaintiff's right chiefly against Teodorica Endencia; and what has been said suffices in our opinion to demonstrate that the damages laid under the second cause of action in the complaint could not be recovered from her, first, because the damages laid under the second cause of action in the complaint could not be recovered from her, first, because the damages in question are special damages which were not within contemplation of 267 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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the parties when the contract was made, and secondly, because said damages are too remote to be the subject of recovery. This conclusion is also necessarily fatal to the right of the plaintiff to recover such damages from the defendant corporation, for, as already suggested, by advising Teodorica not to perform the contract, said corporation could in no event render itself more extensively liable than the principle in the contract. Our conclusion is that the judgment of the trial court should be affirmed, and it is so ordered, with costs against the appellant. 3. Tayag v. Lacson, 426 SCRA 282 (2004) Facts: Respondents Angelica Tiotuyco Vda. de Lacson, and her children were the registered owners of 3 parcels of land located in Mabalacat, Pampanga. The properties, which were tenanted agricultural lands, were administered by Renato Espinosa for the owner. On March 17, 1996, a group of original farmers/tillers, individually executed in favor of the Tayag, separate Deeds of Assignment in which the assignees assigned to Tayag their respective rights as tenants/tillers of the landholdings possessed and tilled by them for and in consideration of P50.00 per square meter. Said amount was made payable ―when the legal impediments to the sale of the property to the petitioner no longer existed.‖ The petitioner was also granted the exclusive right to buy the property if and when the respondents, with the concurrence of the defendants- tenants, agreed to sell the property. In the interim, the petitioner gave varied sums of money to the tenants as partial payments, and the latter issued receipts for the said amounts. On July 24, 1996, the petitioner called a meeting of the defendants-tenants to work out the implementation of the terms of their separate agreements. However, on August 8, 1996, the defendants-tenants, through Joven Mariano, wrote the Tayag stating that they were not attending the meeting and instead gave notice of their collective decision to sell all their rights and interests, as tenants/lessees, over the landholding to the respondents. Tayag filed a complaint with RTC against the tenants, as well as Lacson, for the court to fix a period within which to pay the agreed purchase price of P50.00 per square meter to the defendants, as provided for in the Deeds of Assignment. Petitioner also prayed for a writ of preliminary injunction against the defendants and the respondents. In his complaint, the petitioner alleged that the defendants TIAMSON, et al., have no right to deal with the defendants LACSON or with any third persons while their contracts with the plaintiff are subsisting; defendants LACSONS are inducing or have induced the defendants TIAMSON, et al., to violate their contracts with the plaintiff; Basically, Tayag claims that Lacson induced the tenants to violate the deed of assignment executed by the tenants in favor of Tayag. Also prayed that a Writ of Preliminary Injunction be issued prohibiting, enjoining and restraining defendants from rescinding their contracts with the plaintiff and from alienating their rights and interest over the aforementioned properties in favor of defendants LACSONS or any other third persons; and prohibiting the defendants LACSONS from encumbering/alienating the property. The tenants Tiamson, et al., alleged that the money each of them received from the petitioner were in the form of loans, and that they were deceived into signing the deeds of assignment. The Lacson, thereafter, filed a Comment/Motion to dismiss/deny the Tayag‘s plea for injunctive relief on the following grounds: 1. The Deeds of Assignment executed by the defendants-tenants were contrary to public policy and P.D. No. 27 and Rep. Act No. 6657; 2. Petitioner failed to prove that the respondents induced the defendants-tenants to renege on their obligations under the ―Deeds of Assignment 3. Not being privy to the said deeds, the respondents are not bound by the said deeds 4. The respondents had the absolute right to sell and dispose of their property and to encumber the same and cannot be enjoined from doing so by the trial court. Trial court issued an Order denying the motion of the Lacson for being premature. It directed the hearing to proceed for the respondents to adduce their evidence. CA rendered its decision against the Tayag, annulling and setting aside the assailed orders of the trial court. CA ruled that the Lacson could not be enjoined from alienating or even encumbering their property, especially so since they were not privies to the deeds of assignment executed by the tenants. Defendants-tenants were not yet owners of the portions of the landholdings respectively tilled by them; as such, they had nothing to assign to the petitioner. CA ruled that the deeds of assignment executed by the defendants-tenants were contrary to P.D. No. 27 and Rep. Act No. 6657. Hence, the petitioner filed his petition for review on certiorari before this Court, 268

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Atty. Jess Lopez

Issues: (1) Whether or not the writ of injunction should be granted. (2) Whether or not respondents are guilty of toritious interference. (See 4 th issue) Held: NO. The very foundation of the jurisdiction to issue writ of injunction rests in the existence of a cause of action and in the probability of irreparable injury, inadequacy of pecuniary compensation and the prevention of the multiplicity of suits. Where facts are not shown to bring the case within these conditions, the relief of injunction should be refused. For the court to issue a writ of preliminary injunction, the petitioner was burdened to establish the following: (1) a right in esse or a clear and unmistakable right to be protected; (2) a violation of that right; (3) that there is an urgent and permanent act and urgent necessity for the writ to prevent serious damage. The possibility of irreparable damage without proof of adequate existing rights is not a ground for injunction. Petitioner failed to establish the essential requisites for the issuance of a writ of preliminary injunction. FIRST. The trial court cannot enjoin Lacson, at the instance of the Tayag, from selling, disposing of and encumbering their property. As the registered owners of the property, the Lacson has the right to enjoy and dispose of their property without any other limitations than those established by law, in accordance with Article 428 of the Civil Code. Respondents cannot be enjoined from selling or encumbering their property simply and merely because they had executed Deeds of Assignment in favor of the petitioner, obliging themselves to assign and transfer their rights or interests as agricultural farmers/laborers/sub- tenants over the landholding, and granting the petitioner the exclusive right to buy the property subject to the occurrence of certain conditions. The respondents were not parties to the said deeds. There was no evidence that the respondents agreed, expressly or impliedly, to the said deeds or to the terms and conditions set forth therein. The petitioner even admitted when he testified that he did not know any of the respondents, and that he had not met any of them before he filed his complaint in the RTC. He did not even know that one of those whom he had impleaded as defendant, Angelica Vda. de Lacson, was already dead. SECOND. A reading the averments of the complaint will show that the petitioner clearly has no cause of action against the respondents for the principal relief prayed for therein, for the trial court to fix a period within which to pay to each of the defendants-tenants the balance consideration under the Deeds of Assignment executed by the defendants-tenants. The Lacsons are not parties or privies to the deeds of assignment. The matter of the period for the petitioner to pay the balance of the said amount to each of the defendants-tenants is an issue between them, the parties to the deed. THIRD. On the face of the complaint, the action of the petitioner against the respondents and the defendants- tenants has no legal basis. Under the Deeds of Assignment, the obligation of the petitioner to pay to each of the defendants-tenants the balance of the purchase price was conditioned on the occurrence of the following events: (a) the respondents agree to sell their property to the petitioner; (b) the legal impediments to the sale of the landholding to the petitioner no longer exist; and, (c) the petitioner decides to buy the property. When he testified, the petitioner admitted that the legal impediments referred to in the deeds were (a) the respondents‘ refusal to sell their property; and, (b) the lack of approval of the Department of Agrarian Reform It is only upon the occurrence of the foregoing conditions that the petitioner would be obliged to pay to the defendants-tenants the balance of the P50.00 per square meter under the deeds of assignment. There is no showing in the petitioner‘s complaint that the respondents had agreed to sell their property, and that the legal impediments to the agreement no longer existed. The petitioner and the defendants-tenants had yet to submit the Deeds of Assignment to the Department of Agrarian Reform which, in turn, had to act on and approve or disapprove the same. In fact, as alleged by the petitioner in his complaint, he was yet to meet with the defendants-tenants to discuss the implementation of the deeds of assignment. Unless and until the Department of Agrarian Reform approved the said deeds, if at all the petitioner had no right to enforce the same in a court of law by asking the trial court to fix a period within which to pay the balance of the purchase price and praying for injunctive relief. We do not agree with the contention of the petitioner that the deeds of assignment executed by the defendants-tenants are perfected option contracts, escpecially when not being the registered owners of the property, the defendants-tenants could not legally grant to the petitioner the option, much less the ―exclusive right‖ to buy the property. FOURTH. (RELEVANT ISSUE) Tayag impleaded the Lacson as parties-defendants solely on his allegation that the latter induced or are inducing the defendants-tenants to violate the deeds of assignment, contrary to the provisions of Article 1314 of the New Civil Code Art. 1314. Any third person who induces another to violate his contract shall be liable for damages to the other contracting party. In So Ping Bun v. CA, we held that for the said law to apply, the pleader is BURDENED TO PROVE THE FOLLOWING: 269 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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(1) the existence of a valid contract; (2) knowledge by the third person of the existence of the contract; and (3) interference by the third person in the contractual relation without legal justification. Where there was no malice in the interference of a contract, and the impulse behind one‘s conduct lies in a proper business interest rather than in wrongful motives, a party cannot be a malicious interferer. Where the alleged interferer is financially interested, and such interest motivates his conduct, it cannot be said that he is an officious or malicious intermeddler In fine, one who is not a party to a contract and who interferes thereon is not necessarily an officious or malicious intermeddler. The only evidence adduced by the Tayag to prove his claim is the letter from the defendants-tenants informing him that they had decided to sell their rights and interests over the landholding to the Lacsons, instead of honoring their obligation under the deeds of assignment because, according to them, the petitioner harassed those tenants who did not want to execute deeds of assignment in his favor, and because the said defendants-tenants did not want to have any problem with the respondents who could cause their eviction for executing with the petitioner the deeds of assignment as the said deeds are in violation of P.D. No. 27 and Rep. Act No. 6657. The defendants-tenants did not allege therein that the Lacsons induced them to breach their contracts with the petitioner. Tayag himself admitted when he testified that his claim that the Lacsons induced the defendants-assignees to violate contracts with him was based merely on what “he heard.” Even if the Lacsons received an offer from the defendants-tenants to assign and transfer their rights and interests on the landholding, the Lacsons cannot be enjoined from entertaining the said offer, or even negotiating with the defendants-tenants. respondents could not even be expected to warn the defendants-tenants for executing the said deeds in violation of P.D. No. 27 and Rep. Act No. 6657. Under Section 22 of the latter law, beneficiaries under P.D. No. 27 who have culpably sold, disposed of, or abandoned their land, are disqualified from becoming beneficiaries. From the pleadings of the petitioner, it is quite evident that his purpose in having the defendants-tenants execute the Deeds of Assignment in his favor was to acquire the landholding without any tenants thereon, in the event that the respondents agreed to sell the property to him. The petitioner knew that under Section 11 of Rep. Act No. 3844, if the respondents agreed to sell the property, the defendants-tenants shall have preferential right to buy the same under reasonable terms and conditions: Under Section 12 of the law, if the property was sold to a third person without the knowledge of the tenants thereon, the latter shall have the right to redeem the same at a reasonable price and consideration. By assigning their rights and interests on the landholding under the deeds of assignment in favor of the petitioner, the defendants-tenants thereby waived, in favor of the petitioner, who is not a beneficiary under Section 22 of Rep. Act No. 6657, their rights of preemption or redemption under Rep. Act No. 3844. The defendants- tenants would then have to vacate the property in favor of the petitioner upon full payment of the purchase price. Instead of acquiring ownership of the portions of the landholding respectively tilled by them, the defendants- tenants would again become landless for a measly sum of P50.00 per square meter. The petitioner‘s scheme is subversive, not only of public policy, but also of the letter and spirit of the agrarian laws. That the scheme of the petitioner had yet to take effect in the future or ten years hence is not a justification. The respondents may well argue that the agrarian laws had been violated by the defendants- tenants and the petitioner by the mere execution of the deeds of assignment. In fact, the petitioner has implemented the deeds by paying the defendants-tenants amounts of money and even sought their immediate implementation by setting a meeting with the defendants-tenants. In fine, the petitioner would not wait for ten years to evict the defendants-tenants. For him, time is of the essence. 4. Yu v. Court of Appeals, G.R. No. 86683, January 21, 1993 Facts: Petitioner, the exclusive distributor of the House of Mayfair wallcovering products in the Philippines, cried foul when his former dealer of the same goods, Unisia Merchandising, purchased the merchandise from the House of Mayfair in England through FNF Trading in West Germany and sold said merchandise in the Philippines. Both the court of origin and the appellate court rejected petitioner‘s thesis that Unisia Merchandising was engaged in a sinister form of unfair competition within the context of Article 28 of the New Civil Code. Hence, the petition at bar. There is no dispute that petitioner has had an exclusive sales agency agreement with the House of Mayfair since 1987 to promote and procure orders for Mayfair wallcovering products from customers in the Philippines. Even as petitioner was such exclusive distributor, Unisia Merchandising, which was then petitioner‟s dealer, imported the same goods via FNF Trading which eventually sold the merchandise in the domestic market. Petitioner pressed the idea that he was practically by-passed and that Unisia Merchandising acted in concert with FNF Trading in misleading Mayfair into believing that the goods ordered by the trading firm were intended for shipment to Nigeria although they were actually shipped to and sold in the Philippines. 270

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Atty. Jess Lopez

Unisia Merchandising professed ignorance of the exclusive contract in favor of petitioner. Unisia Merchandising responded by asserting that petitioner‘s understanding with Mayfair is binding only between the parties thereto. Petitioner wanted to enjoin the sale and distribution by Unisia Merchandising of the same goods in the market but Judge Alejandria, Presiding Judge of Branch 34 was unperturbed, thusly: That there is no privity of contract between the plaintiff and the defendant; that the controversy in this case arose from a breach of contract by the FNF Trading of Germany, for having shipped goods it had purchased from The House of Mayfair to the Philippine. ...to restrain the defendant from selling the goods it has ordered from the FNF Trading of Germany, would be without legal justification...” According to the appellate court, petitioner was not able to demonstrate the unequivocal right which he sought to protect and that Unisia Merchandising is a complete stranger vis-a-vis the covenant between petitioner and Mayfair. In the petition at hand, petitioner anchors his plea for redress on his perception that Unisia Merchandising has distributed and continues to sell Mayfair covering products in contravention of petitioner‘s exclusive right conferred by the covenant with the House of Mayfair. A TRO was issued to last until further notice from this Court directed against private respondent. Notwithstanding such proscription, Unisia Merchandising persisted in the distribution and sale Issue: Whether petitioner is entitled to an injunction. Held: YES. That the exclusive sales contract which links petitioner and the House of Mayfair is solely the concern of the privies thereto and cannot thus extend its chain as to bind private respondent herein is, We believe, beside the point. Verily, injunction is the appropriate remedy to prevent a wrongful interference with contracts by strangers to such contracts where the legal remedy is insufficient and the resulting injury is irreparable The liability of Unisia Merchandising, if any, does not emanate from the four corners of the contract for undoubtedly, Unisia Merchandising Co., Inc. is not a party thereto but its accountability is ―an independent act generative of civil liability‖. These observations, however, do not in the least convey the message that We have placed the cart ahead of the horse, so to speak, by pronouncing private respondent‘s liability at this stage in view of the pendency of the main suit for injunction below. We are simply rectifying certain misperceptions entertained by the appellate court as regards the feasibility of requesting a preliminary injunction to enjoin a stranger to an agreement. To Our mind, the right to perform an exclusive distributorship agreement and to reap the profits resulting from such performance are proprietary rights which a party may protect which may otherwise not be diminished, nay, rendered illusory by the expedient act of utilizing or interposing a person or firm to obtain goods from the supplier to defeat the very purpose for which the exclusive distributorship was conceptualized, at the expense of the sole authorized distributor. Another circumstance which respondent court overlooked was petitioner‘s suggestion, which was not disputed by herein private respondent in its comment, that the House of Mayfair in England was duped into believing that the goods ordered through the FNF Trading were to be shipped to Nigeria only, but the goods were actually sent to and sold in the Philippines. A ploy of this character is akin to the scenario of a third person who induces a party to renege on or violate his undertaking under a contract, thereby entitling the other contracting party to relief therefrom breach caused by private respondent was even aggravated by the consequent diversion of trade from the business of petitioner to that of private respondent caused by the latter‘s species of unfair competition as demonstrated no less by the sales effected inspite of this Court‘s restraining order. This brings Us to the irreparable mischief which respondent court misappreciated when it refused to grant the relief simply because of the observation that petitioner can be fully compensated for the damage. A contrario, the injury is irreparable where it is continuous and repeated since from its constant and frequent recurrence, no fair and reasonable redress can be had therefor by petitioner insofar as his goodwill and business reputation as sole distributor are concerned. Withal, to expect petitioner to file a complaint for every sale effected by private respondent will certainly court multiplicity of suits 5. So Ping Bun v. Court of Appeals, 314 SCRA 751 (1999) Facts: Tek Hua Trading Co, through its managing partner, So Pek Giok, entered into lease agreements with lessor Dee C. Chuan & Sons Inc. (DCCSI). Tek Hua used the areas to store its textiles. The contracts each had a one-year term. They provided that should the lessee continue to occupy the premises after the term, the lease shall be on a month-tomonth basis.

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Torts & Damages 2013

Atty. Jess Lopez

When the contracts expired, the parties did not renew the contracts, but Tek Hua continued to occupy the premises. Eventually Tek Hua Trading Co. was dissolved. Later, the original members of Tek Hua Trading Co. including Manuel C. Tiong, formed Tek Hua Enterprising Corp., herein respondent corporation. So Pek Giok, managing partner of Tek Hua Trading, died in 1986. So Pek Giok‘s GRANDSON, petitioner So Ping Bun, occupied the warehouse for his OWN textile business, Trendsetter Marketing. Lessor DCCSI sent letters addressed to Tek Hua Enterprises, informing the latter of the 25% increase in rent effective September 1, 1989. The rent increase was later on reduced to 20% effective January 1, 1990, upon other lessees‘ demand. Again on December 1, 1990, the lessor implemented a 30% rent increase. Enclosed in these letters were new lease contracts for signing. DCCSI warned that failure of the lessee to accomplish the contracts shall be deemed as lack of interest on the lessee‘s part, and agreement to the termination of the lease. Private respondents did not answer any of these letters. Still, the lease contracts were not rescinded. Eventually a letter was sent to So Ping Bun by Tiong, informing petitioner that he allowed him to temporarily use the premises for his personal business. However, since Tiong decided to go back into textile business, he demanded that So Ping Bun vacate the premises in order to use the same to store his stocks. Petitioner refused to vacate. Petitioner requested formal contracts of lease with DCCSI in favor Trendsetter Marketing. So Ping Bun claimed that after the death of his grandfather, So Pek Giok, he had been occupying the premises for his textile business and religiously paid rent. DCCSI acceded to petitioner‘s request. The lease contracts in favor of Trendsetter were executed. Private respondent Tiong filed a case for the nullity of the lease contracts between So Ping Bun and DCCSI. The RTC and the CA ruled for private respondents and nullified the contracts. Issue: Whether So Ping Bun is guilty of tortuous interference of contract. Held: YES. DAMAGE is the loss, hurt, or harm which results from injury, and DAMAGES are the recompense or compensation awarded for the damage suffered. One becomes liable in an action for damages for a non-trespassory invasion of another‟s interest in the private use and enjoyment of asset if (a) the other has property rights and privileges with respect to the use or enjoyment interfered with, (b) the invasion is substantial, (c) the defendant‘s conduct is a legal cause of the invasion, and (d) the invasion is either intentional and unreasonable or unintentional and actionable under general negligence rules. The ELEMENTS OF TORT INTERFERENCE are: (1) Existence of a valid contract; (2) Knowledge on the part of the third person of the existence of contract; and (3) Interference of the third person is without legal justification or excuse. A duty which the law of torts is concerned with is respect for the property of others, and a cause of action ex delicto may be predicated upon an unlawful interference by one person of the enjoyment by the other of his private property. This may pertain to a situation where a third person induces a party to renege on or violate his undertaking under a contract. In the case before us, Bun‘s Trendsetter Marketing asked DCCSI to execute lease contracts in its favor, and as a result petitioner deprived respondent corporation of the latter‟s property right. Clearly, and as correctly viewed by the appellate court, the 3 elements of tort interference above-mentioned are present in the instant case. Authorities debate on whether interference may be justified where the defendant acts for the sole purpose of furthering his own financial or economic interest. ONE VIEW is that, as a general rule, justification for interfering with the business relations of another exists where the actor‘s motive is to benefit himself. Such justification does not exist where his sole motive is to cause harm to the other. Added to this, some authorities believe that it is not necessary that the interferer‘s interest outweigh that of the party whose rights are invaded, and that an individual acts under an economic interest that is substantial, not merely de minimis, such that wrongful and malicious motives are negatived, for he acts in self-protection. Moreover, justification for protecting one‘s financial position should not be made to depend on a comparison of his economic interest in the subject matter with that of others. It is sufficient if the impetus of his conduct lies in a proper business interest rather than in wrongful motives. As early as Gilchrist, we held that where there was NO MALICE in the interference of a contract, and the impulse behind one‘s conduct lies in a PROPER BUSINESS INTEREST rather than in wrongful motives, a party cannot be a malicious interferer. Where the alleged interferer is financially interested, and such interest motivates his conduct, it cannot be said that he is an officious or malicious intermeddler. In the instant case, it is clear that So Ping Bun prevailed upon DCCSI to lease the warehouse to his enterprise at the expense of respondent corporation. Though petitioner took interest in the property of respondent corporation and benefited from it, nothing on record imputes deliberate wrongful motives or malice on him. 272 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

The Civil Code categorically provides also that, ―Any third person who induces another to violate his contract shall be liable for damages to the other contracting party.‖ Petitioner argues that damage is an essential element of tort interference, and since the trial court and the appellate court ruled that private respondents were not entitled to actual, moral or exemplary damages, it follows that he ought to be absolved of any liability, including attorney‘s fees. It is true that the lower courts did not award damages, but this was only because the extent of damages was not quantifiable. While the courts do not encourage tort interferers seeking their economic interest to intrude into existing contracts at the expense of others, however, the court finds that the conduct herein complained of did not transcend the limits forbidding an obligatory award for damages in the absence of any malice. The business desire is there to make some gain to the detriment of the contracting parties. Lack of malice, however, precludes damages. But it does not relieve petitioner of the legal liability for entering into contracts and causing breach of existing ones. The respondent appellate court correctly confirmed the permanent injunction and nullification of the lease contracts between DCCSI and Trendsetter Marketing, without awarding damages. The injunction saved the respondents from further damage or injury caused by petitioner‘s interference. 6. Lagon v. Court of Appeals, G.R. No. 119107, March 18, 2005 Facts: Jose Lagon purchased 2 parcels of land in Sultan Kudarat from the estate of Bai Tonina Sepi. A few months after the sale, he a complaint tortuous interference with contractual relations was filed against him by private respondent Menandro Lapuz. Lapuz claimed that he entered into a contract of lease with Bai Tonina Sepi over the Sultan Kudarat property beginning 1964. It was stipulated that Lapuz was to put commercial buildings to be leased for tenants. The rent derived from said tenants would answer for Lapuz‘s rental payments in favor of Bai Tonina Sepi. The lease contract ended in 1974 but it was allegedly renewed on account of the fact that the commercials buildings were not yet complete. When Sepi died, he remitted his rent to the administrator of her estate. When Lapuz was collecting rent from the tenants, he discovered that Lagon, representing to be the owner of the property, had been collecting rentals also. In other words, the complaint against Lagon by Lapuz alleged that Lagon induced the heirs of the decedent to sell him the property thereby violating Lapuz‟s leasehold rights over the property. Lagon, in his defense, denied that he induced the heirs to sell him the property. Rather, it was sold to him because of the heirs‘ dire need of money to pay off the decedent‘s obligations. He also denied interfering with Lapuz‘s leasehold rights as there was no lease contract covering the property when he purchased it. Moreover, based on his personal investigation and inquiry, no encumbrances or claims were found in said property. Before purchasing the property, he claimed that he went to the lawyer who notarized the lease contracts but the contracts for renewal were unsigned. TC ruled for Lapuz. On appeal, CA affirmed. Hence, this petition. Issue: Whether the purchase by Lagon of the Sultan Kudarat property, during the supposed existence of Lapuz‘s lease contract with the late Bai Tonina Sepi, constituted tortuous interference for which Lagon should be held liable for damages. Held: Article 1314 provides that any third person who induces another to violate his contract shall be liable for damages to the other contracting party. The tort recognized in that provision is known as INTERFERENCE WITH CONTRACTUAL RELATIONS. The interference is penalized because it violates the property rights of a party in a contract to reap the benefits that should result therefrom. The elements of tortuous interference with contractual relations according to So Ping Bun are as follows: (1) Existence of a valid contract; (2) Knowledge on the part of the third person of the existence of the contract; and (3) Interference of the said third person without legal justification or excuse. EXISTENCE OF VALID CONTRACT The existence of a valid contract must be duly established. To prove this, Lapuz presented in court a notarized copy of the purported lease renewal. While the contract appeared as duly notarized, the notarization thereof, only proved its due execution and delivery but not the veracity of its contents.

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Torts & Damages 2013

Atty. Jess Lopez

Nonetheless, after undergoing the rigid scrutiny of petitioner‘s counsel and after the trial court declared it to be valid and subsisting, the notarized copy of the lease contract presented in court appeared to be incontestable proof that Lapuz and the late Bai Tonina Sepi actually renewed their lease contract. Settled is the rule that until overcome by clear, strong and convincing evidence, a notarized document continues to be prima facie evidence of the facts that gave rise to its execution and delivery. KNOWLEDGE BY INTERFERER OF THE CONTRACT Knowledge of the subsistence of the contract is an essential element to state a cause of action for tortuous interference. A defendant in such a case cannot be made liable for interfering with a contract he is unaware of. While it is not necessary to prove actual knowledge, he must nonetheless be aware of the facts which, if followed by a reasonable inquiry, will lead to a complete disclosure of the contractual relations and rights of the parties in the contract. In this case, Lagon claims that he had no knowledge of the lease contract. His sellers (the heirs of Bai Tonina Sepi) likewise allegedly did not inform him of any existing lease contract. After a careful perusal of the records, we find the contention of Lagon meritorious. He conducted his own personal investigation and inquiry, and unearthed no suspicious circumstance that would have made a cautious man probe deeper and watch out for any conflicting claim over the property. An examination of the entire property‘s title bore no indication of the leasehold interest of private respondent. Even the registry of property had no record of the same. Assuming ex gratia argumenti that Lagon knew of the contract, such knowledge alone was not sufficient to make him liable for tortuous interference. INTERFERENCE WITH NO JUSTIFIABLE OR LEGAL CAUSE To sustain a case for tortuous interference, the defendant must have acted with malice OR must have been driven by purely impious reasons to injure the plaintiff. In other words, his act of interference cannot be justified. Furthermore, the records do not support the allegation of Lapuz that Lagon induced the heirs of Bai Tonina Sepi to sell the property to him. The word ― INDUCE‖ refers to situations where a person causes another to choose one course of conduct by persuasion or intimidation. The records show that the decision of the heirs of the late Bai Tonina Sepi to sell the property was completely of their own volition and that Lagon did absolutely nothing to influence their judgment. Lapuz himself did not proffer any evidence to support his claim. In short, even assuming that Lapuz was able to prove the renewal of his lease contract with Bai Tonina Sepi, the fact was that he was unable to prove malice or bad faith on the part of Lagon in purchasing the property. Therefore, the claim of tortuous interference was never established. As a general rule, justification for interfering with the business relations of another exists where the actor‟s motive is to benefit himself. Such justification does not exist where the actor‟s motive is to cause harm to the other. Added to this, some authorities believe that it is not necessary that the interferer‘s interest outweigh that of the party whose rights are invaded, and that an individual acts under an economic interest that is substantial, not merely de minimis, such that wrongful and malicious motives are negatived, for he acts in self-protection. Moreover, justification for protecting one‘s financial position should not be made to depend on a comparison of his economic interest in the subject matter with that of the others. It is sufficient if the impetus of his conduct lies in a proper business interest rather than in wrongful motives. In our view, Lagon‘s purchase of the subject property was merely an advancement of his financial or economic interests, absent any proof that he was enthused by improper motives. In the very early case of Gilchrist v. Cuddy, the Court declared that a person is not a malicious interferer if his conduct is impelled by a proper business interest. In other words, a financial or profit motivation will not necessarily make a person an officious interferer liable for damages as long as there is no malice or bad faith involved. Inasmuch as not all 3 elements to hold Lagon liable for tortuous interference are present, he cannot be made to answer for Lapuz‘s losses. This case is one of damnum absque injuria or damage without injury. *Discussion on damages omitted. 7. Go v. Cordero, G.R. No. 164703, May 4, 2010 Facts: Persons involved:  Cordero – businessman, VP of Pamana Marketing Corp. acquired exclusive dealearship from AFFA 274

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013    

Atty. Jess Lopez

AFFA- fast ferry manufactuer Robinson – Managing director of AFFA Go – Cordero‘s first client as exclusive dealer Landicho and Tecson – lawyers of Go

Sometime in 1996, Mortimer F. Cordero, VP of Pamana Marketing Corporation (Pamana), ventured into the business of marketing inter-island passenger vessels. After contacting various overseas fast ferry manufacturers from all over the world, he came to meet Tony Robinson, an Australian national who is the Managing Director of Aluminium Fast Ferries Australia (AFFA). Robinson signed documents appointing Cordero as the exclusive distributor of AFFA catamaran and other fast ferry vessels in the Philippines. As such exclusive distributor, Cordero offered for sale to prospective buyers the 25-meter Aluminium Passenger catamaran known as the SEACAT 25 After negotiations with Felipe Landicho and Vincent Tecson, lawyers of Allan C. Go who is the owner/operator of ACG Express Liner of Cebu City, a single proprietorship, Cordero was able to close a deal for the purchase of two (2) SEACAT 25 as evidenced by the Memorandum of Agreement. Per agreement between Robinson and Cordero, the latter shall receive commissions totalling US$328,742.00, or 22.43% of the purchase price, from the sale of each vessel. Cordero made 2 trips to the AFFA Shipyard in Brisbane, Australia, and on 1 occasion even accompanied Go and his family and Landicho, to monitor the progress of the building of the vessel. He shouldered all the expenses for airfare, food, hotel accommodations, transportation and entertainment during these trips. He also spent for long distance telephone calls to communicate regularly with Robinson, Go, Tecson and Landicho. However, Cordero later discovered that Go was dealing directly with Robinson when he was informed by Dennis Padua of Wartsila Philippines that Go was canvassing for a second catamaran engine from their company which provided the ship engine for the first SEACAT 25. Thus Cordero tried to contact Go and Landicho to confirm the matter but they were nowhere to be found, while Robinson refused to answer his calls. Cordero immediately flew to Brisbane to clarify matters with Robinson, only to find out that Go and Landicho were already there in Brisbane negotiating for the sale of the second SEACAT 25. Despite repeated follow-up calls, no explanation was given by Robinson, Go, Landicho and Tecson who even made Cordero believe there would be no further sale between AFFA and ACG Express Liner. In a letter, Cordero informed Go that such act of dealing directly with Robinson violated his exclusive distributorship and demanded that they respect the same. Cordero‘s lawyer, Atty. Ernesto A. Tabujara, Jr. of ACCRA law firm, also wrote a letter of the same import to ACG Express Liner. AFFA, through its lawyers, replied that the appointment of Cordero as distributor was for the purpose of one transaction only; and that Cordero allegedly failed to return to AFFA within a reasonable time the draft agreement sent to him, thus they have revoked the agreement. Thereafter, Corder claimed that Landicho, acting on behalf of Go, talked to him over the telephone and offered to amicably settle their dispute. Landicho, acting in behalf of Go, set up a meeting with Cordero on June 29, 1998. On said date, however, only Landicho and Tecson came and no reason was given for Go‘s absence. Tecson and Landicho proposed that they will convince Go to pay him US$1,500,000.00 on the condition that they will get a cut of 20%. And so it was agreed between him, Landicho and Tecson that the latter would give him a weekly status report and that the matter will be settled in 3-4 weeks. But, no such report was made by either Tecson or Landicho who, it turned out, had no intention to do so and were just buying time as the catamaran vessel was due to arrive from Australia. Cordero filed a case with the Bureau of Customs to stop the bleh bleh On August 21, 1998, Cordero instituted a Civil seeking to hold Robinson, Go, Tecson and Landicho liable jointly and solidarily for conniving and conspiring together in violating his exclusive distributorship in bad faith and wanton disregard of his rights, thus depriving him of his due commissions (balance of unpaid commission from the sale of the first vessel in the amount of US$31,522.01 and unpaid commission for the sale of the second vessel in the amount of US$328,742.00) and causing him actual, moral and exemplary damages, includingP800,000.00 representing expenses for airplane travel to Australia, telecommunications bills and entertainment, on account of AFFA‘s untimely cancellation of the exclusive distributorship agreement. Cordero also prayed for the award of moral and exemplary damages, as well as attorney‘s fees and litigation expenses. Robinson filed a motion to dismiss grounded on lack of jurisdiction over his person and failure to state a cause of action. Denied. Pre-trial was reset twice to afford the parties opportunity to reach a settlement. Plaintiff Cordero was allowed to present his evidence ex parte. 275

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Cordero‘s testimony regarding his transaction with Go, Landicho and Tecson, and the latter‘s offer of settlement, was corroborated by his counsel who also took the witness stand. Further, he presented the following documentary evidence:  photographs taken of the June 29, 1998 meeting with Landicho, Tecson and Atty. Tabujara at Shangri-la‘s Mactan Island Resort,  photographs taken in Brisbane showing Cordero, Go with his family, Robinson and Landicho, and  also various documents, communications, vouchers and bank transmittals were presented to prove that: (1) Cordero was properly authorized and actually transacted in behalf of AFFA as exclusive distributor in the Philippines; (2) Cordero spent considerable sums of money in pursuance of the contract with Go and ACG Express Liner; and (3) AFFA through Robinson paid Cordero his commissions from each scheduled payment made by Go for the first SEACAT 25 purchased from AFFA pursuant to Shipbuilding Contract No. 7825. Go, Robinson, Landicho and Tecson filed a motion for new trial. Denied. In the same order, Cordero‘s motion for execution pending appeal was granted. They filed a certiorari case with the CA. The CA then issued a TRO at the instance of defendants in the certiorari case they filed with said questioning the execution orders issued by the trial court. Finally, the CA rendered judgment granting the petition for certiorari in setting aside the trial court‘s orders of execution pending appeal. Cordero appealed the said judgment in a petition for review filed with this Court. The case before us is a consolidation of the petitions for review under Rule 45 separately filed by Go (G.R. No. 164703) and Cordero (G.R. No. 164747) Issue: (1) Whether Cordero has the legal personality to sue the Go et al for breach of contract? (2) Whether the Go et al may be held liable for damages to Cordero for his unpaid commissions and termination of his exclusive distributorship appointment by the principal, AFFA. Held: YES. (1) Cordero is a real party in interest; jurisdiction over Robinson was also properly acquired. (civpro) Go et al challenge the standing of Cordero since they claim that it was Pamana (the company wherein Cordero is VP) which was granted the distributorship. On this issue, the SC agrees with the CA in ruling that it was Cordero and not Pamana who is the exclusive distributor of AFFA in the Philippines as shown by the Certification dated June 1, 1997 issued by Robinson. Go mentions some documents which state that ―Pamana Marketing Corporation represented by Mr. Mortimer F. Cordero‖ was actually the exclusive distributor. But, such apparent inconsistency in naming AFFA‘s exclusive distributor in the Philippines is of no moment. For all intents and purposes, Robinson and AFFA dealt only with Cordero who alone made decisions in the performance of the exclusive distributorship, as with other clients to whom he had similarly offered AFFA‘s fast ferry vessels. Moreover, the stipulated commissions from each progress payments made by Go were directly paid by Robinson to Cordero. Moreover, petitioner Go, Landicho and Tecson never raised petitioner Cordero‘s lack of personality to sue on behalf of Pamana, and did so only before the CA when they contended that it is Pamana and not Cordero, who was appointed and acted as exclusive distributor for AFFA. (2) Even if there is NO DIRECT PROOF that Go et al purchased the SEACAT directly from AFFA, nonetheless EVIDENCE SHOWS THAT THEY ACTED IN BAD FAITH. In Yu v. Court of Appeals, this Court ruled that the right to perform an exclusive distributorship agreement and to reap the profits resulting from such performance are proprietary rights which a party may protect. Thus, injunction is the appropriate remedy to prevent a wrongful interference with contracts by strangers to such contracts where the legal remedy is insufficient and the resulting injury is irreparable. In the case at bar, it was established that Cordero was not paid the balance of his commission by Robinson. From the time Go and Landicho directly dealt with respondent Robinson in Brisbane Cordero had clearly been cut off from the transaction until the arrival of the first SEACAT 25 which was sold through his efforts. When Cordero complained to Go, Robinson, Landicho and Tecson about their acts prejudicial to his rights and demanded that they respect his exclusive distributorship, Go simply let his lawyers led by Landicho and Tecson handle the matter and tried to settle it by promising to pay a certain amount and to purchase high-speed catamarans through Cordero. However, Cordero was not paid anything and worse, AFFA through its lawyer in Australia even terminated his exclusive dealership insisting that his services were engaged for only one (1) transaction, that is, the purchase of the first SEACAT 25 in August 1997. Go argues that unlike in Yu v. Court of Appeals there is no conclusive proof adduced by Cordero that they actually purchased a second SEACAT 25 directly from AFFA and hence there was no violation of the exclusive distributorship agreement. We find that contrary to the claims of Cordero, there was indeed no sufficient evidence that respondents actually purchased a second SEACAT 25 directly from AFFA. But this circumstance will not absolve respondents from liability for invading Cordero‘s rights under the exclusive distributorship. Respondents CLEARLY ACTED IN BAD FAITH in bypassing Cordero as they completed the remaining payments to AFFA without advising him and furnishing him with copies of the bank transmittals as they previously did, and directly dealt with AFFA through 276

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Robinson regarding arrangements for the arrival of the first SEACAT 25 in Manila and negotiations for the purchase of the second vessel pursuant to the Memorandum of Agreement which Cordero signed in behalf of AFFA. As a result of respondents‘ actuations, Cordero incurred losses as he was not paid the balance of his commission from the sale of the first vessel and his exclusive distributorship revoked by AFFA. (3) Go et al. are solidarily liable with AFFA, based on contractual interference. Go contends that the trial and appellate courts erred in holding them solidarily liable for Cordero‘s unpaid commission, which is the sole obligation of the principal AFFA. It was Robinson on behalf of AFFA who, in the letter dated August 5, 1997 addressed to Cordero, undertook to pay commission payments to Pamana. Petitioner Go further maintains that he had not in any way violated or caused the termination of the exclusive distributorship agreement between Cordero and AFFA; he had also paid in full the first and only vessel he purchased from AFFA. (a) The elements of tort interference are present in this case. While it is true that a third person cannot possibly be sued for breach of contract because only parties can breach contractual provisions, a contracting party may sue a third person not for breach but for inducing another to commit such breach. The elements of tort interference are: (1) existence of a valid contract; (2) knowledge on the part of the third person of the existence of a contract; and (3) interference of the third person is without legal justification. FIRST & SECOND ELEMENTS The presence of the first and second elements is not disputed. Through the LETTERS ISSUED BY ROBINSON attesting that Cordero is the exclusive distributor of AFFA in the Philippines, respondents were clearly aware of the contract between Cordero and AFFA. In fact, evidence on record showed that Go initially dealt with and recognized Cordero as such exclusive dealer of AFFA high-speed catamaran vessels in the Philippines. In that capacity as exclusive distributor, petitioner Go entered into the Memorandum of Agreement and Shipbuilding Contract No. 7825 with Cordero in behalf of AFFA. THIRD ELEMENT As to the third element, our ruling in the case of So Ping Bun v. Court of Appeals is instructive, to wit: Authorities debate on whether interference may be justified where the defendant acts for the sole purpose of furthering his own financial or economic interest. One view is that, as a general rule, justification for interfering with the business relations of another exists where the actor‘s motive is to benefit himself. Such justification does not exist where his sole motive is to cause harm to the other. Added to this, some authorities believe that it is not necessary that the interferer‘s interest outweigh that of the party whose rights are invaded, and that an individual acts under an economic interest that is substantial, not merely de minimis, such that wrongful and malicious motives are negatived, for he acts in self-protection. Moreover, justification for protecting one‘s financial position should not be made to depend on a comparison of his economic interest in the subject matter with that of others. It is sufficient if the impetus of his conduct lies in a proper business interest rather than in wrongful motives. As early as Gilchrist vs. Cuddy, we held that where there was no malice in the interference of a contract, and the impulse behind one‘s conduct lies in a proper business interest rather than in wrongful motives, a party cannot be a malicious interferer. Where the alleged interferer is financially interested, and such interest motivates his conduct, it cannot be said that he is an officious or malicious intermeddler. While we do not encourage tort interferers seeking their economic interest to intrude into existing contracts at the expense of others, however, we find that the conduct herein complained of did not transcend the limits forbidding an obligatory award for damages in the absence of any malice. Lack of malice, however, precludes damages. But it does not relieve petitioner of the legal liability for entering into contracts and causing breach of existing ones. MALICE connotes ill will or spite, and speaks not in response to duty. It implies an intention to do ulterior and unjustifiable harm. Malice is bad faith or bad motive. In the case of Lagon v. Court of Appeals, we held that to sustain a case for tortuous interference, the defendant must have acted with malice or must have been driven by purely impure reasons to injure the plaintiff; in other words, his act of interference cannot be justified. We further explained that the word ―INDUCE‖ refers to situations where a person causes another to choose one course of conduct by persuasion or intimidation. Furthermore, even if the defendant knew of the contract, this Court has held that such knowledge was not sufficient to make him liable for tortuous interference. 277

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

In their Answer, Go et al denied having anything to do with the unpaid balance of the commission due to Cordero and the eventual termination of his exclusive distributorship by AFFA. According to them, several builder-competitors still entered the picture after the said contract for the purchase of one (1) SEACAT 25 was sent to AFFA in July 1997, and that by mutual agreement, AFFA agreed to give them a discounted price. This led to the signing of another contract superseding the first one. As to the cessation of communication with Cordero, Go averred it was Cordero who was nowhere to be contacted at the time the shipbuilding progress did not turn good as promised, and it was always Landicho and Tecson who, after several attempts, were able to locate him only to obtain unsatisfactory reports such that it was Go who would still call up Robinson regarding any progress status report. We find these allegations unconvincing and a mere afterthought. as these were the very same averments contained in the Position Paper for the Importer dated October 9, 1998, which was submitted by Go in connection with the complaintaffidavit filed by Cordero before the Bureau of Customs; it appears that the purported second contract superseding the original Shipbuilding Contract and stating a lower price of US$1,150,000.00 (not US$1,465,512.00) was only presented before the BOC to show that the vessel imported into the Philippines was not undervalued by almost US$500,000.00. The act of Go, Landicho and Tecson in inducing Robinson and AFFA to enter into another contract directly with ACG Express Liner to obtain a lower price for the second vessel resulted in AFFA‟s breach of its contractual obligation to pay in full the commission due to Cordero and unceremonious termination of Cordero‘s appointment as exclusive distributor. Following our pronouncement in Gilchrist v. Cuddy (supra), such act may not be deemed malicious if impelled by a proper business interest rather than in wrongful motives. The attendant circumstances, however, demonstrated that Go transgressed the bounds of permissible financial interest to benefit themselves at the expense of Cordero. Respondents furtively went directly to Robinson after Cordero had worked hard to close the deal for them to purchase from AFFA two (2) SEACAT 25, closely monitored the progress of building the first vessel sold, attended to their concerns and spent no measly sum for the trip to Australia with Go, Landicho and Go‘s family members. But what is appalling is the fact that even as Go, Landicho and Tecson secretly negotiated with Robinson for the purchase of a second vessel, Landicho and Tecson continued to demand and receive from Cordero their “commission” or “cut” from Cordero‟s earned commission from the sale of the first SEACAT 25. Cordero was practically excluded from the transaction when Go, Robinson, Tecson and Landicho suddenly ceased communicating with him, without giving him any explanation. While there was nothing objectionable in negotiating for a lower price in the second purchase of SEACAT 25, which is not prohibited by the Memorandum of Agreement, Go, Robinson, Tecson and Landicho clearly connived not only in ensuring that Cordero would have no participation in the contract for sale of the second SEACAT 25, but also that Cordero would not be paid the balance of his commission from the sale of the first SEACAT 25. This, despite their knowledge that it was commission already earned by and due to Cordero. Thus, the trial and appellate courts correctly ruled that the actuations of Go, Robinson, Tecson and Landicho were without legal justification and intended solely to prejudice Cordero. (b) The acts of Go, Tecson and Landico are further proscribed by Art. 19 of the NCC. The failure of Robinson, Go, Tecson and Landico to act with fairness, honesty and good faith in securing better terms for the purchase of high-speed catamarans from AFFA, to the prejudice of Cordero as the duly appointed exclusive distributor, is further proscribed by Article 19 of the Civil Code: As we have expounded in another case: Elsewhere, we explained that when ―a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be responsible.‖ The object of this article, therefore, is to set certain standards which must be observed not only in the exercise of one‘s rights but also in the performance of one‘s duties. These standards are the following: act with justice, give everyone his due and observe honesty and good faith. Its antithesis, necessarily, is any act evincing bad faith or intent to injure. Its elements are the following: (1) There is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. When Article 19 is violated, an action for damages is proper under Articles 20 or 21 of the Civil Code. Article 20 pertains to damages arising from a violation of law x x x. Article 21, on the other hand, states: Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.

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Article 21 refers to acts contra bonus mores and has the following elements: (1) There is an act which is legal; (2) but which is contrary to morals, good custom, public order, or public policy; and (3) it is done withintent to injure. Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Atty. Jess Lopez

A common theme runs through Articles 19 and 21, and that is, the act complained of must be intentional. (c) Go et al are SOLIDARILY LIABLE WITH ROBINSON as joint tortfeasors. Conformably with Article 2194 of the Civil Code, the responsibility of two or more persons who are liable for the quasi-delict is solidary. In Lafarge Cement Philippines, Inc. v. Continental Cement Corporation, we held: Obligations arising from tort are, by their nature, always solidary. We have assiduously maintained this legal principle as early as 1912 in Worcester v. Ocampo, in which we held: 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 benefit. They are each liable as principals, to the same extent and in the same manner as if they had performed the wrongful act themselves. Joint tort feasors are jointly and severally liable for the tort which they commit. The 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. 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 (4) The EXTENT OF LIABILITY OF GO ET AL: only up to the extent of AFFA/Robinson‘s liability. The rule is that the defendant found guilty of interference with contractual relations cannot be held liable for more than the amount for which the party who was inducted to break the contract can be held liable. Respondents Go, Landicho and Tecson were therefore correctly held liable for the balance of petitioner Cordero‘s commission from the sale of the first SEACAT 25, in the amount of US$31,522.09 or its peso equivalent, which AFFA/Robinson did not pay in violation of the exclusive distributorship agreement, with interest at the rate of 6% per annum from June 24, 1998 until the same is fully paid. VIII.

CIVIL LIABILITY ARISING FROM CRIMES -

Rules of Court o Rule 111

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Civil Code o Articles 29 to 31, and 33 to 36 (Memorize)

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Cases

1. Banal v. Tadeo, G.R. No. L-78911-25, December 11, 1987 2. Lim v. Ping, G.R. No. 175256, August 23, 2012 3. Simon v. Chan, G.R. No. 157547, February 23, 2011 4. Cancio v. Isip, G.R. No. 133978, November 12, 2002 5. Casupanan v. Laroya, G.R. No. 145391, August 26, 2002 6. Rodriguez v. Ponferrada, G.R. Nos. 155531-34, July 29, 2005 7. DMPI Employees Credit Cooperative, Inc., v. Velez, G.R. No. 129282, November 29, 2001 279

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Facts: On February 18, 1994, the prosecuting attorney filed with the RTC Misamis Oriental (Br. 37) an information for estafa against Carmen Mandawe for alleged failure to account to respondent Eriberta Villegas the amount of P608,532.46. Respondent Villegas entrusted this amount to Carmen Mandawe, an employee of petitioner DMPI-ECCI, for deposit with the teller of petitioner. Subsequently, on March 29, 1994, Villegas filed with the RTC Branch 20, a complaint3 against Carmen Mandawe and petitioner DMPI-ECCI for a sum of money and damages with preliminary attachment arising out of the same transaction. In time, petitioner sought the dismissal of the civil case on the following grounds: (1) that there is a pending criminal case in RTC Branch 37, arising from the same facts, and (2) that the complaint failed to contain a certification against forum shopping. On December 12, 1996, the RTC issued an order dismissing Civil Case No. CV-94-214. On January 21, 1997, respondent filed an MR of the order. On February 21, 1997, the RTC issued an order granting respondent‟s MR, thereby recalling the dismissal of the case. Hence, this petition. Issue: (1) Whether plaintiff‘s failure to attach a certification against forum shopping is a ground to dismiss. (2) Whether the civil case could proceed independently of the criminal case for estafa without having reserved the filing of the civil action. Held: (1) SC Circular 28-91 requires a certificate of non-forum shopping to be attached to petitions filed before the SC and the CA. Respondent Villegas‘ failure to attach a certificate of nonforum shopping in her complaint did not violate Circular No. 28-91, because at the time of filing, the requirement applied only to petitions filed with the SC and the CA. (2) As a general rule, an offense causes 2 classes of injuries. The first is the social injury produced by the criminal act which is sought to be repaired thru the imposition of the corresponding penalty, and the second is the personal injury caused to the victim of the crime which injury is sought to be compensated through indemnity which is civil in nature. Thus, ―every person criminally liable for a felony is also civilly liable.‖ This is the law governing the recovery of civil liability arising from the commission of an offense. CIVIL LIABILITY includes restitution, reparation for damage caused, and indemnification of consequential damages. The offended party may prove the civil liability of an accused arising from the commission of the offense in the criminal case since the civil action is either deemed instituted with the criminal action or is separately instituted. Rule 111 §§ 1 and 2 state that: When a criminal action is instituted, the civil action for the recovery of civil liability arising from the offense charged shall be deemed instituted with the criminal action unless the offended party waives the civil action, reserves the right to institute it separately or institutes the civil action prior to the criminal action. After the criminal action has been commenced, the SEPARATE CIVIL ACTION ARISING THEREFROM cannot be instituted until final judgment has been entered in the criminal action. INDEPENDENT CIVIL ACTIONS However, with respect to civil actions for recovery of civil liability under Articles 32, 33, 34 and 2176 of the Civil Code arising from the same act or omission, the rule has been changed. Under the present rule, only the civil liability arising from the offense charged is deemed instituted with the criminal action UNLESS the offended party waives the civil action, reserves his right to institute it separately, or institutes the civil action prior to the criminal action. There is NO MORE NEED FOR A RESERVATION of the right to file the independent civil actions under Articles 32, 33, 34 and 2176 of the Civil Code. ―The reservation and waiver referred to refers only to the civil action for the recovery of the civil liability arising from the offense charged. This does not include recovery of civil liability under Articles 32, 33, 34 and 2176 of the Civil Code arising from the same act or omission which may be prosecuted separately even without a reservation. Rule 111 § 3 provides that —

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Sec. 3. When civil action may proceed independently.—In the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines, the independent civil action may be brought by the offended party. It shall proceed independently of the criminal action and shall require only a preponderance of evidence. In no case, however, may the offended party recover damages twice for the same act or omission charged in the criminal action. Thus, Civil Case No. CV-94-214, an independent civil action for damages on account of the FRAUD committed against respondent Villegas under Article 33 of the Civil Code, may proceed independently even if there was no reservation as to its filing. 8. Padilla v. Court of Appeals, 129 SCRA 558 (1984) 9. Dominguez v. People, G.R. No. 167546, July 17, 2009 10. People v. Bayotas, G.R. No. 102007, September 2, 1994 11. Sanchez v. Far East Bank and Trust Company, G.R. No. 155309, November 15, 2005 12. Manliclic v. Calaunan, G.R. No. 150157, January 25, 2007 IX.

DAMAGES A.

In General

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Civil Code o Articles 2195, 2197, and 2198  Memorize: Article 2197

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Case

1. Custodio v. Court of Appeals, G.R. No. 116100, February 9, 1996 2. Ong v. Court of Appeals, G.R. No. 117103, January 21, 1999 B.

Actual Damages

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Civil Code o Articles 2199 to 2202, 2204 to 2213  Memorize: Articles 2199, 2200, 2201, 2202, 2204, 2205, and 2208

1. Algarra v. Sandejas, 27 Phil. 284 (1914) Facts: This is an action for personal injuries by petitioner against respondent. Lucio Algarra sold products of a distillery on a 10% commission and made an average of P50 per month. He had about twenty regular customers who, it seems, purchased in small quantities, necessitating regular and frequent deliveries. On day, he figured in an automobile accident caused by Sandejas‘ negligence. As a result of the injuries received, plaintiff was obliged to spend 10 days in the hospital, during the first 4 or 5 of which he could not leave his bed. After being discharged from the hospital, he received medical attention from a private practitioner for several days. It is not clear at what time plaintiff became entirely well again, but as the doctor to whom he described himself as being well stated that this was about the last of July, and the trial took place September 19, two months' pay would seem sufficient for the actual time lost from his work. Plaintiff further testified that he paid the doctor P8 and expended P2 for medicines. This expense, amounting in all to P110, should also be allowed. Since the accident his wife had done something in a small way to keep up this business but the total orders taken by her would not net them over P15. He lost all his regular customers except for 4, other agents filling their orders since his accident. It took him about 4 years to build up the business he had at the time of the accident, and he could not say how long it would take him to get back the business he had lost. The lower court, while recognizing the justness of his claim, refused to allow him anything for injury to his business due to his enforced absence therefrom. Issue: Whether Algarra is entitled to actual/compensatory damages despite absence of malicious intent on the part of Sandejas who was merely negligent. Held: YES. The Old Civil Code requires that the defendant repair the damage caused by his fault or negligence. No distinction is made therein between damage caused maliciously and intentionally and damages caused through mere negligence in so far as the civil liability of the wrongdoer is concerned. Nor is the defendant required to do more than 281

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Atty. Jess Lopez

repair the damage done, or, in other words, to put the plaintiff in the same position, so far as pecuniary compensation can do so, that he would have been in had the damage not been inflicted. In this respect there is a notable difference between the 2 systems. Under the Anglo-Saxon law, when malicious or willful intention to cause the damage is an element of the defendant's act, it is quite generally regarded as an aggravating circumstance for which the plaintiff is entitled to more than mere compensation for the injury inflicted. These are called exemplary or punitive damages, and no provision is made for them in article 1902 of the Civil Code. The PURPOSE OF THE LAW IN AWARDING ACTUAL DAMAGES is to repair the wrong that has been done, to compensate for the injury inflicted, and not to impose a penalty. Actual damages are not dependent on nor graded by the intent with which the wrongful act is done. In other words, actual damages are compensatory only. They proceed from a sense of natural justice, and are designed to repair that of which one has been deprived by the wrong of another. The party claiming damages must establish by competent evidence the amount of such damages, and courts can not give judgment for a greater amount than those actually proven. We are of the opinion that the requirements of article 1902 (old law on QD), that the defendant repair the damage done can only mean what is set forth in the above definitions. Anything short of that would not repair the damages and anything beyond that would be excessive. Actual compensatory damages are those allowed for tortious wrongs under the Civil Code; nothing more, nothing less. Actual damages include not only loss already suffered, but loss of profits which may not have been realized. Plagiarizing from Sanchez Roman, he says that the indemnity comprises, not only the value of the loss suffered, but also that of the prospective profit that was not realized, and the obligation of the debtor in GOOD FAITH is limited to such losses and damages as were foreseen or might have been foreseen at the time the obligation was incurred and which are a necessary consequence of his failure of fulfillment. Losses and damages under such limitations and frustrated profits must, therefore, be proved directly by means of the evidence the law authorizes. The case at bar involves actual incapacity of the plaintiff for 2 months, and loss of the greater portion of his business. As to the damages resulting from the actual incapacity of the plaintiff to attend to his business there is no question. They are, of course, to be allowed on the basis of his earning capacity, which in this case, is P50 per month. The difficult question in the present case is to determine the damage which has resulted to his business through his enforced absence. ELEMENTS TO BE CONSIDERED While certainty is an essential element of an award of damages, it need not be a mathematical certainty. As to the ELEMENTS TO BE CONSIDERED in "estimating the damage done to plaintiff's business by reason of his accident, this same author, citing numerous authorities, has the following to say: It is proper to consider the business the plaintiff is engaged in, the nature and extent of such business, the importance of his personal oversight and superintendence in conducting it, and the consequent loss arising from his inability to prosecute it. The business of the present plaintiff required his immediate supervision of all the profits derived therefrom were wholly due to his own exertions. Nor are his damages confined to the actual time during which he was physically incapacitated for work, as is the case of a person working for a stipulated daily or monthly or yearly salary. As to persons whose labor is thus compensated and who completely recover from their injuries, the rule may be said to be that their damages are confined to the duration of their enforced absence from their occupation. But the present plaintiff could not resume his work at the same profit he was making when the accident occurred. He had built up an established business which included some 20 regular customers. These customers represented to him a regular income. In addition to this he made sales to other people who were not so regular in their purchases. But he could figure on making at least some sales each month to others besides his regular customers. Taken as a whole his average monthly income from his business was about P50. As a result of the accident, he lost all but 4 of his regular customers and his receipts dwindled down to practically nothing. Other agents had invaded his territory, and upon becoming physically able to attend to his business, he found that it would be necessary to start with practically no regular trade, and either win back his old customers from his competitors or else secure others. During this process of re-establishing his patronage his income would necessarily be less than he was making at the time of the accident and would continue to be so for some time. Of course, if it could be mathematically determined how much less he will earn during this rebuilding process than he would have earned if the accident had not occurred, that would be the amount he would be entitled to in this action. But manifestly this ideal compensation cannot be ascertained. The question therefore resolves itself into whether this damage to his business can be so nearly ascertained as to justify a court in awarding any amount whatever.

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Torts & Damages 2013

Atty. Jess Lopez

When it is shown that a plaintiff's business is a going concern with a fairly steady average profit on the investment, it may be assumed that had the interruption to the business through defendant's wrongful act not occurred, it would have continued producing this average income "so long as is usual with things of that nature. When in addition to the previous average income of the business it is further shown what the reduced receipts of the business are immediately after the cause of the interruption has been removed, there can be no manner of doubt that a loss of profits has resulted from the wrongful act of the defendant. In the present case, we not only have the value of plaintiff's business to him just prior to the accident, but we also have its value to him after the accident. At the trial, he testified that his wife had earned about 15 pesos during the 2 months that he was disabled. That this almost total destruction of his business was directly chargeable to defendant's wrongful act, there can be no manner of doubt; and the mere fact that the loss can not be ascertained with absolute accuracy, is no reason for denying plaintiff's claim altogether. BUSINESS & ADVENTURE A good example of a business not established for which loss of profits will not be allowed may be found in States vs. Durkin. Plaintiffs formed a partnership and entered the plumbing business in the city of Topeka in April. In July of the same year, they brought an action against a plumbers' association on the ground that the latter had formed an unlawful combination in restraint of trade and prevented them from securing supplies for their business within a reasonable time. The court said: In the present case the plaintiffs had only been in business a short time — not so long that it can be said that they had an established business. They had contracted three jobs of plumbing, had finished two, and lost money on both; not, however, because of any misconduct or wrongful acts on the part of the defendants or either of them. They carried no stock in trade, and their manner of doing business was to secure a contract and then purchase the material necessary for its completion. It is not shown that they had any means or capital invested in the business other than their tools. Neither of them had prior thereto managed or carried on a similar business. Nor was it shown that they were capable of so managing this business as to make it earn a profit. There was little of that class of business being done at that time, and little, if any, profit derived therefrom. The plaintiffs' business lacked DURATION, PERMANENCY, and RECOGNITION. It was an adventure, as distinguished from an established business. Its profits were speculative and remote, existing only in anticipation. The law, with all its vigor and energy in its effort to right wrongs and award damages for injuries sustained, may not enter into the domain of speculation or conjecture. We are of the opinion that the evidence presented as to the damage done to plaintiff's business is credible and that it is sufficient and clear enough upon which to base a judgment for damages. Plaintiff having had four years' experience in selling goods on commission, it must be presumed that he will be able to rebuild his business to its former proportions; so that at some time in the future his commissions will equal those he was receiving when the accident occurred. Aided by his experience, he should be able to rebuild this business to its former proportions in much less time than it took to establish it as it stood just prior to the accident. One year should be sufficient time in which to do this. The profits which plaintiff will receive from the business in the course of its reconstruction will gradually increase. The injury to plaintiff's business begins where these profits leave off, and, as a corollary, there is where defendant's liability begins. Upon this basis, we fix the damages to plaintiff's business at P250. The judgment of the lower court is set aside, and the plaintiff is awarded the following damages: 10 pesos for medical expenses; 100 pesos for the two months of his enforced absence from his business; and 250 pesos for the damage done to his business in the way of loss of profits, TOTAL: P360.00 2. PNOC Shipping and Transport Corporation v. Court of Appeals, G.R. No. 107518, October 8, 1998 DOCTRINE: Under Article 2199, actual or compensatory damages are those awarded in satisfaction of, or in recompense for, loss or injury sustained. They proceed from a sense of natural justice and are designed to repair the wrong that has been done, to compensate for the injury inflicted and not to impose a penalty. In actions based on torts or quasi-delicts, actual damages include all the natural and probable consequences of the act or omission complained of. TWO KINDS OF ACTUAL DAMAGES (1) Loss of what a person already possesses (daño emergente); and (2) The failure to receive as a benefit that which would have pertained to him (lucro cesante) To enable an injured party to recover actual or compensatory damages, he is required to prove the actual amount of loss with reasonable degree of certainty premised upon competent proof and on the best evidence available. The burden of 283 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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proof is on the party who would be defeated if no evidence would be presented on either side. He must establish his case by a PREPONDERANCE OF EVIDENCE which means that the evidence, as a whole, adduced by one side is superior to that of the other. In other words, damages cannot be presumed and courts, in making an award must point out specific facts that could afford a basis for measuring whatever compensatory or actual damages are borne. PRICE QUOTATIONS Price quotations are ordinary private writings which under the Revised Rules of Court should have been proffered along with the testimony of the authors thereof. Del Rosario could not have testified on the veracity of the contents of the writings even though he was the seasoned owner of a fishing fleet because he was not the one who issued the price quotations. Section 36, Rule 130 of the Revised Rules of Court provides that a witness can testify only to those facts that he knows of his personal knowledge. The price quotations presented as exhibits partake of the nature of hearsay evidence considering that the persons who issued them were not presented as witnesses. Any evidence, whether oral or documentary, is hearsay if its probative value is not based on the personal knowledge of the witness but on the knowledge of another person who is not on the witness stand. NOMINAL DAMAGES Nonetheless, the non-admissibility of said exhibits does not mean that it totally deprives private respondent of any redress for the loss of its vessel. In Lufthansa German Airlines v. Court of Appeals, the Court said: ―In the absence of competent proof on the actual damage suffered, private respondent is„entitled to nominal damages which, as the law says, is adjudicated in order that a right of the plaintiff, which has been violated or invaded by defendant, may be vindicated and recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered. Nominal damages are damages in name only and not in fact. Where these are allowed, they are not treated as an equivalent of a wrong inflicted but simply in recognition of the existence of a technical injury. However, the amount to be awarded as nominal damages shall be equal or at least commensurate to the injury sustained by private respondent considering the concept and purpose of such damages. The amount of nominal damages to be awarded may also depend on certain special reasons extant in the case. 3. People v. Mamaruncas, G.R. No. 179497, January 25, 2012 Facts: RTC decided — WHEREFORE, the court finds the accused Renandang Mamaruncas and Pendatum Ampuan GUILTY beyond reasonable doubt as principals of the crime of murder qualified by treachery defined and penalized in Art. 248 of the Revised Penal Code as amended, without the presence of any other aggravating circumstances and hereby sentences each of them to suffer the penalty of RECLUSION PERPETUA with the corresponding accessory penalties attached thereto by law and to indemnify the Heirs of Baudelio Batoon the sums of: 1. P10,200,000.00 for and as loss of support; 2. P66,904.00 for and as actual damages; 3. P50,000.00 as death indemnity and 4. P100,000.00 for and as moral damages without subsidiary imprisonment in case of insolvency. Cost against the accused. Having been under preventive detention since February 1, 1996, the period of such detention shall be credited in full in favor of said accused in the service of their respective sentences. CA ruled — WHEREFORE, premises considered, the Appeal is hereby DISMISSED and the questioned Judgment dated July 19, 1999 of the Regional Trial Court is AFFIRMED with MODIFICATION. Appellants Renandang Mamaruncas and Pendatum Ampuan are found GUILTY beyond reasonable doubt of murder as defined in Article 248 of the Revised Penal Code, as amended by Republic Act No. 7659 and are hereby sentenced to suffer the penalty of reclusion perpetua. The appellants are to pay, jointly and severally, the heirs of Baudelio Batoon the amount of P50,000.00 by way of civil indemnity, P50,000.00 as moral damages, and P25,000.00 as exemplary damages and P66,904.00 as actual damages. Issue: Whether the damages awarded are proper. 284

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Torts & Damages 2013

Atty. Jess Lopez

Held: MODIFIED. The Court modifies the award of civil indemnity in the amount of P50,000.00. In line with prevailing jurisprudence, said award is increased to P75,000.00. Anent the award of moral damages, the CA correctly imposed the amount of P50,000.00. These ―awards are mandatory without need of allegation and proof other than the death of the victim, owing to the fact of the commission of murder or homicide.‖ ACTUAL DAMAGES Anent the award of actual damages, the victim‘s widow testified that the family spent a total of P66,904.00 relative to the wake and burial of the victim. However, the claim for said amount is supported merely by a list of expenses personally prepared by the widow instead of official receipts. To be entitled to an award of actual damages, ―it is necessary to prove the actual amount of loss with a REASONABLE DEGREE OF CERTAINTY, premised upon competent proof and on the best evidence obtainable. INDEMNITY FOR LOSS OF EARNING CAPACITY Indemnity for loss of earning capacity cannot be awarded in the absence of documentary evidence EXCEPT where the victim was either SELF-EMPLOYED or a DAILY WAGE WORKER earning less than the minimum wage under current labor laws. 4. People v. Arellano, G.R. No. 122477, June 30, 2000 DOCTRINE: The amount of loss of earning capacity is based mainly on TWO FACTORS. (1) The number of years of which the damages shall be computed; and (2) The rate at which the losses sustained by the respondent should be fixed. Factor NUMBER ONE in this ruling shall be computed by using the formula based on the American Expectancy Table of Mortality or 2/3 x [80 - age of the victim at the time of death] = life expectancy in terms of years. Applying this formula, Andres‘ life expectancy is 2/3 x (80 - 18) = 41.33. Factor NUMBER TWO is arrived at by multiplying the life expectancy by the earning of the deceased. As has been settled in the case of Villa Rey Transit, Inc. v. Court of Appeals, and a long list of cases the computation of the rate of loss of earnings should be based on the net earnings. Where the CRIME WAS COMMITTED ON A SUNDAY after the victim and his co-workers had finished their work for the day, the victim should be presumed to have worked everyday including Sundays or rest days, special days and regular holidays. 5. Adrian Wilson International Associates, Inc., v. TMX Philippines, Inc., G.R. No. 162608, July 26, 2010 DOCTRINE: Actual damages puts the claimant in the position in which he had been before he was injured. The award thereof must be based on the evidence presented, not on the personal knowledge of the court; and certainly not on flimsy, remote, speculative and nonsubstantial proof. Under the Civil Code, one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. VOUCHERS & RECEIPTS The documents it submitted were composed only of a master list of daily and monthly paid employees, summarized and itemized lists and computations of payroll costs during the covered period of shoring installation, salary structures, and vouchers prepared by the accounting department. These pieces of evidence, as well as the bare assertion of the TMX President, do not show a reasonable degree of certainty of actual payment to and actual receipt by its workers but only reflect the list of disbursements. Vouchers are not receipts. A RECEIPT is a written and signed acknowledgment that money has been received or goods have been delivered, while a VOUCHER is documentary record of a business transaction. 6. GQ Garments, Inc., v. Miranda, G.R. No. 161722, July 20, 2006 DOCTRINE: Under Article 2199 of the New Civil Code, actual damages include all the natural and probable consequences of the act or omission complained of, classified as one (1) for the loss of what a person already possesses (daño emergente) and the other, for the failure to receive, as a benefit, that which would have pertained to him (lucro cesante). The burden of proof is on the party who will be defeated if no evidence is presented on either side. His burden is to establish his case by PREPONDERANCE OF EVIDENCE which means that the evidence, as whole, adduced by one side, is superior to that of the other. Actual damages are not presumed. The claimant must prove the actual amount of loss with a reasonable degree of certainty premised upon competent proof and on the best evidence obtainable. He must point out specific facts that could 285 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Atty. Jess Lopez

afford a basis for measuring whatever compensatory or actual damages are borne. Actual damages cannot be anchored on mere surmises, speculations or conjectures. ABSOLUTE CERTAINTY & REASONABLE CERTAINTY The claimants are not mandated to prove damages in any specific or certain amount in order to recover damages for a substantial amount. When the existence of a loss is established, absolute certainty as to its amount is not required. The amount of the damages should be determined with reasonable certainty. The law does not require that the amount fixed be absolute or beyond conjectural possibilities. The ascertainment of the amount of damages should be by the plainest, easiest and most accurate measure which will do justice in the premises. 7. Justiva v. Gustilo, 7 SCRA 72 (1963) attorney‘s fees are not a proper element of damages, and no right to such fees can accrue merely because of an adverse decision, they may be awarded in case of a clearly unfounded civil action OR proceed ing or where the Court deems it just and equitable. DOCTRINE: Although GENERALLY,

―SUCH FURTHER RELIEF AS THE COURT MAY DEEM JUST AND EQUITABLE‖ The prayer for ―such further re lief x x x as this Honorable Court may deem just and equit able,‖ may include actual damages although not alleged in the answer, if and when they are proved. MORAL DAMAGES may be imposed if the insincerity of the various amended complaints is patent. 8. De Guia v. The Manila Electric Railroad & Light Company, G.R. No. 14335, January 28, 1920 DOCTRINE: A person who is entitled to recover EXPENSES OF CURE as an item of damage in a civil action for physical injuries cannot recover doctor's bills for services gratuitously rendered; and the claim must furthermore be limited to medical services reasonably suited to the case. Charges of professional experts retained merely with a view to promote the success of the action for damages should not be allowed. 9. Lim v. Court of Appeals, G.R. No. 125817, January 16, 2002 Facts: Gonzales purchased an Isuzu passenger jeepney from Vallarta. Gonzales did not have the registration transferred in his name nor did he secure a certificate of public convenience for its operation (ergo, kabit system ang peg). On July 1990, the jeepney collided when a 10-wheeler truck owned by Lim suddenly lost its breaks. The impact cause severe damage to the herein jeepney, to other cars, and caused the death of 1 person and injury to many others. Lim shouldered the hospitalization of the wounded and compensated the heirs of the deceased and had the other vehicles restored in good condition. However, Gonzales did neither accepted Lim‘s offer to have the jeepney repaired nor the cash given by the latter. Instead, Gonzales demanded a new jeepney or the same amount of P236,000. When the negotiations failed, Gonzales filed a complaint for recovery of damages against Lim. On Oct 1993, trial court upheld Gonzales‘ claim and awarded him 236K with legal interest from July 1990 as compensatory damages and 30K attorney‘s fees. On appeal, CA affirmed. Hence, this petition. Lim argues that to to recognize an operator under the kabit system as the real party-in-interest and to countenance his claim for damages is utterly subversive of public policy. Also, Lim contends that inasmuch as the passenger jeepney was purchased by private respondent for only P30,000.00, an award of P236,000.00 is inconceivably large and would amount to unjust enrichment. Issue: (1) Whether the award to a party under the kabit system, as in this case, is against public policy. (2) Whether the award of damages is proper. Held: (1) NO. The thrust of the law in enjoining the kabit system is not so much as to penalize the parties but to identify the person upon whom responsibility may be fixed in case of an accident with the end view of protecting the riding public. The policy, therefore, loses its force if the public at large is not deceived, much less involved. In the present case it is at once apparent that the evil sought to be prevented in enjoining the kabit system does not exist. First, neither of the parties to the pernicious kabit system is being held liable for damages. Second, the case arose from the negligence of another vehicle in using the public road to whom no representation, or misrepresentation, as regards the ownership and operation of the passenger jeepney was made and to whom no such representation, or misrepresentation, was necessary. Thus it cannot be said that private respondent Gonzales and the registered owner of the jeepney were in estoppel for leading the public to believe that the jeepney belonged to the registered owner. Third, the riding public was not bothered nor inconvenienced at the very least by the illegal arrangement. On the contrary, it was private respondent 286

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Atty. Jess Lopez

himself who had been wronged and was seeking compensation for the damage done to him. Certainly, it would be the height of inequity to deny him his right. In light of the foregoing, it is evident that private respondent has the right to proceed against petitioners for the damage caused on his passenger jeepney as well as on his business. Any effort then to frustrate his claim of damages by the ingenuity with which petitioners framed the issue should be discouraged, if not repelled. (2) NO. In AWARDING DAMAGES FOR TORTUOUS INJURY, it becomes the sole design of the courts to provide for adequate compensation by putting the plaintiff in the same financial position he was in prior to the tort. It is a fundamental principle in the law on damages that a defendant cannot be held liable in damages for more than the actual loss which he has inflicted and that a plaintiff is entitled to no more than the just and adequate compensation for the injury suffered. His recovery is, in the absence of circumstances giving rise to an allowance of punitive damages, limited to a fair compensation for the harm done. The law will not put him in a position better than where he should be in had not the wrong happened. In the present case, petitioners insist that as the passenger jeepney was purchased for only P30,000.00 to award damages considerably greater than this amount would be improper and unjustified. Petitioners are at best reminded that indemnification for damages comprehends not only the value of the loss suffered but also that of the profits which the obligee failed to obtain. In other words, indemnification for damages is not limited to damnum emergens or actual loss but extends to lucrum cessans or the amount of profit lost. Had Gonzales‘ jeepney not met an accident, it could reasonably be expected that it would have continued earning from the business in which it was engaged. Gonzales avers that he derives an average income of P300.00 per day from his passenger jeepney and this earning was included in the award of damages made by the trial court and upheld by the appeals court. The award therefore of P236,000.00 as compensatory damages is not beyond reason nor speculative as it is based on a reasonable estimate of the total damage suffered by Gonzales, i.e. damage wrought upon his jeepney and the income lost from his transportation business. Petitioners for their part did not offer any substantive evidence to refute the estimate made by the courts a quo. However, we are constrained to depart from the conclusion of the lower courts that upon the award of compensatory damages legal interest should be imposed beginning 22 July 1990, i.e., the date of the accident. Upon the provisions of Art. 2213, interest ―cannot be recovered upon unliquidated claims or damages, except when the demand can be established with reasonable certainty.‖ It is axiomatic that if the suit were for damages, unliquidated and not known until definitely ascertained, assessed and determined by the courts after proof, interest at the rate of six percent (6%) per annum should be from the date the judgment of the court is made (at which time the quantification of damages may be deemed to be reasonably ascertained). In this case, the matter was not a liquidated obligation as the assessment of the damage on the vehicle was heavily debated upon by the parties with Gonzales demand for P236,000.00 being refuted by Lim who argue that they could have the vehicle repaired easily for P20,000.00. In fine, the amount due Gonzales was not a liquidated account that was already demandable and payable. DOCTRINE OF AVOIDABLE CONSEQUENCES One last word. We have observed that Gonzales left his passenger jeepney by the roadside at the mercy of the elements. Article 2203 exhorts parties suffering from loss or injury to exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission in question. One who is injured then by the wrongful or negligent act of another should exercise reasonable care and diligence to minimize the resulting damage. Anyway, he can recover from the wrongdoer money lost in reasonable efforts to preserve the property injured and for injuries incurred in attempting to prevent damage to it. However, we sadly note that in the present case Lim failed to offer in evidence the estimated amount of the damage caused by Gonzales‘ unconcern towards the damaged vehicle. It is the burden of petitioners to show satisfactorily not only that the injured party could have mitigated his damages but also the amount thereof; failing in this regard, the amount of damages awarded cannot be proportionately reduced. WHEREFORE, the questioned Decision awarding private respondent Donato Gonzales P236,000.00 with legal interest from 22 July 1990 as compensatory damages and P30,000.00 as attorney‘s fees is MODIFIED. Interest at the rate of six percent (6%) per annum shall be computed from the time the judgment of the lower court is made until the finality of this Decision. If the adjudged principal and interest remain unpaid thereafter, the interest shall be twelve percent (12%) per annum computed from the time judgment becomes final and executory until it is fully satisfied.

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10. Talisay-Silay Milling Co., Inc., v. Gonzales, G.R. No. 91852, August 15, 1995 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

DOCTRINE: The familiar rule is that damages consisting of UNREALIZED PROFITS, frequently referred as ‗ganancias frustradas‘ or ―lucrum cessans,‖ are not to be granted on the basis of mere speculation, conjecture or surmise but rather by reference to some reasonably definite standard such as market value, established experience or direct inference from known circumstances. Uncertainty as to whether or not a claimant suffered unrealized profits at all — i.e., uncertainty as to the very fact of injury—will, of course, preclude recovery of this species of damages. Where, however, it is reasonably certain that injury consisting of failure to realize otherwise reasonably expected profits had been incurred, uncertainty as to the precise amount of such unrealized profits will not prevent recovery or the award of damages. The problem then would be the ascertainment of the amount of such unrealized profits. 11. Coleman v. Hotel de France Company, G.R. No. 9185, January 25, 1915 DOCTRINE: Upon proof of the breach of a contract of employment by the employer, the employee is entitled to recover the full amount which it appears he might have earned under the contract but for the breach, less such compensation as he actually obtains or might obtain in some other employment during the term of the contract which had not yet expired at the date of the breach, the burden of proof as to the amount by which the amount which might have been earned under the contract may thus be reduced being upon the defendant. 12. Daywalt v. Corporacion de PP Agustinos Recoletos, 39 Phil. 587 (1919)  Supra Facts: In 1902, Teodorica Endencia executed a contract whereby she obligated herself to convey to Geo W. Daywalt a 452-hectare parcel of land for P 4000. They agreed that a deed should be executed as soon as Endencia‘s title to the land was perfected in the Court of Land Registration and a Torrens title issued in her name. When the Torrens title was issued, Endencia found out that the property measured 1248 hectares instead of 452 hectares, as she initially believed. Because of this, she became reluctant to transfer the whole tract to Daywalt, claiming that she never intended to sell so large an amount and that she had been misinformed as to its area. Daywalt filed an action for specific performance. The SC ordered Endencia to convey the entire tract to Daywalt. Meanwhile, La Corporacion de los Padres Agustinos Recoletos (Recoletos), was a religious corp., which owned an estate immediately adjacent to the property sold by Endencia to Daywalt. It also happened that Fr. Sanz, the representative of the Recoletos, exerted some influence and ascendancy over Endencia, who was a woman of little force and easily subject to the influence of other people. Fr. Sanz knew of the existence of the contracts with Daywalt and discouraged her from conveying the entire tract. Daywalt filed an action for damages against the Recoletos on the ground that it unlawfully induced Endencia to refrain from the performance of her contract for the sale of the land in question and to withhold delivery of the Torrens title. Daywalt‘s claim for damages against Recoletos was for the huge sum of P 500,000 [in the year 1919], since he claims that because of the interference of the Recoletos, he failed to consummate a contract with another person for the sale of the property and its conversion into a sugar mill. Issue: Whether Recoletos is liable for damages. Held:

I. Under the FIRST CAUSE OF ACTION, the plaintiff seeks to recover from the defendant corporation the sum of P24,000, as damages for the use and occupation of the land in question by reason of the pasturing of cattle thereon during the period stated. The trial court came to the conclusion that the defendant corporation was liable for damages by reason of the use and occupation of the premises in the manner stated; and fixed the amount to be recovered at P2,497. The plaintiff appealed and has assigned error to this part of the judgment of the court below, insisting that damages should have been awarded in a much larger sum and at least to the full extent of P24,000, the amount claimed in the complaint. As the defendant did not appeal, the propriety of allowing damages for the use and occupation of the land to the extent of P2,497, the mount awarded, is not now in question; and the only thing here to be considered, in connection with this branch of the case, is whether the damages allowed under this head should be increased. The trial court rightly ignored the fact that the defendant corporation had paid Teodorica Endencia for use and occupation of the same land during the period in question at the rate of P425 per annum, inasmuch as the final decree of this court in the action for specific performance is conclusive against her right, and as the defendant corporation had notice of the rights of the plaintiff under his contract of purchase, it can not be permitted that the corporation should escape liability in this action by proving payment of rent to a person other than, the true owner. 288

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

With reference to the rate at which compensation should be estimated the trial court came to the following conclusion: As to the rate of the compensation, the plaintiff contends that the defendant corporation maintained at least one thousand head of cattle on the land and that the pasturage was of the value of forty centavos per head monthly, or P4,800 annually, for the whole tract. The court cannot accept this view. It is rather improbable that 1,248 hectares of wild Mindoro land would furnish sufficient pasturage for one thousand head of cattle during the entire year, and, considering the locality, the rate of forty centavos per head monthly seems too high. The evidence shows that after having recovered possession of the land the plaintiff rented it to the defendant corporation for fifty centavos per hectare annually, the tenant to pay the taxes on the land, and this appears to be a reasonable rent. There is no reason to suppose that the land was worth more for grazing purposes during the period from 1909 to 1913, than it was at the later period. Upon this basis the plaintiff is entitled to damages in the sum of P2,497, and is under no obligation to reimburse the defendants for the land taxes paid by either f them during the period the land was occupied by the defendant corporation. It may be mentioned in this connection that the Lontok tract adjoining the land in question and containing over three thousand hectares appears to have been leased for only P1,000 a year, plus the taxes. From this it will be seen that the trial court estimated the rental value of the land for grazing purposes at 50 centavos per hectare per annum, and roughly adopted the period of four years as the time for which compensation at that rate should be made. As the court had already found that the defendant was liable for these damages from June, 1, 1909, to May 1, 1914, or a period of four years and eleven months, there seems some ground for the contention made in the appellant‘s first assignment of error that the court‘s computation was erroneous, even accepting the rule upon which the damages were assessed, as it is manifest that at the rate of 50 centavos per hectare per annum, the damages for four years and eleven months would be P3,090. Notwithstanding this circumstance, the damages assessed are sufficient to compensate the plaintiff for the use and occupation of the land during the whole time it was used. There is evidence in the record strongly tending to show that the wrongful use of the land by the defendant was not continuous throughout the year but was confined mostly to the season when the forage obtainable on the land of the defendant corporation was not sufficient to maintain its cattle, for which reason it became necessary to allow them to go over to pasture on the land in question; and it is not clear that the whole of the land was used for pasturage at any time. Considerations of this character probably led the trial court to adopt four years as roughly being the period during which compensation should be allowed. But whether this was advertently done or not, we see no sufficient reason, in the uncertainty of the record with reference to the number of the cattle grazed and the period when the land was used, for substituting our guess for the estimate made by the trial court. II. TORTIOUS INTERFERENCE ISSUE In the SECOND CAUSE OF ACTION stated in the complaint the plaintiff seeks to recover from the defendant corporation the sum of P500,000, as damages. The determination of the issue presented in this second cause of action requires a consideration of two points. The FIRST is whether a person who is not a party to a contract for the sale of land makes himself liable for damages, to the vendee, beyond the value of the use and occupation, by colluding with the vendor and maintaining him in the effort to resist an action for specific performance. The SECOND is whether the damages which the plaintiff seeks to recover under this head are too remote and speculative to be the subject of recovery. The stranger cannot become more extensively liable in damages for the nonperformance of the contract than the party in whose behalf he intermeddles. In the case at bar, as Teodorica Endencia was the party directly bound by the contract, it is obvious that the liability of the defendant corporation, even admitting that it has made itself co-participant in the breach of the contract, can in no event exceed hers. This leads us to consider at this point the extent of the liability of Teodorica Endencia to the plaintiff by reason of her failure to surrender the certificate of title and to place the plaintiff in possession. It should in the first place be noted that the liability of Teodorica Endencia for damages resulting from the breach of her contract with Daywalt was a proper subject for adjudication in the action for specific performance which Daywalt instituted against her in 1909 and which was litigated by him to a successful conclusion in this court, but without obtaining any special adjudication with reference to damages. Indemnification for damages resulting from the breach of a contract is a right inseparably annexed to every action for the fulfillment of the obligation; and it is clear that if damages are not sought or recovered in the action to enforce performance they cannot be recovered in an independent action. 289

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

As to Teodorica Endencia, therefore, it should be considered that the right of action to recover damages for the breach of the contract in question was exhausted in the prior suit. However, her attorneys have not seen fit to interpose the defense of res judicata in her behalf; and as the defendant corporation was not a party to that action, and such defense could not in any event be of any avail to it, we proceed to consider the question of the liability of Teodorica Endencia for damages without reference to this point. The most that can be said with reference to the conduct of Teodorica Endencia is that she refused to carry out a contract for the sale of certain land and resisted to the last an action for specific performance in court. The result was that the plaintiff was prevented during a period of several years from exerting that control over the property which he was entitled to exert and was meanwhile unable to dispose of the property advantageously. Now, what is the measure of damages for the wrongful detention of real property by the vender after the time has come for him to place the purchaser in possession? The damages ordinarily and normally recoverable against a vendor for failure to deliver land which he has contracted to deliver is the value of the use and occupation of the land for the time during which it is wrongfully withheld. And of course where the purchaser has not paid the purchase money, a deduction may be made in respect to the interest on the money which constitutes the purchase price. Substantially the same rule holds with respect to the liability of a landlord who fails to put his tenant in possession pursuant to a contract of lease. The measure of damages is the value of the leasehold interest, or use and occupation, less the stipulated rent, where this has not been paid. The rule that the measure of damages for the wrongful detention of land is normally to be found in the value of use and occupation is, we believe, one of the things that may be considered certain in the law almost as wellsettled, indeed, as the rule that the measure of damages for the wrongful detention of money is to be found in the interest. We recognize the possibility that more extensive damages may be recovered where, at the time of the creation of the contractual obligation, the vendor, or lessor, is aware of the use to which the purchaser or lessee desires to put the property which is the subject of the contract, and the contract is made with the eyes of the vendor or lessor open to the possibility of the damage which may result to the other party from his own failure to give possession. The case before us is not of this character, inasmuch as at the time when the rights of the parties under the contract were determined, nothing was known to any of them about the San Francisco capitalist who would be willing to back the project. The extent of the liability for the breach of a contract must be determined in the light of the situation in existence at the time the contract is made; and the damages ordinarily recoverable are in all events limited to such as might be reasonably foreseen in the light of the facts then known to the contracting parties. Where the purchaser desires to protect himself, in the contingency of the failure of the vendor promptly to give possession, from the possibility of incurring other damages than such as are incident to the normal value of the use and occupation, he should cause to be inserted in the contract a clause providing f or stipulated amount to be paid upon failure of the vendor to give possession; and no case has been called to our attention where, in the absence of such a stipulation, damages have been held to be recoverable by the purchaser in excess of the normal value of use and occupation. On the contrary, the most fundamental conceptions of the law relative to the assessment of damages are inconsistent with such idea. The DAMAGES RECOVERABLE IN CASE OF THE BREACH OF A CONTRACT are two sorts, namely, (1) the ordinary, natural, and in a sense necessary damage; and (2) special damages. ORDINARY DAMAGES is found in all breaches of contract where there are no special circumstances to distinguish the case specially from other contracts. The consideration paid for an unperformed promise is an instance of this sort of damage. In all such cases the damages recoverable are such as naturally and generally would result from such a breach, according to the usual course of things. In cases involving only ordinary damage no discussion is ever indulged as to whether that damage was contemplated or not. This is conclusively presumed from the immediateness and inevitableness of the damage, and the recovery of such damage follows as a necessary legal consequence of the breach. Ordinary damage is assumed as a matter of law to be within the contemplation of the parties. SPECIAL DAMAGE, on the other hand, is such as follows less directly from the breach than ordinary damage. It is only found in case where some external condition, apart from the actual terms to the contract exists or intervenes, as it were, to give a turn to affairs and to increase damage in a way that the promisor, without actual notice of that external condition, could not reasonably be expected to foresee. Before such damage can be recovered the plaintiff must show that the particular condition which made the damage possible and a likely consequence of the breach was known to the defendant at the time the contract was made. The statement that special damages may be recovered where the likelihood of such damages flowing from the breach of the contract is contemplated and foreseen by the parties needs to be supplemented by that where the damage which a plaintiff seeks to recover as special damage is so far speculative as to be in contemplation of law remote, notification of the special conditions which make that damage possible cannot render the defendant liable therefor. To bring 290 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Atty. Jess Lopez

damages which would ordinarily be treated as remote within the category of recoverable special damages, it is necessary that the condition should be made the subject of contract in such sense as to become an express or implied term of the engagement. In the preceding discussion we have considered the plaintiff's right chiefly as against Teodorica Endencia; and what has been said suffices in our opinion to demonstrate that the damages laid under the second cause of action in the complaint could not be recovered from her, FIRST, because the damages in question are special damages which were not within contemplation of the parties when the contract was made, and SECONDLY, because said damages are too remote to be the subject of recovery. This conclusion is also necessarily fatal to the right of the plaintiff to recover such damages from the defendant corporation, for, as already suggested, by advising Teodorica not to perform the contract, said corporation could in no event render itself more extensively liable than the principal in the contract. 13. Cariaga v. Laguna Tayabas Bus Company, G.R. No. L-11037, December 29, 1960 Facts: 1 p.m., 18 June 1952 – a Laguna Tayabas (LTB) Bus driven by Moncada left Manila for Laguna, with petitioner Cariaga – a 4th year UST med student – as a passenger. At 3 p.m., it reached a part of Laguna where a national highway crossed a railroad track where it bumped a train which was passing by with such terrific force as to derail the first six wheels of the train. The front part of the bus was wrecked. The driver died instantly, and Cariaga, among many others, were injured. He was left unconscious for 35 days. He was confined first at the San Pablo City Hospital, then at the De los Santos Clinic, and then at the UST hospital. He was returned to the De los Santos Clinic. LTB paid for all expenses, and gave him a P10 daily convalescence allowance. On 24 April 1953, an action was filed by the parents against LTB and the Manila Railroad Company for P312,000 of actual, compensatory, moral, and exemplary damages. LTB pointed to MRR‟s negligence in not putting up a crossing bar, while MRR pointed to LTB‘s driver. The CFI ruled that the LTB driver‘s negligence was the cause, sentencing the LTB to pay. LTB and the Cariagas appeal, the latter claiming that the court erred in awarding ONLY COMPENSATORY DAMAGES, and not actual and moral damages. Issue: (1) Whether Manila Railroad is likewise negligent. (2) Whether Cariagas are entitled to the damages claimed. Held: The Cariagas, as appellants, claim that the award of P10,000.00 compensatory damages to Eduardo is inadequate considering the nature and the after effects of the physical injuries suffered by him. After a careful consideration of the evidence on this point we find their contentions to be well-founded. From the deposition of Dr. Romeo Gustilo, a neurosurgeon, it appears that, as a result of the injuries suffered by Edgardo, his right forehead was fractured necessitating the removal of practically all of the right frontal lobe of his brain. From the testimony of Dr. Jose A. Fernandez, a psychiatrist, it may be gathered that, because of the physical injuries suffered by Edgardo, his mentality has been so reduced that he can no longer finish his studies as a medical student; that he has become completely misfit for any kind of work; that he can hardly walk around without someone helping him, and has to use a brace on his left leg and feet. Upon the whole evidence on the matter, the lower court found that the removal of the right frontal lobe of the brain of Edgardo reduced his intelligence by about 50%; that due to the replacement of the right frontal bone of his head with a tantalum plate Edgardo has to lead a quite and retired life because "if the tantalum plate is pressed in or dented it would cause his death." The impression one gathers from this evidence is that, as a result of the physical injuries suffered by Edgardo Cariaga, he is now in a helpless condition, virtually an invalid, both physically and mentally. Appellant LTB admits that under Art. 2201 of the Civil Code the damages for which the obligor, guilty of a breach of contract but who acted in good faith, is liable shall be those that are the natural and probable consequences of the breach and which the parties had forseen or could have reasonably forseen at the time the obligation was constituted, provided such damages, according to Art. 2199 of the same Code, have been duly proved. Upon this premise it claims that only the actual damages suffered by Edgardo Cariaga consisting of medical, hospital and other expenses in the total sum of P17,719.75 are within this category. We are of the opinion, however, that the income which Edgardo Cariaga could earn if he should finish the medical course and pass the corresponding board examinations must be deemed to be within the same category because they could have reasonably been foreseen by the parties at the time he boarded the bus No. 133 owned and operated by the LTB. At that time he was already a 4th year student in medicine in a reputable university. While his scholastic may not be first rate, it is, nevertheless, sufficient to justify the assumption that he could have passed the board test in due time. As regards the income that he could possibly earn as a medical practitioner, it appears that, according to Dr. Amado Doria, a witness for the LTB, the amount of P300.00 could easily be expected as the minimum monthly income of Edgardo had he finished his studies. 291 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Upon consideration of all the facts mentioned heretofore this Court is of the opinion, and so holds, that the compensatory damages awarded to Edgardo Cariaga should be increased to P25,000.00. CLAIM FOR MORAL DAMAGES & ATTORNEY‘S FEES Edgardo Cariaga's claim for moral damages and attorney's fees was denied by the trial court, the pertinent portion of its decision reading as follows: Plaintiffs' claim for moral damages cannot also be granted. Article 2219 of the Civil Code enumerates the instances when moral damages may be covered and the case under consideration does not fall under any one of them. The present action cannot come under paragraph 2 of said article because it is not one of the quasi-delict and cannot be considered as such because of the pre-existing contractual relation between the Laguna Tayabas Bus Company and Edgardo Cariaga. Neither could defendant Laguna Tayabas Bus Company be held liable to pay moral damages to Edgardo Cariaga under Article 2220 of the Civil Code on account of breach of its contract of carriage because said defendant did not act fraudulently or in bad faith in connection therewith. Defendant Laguna Tayabas Bus Company had exercised due diligence in the selection and supervision of its employees like the drivers of its buses in connection with the discharge of their duties and so it must be considered an obligor in good faith. The plaintiff Edgardo Cariaga is also not entitled to recover for attorney's fees, because this case does not fall under any of the instances enumerated in Article 2208 of the Civil Code. We agree with the trial court and, to the reason given above, we add those given by this Court in Cachero vs. Manila Yellow Taxicab Co., Inc: A mere perusal of plaintiff's complaint will show that this action against the defendant is predicated on an alleged breach of contract of carriage, i.e., the failure of the defendants to bring him "safely and without mishaps" to his destination, and it is to be noted that the chauffeur of defendant's taxicab that plaintiff used when he received the injuries involved herein, Gregorio Mira, has not even made a party defendant to this case. Considering, therefore, the nature of plaintiff's action in this case, is he entitled to compensation for moral damages? Article 2219 of the Civil Code says the following: Art. 2219. Moral damages may be recovered in the following and analogous cases: (1) A criminal offense resulting in physical injuries; (2) Quasi-delicts causing physical injuries; (3) Seduction, abduction, rape, or other lascivious acts; (4) Adultery or concubinage; (5) Illegal or arbitrary detention or arrest; (6) Illegal search; (7) Libel, slander or any other form of defamation; (8) Malicious prosecution; (9) Acts mentioned in Article 309; (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. Of course enumerated in the just quoted Article 2219 only the first two may have any bearing on the case at bar. We find, however, with regard to the first that the defendant herein has not committed in connection with this case any "criminal offense resulting in physical injuries". The one that committed the offense against the plaintiff is Gregorio Mira, and that is why he has been already prosecuted and punished therefor. Altho (a) owners and managers of an establishment and enterprise are 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; (b) employers are likewise liable for damages caused by their employees and household helpers acting within the scope of their assigned task (Article 218 of the Civil Code); and (c) employers and corporations engaged in any kind of industry are subsidiary civilly liable for felonies committed by their employees in the discharge of their duties (Art. 103, Revised Penal Code), plaintiff herein does not maintain this action under the provisions of any of the articles of the codes just mentioned and against all the persons who might be liable for the damages caused, but as a result of an admitted breach of contract of carriage and against the defendant employer alone. We, therefore, hold that the case at bar does not come within the exception of paragraph 1, Article 2219 of the Civil Code. The present complaint is not based either on a "quasi-delict causing physical injuries" A question of nomenclature confronted the Commission. After a careful deliberation, it was agreed to use the term "quasi-delict" for those obligations 292 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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which do not arise from law, contracts, quasi-contracts, or criminal offenses. They are known in Spanish legal treaties as "culpa aquiliana", "culpa-extra-contractual" or "cuasi-delitos". The phrase "culpa-extra-contractual" or its translation "extra-contractual-fault" was eliminated because it did not exclude quasi-contractual or penal obligations. "Aquilian fault" might have been selected, but it was thought inadvisable to refer to so ancient a law as the "Lex Aquilia". So "quasidelict" was chosen, which more nearly corresponds to the Roman Law classification of the obligations and is in harmony with the nature of this kind of liability. The Commission also thought of the possibility of adopting the word "tort" from Anglo-American law. But "tort" under that system is much broader than the Spanish-Philippine concept of obligations arising from non-contractual negligence. "Tort" in Anglo-American jurisprudence includes not only negligence, but also intentional criminal act, such as assault and battery, false imprisonment and deceit. In the general plan of the Philippine legal system, intentional and malicious acts are governed by the Penal Code, although certain exceptions are made in the Project. In the case of Cangco vs. Manila Railroad, We established the distinction between obligation derived from negligence and obligation as a result of a breach of contract. Thus, we said: It is important to note that the foundation of the legal liability of the defendant is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. That is to say, its liability is direct and immediate, differing essentially in the legal viewpoint from the presumptive responsibility for the negligence of its servants, imposed by Article 1903 of the Civil Code (Art. 2180 of the new), which can be rebutted by proof of the exercise of due care in their selection of supervision. Article 1903 is not applicable to obligations arising EX CONTRACTU, but only to extra-contractual obligations — or to use the technical form of expression, that article relates only to CULPA AQUILIANA' and not to CULPA CONTRACTUAL. The decisions in the cases of Castro vs. Acro Taxicab Co., (82 Phil., 359; 46 Off. Gaz., No. 5, p. 2023); Lilius, et al. vs. Manila Railroad, 59 Phil., 758) and others, wherein moral damages were awarded to the plaintiffs, are not applicable to the case at bar because said decision were rendered before the effectivity of the new Civil Code (August 30, 1950) and for the further reason that the complaints filed therein were based on different causes of action. In view of the foregoing the sum of P2,000 was awarded as moral damages by the trial court has to be eliminated, for under the law it is not a compensation awardable in a case like the one at bar. What has been said heretofore relative to the moral damages claimed by Edgardo Cariaga obviously applies with greater force to a similar claim (4th assignment of error) made by his parents. The claim made by said spouses for actual and compensatory damages is likewise without merits. As held by the trial court, in so far as the LTB is concerned, the present action is based upon a breach of contract of carriage to which said spouses were not a party, and neither can they premise their claim upon the negligence or quasi-delict of the LTB for the simple reason that they were not themselves injured as a result of the collision between the LTB bus and train owned by the Manila Railroad Company. 14. OMC Carriers, Inc., v. Nabua, G.R. No. 148974, July 2, 2010 Facts: On August 4, 1995 an Isuzu private tanker owned by and registered in the name of petitioner OMC Carriers and then being driven by its employee Jerry P . Añalucas was cruising along Quirino Highway when it hit a private vehicle, an Isuzu Gemini which was making a left turn towards a nearby Caltex gasoline station. The impact heavily damaged the right side portion of the latter motor and mortally injured its 18-year-old driver who was later pronounced dead on arrival at the Fairview Polymedic Hospital. Respondent spouses Berlino and Rosario Nabua, the parents of the victim, filed a Complaint for damages against petitioners and the General Manager of OMC Carriers, Chito Calauag, before the RTC of Quezon City. RTC rendered a Decision in favor of the plaintiffs as against defendants and ordering the latter to pay the plaintiffs, jointly and solidarily: 1. P110,000.00 for actual damages, or for money spent during the funeral, wake and burial of the deceased Regie Nabua; 2. P2,000,000.00 for compensatory damages and the amount of P60,000.00 as indemnity for the death of Reggie Nabua; 3. P100,000.00 as moral damages and another P100,000.00 as exemplary damages; and 4. P50,000.00 as attorney‘s fees; 5. Costs of the suit. 293 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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On appeal, CA rendered a Decision, partially granting the petition: 1. Absolving appellant Chito Calauag from liability for the death of Regie Nabua; and 2. Deleting, for want of basis, the following damages awarded by the court a quo, viz: a. P2,000,000.00 as lost earnings of the deceased; and b. P100,000.00 as exemplary damages. Petitioner‘s MR was denied. Hence, this petition. Issue: Whether the award of damages was proper. Held: MODIFIED. NEGLIGENCE OF AÑALUCAS‘ AS THE PROXIMATE CAUSE Both the RTC and CA had correctly found that the proximate cause of the accident was the negligence of petitioner Añalucas. The testimony of eyewitness Betiranta shows that the victim, Reggie Nabua, was driving at a slow pace when he was entering the Caltex station. Another eyewitness corroborated the testimony of Betiranta that the victim was slowly driving his car towards the gas station. He also emphasized that the truck which bumped the Gemini car was very fast. Even petitioners‘ own witness, PO3 Edgardo Talacay, testified that petitioners‘ truck left skid marks, which would not be present if the truck was running in a normal speed. PETITIONER OMC FAILED TO EXERCISE DILIGENCE IN THE SUPERVISION OF THEIR EMPLOYEES While they were able to amply demonstrate the implantation of the company‘s hiring procedure insofar as appellant Jerry Añalucas was concerned , the same witnesses failed to similarly individualize the company‘s purported supervisory policies. The existence of hiring procedure and supervisory policies cannot be casually invoked to overturn the presumption of negligence on the part of the employer. In the case at bar, while this Court may be satisfied that petitioner company had exercised due diligence in the selection of petitioner Añalucas , the focus now shifts as to whether or not petitioner company had satisfied the test of due supervision . Petitioner company‘s attempt to prove that it had exercised due diligence of a good father of a family in the supervision of petitioner Añalucas is summarized in its Memorandum : New employee was given formal/written papers as to things expected from him as a driver; circulars and guidelines are placed in each of the tankers; every carbarn time, the Chief Mechanic and Asst. Operations Manager check the tanker for any sign of damage to ascertain if the driver had been involved in an accident; examine the licenses of the drivers to know if they had been issued Traffic Violation Tickets; if the license has expired or a ticket had been issued and has expired, the driver is grounded and substitute driver is assigned to the tanker to temporarily take the place of the grounded driver. After a thorough and extensive review of the records, this Court is unconvinced that petitioner company had satisfactorily discharged its burden. Memorandum alluded to by petitioner company amounts to nothing more than a ―reminder memo on offenses punishable by dismissal wherein specific offenses are spelled out to which erring employees may be punished by the company. The alleged circulars do not, in any way, concern safety procedures to prevent accident or damage to property or injury to people on the road. The testimonies relating to the checking of damages during carbarn time, the inspection if drivers were given traffic violation tickets and inspection of the validity of the drivers‘ licenses are all oral evidence without any object or documentary evidence to support them. ISSUE OF DAMAGES DEATH INDEMNITY Petitioners contend that the CA erred when it affirmed the RTC‟s award of P60,000.00 as death indemnity and P100,000.00 as moral damages. Petitioners contend that such an award was contrary to prevailing jurisprudence. In addition, petitioners also argue that the award of attorney‟s fees was without legal basis. The same is meritorious. Death indemnity has been fixed by jurisprudence at P50,000.00. Hence, the amount awarded by the RTC and the CA must be reduced accordingly. MORAL DAMAGES On the issue of moral damages, prevailing jurisprudence fixes moral damages of P50,000.00 for death. It must be stressed that moral damages are not intended to enrich a plaintiff at the expense of the defendant. They are awarded to allow the plaintiff to obtain means, diversion or amusements that will serve to alleviate the moral suffering he/she has undergone due to the defendant‘s culpable action and must, perforce, be proportional to the suffering inflicted. Thus, given the circumstances of the case at bar, an award of P50,000.00 as moral damages is proper. ATTORNEY‘S FEES Next, the rule on the award of attorney‘s fees is that there must be a justification for the same. In the absence of a statement why attorney‘s fees were awarded, the same should be disallowed. On this note, after reading through the 294 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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text of the CA decision, this Court finds that the same is bereft of any findings of fact and law to justify the award of attorney‘s fees. While it may be safe to surmise that the RTC granted attorney‘s fees as a consequence of its grant of exemplary damages, such cannot be said for the CA, since the same deleted the award of exemplary damages after finding that petitioner Añalucas was not grossly negligent . The CA did not explain why it was still awarding attorney‘s fees to respondents, therefore, such an award must be deleted. ACTUAL DAMAGES While petitioners did not put in error the award of actual damages, this Court feels that the same should nevertheless be reviewed as an appellate court is clothed with ample authority to review rulings even if they are not assigned as errors. This is especially so if the court finds that their consideration is necessary in arriving at a just decision of the case before it. For one to be entitled to actual damages, it is necessary to prove the actual amount of loss with a reasonable degree of certainty, premised upon competent proof and the best evidence obtainable by the injured party. Actual damages are such compensation or damages for an injury that will put the injured party in the position in which he had been before he was injured. They pertain to such injuries or losses that are actually sustained and susceptible of measurement. 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. In the case at bar, respondents only submitted the following evidence to substantiate their claim for actual damages:

Based on the foregoing, the RTC erred when it awarded the amount of P110,000.00 as actual damages, as the said amount was not duly substantiated with receipts. Hence, the amount of actual damages that can only be recovered is P59,173.50. Lastly, although respondents did not appeal the CA Decision, they now pray in their Memorandum that this Court reinstate the RTC award of P2,000,000.00 as compensatory damages which was deleted by the CA. Respondents point out that the victim, Reggie Nabua, was 18 years old and at the time of his death, a freshman taking up Industrial Engineering. On this point, Metro Manila Transit Corporation v. Court of Appeals is instructive, to wit: Art. 2206 of the Civil Code provides that in addition to the indemnity for death caused by a crime or quasi delict, the ―defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the latter; Compensation of this nature is awarded not for loss of earnings but for loss of capacity to earn money. Evidence must be presented that the victim, if not yet employed at the time of death, was reasonably certain to complete training for a specific profession. In People v. Teehankee, no award of compensation for loss of earning capacity was granted to the heirs of a college freshman because there was no sufficient evidence on record to show that the victim would eventually become a professional pilot. But compensation should be allowed for loss of earning capacity resulting from the death of a minor who has not yet commenced employment or training for a specific profession if sufficient evidence is presented to establish the amount thereof

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In sharp contrast with the situation obtaining in People v. Teehankee, where the prosecution merely presented evidence to show the fact of the victim‘s graduation from high school and the fact of his enrollment in a flying school, the spouses Rosales did not content themselves with simply establishing Liza Rosalie‘s enrollment at UP Integrated School. They presented evidence to show that Liza Rosalie was a good student, Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Atty. Jess Lopez

promising artist, and obedient child. She consistently performed well in her studies since grade school. In the case at bar, respondents only testified to the fact that the victim, Reggie Nabua, was a freshman taking up Industrial Engineering at the Technological Institute of the Philippines in Cubao. Unlike in Metro Transit where evidence of good academic record, extra-curricular activities, and varied interests were presented in court, herein respondents offered no such evidence. Hence, the CA was correct when it deleted the award of compensatory damages amounting to P2,000,000.00, as the same is without any basis. 15. Continental Cement Corporation v. ASEA Brown Boveri, Inc., G.R. No. 171660, October 17, 2011 Facts: Continental Cement Corporation (CCC), a corporation engaged in the business of producing cement,obtained the services of respondents Asea Brown Boveri, Inc. (ABB) and BBC Brown Boveri, Corp. to repair its 160 KW Kiln DC Drive Motor (Kiln Drive Motor). Due to the repeated failure of respondents to repair the Kiln Drive Motor, petitioner filed with RTC a Complaint for sum of money and damages, against respondent corporations and respondent Tord B. Eriksson (Eriksson), Vice-President of the Service Division of the respondent ABB. Petitioner alleged that: Plaintiff delivered the 160 KW Kiln DC Drive Motor to the defendants to be repaired. The defendant, Tord B. Eriksson, was personally directing the repair of the said Kiln Drive Motor and that apparently, the defendant Asea Brown Boveri, Inc. has no separate personality because of the 4,000 shares of stock, 3996 shares were subscribed by Honorio Poblador, Jr. The four other stockholders subscribed for one share of stock each only. After the first repair, the test failed. Plaintiff removed the DC Drive Motor and replaced it with its old motor. It was only on October 9, 1990 that the plaintiff resumed operation. The plaintiff lost 1,040 MTD per day from October 5 to October 9, 1990. After the defendants had undertaken the second repair of the motor in question, it was installed in the kiln. The test failed again. plaintiff suffered production losses for five days at the rate of 1,040 MTD daily. The defendants were given a third chance to repair. Again, the test failed. RESPONDENTS CLAIMED that under Clause 7 of the General Conditions, attached to the letter of offer dated July 4, 1990 issued by respondent ABB to petitioner, the liability of respondent ABB ―does not extend to consequential damages either direct or indirect.‖ Moreover, as to respondent Eriksson, there is no lawful and tenable reason for petitioner to sue him in his personal capacity because he did not personally direct the repair of the Kiln Drive Motor. Issue: Whether petitioner is entitled to damages/penalties Held: YES. Petitioner and respondent ABB entered into a contract for the repair of petitioner‘s Kiln Drive Motor, evidenced by Purchase Order Nos. 17136-37. Respondent ABB, however, not only incurred delay in performing its obligation but likewise failed to repair the Kiln Drive Motor; thus, prompting petitioner to sue for damages. CLAUSE 7 NOT BINDING ON PETITIONER Respondents contend that under Clause 7 of the General Conditions their liability ―does not extend to consequential damages either direct or indirect.‖ This contention, however, is unavailing because respondents failed to show that petitioner was duly furnished with a copy of said General Conditions. Hence, it is not binding on petitioner. Having breached the contract it entered with petitioner, respondent ABB is liable for damages pursuant to Articles 1167, 1170, and 2201 of the Civil Code, which state: Art. 1167. If a person obliged to do something fails to do it, the same shall be executed at his cost. This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore, it may be decreed that what has been poorly done be undone. Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages. Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable shall be those that are the natural and probable consequences of the breach of the obligation, and which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted. In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation. 296

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Atty. Jess Lopez

Though entitled, petitioner in this case is not claiming reimbursement for the repair allegedly done by Newton Contractor, but is instead asking for damages for the delay caused by respondent ABB. PETITIONER IS ENTITLED TO PENALTIES UNDER PURCHASE ORDER NOS. 17136-37. As per Purchase Order Nos. 17136-37, petitioner is entitled to penalties in the amount of P987.25 per day from the time of delay, August 30, 1990, up to the time the Kiln Drive Motor was finally returned to petitioner. Although the testing of Kiln Drive Motor was done on March 13, 1991, the said motor was actually delivered to petitioner as early as January 7, 1991. The installation and testing was done only on March 13, 1991 upon the request of petitioner because the Kiln was under repair at the time the motor was delivered; hence, the load testing had to be postponed. Under Article 1226 of the Civil Code, the PENALTY CLAUSE TAKES THE PLACE OF INDEMNITY FOR DAMAGES and the PAYMENT OF INTERESTS in case of non-compliance with the obligation, unless there is a stipulation to the contrary. Since there is no stipulation to the contrary, the penalty in the amount of P987.25 per day of delay covers all other damages (i.e. production loss, labor cost, and rental of the crane) claimed by petitioner. PETITIONER IS NOT ENTITLED TO RECOVER PRODUCTION LOSS, LABOR COST AND THE RENTAL OF CRANE. Article 1226 of the Civil Code further provides that if the obligor refuses to pay the penalty, such as in the instant case, damages and interests may still be recovered on top of the penalty. Damages claimed must be the natural and probable consequences of the breach, which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted. Thus, in addition to the penalties, petitioner seeks to recover as damages production loss, labor cost and the rental of the crane. Competent proof and a reasonable degree of certainty are needed to justify a grant of actual or compensatory damages; speculations, conjectures, assertions or guesswork are not sufficient. Consequential damages, such as loss of profits on account of delay or failure of delivery, may be recovered only if such damages were reasonably foreseen or have been brought within the contemplation of the parties as the probable result of a breach at the time of or prior to contracting respondent ABB, at the time it agreed to repair petitioner‘s Kiln Drive Motor, could not have reasonably foreseen that it would be made liable for production loss, labor cost and rental of the crane in case it fails to repair the motor or incurs delay in delivering the same, especially since the motor under repair was a SPARE MOTOR. PETITIONER IS NOT ENTITLED TO ATTORNEY‘S FEES Jurisprudence requires that the factual basis for the award of attorney‘s fees must be set forth in the body of the decision and not in the dispositive portion only. No explanation was given by the RTC in awarding attorney‘s fees in favor of petitioner. RESPONDENT ERIKSSON CANNOT BE MADE JOINTLY AND SEVERALLY LIABLE FOR THE PENALTIES There is no showing that Eriksson directed or participated in the repair of the Kiln Drive Motor or that he is guilty of bad faith or gross negligence in directing the affairs of respondent ABB. A corporation has a personality separate and distinct from the persons composing or representing it; hence, personal liability attaches only in exceptional cases, such as when the director, trustee, or officer is guilty of bad faith or gross negligence in directing the affairs of the corporation. In sum, petitioner is entitled to penalties in the amount of P987.25 per day from August 30, 1990 up to January 7, 1991 (131 days). 16. Mendoza v. Philippine Air Lines, 90 Phil. 836 (1952) Facts: Plaintiff Jose Mendoza was the owner of the Cita Theater located in the City of Naga, Camarines Sur, where he used to exhibit movie pictures booked from movie producers or film owners in Manila. Upcoming was the fiesta or town holiday of the City of Naga on September 17 & 18. As a good businessman, appellant, taking advantage of these circumstances, decided to exhibit a film which would fit the occasion and have a special attraction and significance to the people attending said fiesta. A month before the holiday, he contracted with the LVN pictures, Inc., a movie producer in Manila for him to show during the town fiesta the Tagalog film entitled "HIMALA NG BIRHEN" or Miracle of the Virgin. He made extensive preparations; he had 2000 posters printed and later distributed not only in the City of Naga but also in the neighboring towns. He also advertised in a weekly of general circulation in the province. In pursuance of the agreement between the LVN Pictures Inc. and Mendoza, LVN Pictures Inc. delivered to the Philippine Airlines (PAL) whose planes carried passengers and cargo and made regular trips from Manila to the Pili Air Port near Naga, Camarines Sur, a can containing the film "Himala ng Birhen" consigned to the Cita Theater. This can of films was loaded on one flight of the defendant, wherein said shipment was scheduled to arrive on the afternoon of the first day of the festival. For reasons not explained by the defendant, but which would appear to be the fault of its employees or agents, this can of film was not unloaded at Pili Air Port and it was brought back to Manila. Mendoza who had completed all 297

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arrangements for the exhibition of the film beginning in the evening of September 17th, to exploit the presence of the big crowd that came to attend the town fiesta, went to the Air Port and inquired from the defendant's station master there about the can of film. After investigation and search in the Manila office, the film was finally located the following day, September 18th, and then shipped to the Pili Air Port on September 20th. Mendoza received it and exhibited the film but he had missed his opportunity to realize a large profit as he expected for the people after the fiesta had already left for their towns. To recoup his losses, Mendoza brought this action against the PAL. The lower court found that because of his failure to exhibit the film "Himala ng Birhen" during the town fiesta, Mendoza suffered damages or rather failed to earn profits in the amount of P3,000.00, but finding the PAL not liable for said damages, dismissed the complaint. To avoid liability, PAL, called the attention of the trial court to the terms and conditions of paragraph 6 of the Way Bill, claiming that since there was no obligation on its part to carry the film in question on any specified time, it could not be held accountable for the delay of about three days. The trial court, however, found and held that although the defendant was not obligated to load the film on any specified plane or on any particular day, once said can film was loaded and shipped on one of its planes making trip to Camarines, then it assumed the obligation to unload it at its point of destination and deliver it to the consignee, and its unexplained failure to comply with this duty constituted negligence. The trial court relied on the ruling in the case of Daywalt, wherein it held that not because plaintiff failed to realize profits in the sum of P3,000.00 due to the negligence of the defendant, should the latter be made to reimburse him said sum. Applying provisions of Art. 1107 of the Civil Code which provides that losses and those foreseen, or which might have been foreseen, at the time of constituting the obligation, and which are a necessary consequence of the failure to perform it, the trial court held that inasmuch as these damages suffered by Mendoza were not foreseen or could not have been foreseen at the time that the defendant accepted the can of film for shipment, for the reason that neither the shipper LVN Pictures Inc. nor the consignee Mendoza had called its attention to the special circumstances attending the shipment and the showing of the film during the town fiesta of Naga, plaintiff may not recover the damages sought. Issue: Whether PAL is liable for damages. Held: NO. PAL contends that Art. 358 of the Code of Commerce should govern the award of the damages in his favor. Said article provides that if there is no period fixed for the delivery of the goods, the carrier shall be bound to forward them in the first shipment of the same or similar merchandise which he may make to the point of delivery, and that upon failure to do so, the damages caused by the delay should be suffered by the carrier. This is a general provision for ordinary damages and is no different from the provisions of the Civil Code, particularly Art. 1101 thereof, providing for the payment of damages caused by the negligence or delay in the fulfillment of one's obligation. Even applying the provisions of the Code of Commerce, as already stated, the pertinent provisions regarding damages only treats of ordinary damages or damages in general, NOT SPECIAL DAMAGES like those suffered by the plaintiff herein. Article 2 of the Code of Commerce provides that commercial transactions are to be governed by the provisions of the Code of Commerce, but in the absence of applicable provisions, they will be governed by the usages of commerce generally observed in each place; and in default of both, by those of the Civil Law. The trial court correctly found that the defendant company could not have foreseen the damages that would be suffered by Mendoza upon failure to deliver the can of film on the 17th of September, for the reason that the plans of Mendoza to exhibit that film during the town fiesta and his preparations, specially the announcement of said exhibition by posters and advertisement in the newspaper, were not called to the defendant's attention. A similar case is at hand. In the case of Chapman vs. Fargo, the plaintiff in Troy, New York, delivered picture films to the defendant Fargo, an express company, consigned and to be delivered to him in Utica. At the time of the shipment the attention of the express company was called to the fact that the shipment involved motion picture films to be exhibited in Utica, and that they should be sent to their destination, rush. There was delay in their delivery and it was found that the plaintiff because of his failure to exhibit the film in Utica due to the delay suffered damages or loss of profits. But the highest court in the State of New York refused to award him special damages. Said appellate court observed: But before defendant could be held to special damages, such as the present alleged loss of profits on account of delay or failure of delivery, it must have appeared that he had notice at the time of delivery to him of the particular circumstances attending the shipment, and which probably would lead to such special loss if he defaulted. Or, as the rule has been stated in another form, in order to impose on the defaulting party further liability than for damages naturally and directly, i.e., in the ordinary course of things, arising from a breach of contract, such unusual or extraordinary damages must have been brought within the contemplation of the parties as the probable result of a 298

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Atty. Jess Lopez

breach at the time of or prior to contracting. Generally, notice then of any special circumstances which will show that the damages to be anticipated from a breach would be enhanced has been held sufficient for this effect. As may be seen, that New York case is a stronger one than the present case for the reason that the attention of the common carrier in said case was called to the nature of the articles shipped, the purpose of shipment, and the desire to rush the shipment, circumstances and facts absent in the present case. Here, the contract of carriage between the LVN Pictures Inc. and the defendant carrier contains the stipulations of the delivery to Mendoza as consignee. His demand for the delivery of the can of film to him at the Pili Air Port may be regarded as a notice of his acceptance of the stipulation of the delivery in his favor contained in the contract of carriage, such demand being one of the fulfillment of the contract of carriage and delivery. In this case he also made himself a party to the contract, or at least has come to court to enforce it. His cause of action must necessarily be founded on its breach. One can readily sympathize with the appellant herein for his loss of profits which he expected to realize. But he overlooked the legal angle. In situations like the present where failure to exhibit films on a certain day would spell substantial damages or considerable loss of profits, including waste of efforts on preparations and expenses incurred in advertisements, exhibitors, for their security, may either get hold of the films well ahead of the time of exhibition in order to make allowance for any hitch in the delivery, or else enter into a special contract or make a suitable arrangement with the common carrier for the prompt delivery of the films, calling the attention of the carrier to the circumstances surrounding the case and the approximate amount of damages to be suffered in case of delay. 17. Villa Rey Transit v. Court of Appeals, G.R. No. L-25499, February 18, 1970 Facts: VRT owns Izuzu First Class passenger bus driven by one Casim. Policronio Quintos, as a paying passenger, sat on the first seat, second row, right side of the bus. While travelling, it hit the rear of a bullcart filled with hay and bamboo poles. As a result, a pole went through the windshield of the bus and straight to the face of Quintos. He obviously died. Private respondents herein are the sisters and onlysurviving heirs of Quintos. They filed an action against VRT for breach of contract of carriage and for recovery of damages amounting to 63,750. Trial court ruled that — Although as elsewhere shown in this decision the damages for wake and burial expenses, loss of income, death of the victim, and attorneys fee reach the aggregate of F79.615.95, this Court finds it just that said damages be assessed at total of only P63,750.00 as prayed for in plaintiffs‘ amended complaint. WHEREFORE, judgment is hereby rendered ordering the defendant to pay to the plaintiffs the amount of P63.750.00 as damages for breach of contract of carriage resulting from the death of Policronio Quintos, Jr. CA affirmed. Hence this petition. Issue: Whether the amount of damages is proper. Held: The determination of such amount depends, mainly upon TWO (2) FACTORS, namely: (1) the number of years on the basis of which the damages shall be computed and (2) the rate at which the losses sustained by said respondents should be fixed. FIRST FACTOR: LIFE EXPECTANCY The first factor was based by the trial court — the view of which was concurred in by the Court of Appeals — upon the LIFE EXPECTANCY of Policronio Quintos, Jr., which was placed at 33-1/3 years — he being over 29 years of age (or around 30 years for purposes of computation) at the time of his demise — by applying the formula (2/3 x [80-30] = life expectancy) adopted in the American Expectancy Table of Mortality or the actuarial of Combined Experience Table of Mortality. Upon the other hand, petitioner maintains that the lower courts had erred in adopting said formula and in not acting in accordance with Alcantara v. Surro in which the damages were computed on a four (4) year basis, despite the fact that the victim therein was 39 years old, at the time of his death, and had a life expectancy of 28.90 years. The case cited is not controlling in the one at bar. In the Alcantara case, none of the parties had questioned the propriety of the 4-year basis adopted by the trial court in making its award of damages. Both parties appealed, but only as regards the amount thereof. The plaintiffs assailed the non-inclusion, in its computation, of the bonus that the corporation, which 299 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Atty. Jess Lopez

was the victim‘s employer, had awarded to deserving officers and employees, based upon the profits earned less than two (2) months before the accident that resulted in his death. The defendants, in turn, objected to the sum awarded for the fourth year, which was treble that of the previous years, based upon the increases given, in that fourth year, to other employees of the same corporation. Neither this objection Thus, life expectancy is, not only relevant, but, also, an important element in fixing the amount recoverable by private respondents herein. Although it is not the sole element determinative of said amount, no cogent reason has been given to warrant its disregard and the adoption, in the case at bar, of a purely arbitrary standard, such as a fouryear rule. In short, the CA has not erred in basing the computation of petitioner‘s liability upon the life expectancy of Policronio Quintos, Jr. nor said claim for inclusion of the bonus was sustained by this Court. Accordingly, the same had not thereby laid down any rule on the length of time to be used in the computation of damages. SECOND FACTOR: RATE AT WHICH DAMAGES ARE COMPUTED Petitioner impugns the decision appealed from upon the ground that the damages awarded therein will have to be paid now, whereas most of those sought to be indemnified will be suffered years later: This argument is basically true, and this is, perhaps, one of the reasons why the Alcantara case points out the absence of a ‗‗fixed basis‖ for the ascertainment of the damages recoverable in litigations like the one at bar. Just the same, the force of the said argument of petitioner herein is offset by the fact that, although payment of the award in the case at bar will have to take place upon the finality of the decision therein, the liability of petitioner herein had been fixed at the rate only of P2,184.00 a year, which is the annual salary of Policronio Quintos, Jr. at the time of his death, as a young ―training assistant‖ in the Bacnotan Cement Industries, Inc. In other words, unlike the Alcantara case, on which petitioner relies, the lower courts did not consider, in the present case, Policronio‘s potentiality and capacity to increase his future income. Indeed, upon the conclusion of his training period, he was supposed to have a better job and be promoted from time to time, and, hence, to earn more, if not — considering the growing importance of trade, commerce and industry and the concomitant rise in the income level of officers and employees therein — much more. At this juncture, it should be noted, also, that We are mainly concerned with the determination of the losses or damages sustained by the private respondents, as dependents and intestate heirs of the deceased, and that said damages consist, not of the full amount of his earnings, but of the support they received or would have received from him had he not died in consequence of the negligence of petitioner‘s agent. In fixing the amount of that support, We must reckon with the ―necessary expenses of his own living‖, which should be deducted from his earnings. 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. ALL THINGS CONSIDERED, We are of the opinion that it is fair and reasonable to fix the deductible living and other expenses of the deceased at the sum of Pl,184.00 a year, or about P100.00 a month, and that, consequently, the loss sustained by his sisters may be roughly estimated at Pl,000.00 a year or P33,333.33 for the 33-1/3 years of his life expectancy. To this sum of F33,333.33, the following should be added: (a) P12,000.00, pursuant to Arts. 104 and 107 of the Revised Penal Code, in relation to Article 2206 of our Civil Code, as construed and applied by this Court; (b) Pl,727.95, actually spent by private respondents for medical and burial expenses; and (c) attorney‟s fee, which was fixed by the trial court, at P500.00, but which, in view of the appeal taken by petitioner herein, first to the CA and later to this Court, should be increased to P2,500.00. In other words, the amount adjudged in the decision appealed from should be reduced to the aggregate sum of P49,561.28, with interest thereon, at the legal rate, from December 29, 1961, date of the promulgation of the decision of the trial court. 18. Cruz v. Sun Holidays, Inc., G.R. No. 186312, June 29, 2010 Facts: Spouses Dante and Leonora Cruz (petitioners) lodged a Complaint against Sun Holidays, Inc. (respondent) for damages arising from the death of their son Ruelito C. Cruz (Ruelito) who perished with his wife on September 11, 2000 on board the boat M/B Coco Beach III that capsized en route to Batangas from Puerto Galera, Oriental Mindoro where the couple had stayed at Coco Beach Island Resort (Resort) owned and operated by respondent. The stay of the newly wed Ruelito and his wife at the Resort from September 9 to 11, 2000 was by virtue of a tour package-contract with respondent that included transportation to and from the Resort and the point of departure in 300 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Batangas. Miguel C. Matute (Matute), a scuba diving instructor and one of the survivors, gave his account of the incident that led to the filing of the complaint as follows: Shortly after the boat sailed, it started to rain. As it moved farther away from Puerto Galera and into the open seas, the rain and wind got stronger, causing the boat to tilt from side to side and the captain to step forward to the front, leaving the wheel to one of the crew members. The waves got more unwieldy. After getting hit by two big waves which came one after the other, M/B Coco Beach III capsized putting all passengers underwater. The passengers, who had put on their life jackets, struggled to get out of the boat. Upon seeing the captain, Matute and the other passengers who reached the surface asked him what they could do to save the people who were still trapped under the boat. The captain replied "Iligtas niyo na lang ang sarili niyo" (Just save yourselves). Help came after about 45 minutes when two boats owned by Asia Divers in Sabang, Puerto Galera passed by the capsized M/B Coco Beach III. Boarded on those two boats were 22 persons, consisting of 18 passengers and four crew members, who were brought to Pisa Island. Eight passengers, including petitioners‘ son and his wife, died during the incident. At the time of Ruelito‘s death, he was 28 years old and employed as a contractual worker for Mitsui Engineering & Shipbuilding Arabia, Ltd. in Saudi Arabia, with a basic monthly salary of $900. They filed the Complaint, as earlier reflected, alleging that respondent, as a common carrier, was guilty of negligence in allowing M/B Coco Beach III to sail notwithstanding storm warning bulletins issued by the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA). Issues: (1) Whether Sun Holidays is a common carrier. (YES, discussion omitted) (2) Whether Sun Holidays was negligent. (YES, discussion omitted) (3) Whether the amount of damages are proper. Held: Article 1764 vis-à-vis Article 2206 of the Civil Code holds the common carrier in breach of its contract of carriage that results in the death of a passenger liable to pay the following: (1) indemnity for death, (2) indemnity for loss of earning capacity and (3) moral damages. Petitioners are entitled to indemnity for the death of Ruelito which is fixed at P50,000. As for DAMAGES REPRESENTING UNEARNED INCOME, the formula for its computation is: Net Earning Capacity = life expectancy x (gross annual income - reasonable and necessary living expenses). Life expectancy is determined in accordance with the formula: 2 / 3 x [80 — age of deceased at the time of death] 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 of Combined Experience Table of Mortality. The SECOND FACTOR 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 loss is not equivalent to the entire earnings of the deceased, but only such portion as he would have used to support his dependents or heirs. Hence, to be deducted from his gross earnings are the necessary expenses supposed to be used by the deceased for his own needs. In COMPUTING THE THIRD FACTOR – necessary living expense, Smith Bell Dodwell Shipping Agency Corp. v. Borja teaches that when, as in this case, there is no showing that the living expenses constituted the smaller percentage of the gross income, the living expenses are fixed at HALF OF THE GROSS INCOME. Applying the above guidelines, the Court determines Ruelito's life expectancy as follows: Life expectancy = 2/3 x [80 - age of deceased at the time of death] 2/3 x [80 - 28] 2/3 x [52] Life expectancy = 35 Documentary evidence shows that Ruelito was earning a basic monthly salary of $900 which, when converted to 301 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Philippine peso applying the annual average exchange rate of $1 = P44 in 2000, amounts to P39,600. Ruelito‘s net earning capacity is thus computed as follows: Net Earning Capacity

Net Earning Capacity

= life expectancy x (gross annual income - reasonable and necessary living expenses). = 35 x (P475,200 - P237,600) = 35 x (P237,600) = P8,316,000

Respecting the award of moral damages, since respondent common carrier‟s breach of contract of carriage resulted in the death of petitioners‟ son, following Article 1764 vis-à-vis Article 2206 of the Civil Code, petitioners are entitled to moral damages. Under the circumstances, it is reasonable to award petitioners the amount of P100,000 as moral damages and P100,000 as exemplary damages. Pursuant to Article 2208 of the Civil Code, attorney's fees may also be awarded where exemplary damages are awarded. The Court finds that 10% of the total amount adjudged against respondent is reasonable for the purpose. Interest computation: Finally, Eastern Shipping Lines, Inc. v. Court of Appeals teaches 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, 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. Since the amounts payable by respondent have been determined with certainty only in the present petition, the interest due shall be computed upon the finality of this decision at the rate of 12% per annum until satisfaction, in accordance with paragraph number 3 of the immediately cited guideline in Easter Shipping Lines, Inc. 19. De Caliston v. Court of Appeals, G.R. No. L-63135, June 24, 1983 Facts: While driving a passenger bus in Bacolod City, Geronimo Dalcamio ran over Juana Sonza Vda. de Darrocha (a USVA pensioner) who died instantly, survived by her only child, Gloria Darrocha de Caliston. Prosecuted for homicide thru reckless imprudence, Dalmacio was convicted by the CFI of Negros Occidental, sentenced to imprisonment and ordered to pay the herein petitioner P15,000.00 for the death of the victim, P5,000.00 as moral damages, P5,000.00 for burial expenses and P10,000.00 for loss of pension CA modified by absolving Dalmacio from the payment of the P10,000.00 for loss of pension and credited him for the amount of P5,000.00 previously paid to the herein petitioner under a vehicular insurance policy obtained by the bus owner. Issue: Whether the deletion of the 10,000 for loss of pension was proper. Held: NO. The deletion of the P10,000.00 awarded for loss of pension is unjustified. Article 2206 of the Civil Code : ―The amount of damages for death caused by a crime or quasidelict shall be at least three thousand pesos, even though there may have been mitigating circumstances. In addition: (1) On The defendant 302 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the latter. . .‖ The pension of the decedent being a sure income that was cut short by her death for which Dalmacio was responsible, the surviving heir of the former is entitled to the award of P10,000.00 which is just equivalent to the pension the decedent would have received for one year if she did not die. The P5,000.00 paid to the herein petitioner by the insurer of the passenger bus which figured in the accident may be deemed to have come from the bus owner who procured the insurance. Since the civil liability (ex-delicto) of the latter for the death caused by his driver is subsidiary and, at bottom, arises from the same culpa, the insurance proceeds should be credited in favor of the errant driver. The petition is hereby granted partially in that the P10,000.00 award for loss of pension deleted in the appealed Court of Appeals decision is hereby reinstated. 20. Tamayo v. Señora, G.R. No. 176946, November 15, 2010 Facts: At about 11AM., Antonieto M . Señora, then 43 years old and a police chief inspector of the PNP, was riding a motorcycle and crossing the intersection of Sucat Road towards Filipinas Avenue, when a tricycle allegedly bumped his motorcycle from behind. As a result, the motorcycle was pushed into the path of an Isuzu Elf Van (delivery van), which was cruising along Sucat Road and heading towards South Superhighway. The delivery van ran over Señora , while his motorcycle was thrown a few meters away. He was recovered underneath the delivery van and rushed to the Medical Center of Parañaque, where he was pronounced dead on arrival. The tricycle was driven by Leovino F. Amparo, who testified that it was the delivery van that bumped Señora‘s motorcycle. He said that he did not see how the motorcycle could have been hit by his tricycle since he was looking at his right side, but when he heard a sound , he looked to his left and saw Señora already underneath the delivery van . He also said that when he was brought to the police station for investigation, he brought his tricycle to disprove the claim of the delivery van driver by showing that his tricycle sustained no damage. The delivery van, on the other hand, was driven by Elmer O. Polloso and registered in the name of Cirilo Tamayo. While trial was ongoing, Cirilo was suffering from lung cancer and was bedridden. His wife, petitioner Constancia, testified on his behalf. Constancia narrated that she and her husband were managing a single proprietorship known as Tamayo and Sons Ice Dealer. She testified that it was Cirilo who hired their drivers. She claimed that, as employer, her husband exercised the due diligence of a good father of a family in the selection, hiring, and supervision of his employees, including driver Polloso. Cirilo would tell their drivers not to drive fast and not to be too strict with customers. One of Cirilo‘s employees, Nora Pascual, also testified. She alleged that she was working as auditor and checker for Tamayo and Sons Ice Dealer. She testified that she and another employee were with Polloso in the delivery van at the time of the incident. She narrated that, while they were traversing Sucat Road, she saw a motorcycle going towards Filipinas Avenue. Pascual said that, when they reached the intersection of Sucat Road and Filipinas Avenue, Polloso blew the horn. She then saw a tricycle bump the rear of the motorcycle. She said that Polloso stopped the delivery van. When they alighted, they saw the motorcycle already under the delivery van. Pascual further testified that Polloso was a careful driver who drove the truck slowly and followed traffic rules. She also said that Cirilo called for a meeting before the delivery trucks left and told his drivers to be careful in their driving and to be courteous to their customers. Issue: (1) Whether Polloso was negligent. (2) Whether Cirillo is solidarily liable as an employer. (3) Whether the computation for net earning capacity is proper. Held: The Court holds that the RTC and the CA correctly found Polloso negligent. To be credible, testimonial evidence should not only come from the mouth of a credible witness but it should also be credible, reasonable, and in accord with human experience. It should be positive and probable such that it is difficult for a rational mind not to find it credible. If, as Pascual testified, the truck stopped when the tricycle bumped the motorcycle from behind, then there would have been no accident. Even if the motorcycle was nudged into the path of the truck, as she claimed, there would have been no impact if the truck itself was not moving, and certainly not an impact that would pin the motorcycle‟s driver under the truck and throw the motorcycle a few meters away. The Court likewise finds that the CA did not err in upholding Cirilo‘s solidary liability for Señora‘s death . The RTC correctly disregarded the testimonies of Cirilo‘s wife and his employee, leaving no other evidence to support the claim that he had exercised the degree of diligence required in hiring and supervising his employees. Finally, the Court SUSTAINS THE AWARD FOR LOSS OF EARNING CAPACITY by the CA. 303 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Atty. Jess Lopez

The AWARD OF DAMAGES FOR LOSS OF EARNING CAPACITY is concerned with the determination of losses or damages sustained by respondents, as dependents and intestate heirs of the deceased. This consists not of the full amount of his earnings, but of the support which they received or would have received from him had he not died as a consequence of the negligent act. Thus, the amount recoverable is not the loss of the victim‘s entire earnings, but rather the loss of that portion of the earnings which the beneficiary would have received. INDEMNITY FOR LOSS OF EARNING CAPACITY is determined by computing the net earning capacity of the victim. The CA correctly modified the RTC‘s computation. The RTC had misapplied the formula generally used by the courts to determine net earning capacity, which is, to wit:

LIFE EXPECTANCY shall be computed by applying the formula (2/3 x [80 - age at death]) adopted from the American Expectancy Table of Mortality or the Actuarial of Combined Experience Table of Mortality. Hence, the RTC erred in modifying the formula and using the retirement age of the members of the PNP (55) instead of ―80.‖ On the other hand, GROSS ANNUAL INCOME requires the presentation of documentary evidence for the purpose of proving the victim‘s annual income. The victim‘s heirs presented in evidence Señora‘s pay slip from the PNP, showing him to have had a gross monthly salary of P12,754.00. Meanwhile, the victim‘s net income was correctly pegged at 50% of his gross income in the absence of proof as regards the victim‘s living expenses. Consequently, the Court sustains the award of P1,887,847.00 as damages for loss of earning capacity. 21. Philippine Hawk Corporation v. Lee, G.R. No. 166869, February 16, 2010 Facts: On 15 March 2005 Lee filed a complaint against PHC and Avila for damages based on quasi-delict arising from a vehicular accident that occurred on 17 March 1991. It involved a bus belonging to PHC and driven by Avila, a jeep, and a motorcycle which she was riding in tandem with her husband, Silvio Tan. They were stopped at the side of the highway when the bus, running at fast speed, hit both their motorcycle and a jeep. He died thereat. On 18 June 1992, she filed an amended complaint in the civil case for damages, seeking moral and exemplary damages, funeral and interment expenses, medical and hospitalization expenses, the cost of the motorcycle‟s repair, attorney‘s fees, and other just and equitable reliefs. She alleged that her husband was operating a Caltex station yielding P1M a year, as well as a copra business yielding P36k a year. PHC pointed to Tan‘s negligence, and that it exercised diligence in selection and supervision. The jeepney driver said that the bus hit the motorcycle first, then his jeep. Avila said that a motorcycle ran from his left side and crossed his path, and that he did not stop for fear for his life. He denied bumping it, only hearing a loud bang. He had been involved in sideswiping incidents. The conductor said that the motorcycle bumped the side of the bus. A kagawad said the same. The RTC found Avila guilty of simple negligence, ordering him and PHC to pay P745,575 as lost earnings and actual damages plus P50,000 as moral damages. The CA affirmed with modification to the amounts, adding temperate damages. Issue: (1) Whether Avila is negligent. (discussion omitted) (2) Whether PHC is liable for damages. (3) Whether the damages awarded are proper. Held: As regards the issue on the damages awarded, petitioner contends that it was the only one that appealed the decision of the trial court with respect to the award of actual and moral damages; hence, the CA erred in awarding other kinds of damages in favor of respondent, who did not appeal from the trial court‟s decision. Petitioner‘s contention is unmeritorious. Section 8, Rule 51 of the 1997 Rules of Civil Procedure provides: SEC. 8. Questions that may be decided. -- No error which does not affect the jurisdiction over the subject matter or the validity of the judgment appealed from or the 304

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proceedings therein will be considered unless stated in the assignment of errors, or closely related to or dependent on an assigned error and properly argued in the brief, save as the court pass upon plain errors and clerical errors. Philippine National Bank v. Rabat cited the book of Justice Florenz D. Regalado to explain the section above, thus: In his book, Mr. Justice Florenz D. Regalado commented on this section, thus: 1. Sec. 8, which is an amendment of the former Sec. 7 of this Rule, now includes some substantial changes in the rules on assignment of errors. The basic procedural rule is that only errors claimed and assigned by a party will be considered by the court, except errors affecting its jurisdiction over the subject matter. To this exception has now been added errors affecting the validity of the judgment appealed from or the proceedings therein. Also, even if the error complained of by a party is not expressly stated in his assignment of errors but the same is closely related to or dependent on an assigned error and properly argued in his brief, such error may now be considered by the court. These changes are of jurisprudential origin. 2. The procedure in the Supreme Court being generally the same as that in the Court of Appeals, unless otherwise indicated (see Secs. 2 and 4, Rule 56), it has been held that the latter is clothed with ample authority to review matters, even if they are not assigned as errors on appeal, if it finds that their consideration is necessary in arriving at a just decision of the case. Also, an unassigned error closely related to an error properly assigned (PCIB vs. CA, et al., L-34931, Mar. 18, 1988), or upon which the determination of the question raised by error properly assigned is dependent, will be considered by the appellate court notwithstanding the failure to assign it as error (Ortigas, Jr. vs. Lufthansa German Airlines, L-28773, June 30, 1975; Soco vs. Militante, et al., G.R. No. 58961, June 28, 1983). It may also be observed that under Sec. 8 of this Rule, the CA is authorized to consider a plain error, although it was not specifically assigned by the appellant (Dilag vs. Heirs of Resurreccion, 76 Phil. 649), otherwise it would be sacrificing substance for technicalities. In THIS CASE FOR DAMAGES BASED ON QUASI-DELICT, the trial court awarded respondent the sum of P745,575.00, representing loss of earning capacity (P590,000.00) and actual damages (P155,575.00 for funeral expenses), plus P50,000.00 as moral damages. On appeal to the CA, petitioner assigned as error the award of damages by the trial court on the ground that it was based merely on suppositions and surmises, not the admissions made by respondent during the trial. In its Decision, the CA sustained the award by the trial court for loss of earning capacity of the deceased Silvino Tan, moral damages for his death, and actual damages, although the amount of the latter award was modified. The indemnity for loss of earning capacity of the deceased is provided for by Article 2206 of the Civil Code. Compensation of this nature is awarded not for loss of earnings, but for loss of capacity to earn money. As a rule, documentary evidence should be presented to substantiate the claim for damages for loss of earning capacity. By way of exception, damages for loss of earning capacity may be awarded despite the absence of documentary evidence when: (1) the deceased is SELF-EMPLOYED and earning less than the minimum wage under current labor laws, in which case, judicial notice may be taken of the fact that in the deceased's line of work no documentary evidence is available; or (2) the deceased is EMPLOYED AS A DAILY WAGE WORKER earning less than the minimum wage under current labor laws. In this case, the records show that respondent‘s husband was leasing and operating a Caltex gasoline station in Gumaca, Quezon. Respondent testified that her husband earned an annual income of 1M. Respondent presented in evidence a Certificate of Creditable Income Tax Withheld at Source for the Year 1990, which showed that respondent‘s husband earned a gross income of P950,988.43 in 1990. It is reasonable to use the Certificate and respondent‘s testimony as bases for fixing the gross annual income of the deceased at one million pesos before respondent‘s husband died on March 17, 1999. However, no documentary evidence was presented regarding the income derived from their copra business; hence, the testimony of respondent as regards such income cannot be considered.

305

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Atty. Jess Lopez

In the COMPUTATION OF LOSS OF EARNING CAPACITY, only net earnings, not gross earnings, are to be considered; that is, the total of the earnings less expenses necessary for the creation of such earnings or income, less living and other incidental expenses. In the absence of documentary evidence, it is reasonable to peg necessary expenses for the lease and operation of the gasoline station at 80 percent of the gross income, and peg living expenses at 50 percent of the net income (gross income less necessary expenses). In this case, the computation for loss of earning capacity is as follows: Net Earning = Life Expectancy x Gross Annual Income – Reasonable and Capacity [2/3 (80-age at the (GAI) Necessary time of death)] Expenses (80% of GAI) X = [2/3 (80-65)] x P1,000,000.00 - P800,000.00 X

= 2/3 (15)

x

P200,000.00

X

= 30/3

x

P100,000.00

x

P100,000.00

X X

= 10 = P1,000,000.00

-

P100,000.00 (Living Expenses)

The Court of Appeals also awarded actual damages for the expenses incurred in connection with the death, wake, and interment of respondent‘s husband in the amount of P154,575.30, and the medical expenses of respondent in the amount of P168,019.55. Actual damages must be substantiated by documentary evidence, such as RECEIPTS, in order to prove expenses incurred as a result of the death of the victim or the physical injuries sustained by the victim. A review of the valid receipts submitted in evidence showed that the funeral and related expenses amounted only to P114,948.60, while the medical expenses of respondent amounted only to P12,244.25, yielding a total of P127,192.85 in actual damages. Moreover, the CA correctly sustained the award of moral damages in the amount of P50,000.00 for the death of respondent‘s husband. Moral damages are not intended to enrich a plaintiff at the expense of the defendant. They are awarded to allow the plaintiff to obtain means, diversions or amusements that will serve to alleviate the moral suffering he/she has undergone due to the defendant‘s culpable action and must, perforce, be proportional to the suffering inflicted. In addition, the CA correctly awarded TEMPERATE DAMAGES in the amount of P10,000.00 for the damage caused on respondent‘s motorcycle. Under Art. 2224 of the Civil Code, temperate damages “may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty.” The cost of the repair of the motorcycle was prayed for by respondent in her Complaint. However, the evidence presented was merely a job estimate of the cost of the motorcycle‘s repair amounting to P17, 829.00. The Court of Appeals aptly held that there was no doubt that the damage caused on the motorcycle was due to the negligence of petitioner‘s driver. In the absence of competent proof of the actual damage caused on the motorcycle or the actual cost of its repair, the award of temperate damages by the appellate court in the amount of P10,000.00 was reasonable under the circumstances. The CA also correctly awarded respondent moral damages for the physical injuries she sustained due to the vehicular accident. Under Art. 2219 of the Civil Code, moral damages may be recovered in quasi-delicts causing physical injuries. However, the award of P50,000.00 should be reduced to P30,000.00 in accordance with prevailing jurisprudence. Further, the CA correctly awarded respondent civil indemnity for the death of her husband, which has been fixed by current jurisprudence at P50,000.00. The award is proper under Art. 2206 of the Civil Code. In fine, the CA correctly awarded civil indemnity for the death of respondent‘s husband, temperate damages, and moral damages for the physical injuries sustained by respondent in addition to the damages granted by the trial court to respondent. The trial court overlooked awarding the additional damages, which were prayed for by respondent in her Amended Complaint. The appellate court is clothed with ample authority to review matters, even if they are not assigned as errors in the appeal, if it finds that their consideration is necessary in arriving at a just decision of the case. 22. Simex International (Manila), Incorporated v. Court of Appeals, G.R. No. 88013, March 19, 1990 Facts: We are concerned in this case with the question of damages, specifically moral and exemplary damages. The negligence of the private respondent has already been established. All we have to ascertain is whether the petitioner is entitled to the said damages and, if so, in what amounts. Simex is a private corporation engaged in the exportation of food products. He buys these products from various local suppliers and then sells them abroad. Most of the products are purchased by the petitioner on credit. Petitioner was a 306 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

depositor of the respondent Traders Royal bank and maintained a checking account in Cubao. Petitioner deposited P100,000 to its account in the said bank, increasing its balance as of that date to P190,380. Subsequently, the Simex issued several checks against its deposit but was suprised to learn later that they had been dishonored for insufficient funds. California Manufacturing Corporation sent a letter of demand to the Simex, threatening prosecution if the dishonored check issued to it was not made good. It also withheld delivery of the order made by the petitioner. Similar letters were sent to the petitioner by the Malabon Long Life Trading and by the G. and U. Enterprises. Malabon also canceled the petitioner‘s credit line and demanded that future payments be made by it in cash or certified check. Action on the pending orders of the petitioner with the other suppliers whose checks were dishonored was also deferred. Investigation disclosed that the sum of P100,000 deposited by the petitioner on May 25, 1981, had not been credited to it. The error was rectified on June 17, 1981, and the dishonored checks were paid after they were re-deposited. Simex demanded reparation from the Traders Royal Bank for its ―gross and wanton negligence.‖ This demand was not met. The petitioner then filed a complaint in the then CFI of Rizal claiming from the private respondent moral damages in the sum of P1,000,000 and exemplary damages in the sum of P500,000, plus 25% attorney‘s fees, and costs. After trial, court held that moral and exemplary damages were not called for under the circumstances. However, observing that the plaintiff‘s right had been violated, he ordered the defendant to pay nominal damages in the amount of P20,000 plus P5,000 attorney‘s fees and costs. CA affirmed. CA found that private respondent was guilty of negligence but agreed that Simex was nevertheless not entitled to moral damages because the bank rectified its records. It credited the said amount in favor of plaintiff-appellant in less than a month. The dishonored checks were eventually paid. These circumstances negate any imputation or insinuation of malicious, fraudulent, wanton and gross bad faith and negligence on the part of the defendant-appellant. Issue: Whether award for actual, moral, and exemplary damages is proper. Held: YES but not for nominal damages. The negligence of the private respondent had been brushed off rather lightly as if it were a minor infraction requiring no more than a slap on the wrist. The error should not have been committed in the first place. The respondent bank has not even explained why it was committed at all. It is true that the dishonored checks were ―eventually‖ paid. However, this took almost a month when, properly, the checks should have been paid immediately upon presentment. The initial carelessness of the TRB, aggravated by the lack of promptitude in repairing its error, justifies the grant of moral damages. This rather lackadaisical attitude toward the complaining depositor constituted the gross negligence, if not wanton bad faith, that the respondent court said had not been established by the petitioner. ACTUAL DAMAGES While stressing the rectification made by the respondent bank, the decision practically ignored the prejudice suffered by the petitioner. This was simply glossed over if not, indeed, disbelieved. The fact is that the Simex‘s credit line was canceled and its orders were not acted upon pending receipt of actual payment by the suppliers. Its business declined. Its reputation was tarnished. Its standing was reduced in the business community. All this was due to the fault of the respondent bank which was undeniably remiss in its duty to the petitioner. Article 2205 of the Civil Code provides that actual or compensatory damages may be received “(2) for injury to the plaintiff‟s business standing or commercial credit.”. There is no question that the petitioner did sustain actual injury as a result of the dishonored checks and that the existence of the loss having been established ―absolute certainty as to its amount is not required.‖ Such injury should bolster all the more the demand of the petitioner for moral damages and justifies the examination by this Court of the validity and reasonableness of the said claim. MORAL DAMAGES We agree that moral damages are not awarded to penalize the defendant but to compensate the plaintiff for the injuries he may have suffered. In the case at bar, Simex is seeking such damages for the prejudice sustained by it as a result of the private respondent‘s fault. Respondent court said that the claimed losses are purely speculative and are not supported by substantial evidence, but if failed to consider that the amount of such losses need not be established with exactitude, precisely because of their nature. Moral damages are not susceptible of pecuniary estimation. Article 2216 of the Civil Code specifically provides that ―no proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated or exemplary damages may be adjudicated.‖ That is why the determination of the amount to be awarded (except liquidated damages) is left to the sound discretion of the court, according to ―the circumstances of each case.‖ 307

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

From every viewpoint except that of the petitioner‘s, its claim of moral damages in the amount of P1,000,000 is nothing short of preposterous. Its business certainly is not that big, or its name that prestigious, to sustain such an extravagant pretense. Moreover, a corporation is not as a rule entitled to moral damages because, not being a natural person, it cannot experience physical suffering or such sentiments as wounded feelings, serious anxiety, mental anguish and moral shock. The ONLY EXCEPTION TO THIS RULE IS WHERE THE CORPORATION HAS A GOOD REPUTATION THAT IS DEBASED, RESULTING IN ITS SOCIAL HUMILIATION. (OBITER LANG TO SABI NI DY!) Simex did suffer injury because of the private respondent‘s negligence that caused the dishonor of the checks issued by it. The immediate consequence was that its prestige was impaired because of the bouncing checks and confidence in it as a reliable debtor was diminished. Considering all this, we feel that the award of nominal damages in the sum of P20,000 was not the proper relief to which the petitioner was entitled. Under Article 2221 of the Civil Code, ―nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.‖ As we have found that the petitioner has indeed incurred loss through the fault of the private respondent, the proper remedy is the award to it of moral damages, which we impose, in our discretion, in the same amount of P20,000. EXEMPLARY DAMAGES Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages. Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. In every case, the depositor expects the bank to treat his account with the utmost fidelity, whether such account consists only of a few hundred pesos or of millions. A blunder on the part of the bank, such as the dishonor of a check without good reason, can cause the depositor not a little embarrassment if not also financial loss and perhaps even civil and criminal litigation. The point is that as a business affected with public interest and because of the nature of its functions, the bank is under obligation to treat the accounts of its depositors with meticulous care, always having in mind the fiduciary nature of their relationship. In the case at bar, it is obvious that TRB bank was remiss in that duty and violated that relationship. What is especially deplorable is that, having been informed of its error in not crediting the deposit in question to the petitioner, the respondent bank did not immediately correct it but did so only one week later or 23 days after the deposit was made. It bears repeating that the record does not contain any satisfactory explanation of why the error was made in the first place and why it was not corrected immediately after its discovery. Such ineptness comes under the concept of the wanton manner contemplated in the Civil Code that calls for the imposition of exemplary damages. The Court hereby imposes upon the respondent bank exemplary damages in the amount of P50,000, ―by way of example or correction for the public good,‖ in the words of the law to serve as a warning and deterrent against the repetition of the ineptness and indefference that has been displayed here, lest the confidence of the public in the banking system be further impaired. ACCORDINGLY, the appealed judgment is hereby MODIFIED and the private respondent is ordered to pay the petitioner, in lieu of nominal damages, MORAL DAMAGES in the amount of P20,000.00, and EXEMPLARY DAMAGES in the amount of P50,000.00 plus the original award of ATTORNEY‘S FEES in the amount of P5,000.00, and costs. 23. National Power Corporation v. Court of Appeals, G.R. No. L-43814, April 16, 1982 Facts: NPC issued an invitation for bids for the clearing of the reservoir area of Angat River Hydroelectric Project. Wilmag Iron Mines, Inc. (hereinafter referred to as WILMAG), among others, submitted its bid. NPC accepted. NPC and WILMAG entered into a contract for the clearing project. The contract provided for the complete clearing of the reservoir area of approximately 2,300 hectares at the unit price of P150.00 per hectare within 720 days from the date of its signing by WILMAG, subject to any extension that may be granted by NPC. WILMAG effected completion of the project. NPC, in a certification, cleared WILMAG of all money and property responsibilities in connection with the project. About a year after the completion and turnover of the clearing project, WILMAG filed with NPC its claims (1) for reimbursement of alleged increased labor cost in the amount of P1,222,595.01 resulting from the statutory adjustment of minimum wage rates from P4.00 to P 6.00 a day upon the effectivity of Republic Act No. 1480 on April 21, 1965; and (2.) for an alleged outstanding balance still due on the clearing project contract in the amount of P146,152.88. WILMAG's claims were rejected by NPC. WILMAG filed its complaint with the CFI of Manila, seeking to recover from NPC the total amount of P 40,572,689.41 broken down as follows: 308 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Atty. Jess Lopez

1. The amount of P146,152.88 representing the outstanding balance of the clearing project contract price; 2. The amount of P1,222,595.01 representing the additional increased labor cost resulting from the adjustment of minimum wages effected by Republic Act No. 4180; 3. The amount of P15,497,179.90 representing the value of felled logs and cut timber it failed to remove and haul away from the clearing area due to the "restrictions and prohibitions" imposed by NPC Resolution No. 65-285; 4. The amount of P236,613.76 representing forest charges assessed by the Bureau of Forestry on the unhauled felled logs and cut timber; 5. The amount of P2,459,828.07, exclusive of interests and other charges, representing the totality of various claims against it by its creditors; 6. The amount of P21,005,119.79 representing consequential damages, itemized as follows: a. The sum of P2,564,030.40 representing unrealized profits; b. The sum of P2,750,000.00 representing damages arising from various court suits filed against it; c. The sum of P2,824,350.34 representing its outstanding balance to the subcontractors it employed in the clearing project; and d. The sum of P12,866,739.05 representing actual investment spent in the clearing project; 7. The amount of P2,200.00 representing premium payments made by it on its performance bond; 8. The amount of P3,000,00 representing incidental expenses; and 9. A reasonable amount representing attorney's fees and other expenses of litigation, plus costs. NPC specifically denied the averments of material facts on which WILMAG relied for its numerous claims. CFI rendered its judgment in favor of WILMAG, ordering NPC to pay to WILMAG the following:

CA substantially affirmed the trial court's award (reducing the same by some P2-million to about P16.778 million by decreasing the blatantly excessive damages allegedly suffered by respondent with reference to its commercial credit and business reputation" in the some of P2-million to P500,000.00 and P100,000 — attorney's fees to P25,000.00 and eliminating the P500,000 — award for "nominal damages" in the definitely not nominal amount of P500,000.00), which award, as stated at the beginning would now reach a staggering sum of over P30-million with the accumulated 6% interest per annum from the filing of the complaint in 1967, as follows WHEREFORE, modified as above indicated, judgment is hereby rendered in favor of the appellee and against the appellant, sentencing the latter to pay the former, as follows: 1. The sum of P54,325.89 as the unpaid balance of the contract price due the appellee, with interest at 6% per annum from the date of the filing of the complaint 2. The sum of P622,662.50 as reimbursement for the same amount paid by the appellee to its laborers from April 21, 1965 to December 31, 1965, and the additional sum of P21,266.00 from January 1, 1966 to June 20, 1966 as increased wages under the Minimum Wage Law, or the total sum of P643,928.50, with interest at 6% per annum from the filing of the complaint 3. The amount of P15,497,179.50 for the value of commercial logs appellee failed to remove from the reservoir area, with interest also at 6% per cent [sic] from the time of the filing of the complaint; 4. The amount of P500,000.00 as damages to the commercial credit and business reputation of the plaintiff (sic) 5. The amount of P25,000.00 as attorney's fees; and 6. The costs of this action. Issue: Whether the award of damages was proper. 309

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Held: NO. As will presently be seen, particularly on the huge P15.497-million damage award, both CA court and the trial court grievously erred in granting the same and other amounts through gross misappreciation of the evidence or despite the lack of supporting evidence to sustain their erroneous conclusions of fact. CA leaned heavily upon two (2) considerations, the first of which was that "the NPC in paragraph 2 of its answer admitted that the WILMAG completed 1,621.1534 hectares." However, paragraph 2 of NPC's answer actually reads: That defendant admits the allegations contained in paragraph 5 of the complaint with the qualification that the total work completed by plaintiff under the contract was 81.77% or 1,621.1534 hectares. (Emphasis supplied) All the foregoing documents in evidence fix the reservoir area under clearing at 1,621.1534 hectares and the area actually cleared by WILMAG at 1,325.6475 hectares. An arithmetical computation demonstrates easily that 1,325.6475 hectares constitute 81.77% of 1,621.1534 hectares and this result serves to clear the apparent incongruity between or error in the figures cited by NPC in paragraph 2 of its answer. In short, the documents of record show that NPC's said answer should read that "the total work completed by plaintiff under the contract was 81.77% of (not ―or‖) 1,621.1534 hectares" The foregoing considerations relied upon by the appellate court in misappreciation of the facts having been shown to be inconsistent and irreconcilable with the evidence on record, require the setting aside of its holding that NPC pay WILMAG "for the entire 1,621.1534 hectares or the total amount of P243,173.01 at P150.00 a hectare." The Court holds that there is no balance due on the contract to WILMAG, since it actually cleared only 1,325.6475 hectares of the reservoir area for which it already received in full settlement and payment from NPC the total amount of P198,847.12. The Court holds that the CA reached an erroneous conclusion in not holding that the failure of WILMAG to comply with the material terms and essential pre-conditions of the contractual provisions involved herein, wherein time was of the essence, of submitting monthly the duplicates of its labor payrolls and certified lists of laborers (which failure WILMAG attempted to justify by the untenable excuse that its "financial difficulties" engendered by its failure "to remove and avail of the commercial products obtainable from the project incapacitated it to pay adequately its laborers" and, as a consequence, it "did not obtain the signatures of its laborers on the payrolls until they were fully paid" 14 on April 10, 1967) relieves NPC of any and all liability for any increased labor cost resulting from the adjustment of minimum wage rates effected by Republic Act No. 4180. Damages must be shown by actual proof with a reasonable degree of certainty and cannot be based on speculation and conjecture. Here, so many factors militate against the appellate and trial court's finding that the cleared area yielded a treasure trove of commercial timber valued at P15,497 million. The appellate court's conclusion that when the Bureau of Forestry issued a timber license to WILMAG to cut 185,199.00 cubic meters of timber from the area, the license "must have been issued" by said bureau based on the existence of such amount of timber is pure conjecture. No positive proof of the existence of such amount of timber was ever presented. It is a matter of judicial notice and public knowledge that in the issuance of timber licenses, it is the applicant (WILMAG in this case) who states for his own purposes the volume of timber for which he/it desires a license and pays the corresponding fees therefor. But such license is not proof that there exists indeed such magnitude of commercial timber in the logging area covered by the application and license. To allege that the clearing area was brimming with commercial timber worth at least 15 million pesos is to say that in addition to the contract price of not more than P345,000.00 (based on a total area of 2,300 hectares), NPC would be giving away an unstated consideration which is more than forty-three (43) times the stated value of the contract. Such an action by NPC is unnatural and goes against the presumption that a person takes ordinary care of his concerns (Rule 131, sec. 5, Revised Rules of Court)." And we may add, that if WILMAG's claim were true then the NPC officials would have been guilty of gross negligence and would be subject to prosecution under the Anti-Graft Act. The eighth and ninth assigned errors relate to the award by the appellate court in favor of WILMAG of the "amount of P 500,000.00 as damages to [its] commercial credit and business reputations" and the "amount of P25,000.00 as attorney's fees." The provisions allowing recovery of damages "[f]or injury to the plaintiff's business standing or commercial credit" fall under the chapter on actual or compensatory damages of Title XVIII /n damages of the new Civil Code. And such actual or compensatory damages must be established by clear evidence. In justifying its award of damages in the amount of P 500,000.00 for alleged injury to WILMAG's business standing or commercial credit, the CA merely took as good WILMAG's bare assertion that its "credit standing in the community were [sic] completely shattered, its entire business destroyed and its mortgages lost" but cites no evidence whatsoever to support the same. More importantly, these damages have no legal basis in view of our finding that WILMAG has no cause of action against NPC.

310

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

As NPC submits in its brief, WILMAG has no business reputation or commercial credit standing in the community (in its decision, the Court of Appeals did not even mention or discuss the business reputation or standing of WILMAG). WILMAG's own evidence showed that multifarious complaints or charges have been filed against it and its officials with the courts and other government agencies. This contradict any pretension of said corporation to probity and integrity." The appellate court's awards of P500,000.00 damages and P25,000.00 attorney's fees to WILMAG must accordingly be likewise set aside for lack of legal and factual basis. WILMAG enumerated a litany of "34 civil and 2 criminal cases for estafa" filed against it and its controlling stockholder Natividad M. Fajardo by third parties, seeking to justify the present action for damages against NPC allegedly because it could not as a result pay its loans to banks and fulfill its obligations to their subdivision buyers. Suffice it to state that NPC has nothing whatever to do with such suits and certainly cannot be held in any way liable for WILMAGs (apparently known to its creditors also as RAMAWIL) failure to live up to their contractual undertakings with them. 24. Tanay Recreation Center and Development Corp., v. Fausto, G.R. No. 140182, April 12, 2005 Facts: Petitioner Tanay Recreation Center and Development Corp. (TRCDC) is the lessee of a property located in Sitio Gayas, Tanay, Rizal, owned by Catalina Matienzo Fausto, under a Contract of Lease. On this property stands the Tanay Coliseum Cockpit operated by petitioner. The lease contract provided for a 20-year term, subject to renewal within 60 days prior to its expiration. The contract also provided that should Fausto decide to sell the property, petitioner shall have the ―priority right‖ to purchase the same. Petitioner wrote Fausto informing her of its intention to renew the lease. However, it was Fausto‘s daughter, respondent Anunciacion F. Pacunayen, who replied, asking that petitioner remove the improvements built thereon, as she is now the absolute owner of the property. It appears that Fausto had earlier sold the property to Pacunayen and title has already been transferred in her name. Petitioner filed a complaint for Annulment of Deed of Sale, Specific Performance with Damages. Respondent claimed that petitioner is estopped from assailing the validity of the deed of sale as the latter acknowledged her ownership when it merely asked for a renewal of the lease. The RTC rendered judgment, extending the lease for 7 years and dismissed petitioner‟s claim for damages. The CA affirmed. Issue: (1) Whether Tanay had the right of first refusal over the property. (2) Whether the award of damages was proper. Held: YES. When a lease contract contains a right of first refusal, the lessor is under a legal duty to the lessee not to sell to anybody at any price until after he has made an offer to sell to the latter at a certain price and the lessee has failed to accept it. The lessee has a right that the lessor's first offer shall be in his favor. Petitioner‘s right of first refusal is an integral and indivisible part of the contract of lease and is inseparable from the whole contract. The consideration for the lease includes the consideration for the right of first refusal and is built into the reciprocal obligations of the parties. It simply means that should Fausto decide to sell the leased property during the term of the lease, such sale should first be offered to petitioner. The stipulation does not provide for the qualification that such right may be exercised only when the sale is made to strangers or persons other than Fausto‘s kin. Thus, under the terms of petitioner‟s right of first refusal, Fausto has the legal duty to petitioner not to sell the property to anybody, even her relatives, at any price until after she has made an offer to sell to petitioner at a certain price and said offer was rejected by petitioner. Pursuant to their contract, it was essential that Fausto should have first offered the property to petitioner before she sold it to respondent. It was only after petitioner failed to exercise its right of first priority could Fausto then lawfully sell the property to respondent. The rule is that a sale made in violation of a right of first refusal is VALID. However, it may be rescinded, or, as in this case, may be the subject of an action for specific performance. The prevailing doctrine is that a right of first refusal means identity of terms and conditions to be offered to the lessee and all other prospective buyers and a contract of sale entered into in violation of a right of first refusal of another person, while valid, is rescissible. It was also incorrect for the CA to rule that it would be useless to annul the sale between Fausto and respondent because the property would still remain with respondent after the death of her mother by virtue of succession, as in fact, Fausto died in March 1996, and the property now belongs to respondent, being Fausto‘s heir. With the death of Fausto, whatever rights and obligations she had over the property, including her obligation under the lease contract, were transmitted to her heirs by way of succession, a mode of acquiring the property, rights and obligation of the decedent to the extent of the value of the inheritance of the heirs.

311

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

(2) DAMAGES Petitioner further seeks the award of the following damages in its favor: (1) P100,000.00 as actual damages; (2) P1,100,000.00 as compensation for lost goodwill or reputation; (3)P100,000.00 as moral damages; (4) P100,000.00 as exemplary damages; (5) P50,000.00 as attorney‘s fees; (6) P1,000.00 appearance fee per hearing; and (7) the costs of suit. According to petitioner, respondent‘s act in fencing the property led to the closure of the Tanay Coliseum Cockpit and petitioner was unable to conduct cockfights and generate income of not less than P100,000.00 until the end of September 1991, aside from the expected rentals from the cockpit space lessees in the amount of P11,000.00. Under Article 2199 of the Civil Code, it is provided that: Except 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. Such compensation is referred to as actual or compensatory damages. The rule is that actual or compensatory damages cannot be presumed, but must be proved with reasonable degree of certainty. A court cannot rely on speculations, conjectures, or guesswork as to the fact and amount of damages, but must depend upon competent proof that they have been suffered by the injured party and on the best obtainable evidence of the actual amount thereof. It must point out specific facts, which could afford a basis for measuring whatever compensatory or actual damages are borne. In the present case, there is no question that the Tanay Coliseum Cockpit was closed for two months and TRCDC did not gain any income during said period. But there is nothing on record to substantiate petitioner‟s claim that it was bound to lose some P111,000.00 from such closure. TRCDC‘s accountant, Merle Cruz, stated that based on the corporation‘s financial statement for the years 1990 and 1991, they derived the amount of P120,000.00 as annual income from rent. From said financial statement, it is safe to presume that TRCDC generated a monthly income of P10,000.00 a month (P120,000.00 annual income divided by 12 months). At best therefore, whatever actual damages that petitioner suffered from the cockpit‟s closure for a period of two months can be reasonably summed up only to P20,000.00. Such award of damages shall earn interest at the legal rate of six percent (6%) per annum, which shall be computed from the time of the filing of the Complaint on August 22, 1991, until the finality of this decision. After the present decision becomes final and executory, the rate of interest shall increase to twelve percent (12%) per annum from such finality until its satisfaction, this interim period being deemed to be equivalent to a forbearance of credit. Petitioner also claims the amount of P1,100,000.00 as compensation for lost goodwill or reputation. It alleged that ―with the unjust and wrongful conduct of the defendants as above-described, plaintiff stands to lose its goodwill and reputation established for the past 20 years. An award of damages for LOSS OF GOODWILL or REPUTATION falls under actual or compensatory damages as provided in Article 2205 of the Civil Code, to wit: Art. 2205. Damages may be recovered: (1) For loss or impairment of earning capacity in cases of temporary or permanent personal injury; (2) For injury to the plaintiff‘s business standing or commercial credit. Even if it is not recoverable as compensatory damages, it may still be awarded in the concept of temperate or moderate damages. In arriving at a reasonable level of temperate damages to be awarded, trial courts are guided by the ruling that: There are cases where from the nature of the case, definite proof of pecuniary loss cannot be offered, although the court is convinced that there has been such loss. For instance, injury to one's commercial credit or to the goodwill of a business firm is often hard to show certainty in terms of money. Should damages be denied for that reason? The judge should be empowered to calculate moderate damages in such cases, rather than that the plaintiff should suffer, without redress from the defendant's wrongful act. In this case, aside from the nebulous allegation of petitioner in its amended complaint, there is no evidence on record, whether testimonial or documentary, to adequately support such claim. Hence, it must be denied. Petitioner‘s claim for moral damages must likewise be denied. The award of moral damages cannot be granted in favor of a corporation because, being an artificial person and having existence only in legal contemplation, it has no feelings, no emotions, no senses. It CANNOT, THEREFORE, EXPERIENCE PHYSICAL SUFFERING AND MENTAL ANGUISH, WHICH CAN BE EXPERIENCED ONLY BY ONE HAVING A NERVOUS SYSTEM. Petitioner being a corporation, the claim for moral damages must be denied. 312 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

With regard to the claim for exemplary damages, it is a requisite in the grant thereof that the act of the offender must be accompanied by bad faith or done in wanton, fraudulent or malevolent manner. Moreover, where a party is not entitled to actual or moral damages, an award of exemplary damages is likewise baseless. In this case, petitioner failed to show that respondent acted in bad faith, or in wanton, fraudulent or malevolent manner. Petitioner likewise claims the amount of P50,000.00 as attorney‘s fees, the sum of P1,000.00 for every appearance of its counsel, plus costs of suit. It is well settled that no premium should be placed on the right to litigate and not every winning party is entitled to an automatic grant of attorney's fees. The party must show that he falls under one of the instances enumerated in Article 2208 of the Civil Code. In this case, since petitioner was compelled to engage the services of a lawyer and incurred expenses to protect its interest and right over the subject property, the award of attorney‟s fees is proper. However there are CERTAIN STANDARDS IN FIXING ATTORNEY'S FEES, to wit: (1) (2) (3) (4) (5) (6) (7) (8)

the amount and the character of the services rendered; labor, time and trouble involved; the nature and importance of the litigation and business in which the services were rendered; the responsibility imposed; the amount of money and the value of the property affected by the controversy or involved in the employment; the skill and the experience called for in the performance of the services; the professional character and the social standing of the attorney; and the results secured, it being a recognized rule that an attorney may properly charge a much larger fee when it is contingent than when it is not.

Considering the foregoing, the award ofP10,000.00 as attorney‘s fees, including the costs of suit, is reasonable under the circumstances. 25. Metro Manila Transit Corporation v. Court of Appeals, G.R. No. 116617, November 16, 1998 Facts: Liza Rosales, a third year HS student from UPIS, was hit by an MMTC bus when she was crossing Katipunan. An eyewitness said the girl was already near the center of the street when the bus, then bound for the south, hit her. She fell to the ground upon impact, rolled between the two front wheels of the bus, and was run over by the left rear tires thereof. Her body was dragged several meters away from the point of impact. Liza Rosalie was taken to the Philippine Heart Center, but efforts to revive her proved futile. Musa, the driver was found guilty of reckless imprudence. Parents of Liza filed an independent civil action for damages against MMTC, its GM, Musa, a dispatcher of MMTC, and the GSIS. RTC of QC rendered its decision in 1990 and found MMTC and Musa negligence and thus liable damages as follows: WHEREFORE, foregoing premises considered, judgment is hereby rendered ordering defendant Metro Manila Transit Corporation primarily and defendant Pedro Musa subsidiarily liable to plaintiffs spouses Rodolfo V. Rosales and Lily R. Rosales as follows: Actual damages in the amount of P150,000.00; Moral damages in the amount of P500,000.00; Exemplary damages in the amount of P100,000.00; Attorney‘s fees in the amount of P50,000.00; and Costs of suit CA affirmed with modifications: WHEREFORE, except for the modification deleting the award of P150,000.00 as actual damages and awarding in lieu thereof the amount of P30,000.00 as death indemnity, the decision appealed from is, in all other aspects, hereby AFFIRMED. On MR, the death indemnity of Liza was increased to 50,000. Hence, these appeals. Issue: Whether the award of damages were proper. (Skipped the finding of negligence) Held: Having found both MMTC and its driver Pedro Musa liable for negligence for the death of Liza Rosalie on August 9, 1986, we now consider the question of damages which her parents, the spouses Rosales, are entitled to recover, which is the subject of the appeal. INDEMNITY FOR DEATH Art. 2206 provides for the payment of indemnity for death caused by a crime or quasi-delict. Initially fixed in said article of the Civil Code at P3,000.00, the amount of the indemnity has through the years been gradually increased based on 313 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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the value of the peso. At present, it is fixed at P50,000.00. To conform to this new ruling, the CA correctly increased the indemnity. ACTUAL DAMAGES Art. 2199 provides that ―except 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.‖ The spouses Rosales are claiming actual damages in the amount of P239,245.40. However, during the trial, they submitted receipts showing that expenses for the funeral, wake, and interment of Liza Rosalie amounted only to P60,226.65. Hence, apart from the indemnity for death, the spouses Rosales are entitled to recover the above amount as actual damages. MORAL DAMAGES Under Art. 2206, 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.‖ The reason for the grant of moral damages has been explained thus: The award of moral damages is aimed at a restoration, within the limits of the possible, of the spiritual status quo ante; and therefore, it must be proportionate to the suffering inflicted. The intensity of the pain experienced by the relatives of the victim is proportionate to the intensity of affection for him and bears no relation whatsoever with the wealth or means of the offender. In the instant case, the spouses Rosales presented evidence of the intense moral suffering they had gone through as a result of the loss of Liza Rosalie who was their youngest child. Rodolfo Rosales recounted the place of Liza Rosalie in the family and their relationship with her. (Omitted testimony of the parents in re loss of Liza) The spouses Rosales claim moral damages in the amount of P5,000,000.00. In People v. Teehankee, Jr., this Court awarded P1 million as moral damages to the heirs of a 17-year-old girl who was murdered. This amount seems reasonable to us as moral damages for the loss of a minor child, whether he or she was a victim of a crime or a quasidelict. Hence, we hold that the MMTC and Musa are solidarily liable to the spouses Rosales in the amount of P1,000,000.00 as moral damages for the death of Liza. EXEMPLARY DAMAGES Art. 2231 provides that exemplary damages may be recovered in cases involving quasi-delicts if ―the defendant acted with GROSS negligence.‖ This obtains in the present case. The records indicate that at the time of the mishap, there was a pending criminal case against Musa for reckless imprudence resulting in slight physical injuries with another branch of the RTC, Quezon City. The evidence also shows that he failed to stop his vehicle at once even after eye witnesses shouted at him. The spouses Rosales claim exemplary damages in the amount of P5,000,000.00. Under the circumstances, we deem it reasonable to award the spouses Rosales exemplary damages in the amount of 500k. ATTORNEY‘S FEES Pursuant to Art. 2208, attorney‟s fees may be recovered when, as in the instant case, exemplary damages are awarded. In the recent case of Sulpicio Lines, Inc. v. Court of Appeals, which involved the death of a minor child in the sinking of a vessel, we held an award of P50,000.00 as attorney‟s fees to be reasonable. Hence, we affirm the award of attorney‘s fees made by the CA to the spouses Rosales in that amount. COMPENSTATION FOR LOSS OF EARNING CAPACITY Art. 2206 of the Civil Code provides that in addition to the indemnity for death caused by a crime or quasi-delict, the ―defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the latter. Compensation of this nature is awarded not for loss of earnings but for loss of capacity to earn money. Evidence must be presented that the victim, if not yet employed at the time of death, was reasonably certain to complete training for a specific profession. In People v. Teehankee, no award of compensation for loss of earning capacity was granted to the heirs of a college freshman because there was no sufficient evidence on record to show that the victim would eventually become a professional pilot. But compensation should be allowed for loss of earning capacity resulting from the death of a minor who has not yet commenced employment or training for a specific profession if sufficient evidence is presented to establish the amount thereof. The argument for allowing compensation for loss of earning capacity of a minor is even stronger if he or she was a student, whether already training for a specific profession or still engaged in general studies. In sharp contrast with the situation obtaining in People v. Teehankee, where the prosecution merely presented evidence to show the fact of the victim‘s graduation from high school and the fact of his enrollment in a flying school, the spouses 314 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Rosales did not content themselves with simply establishing Liza Rosalie‟s enrollment at UP Integrated School. They presented evidence to show that Liza Rosalie was a good student, promising artist, and obedient child. She consistently performed well in her studies since grade school. A survey taken in 1984 when Liza Rosalie was 12 years old showed that she had good study habits and attitudes. Cleofe Chi, guidance counselor of the University of the Philippines Integrated School, described Liza Rosalie as personable, well-liked, and with a balanced personality. Considering her good academic record, extracurricular activities, and varied interests, it is reasonable to assume that Liza Rosalie would have enjoyed a successful professional career had it not been for her untimely death. Hence, it is proper that compensation for loss of earning capacity should be awarded to her heirs in accordance with the formula established in decided cases for computing net earning capacity. LIFE EXPECTANCY Life expectancy is equivalent to 2/3 multiplied by the difference of 80 and the age of the deceased. Since Liza Rosalie was 16 at the time of her death, her life expectancy was 44 more years. Her projected gross annual income, computed based on the minimum wage for workers in the non-agricultural sector in effect at the time of her death, then fixed at P37.00, is P14,630.46. Allowing for necessary living expenses of 50% of her projected gross annual income, her TOTAL NET EARNING CAPACITY amounts to P321,870.12. Wage Order (1984) = 37.00 37 x 365 = 13,505 13,505 / 12 = 1,125.42 (equivalent monthly rate) 1,125.42 x 13 (representing 13th month pay) = 14,630.46 (gross annual income) 14,630.46 x 50% = 7,315.23 (net annual income) 7,315.23 x 44 (life expectancy) = 321,870.12 (net earning capacity) WHEREFORE, the decision of the Court of Appeals is SET ASIDE and another one is RENDERED holding the Metro Manila Transit Corporation and Pedro Musa jointly and severally liable for the death of Liza Rosalie R. Rosales and ORDERING them as such to pay to the spouses Rodolfo V. Rosales and Lily R. Rosales the following amounts: 1. death indemnity in the amount (P50,000.00); 2. actual damages in the amount of (P60,226.65); 3. moral damages in the amount of (P1,000,000.00); 4. exemplary damages in the amount of (P500,000.00); 5. attorney‘s fees in the amount of (P50,000.00); 6. compensation for loss of earning capacity in the amount of (P321,870.12); and 7. the costs of suit. 26. People v. Beduya, G.R. No. 175315, August 9, 2010 Facts: On May 6, 2002, at around 11:45 p.m., Roy Bughao (Bughao) was carrying a torch on his way home from the birthday celebration of his cousin when Elizer and Ric suddenly appeared. Ric went around him while his brother Elizer pointed a knife. He drew back and swung the torch at them and shouted, "Why do you hurt me, what is my fault?" The Beduya brothers did not reply and continued their assault. Bughao then scrambled for safety and ran towards the yard of victim Dominador S. Acope, Sr. (Acope, Sr.) and hid in a dark area. At around 12:30 a.m. of May 7, 2002, the victim and his son, Dominador Acope, Jr. (Acope, Jr.), were roused from their sleep by a voice coming from the road in front of their house. The victim went outside while his son peeped through the window. The victim saw Bughao who readily identified himself and said that Elizer pointed a knife at him. As the Beduya brothers entered the yard of the victim‘s house, Bughao hid himself. While in hiding, he saw the Beduya brothers approach the victim after they were advised to go home since it was already late. The Beduya brothers did not heed the advice and instead Ric slapped the victim while Elizer stabbed him. The victim retaliated by striking them with a piece of wood he got hold of. Elizer and Ric ran away but one of them stumbled on the pile of firewood and the clothesline in the yard before they succeeded in departing from the premises. Acope, Jr. immediately proceeded to his uncle‘s house which was 40 meters away and sought his help. The incident was also reported to their Barangay Captain, who responded by going to the residence of the victim. The Barangay Captain took the victim to the Jimenez Medicare Hospital but was later advised to proceed to the MHARS General Hospital in Ozamis City, where the police officer took the statement of the victim and Acope, Jr. On the next day, May 8, 2002, the victim died due to "septic and hypovolemic shock secondary to stabbed wound."

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During the pendency of the appeal, appellant Ric died of cardio pulmonary arrest secondary to bleeding peptic ulcer as shown by his certificate of death. Accordingly, we dismissed the appeal insofar as said appellant is concerned. However, judgment shall be rendered as to Elizer. Elizer was convicted of murder. Issue: (1) Whether the Brothers Beduya killed the victim with the abuse of superior strength for which they were convicted with murder. (2) Whether the damages awarded was proper. Held: (1) YES. Said qualifiying circumstance was present. (2) NO. The trial court awarded, and the CA affirmed, actual damages to the heirs of the victim in the amounts of P6,000.00 as funeral expenses and P9,411.85 as medical expenses incurred as a result of the incident. However, our review of the records revealed that the award was not substantiated by any evidence. There was no competent proof on the specific amounts of actual damages allegedly incurred and this omission cannot be supplied by a broad and general stipulation during trial that the victim‘s wife would testify on the damages brought about by the commission of the crime. The award of actual damages should consequently be deleted as there were no receipts presented evidencing the expenses allegedly incurred. However, as the heirs of the victim clearly incurred medical and funeral expenses, P25,000.00 by way of TEMPERATE damages should be awarded. "This award is adjudicated so that a right which has been violated may be recognized or vindicated, and not for the purpose of indemnification." When death results as a consequence of the crime, the heirs of the deceased are entitled to the amount of P50,000.00 as indemnity for the death of the victim without need of any evidence or proof of damages. Accordingly, we award said sum to the heirs of the victim, Acope, Sr. "MORAL DAMAGES are mandatory in cases of murder and homicide without need of allegation and proof other than the death of the victim. Consistent with this rule, we award the amount of P50,000.00 as moral damages in accordance with prevailing jurisprudence." The trial court was correct in awarding INDEMNITY FOR THE LOSS OF EARNING CAPACITY of the victim. However, the computation for this award should be more accurate. Acope, Sr., was 46 years old on the day he died. He earned an average of P3,000.00 a month as a farmer and barangay tanod. This is equivalent to the sum of P36,000.00 per annum. Pursuant to the American Expectancy Table of Mortality, which has been adopted in this jurisdiction, the formula for the computation of loss of earning capacity is provided as follows: Net Earning Capacity (X) = Life Expectancy x (Gross Annual Income – Living Expenses, e.g., 50% of Gross Annual Income) Life expectancy is determined in accordance with the following formula: Life Expectancy = 2/3 x (80 – age of deceased) Accordingly, the unearned income of Acope, Sr., is: X = [2 (80-46)/3] x (P36k-P18k) = P408,006.00 In applying the formula and computation for net income stated above, the amount of loss of earning capacity is the exact sum of P408,006.00. 27. People v. Anticamara, G.R. No. 178771, June 8, 2011 Facts: The accused are charged with the crimes of Murder and of Kidnapping/Serious Illegal Detention The testimony of AAA had clearly established the following facts: 1. At about 3AM of May 7, 2002, while she and the victim Abad Sulpacio were sleeping inside the house of the Estrella family in Barangay Carmen, Rosales, Pangasinan several persons entered to rob the place; 2. Inside the house, she saw and recognized the accused Lando Calaguas and Dick Tañedo , and heard the latter uttering ―somebody will die‖; 3. Bringing her outside the house, Lando pushed her into the Revo where she saw inside Abad Sulpacio who was blindfolded and with his hands tied; 316

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4. Inside the Revo , she recognized the accused Dick Tañedo , Lando Calaguas , Marvin Lim , Roberto Tañedo , Alberto Anticamara and Fred; 5. The Revo then proceeded towards the fishpond owned by the Estrellas in Sitio Rosalia, Brgy. San Bartolome, Rosales, Pangasinan; 6. The last time that she saw Abad Sulpacio was when he was dragged out from the vehicle by Lando , Fred, Marvin and Al upon reaching Sitio Rosalia . At that, time Dick Tañedo stayed with her in the vehicle ; 7. Thereafter, when Fred returned to the vehicle, she heard him uttered (sic): ―Make a decision now. Abad has already four (4) bullets in his body, and the one left is for this girl. RTC I. In Criminal Case No. 4498-R for MURDER: A. Nicetas ―Cita‖ Tañedo is hereby acquitted of the crime charged for insufficiency of evidence; B. Lando Calaguas) and Al Camara) are hereby found guilty beyond reasonable doubt, as principal, of the crime of Murder qualified by treachery. Considering the presence of aggravating circumstance of premeditation, with no mitigating circumstance to offset the same, the penalty of DEATH is hereby imposed upon the two (2) accused (Lando Calaguas) and Alberto Anticamara (Al Camara). They are also ordered jointly and severally [to] pay the heirs of the victim Abad Sulpacio the following: 1) Fifty Thousand Pesos (P50,000.00) as moral damages; 2) Seventy-Five Thousand Pesos (P75,000.00) as indemnity for the death of the victim; 3) Fifty-Seven Thousand One Hundred Twenty-Two Pesos and Thirty Centavos (P57,122.30) as actual damages; and 4) The cost of suit. II. Criminal Case No. 4481-R for KIDNAPPING/SERIOUS ILLEGAL DETENTION: A) Nicetas ―Cita‖ Tañedo is hereby acquitted of the crime charged for insufficiency of evidence ; B) Lando Calaguas) and Alberto Anticamara (alyas Al Camara) are hereby found guilty beyond reasonable doubt, as principal, of the crime of Kidnapping/Serious Illegal Detention. Considering that the victim AAA was raped during her detention, the maximum penalty of DEATH is hereby imposed upon the two accused, Fernando Calaguas Fernandez (Lando Calaguas) and Alberto Anticamara (Al Camara). The two accused are also ordered to pay, jointly and severally, the victim AAA the amount of: 1) One Hundred Thousand Pesos (P100,000.00) as moral damages; 2) Fifty Thousand Pesos (P50,000.00) as exemplary damages; and 3) Cost of suit CA affirming the decision of the RTC; but in view of the abolition of the death penalty, the appellants were sentenced to reclusion perpetua. Issue: (1) Whether Anticamara et al are indeed guilty. (2) Whether the award of damages is proper. Held: In CRIMINAL CASE FOR MURDER: The trial court found that although there was no direct eyewitness in the killing of Sulpacio, the prosecution adduced sufficient circumstantial evidence to establish with moral certainty the identities and guilt of the perpetrators of the crime. In the case at bar, although no one directly saw the actual killing of Sulpacio, the prosecution was able to paint a clear picture that the appellants took Sulpacio away from the house of the Estrellas, tied and blindfolded him, and brought him to another place where he was repeatedly shot and buried. The killing of Sulpacio was part of their conspiracy. Prior to the commission of the crime, the group met at the landing field in Carmen, Pangasinan and discussed their plan to rob the house of the Estrellas with the agreement that whoever comes their way will be eliminated. It was proven that when AAA boarded the vehicle, she saw Sulpacio tied and blindfolded. This situation of the victim when found shows without doubt that he was killed while tied and blindfolded; hence, the qualifying aggravating circumstance of treachery was present The essence of premeditation is that the execution of the act was preceded by cool thought and reflection upon the resolution to carry out the criminal intent during a space of time sufficient to arrive at a calm judgment. From the time the group met at the landing field at around 6:30 p.m. of May 6, 2002, and discussed the possibility of killing anyone who stands on their way, up to the time they took Sulpacio away from the Estrellas‘ house and eventually killed him thereafter at around past 3:00 a.m., more than eight hours had elapsed—sufficient for the appellants to reflect on the consequences of their actions and desist from carrying out their evil scheme, if they wished to. In Criminal Case for KIDNAPPING and SERIOUS ILLEGAL DETENTION The Court finds appellant Lando guilty of the special complex crime of kidnapping and serious illegal detention with rape, defined in and penalized under Article 267 of the Revised Penal Code. Lando and Al forcibly took AAA, a female, 317 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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away from the house of the Estrellas and held her captive against her will. Lando brought AAA to his house whereby she was deprived of her liberty for almost one month. For there to be kidnapping, it is enough that the victim is restrained from going home. Its essence is the actual deprivation of the victim‘s liberty, coupled with indubitable proof of the intent of the accused to effect such deprivation. Although AAA was not confined in an enclosure, she was restrained and deprived of her liberty, because every time appellant Lando and his wife went out of the house, they brought AAA with them. AAA was constantly guarded by appellant Lando and his family. The crime of rape was also established by the prosecution. Appellant Lando succeeded in having carnal knowledge of AAA through the use of threat and intimidation. Lando brought her to a hotel to hide her from Fred and Bert, who intended to kill her. While in the hotel, appellant Lando raped her. In rape cases, the credibility of the victim‟s testimony is almost always the single most important factor. It may be the sole basis for the accused‘s conviction. Owing to the nature of the offense, in many cases, the only evidence that can be given Article 267 of the Revised Penal Code provides that if the victim is killed or dies as a consequence of the detention, or is raped or subjected to torture or dehumanizing acts, the maximum penalty shall be imposed. THE DAMAGES 1. MURDER, the award of civil indemnity is mandatory and granted to the heirs of the victim without need of proof other than the commission of the crime. In People v. Quiachon, even if the penalty of death is not to be imposed because of the prohibition in R.A. 9346, the civil indemnity of P75,000.00 is proper, because it is not dependent on the actual imposition of the death penalty but on the fact that qualifying circumstances warranting the imposition of the death penalty attended the commission of the offense. As explained in People v. Salome, while R.A. No. 9346 prohibits the imposition of the death penalty, the fact remains that the penalty provided for by law for a heinous offense is still death, and the offense is still heinous. Accordingly, the award of civil indemnity in the amount of P75,000.00 is proper. Anent MORAL DAMAGES, the same are mandatory in cases of murder, without need of allegation and proof other than the death of the victim. However, consistent with recent jurisprudence on heinous crimes where the imposable penalty is death but reduced to reclusion perpetua pursuant to R.A. No.9346, the award of moral damages should be increased from P50,000.00 to P75,000.00. The award of EXEMPLARY DAMAGES is in order, because of the presence of the aggravating circumstances of treachery and evident premeditation in the commission of the crime. The Court awards the amount of P30,000.00, as exemplary damages, in line with current jurisprudence on the matter. ACTUAL DAMAGES is also warranted. Modesta Abad, the spouse of victim Sulpacio, incurred expenses in the amount of P57,122.30, which was duly supported by receipts. 2. KIDNAPPING and SERIOUS ILLEGAL DETENTION, AAA is entitled to civil indemnity in line with prevailing jurisprudence that civil indemnification is mandatory upon the finding of rape. Applying prevailing jurisprudence, AAA is entitled to P75,000.00 as civil indemnity. In addition, AAA is entitled to moral damages pursuant to Article 2219 of the Civil Code,71 without the necessity of additional pleadings or proof other than the fact of rape. Moral damages is granted in recognition of the victim‘s injury necessarily resulting from the odious crime of rape. Such award is separate and distinct from the civil indemnity. However, the amount of P100,000.00 awarded as moral damages is reduced to P75,000.00, in line with current jurisprudence. The award of exemplary damages to AAA in the amount of P50,000 is hereby reduced to P30,000.00 in accordance with recent jurisprudence. As to appellant Al. In the absence of conspiracy, the liability of the accused is individual and not collective. Since appellant Al is liable only for the crime of serious illegal detention, he is jointly and severally liable only to pay the amount of P50,000.00 as civil indemnity. For serious illegal detention, the award of civil indemnity is in the amount of P50,000.00, in line with prevailing jurisprudence. Al‘s liability for moral damages is limited only to the amount of P50,000.00. Pursuant to Article 2219 of the Civil Code, moral damages may be recovered in cases of illegal detention. This is predicated on AAA‘s having suffered serious anxiety and fright when she was detained for almost one (1) month. 28. People v. Rarugal, G.R. No. 188603, January 16, 2013 Facts: At around 9:45 p.m., while victim Arnel Florendo was cycling along Sampaguita Street, Novaliches, Quezon City, Rarugal, with the use of a long double-bladed weapon, stabbed Florendo; thus, forcibly depriving him of his 318

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bicycle. Immediately thereafter, appellant hurriedly fled the scene. This incident was witnessed by Roberto Sit-Jar, who positively identified appellant in court. Florendo arrived home bleeding. He was quickly attended to by his siblings, including his brother Renato. When Renato recounted the events of that night to the court, he testified that Florendo told him and his other relatives that it was appellant who had stabbed him. They then took Florendo to Tordesillas Hospital but had to transfer him to Quezon City General Hospital, due to the unavailability of blood. It was there that Florendo died 7 days later with the family spending about P2,896.007 for his hospitalization and P25,000.008 for his funeral. In his defense, Rarugal denied that he stabbed Florendo since he was at that time working as a farm administrator for the town mayor in Pangasinan. He said he was living with his cousin in Urbiztondo, Pangasinan where he had been staying since 1997. He stated that during the period 1997 to 1998, he did not visit Manila at any point. On crossexamination, appellant stated that he was arrested in front of his house in Novaliches, Quezon City. The records are devoid of any indication that it was physically impossible for appellant to have been in the scene of the crime at the time it was committed. Appellant‘s bare alibi that he was working as a farm administrator in Urbiztondo, Pangasinan and was allegedly staying there at the time of the commission of the crime does not suffice to prove the alleged physical impossibility that he committed the crime charged, more so in the face of positive identification by the witness, who was not motivated by any improper motive to falsely testify against him. Also, the victim was still alive after the stabbing incident. He had time to reach his house and confide in his brother, witness Renato, that it was appellant who had stabbed him. The statement of Florendo made to his brother Renato has complied with the requisites of a dying declaration. It is important to note that Florendo, after being stabbed by appellant twice on the chest, went home and under labored breathing, told Renato that it was appellant who had stabbed him. Clearly, the statement made was an expression of the cause and the surrounding circumstances of his death, and under the consciousness of impending death. There being nothing in the records to show that Florendo was incompetent, he would have been competent to testify had he survived. It is enough to state that the deceased was at the time competent as a witness. Lastly, the dying declaration is offered in an inquiry the subject of which involves his death. It is of no moment that the victim died 7 days from the stabbing incident and after receiving adequate care and treatment, because the apparent proximate cause of his death, the punctures in his lungs, was a consequence of appellant‘s stabbing him in the chest. Appellant‘s act of suddenly stabbing Florendo while he was innocently cycling along Sampaguita Street, Barangay Capari, Novaliches, Quezon City constituted the qualifying circumstance of treachery. Treachery is present when the offender commits any of the crimes against persons, employing means, methods, or forms in the execution, which tend directly and specially to insure its execution, without risk to the offender arising from the defense which the offended party might make. Article 248 of the Revised Penal Code, as amended by Republic Act No. 7659, provides for the penalty of reclusion perpetua to death for the crime of murder. There being no aggravating or mitigating circumstance, the RTC, as affirmed by the CA, properly imposed the penalty of reclusion perpetua, pursuant to Article 63, paragraph 2, of the Revised Penal Code. DAMAGES However, to conform to existing jurisprudence, the Court must modify the amount of INDEMNITY FOR DEATH and EXEMPLARY DAMAGES awarded by the courts below. Anent the award of damages, WHEN DEATH OCCURS DUE TO A CRIME, the following may be recovered: (1) civil indemnity ex delicto for the death of the victim; (2) actual or compensatory damages; (3) moral damages; (4) exemplary damages; (5) attorney‟s fees and expenses of litigation; and (6) interest, in proper cases. The heirs were able to prove ACTUAL DAMAGES in the amount of P27,896.00 based on the receipts they submitted. Moreover, we agree with the CA that the award of exemplary damages is proper in this case. In fine, relative to the civil aspect of the case, an aggravating circumstance, whether ordinary or qualifying, should entitle the offended party to an award of exemplary damages within the unbridled meaning of Article 2230 of the Civil Code.‖

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We, however, increase the award of exemplary damages to P30,000.00 and the award for mandatory civil indemnity to P75,000.00 to conform to recent jurisprudence. We sustain the RTC‘s award for moral damages in the amount of P50,000.00 even in the absence of proof of mental and emotional suffering of the victim‘s heirs. As borne out by human nature and experience, a violent death invariably and necessarily brings about emotional pain and anguish on the part of the victim‘s family. In addition, and in conformity with current policy, we also impose on all the monetary awards for damages interest at the legal rate of 6% per annum from date of finality of this Decision until fully paid. 29. Padilla Machine Shop v. Javilgas, G.R. No. 175960, February 19, 2008 Facts: 10 December 2002 – Javilgas filed a complaint for illegal dismissal, underpayment of 13th month pay, separation pay, and non-remittance of SS contributions. He alleged that he was hired in January 1998 to recondition machines until his dismissal in April 2002. He found in 2002 that his employer was not remitting SSS contributions, and thus was not able to avail of SSS benefits when his wife gave birth. When he complained, he was transferred to the Novaliches branch office. On April 2002, he was called up by Rodolfo Padilla, who told him to simply ―stop working‖. Hence, the present suit. Rodolfo, the proprietor, alleged that he voluntarily left the shop in 2000, and begged to be reemployed. He was reemployed, but customers were not satisfied with his workl hence, the reassignment. He also incurred numerous absences, and opened his own shop, ―pirating‖ the clients of petitioners. He alleged once more that he voluntarily left. The LA found that he was illegally dismissed. It ruled— WHEREFORE, judgment is hereby rendered finding Complainant to have been illegally dismissed. Concomitantly, Respondents are ordered jointly and severally to pay Complainant the following: P232,065.92—representing backwages; 50,400.00—representing separation pay; 18,571.00—representing 13th month pay P301,036.92—Total Ten percent of the total award as attorney‘s fees. The claim of non-remittance of SSS contribution is dismissed for lack of jurisdiction. The NLRC reversed. The CA, reinstated the LA ruling. Issue: (1) Whether Javilgas was illegally dismissed. (2) Whether attorneys fees were proper Held: (1) YES. ILLEGALLY DISMISSED. Petitioners did not offer any evidence to disprove the allegation that Rodolfo Padilla informed Javilgas by phone to stop reporting to work. On the contrary, Rodolfo admitted that he ―advised‖ Javilgas to ―concentrate on his (Javilgas‘) shop if he has no more time for the company (Padilla Machine Shop).‖ Moreover, it was only in the NLRC that the documents and photographs purporting to show that Javilgas was conducting business inimical to the interests of Padilla Machine Shop were submitted. In illegal dismissal cases, the burden of proof is on the employer to show that the employee was dismissed for a valid and just cause. Petitioners have failed to discharge themselves of the burden. Petitioner Rodolfo, however, did not elaborate or show proof of the claimed abandonment. Instead, he concluded that Javilgas “abandoned his corresponding duties and responsibilities x x x when he established and created his own machine shop outfit x x x.‖ For abandonment to exist, it is essential (a) that the employee must have failed to report for work or must have been absent without valid or justifiable reason; and, (b) that there must have been a clear intention to sever the employeremployee relationship manifested by some overt acts. The establishment of his own shop is not enough proof that Javilgas intended to sever his relationship with his employer. Moreover, it was only in 2003 that Rodolfo allegedly confirmed his suspicion that Javilgas was operating his own machine shop. Rodolfo admits that it was only when the case was on appeal to the NLRC that his suspicion was confirmed. This only proves that in April 2002, when Rodolfo allegedly “advised” Javilgas to “concentrate on his (Javilgas‟) shop if he has no more time for the company (Padilla Machine Shop),” petitioners had nothing but unfounded suspicions.

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Atty. Jess Lopez

Petitioners consistently deny that Javilgas was dismissed from service; that he abandoned his employment when he walked out after his conversation with Rodolfo and never returned to work again. But denial, in this case, does not suffice; it should be coupled with evidence to support it. In the instant case, petitioners failed to adduce evidence to rebut Javilgas‘ claim of dismissal and satisfy the burden of proof required. As regards the eight-month hiatus before Javilgas instituted the illegal dismissal case, we sustain the Court of Appeals‘ ruling that Javilgas filed the complaint within a reasonable period during the three-year period provided under Article 291 of the Labor Code. ATTORNEY‘S FEES Finally, there is no merit in petitioners‘ claim that attorney‘s fees may not be awarded to the respondent since his case was being handled pro bono by the U.P. Office of Legal Aid, which provides free legal assistance to indigent litigants. In this jurisdiction, there are TWO CONCEPTS OF ATTORNEY‘S FEES. In the ORDINARY SENSE, attorney‘s fees represent the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter. On the other hand, in its EXTRAORDINARY CONCEPT, attorney‟s fees may be awarded by the court as indemnity for damages to be paid by the losing party to the prevailing party, and not counsel. In its extraordinary sense, attorney‘s fees as part of damages is awarded only in the instances specified in Article 2208 of the Civil Code, among which are the following which obtain in the instant case: (7) In actions for the recovery of wages of household helpers, laborers and skilled workers; (8) laws;

In actions for indemnity under workmen's compensation and employer's liability

(11) In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered. 30. David v. Misamis Occidental II Electric Cooperative, Inc., G.R. No. 194785, July 11, 2012 Facts: Petitioner Virgilio S. David (David) was the owner or proprietor of VSD Electric Sales, a company engaged in the business of supplying electrical hardware including transformers for rural electric cooperatives like respondent Misamis Occidental II Electric Cooperative, Inc. (MOELCI). To solve its problem of power shortage affecting some areas within its coverage, MOELCI expressed its intention to purchase a 10 MVA power transformer from David. David agreed to supply the power transformer provided that MOELCI would secure a board resolution because the item would still have to be imported. Engr. Rada and Director Jose Jimenez who was in-charge of procurement, returned to Manila and presented to David the requested board resolution which authorized the purchase of one 10 MVA power transformer. David presented his proposal for the acquisition of said transformer. David instructed his then secretary and bookkeeper, Ellen M. Wong, to type the names of Engr. Rada and Jimenez at the end of the proposal. Both signed the document under the word ―conforme.‖ The board resolution was thereafter attached to the proposal. In the proposal, the subject transformer, together with the basic accessories, was valued at P5,200,000.00. It was also stipulated therein that 50% of the purchase price should be paid as downpayment and the remaining balance to be paid upon delivery and that the freight handling, insurance, customs duties, and incidental expenses were for the account of the buyer. The Board Resolution, on the other hand, stated that the purchase of the said transformer was to be financed through a loan from the National Electrification Administration (NEA). As there was no immediate action on the loan application, Engr. Rada returned to Manila and requested David to deliver the transformer to them even without the required downpayment. David granted the request provided that MOELCI would pay interest at 24% per annum. Engr. Rada acquiesced On December 17, 1992, the goods were shipped to Ozamiz City via William Lines. When nothing was heard from MOELCI for sometime after the shipment, David‘s Marketing Manager, went to Ozamiz City to check on the shipment. Medina was able to confer with Engr. Rada who told him that the loan was not yet released and asked if it was possible to withdraw the shipped items. Medina agreed. When no payment was made after several months, Medina was constrained to send a demand letter, which MOELCI duly received. Engr. Rada replied in writing that the goods were still in the warehouse of William Lines again reiterating that the loan had not been approved by NEA. This prompted Medina to head back to Ozamiz City where he 321 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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found out that the goods had already been released to MOELCI evidenced by the shipping company‘s copy of the Bill of Lading which was stamped ―Released,‖ and with the notation that the arrastre charges in the amount of P5,095.60 had been paid. Subsequently, demand letters were sent to MOELCI demanding the payment of the whole amount plus the balance of previous purchases of other electrical hardware. Aside from the formal demand letters, David added that several statements of accounts were regularly sent through the mails by the company and these were never disputed by MOELCI. David filed a complaint for specific performance with damages with the RTC. MOECLI moved for its dismissal on the ground that there was lack of cause of action as there was no contract of sale, to begin with, or in the alternative, the said contract was unenforceable under the Statute of Frauds. Trial ensued. RTC dismissed the complaint. It found that although a contract of sale was perfected, it was not consummated because David failed to prove that there was indeed a delivery of the subject item and that MOELCI received it. CA affirmed the ruling of the RTC ruling that although David was correct in saying that MOELCI was deemed to have admitted the genuineness and due execution of the ―quotation letter‖ (Exhibit A), wherein the signatures of the Chairman and the General Manager of MOELCI appeared, he failed to offer any textual support to his stand that it was a contract of sale instead of a mere price quotation agreed to by MOELCI representatives. Hence, this petition. Issues: (1) Whether or not there was a perfected contract of sale – YES (2) Whether or not there was delivery. – YES (3) Whether or not stipulated interest is proper. – NO (4) Whether or not award for attorney‘s fees is proper. – NO Held: There was a perfected contract of sale. First, there was meeting of minds as to the transfer of ownership of the subject matter. The letter, though appearing to be a mere price quotation/proposal, was not what it seemed. It contained terms and conditions, so that, by the fact that Jimenez, Chairman of the Committee on Management, and Engr. Rada, General Manager of MOELCI, had signed their names under the word ―CONFORME,‖ they, in effect, agreed with the terms and conditions with respect to the purchase of the subject Power Transformer. If their purpose was merely to acknowledge the receipt of the proposal, they would not have signed their name under the word ―CONFORME.‖ Moreoever, a board resolution was issued authorizing the purchase and top officials of MOELCI even visited David‘s office in Quezon City three times to discuss the terms of the purchase. Second, the document specified a determinate subject matter. Third, the document stated categorically the price certain in money which was P5,200,000.00 for one (1) unit There was delivery. There was delivery and release. Among the terms and conditions of the proposal to which MOELCI agreed stated ―C&F Manila, freight, handling, insurance, custom duties and incidental expenses shall be for the account of MOELCI II.‖ Thus, the delivery made by David to William Lines, Inc., as evidenced by the Bill of Lading, was deemed to be a delivery to MOELCI. When David sent the item through the carrier, it amounted to a delivery to MOELCI. There being delivery and release, said fact constitutes partial performance which takes the case out of the protection of the Statute of Frauds. INTEREST REDUCED TO 12% That being said, the Court now comes to David‘s prayer that MOELCI be made to pay the total sum of P5,472,722.27 plus the stipulated interest at 24% per annum from the filing of the complaint. Although the Court agrees that MOELCI should pay interest, the stipulated rate is, however, UNCONSCIONABLE and should be EQUITABLY REDUCED. Accordingly, the excessive interest of 24% per annum stipulated in the sales invoice should be reduced to 12% per annum. ENTITLEMENT TO ATTORNEY‟S FEES AS PART OF DAMAGES Indeed, David was compelled to file an action against MOELCI but this reason alone will not warrant an award of attorney‟s fees. It is settled that the AWARD OF ATTORNEY‘S FEES IS THE EXCEPTION RATHER THAN THE RULE. Attorney‘s fees, as part of damages, are not necessarily equated to the amount paid by a litigant to a lawyer. In the ordinary sense, attorney‘s fees represent the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter; while in its extraordinary concept, they may be awarded by the court as indemnity for damages to be paid by the losing party to the prevailing party. Attorney‘s fees as part of damages are awarded only in the instances specified in Article 2208 of the Civil Code which demands factual, legal, and equitable justification. Its basis cannot be left to speculation or conjecture. In this regard, none was proven.

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Atty. Jess Lopez

Moreover, in the absence of stipulation, a winning party may be awarded attorney‘s fees only in case plaintiff‘s action or defendant‘s stand is so untenable as to amount to gross and evident bad faith. MOELCI‘s case cannot be similarly classified. Also, David‘s claim for the balance of P73,059.76 plus the stipulated interest is denied for being unsubstantiated. Decision of the CA is REVERSED and SET ASIDE. Respondent Misamis Occidental II Electric Cooperative, Inc. is ordered to pay petitioner Virgilio S. David the total sum of P5,472,722.27 with interest at the rate of 12% per annum reckoned from the filing of the complaint until fully paid. 31. Lacson v. Reyes, 182 SCRA 729 (1990) Facts: Ephraim Serquina, petitioned the respondent court for the probate of the last will and testament of Carmelita Farlin. He also petitioned the court in his capacity as counsel for the heirs, the Lacsons, and as executor under the will. Petition was not opposed. Respondent court issued a ―certificate of allowance‖. Atty. Ephraim Serquina filed a ―motion for attorney‘s fees‖ against the petitioners, alleging that the heirs had agreed to pay, as and for his legal services rendered, the sum of P68,000.00. The heirs denied the claim for P68,000.00 alleging that the sum agreed upon was only P7,000.00, a sum they had allegedly already paid. Issue: Whether Atty. Sequina is entitled to attorney‘s fees. Held: NO. It is pointed out that an attorney who is concurrently an executor of a will is barred from recovering attorney‟s fees from the estate. SEC. 7. ... If there are two or more executors or administrators, the compensation shall be apportioned among them by the court according to the services actually rendered by them respectively. When the executor or administrator is an attorney, he shall not charge against the estate any professional fees for legal services rendered by him. When the deceased by will makes some other provision for the compensation of his executor, that provision shall be a full satisfaction for his services unless by a written instrument filed in the court he renounces all claim to the compensation provided by the will. The rule is therefore clear that an administrator or executor may be allowed fees for the necessary expenses he has incurred as such, but he may not recover attorney‟s fees from the estate. Compensation is fixed by the rule but such compensation is in the nature of executor‘s or administrator‘s commissions, and never as attorney‟s fees. A greater sum other than that established by the rule may be allowed ‗in any special case, where the estate is large, and the settlement has been attended with great difficulty, and has required a high degree of capacity on the part of the executor or administrator.‘ It is left to the sound discretion of the court. With respect to attorney‟s fees, the rule, as we have seen, disallows them. Accordingly, to the extent that the trial court set aside the sum of P65,000.00 as and for Mr. Serquina‘s attorney‘s fees, to operate as a ―lien on the subject properties,‖ the trial judge must be said to have gravely abused its discretion. WHO SHOULDERS ATTORNEY‟S FEES? We have held that a lawyer of an administrator or executor may not charge the estate for his fees, but rather, his client. Mutatis mutandis, where the administrator is himself the counsel for the heirs, it is the latter who must pay therefor. In that connection, attorney‘s fees are in the nature of actual damages, which must be duly proved. They are also SUBJECT TO CERTAIN STANDARDS, to wit: (1) they must be reasonable, that is to say, they must have a bearing on the importance of the subject matter in controversy; (2) the extent of the services rendered; and (3) the professional standing of the lawyer. In all cases, they must be addressed in a full-blown trial and not on the bare word of the parties. And always, they are subject to the moderating hand of the courts. Records show that Atty. Ephraim Serquina, as counsel for the heirs, performed the following: That after the order of allowance for probate of the will, the undersigned counsel assisted the heirs to transfer immediately the above-mentioned real estate in their respective names, from (sic) the payment of estate taxes in the Bureau of Internal Revenue to the issuance by the Registry of Deeds of the titles, in order for the heirs to sell the foregoing real estate of 10,683 sq. m. (which was also the subject of sale prior to the death of the testator) to settle testator‘s obligations and day-to-day subsistence being (sic) that the heirs, except Zena F. Velasco, are not employed neither doing any business 323

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The Court is not persuaded from the facts above that Atty. Serquina is entitled to the sum claimed by him (P68,000.00) or that awarded by the lower court (P65,000.00). Court observes that these are acts performed routinely since they form part of what any lawyer worth his salt is expected to do. The will was furthermore not contested. They are not, so Justice Pedro Tuason wrote, ―a case [where] the administrator was able to stop what appeared to be an improvident disbursement of a substantial amount without having to employ outside legal help at an additional expense to the estate,‖ to entitle him to a bigger compensation. He did not exactly achieve anything out of the ordinary. 32. Petron Corporation v. National College of Business and Arts, 516 SCRA 168 (2007) Facts: Sometime in 1969, the V. Mapa properties, then owned by Felipe and Enrique Monserrat, Jr., were mortgaged to DBP as part of the security for the P5.2 million loan of Manila Yellow Taxicab Co., Inc. (MYTC) and Monserrat Enterprises Co. MYTC, for its part, mortgaged 4 parcels of land located in Quiapo, Manila. On March 31, 1975, however, Felipe‘s ½ undivided interest in the V. Mapa properties was levied upon in execution of a money judgment in the RTC of Manila (Manila case). DBP challenged the levy through a third-party claim asserting that the V. Mapa properties were mortgaged to it and were, for that reason, exempt from levy or attachment. The RTC quashed it. MYTC and the Monserrats got DBP to accept a dacion en pago arrangement whereby MYTC conveyed to the bank the four mortgaged Quiapo properties as full settlement of their loan obligation. But despite this agreement, DBP did not release the V. Mapa properties from the mortgage. Felipe, acting for himself and as Enrique‘s attorney-in-fact, sold the V. Mapa properties to respondent NCBA. Part of the agreement was that Felipe and Enrique would secure the release of the titles to the properties free of all liens and encumbrances including DBP‟s mortgage lien and Filoil‟s levy. But the Monserrats failed to comply with this undertaking. NCBA caused the annotation of an affidavit of adverse claim on the TCTs covering the V. Mapa properties. NCBA filed a complaint against Felipe and Enrique for specific performance with an alternative prayer for rescission and damages in the RTC. During the pendency of the civil case, Enrique‘s ½ undivided interest in the V. Mapa properties was levied on in execution of a judgment of the RTC of Makati (Makati case), holding him liable to Petron on a promissory note. Subsequently the V. Mapa properties were sold at public auction to satisfy the judgments in the Manila and Makati cases. Petron, the highest bidder, acquired both Felipe‘s and Enrique‘s undivided interests in the property. The final deeds of sale of Enrique‘s and Felipe‘s shares in the V. Mapa properties were awarded to Petron. the Monserrats‘ TCTs were cancelled and new ones were issued to Petron. Eventually, Petron intervened in NCBA‘s suit against Felipe, Enrique and DBP to assert its right to the V. Mapa properties. The RTC ruled that Petron never acquired valid title to the V. Mapa properties as the levy and sale thereof were void and that NCBA was now the lawful owner of the properties. Moreover, the RTC held Petron, DBP, Felipe and Enrique jointly and severally liable to NCBA for exemplary damages and attorney‘s fees. The CA affirmed. Issue: Whether Petron is entitled to exemplary damages and attorney‘s fees/ Held: NO. Article 2208(5) contemplates a situation where one refuses unjustifiably and in evident bad faith to satisfy another‘s plainly valid, just and demandable claim, compelling the latter needlessly to seek redress from the courts. In such a case, the law allows recovery of money the plaintiff had to spend for a lawyer‘s assistance in suing the defendant – expenses the plaintiff would not have incurred if not for the defendant‘s refusal to comply with the most basic rules of fair dealing. It does not mean, however, that the losing party should be made to pay attorney‟s fees merely because the court finds his legal position to be erroneous and upholds that of the other party, for that would be an intolerable transgression of the policy that no one should be penalized for exercising the right to have contending claims settled by a court of law. In fact, even a clearly untenable defense does not justify an award of attorney‘s fees unless it amounts to gross and evident bad faith. Petron‘s claim to the V. Mapa properties, founded as it was on final deeds of sale on execution, was far from untenable. No gross and evident bad faith could be imputed to Petron merely for intervening in NCBA‘s suit against DBP and the Monserrats in order to assert what it believed (and had good reason to believe) were its rights and to have the disputed ownership of the V. Mapa properties settled decisively in a single lawsuit. With respect to the award of EXEMPLARY DAMAGES, the rule in this jurisdiction is that the plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may even consider the question of whether exemplary damages should be awarded. In other words, no exemplary damages may be awarded without the plaintiff‘s right to moral, temperate, liquidated or compensatory damages having first been established. Therefore, in view of the ruling that Petron cannot be made liable to NCBA for compensatory damages (i.e., attorney‘s fees), Petron cannot be held liable for exemplary damages either.

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33. Buan v. Camaganacan, 16 SCRA 321 (1966) Facts: Repsondent was a passenger of a Phil. Rabbit Bus belonging to the Estate of Buan. When said bus tried to overtake a La Mallorca bus. Unfortunately, it hit a trailer travelling in the opposite side. As a result, respondent suffered injuries (fractured right wrist, crushed left hand, lacerations on right leg. Defedants paid for the medical expense. On July 1955, respondent filed a suit for damages. The lower court ordered Buan to pay P2,680 as actual damages plus P2,000 attorneys fees totaling 4680. The trial court did not state in its decision why it was awarding attorney‘s fees against the defendants therein, the matter of such fees was touched but once and appears already in the dispositive portion of the decision. Issue: Whether the award of 2,000 as attorneys fees is appropriate. Held NO. The text of the decision should state the reason why attorneys‘ fees are being awarded, otherwise, the award is disallowed. The very opening paragraph of Article 2208 reveals that the award of attorneys‟ fees remains exceptional in our law, and it is up to the court to make an express finding of the facts that bring the case within the execution and justify the grant of counsel fees. The GENERAL RULE being still that it is not sound public policy to place a penalty on the right to litigate nor should counsel fees be awarded every time a party wins a lawsuit. While under Art. 2208 it is allowed to recover counsel fees where the court deems it just and equitable that such should be recovered, but even in such cases the conclusion must be borne out by findings of facts and law. What is just and equitable in a given case is not a mere matter of feeling but of demonstration. This is especially true since the last part of Article 2208 expressly adds that the ―attorneys‘ fees and expenses of litigation must be reasonable‖. In the present case, for the award of P2,680.00 in actual damages the appealed decisions awards no less than P2,000.00 in counsel fees, which is hardly reasonable. Hence, the exercise of judicial discretion in the award of attorneys‟ fees under Article 2208 (11) of the Civil Code demands a factual, legal, or equitable justification upon the basis of which the court exercises its discretion. Without such justification, the award is a conclusion without a premise, as basis being improperly left to speculation and conjecture. For the foregoing reasons, the decision under review is hereby modified by deleting therefrom the award of attorney‘s fees. 34. Villanueva v. Salvador, 480 SCRA 39 (2006) Facts: On December 20, 1991, herein respondents, the spouses Alejo Salvador and Virginia Salvador (Salvadors, collectively), secured a loan of P7,650.00 from petitioner Ever Pawnshop owned and managed by co-petitioner Enrico B. Villanueva (Villanueva). On January 23, 1992, the Salvadors took out a second loan of P5,400.00 pledging, just like in the first loan transaction, jewelry items. Pawnshop Ticket No. 29919, covering the first loan, indicated April 10, 1992 as the last day to redeem the jewelries pawned, whereas the redemption period for the items given as security for the second loan under Pawnshop Ticket No. 30792 fell on May 22, 1992 The separate redemption periods came and went, but the Salvadors failed to redeem the pawned pieces of jewelry. Nonetheless, on June 1, 1992, their son paid Ever Pawnshop P7,000.00, the amount to be applied against the first loan of P7,650.00. On account of this development, Pawnshop Ticket No. 29919 was cancelled and replaced by Pawnshop Ticket No. 34932. Vis-à-vis the second loan, Ever Pawnshop agreed to the extension of the maturity date to June 30, 1992, provided the Salvadors pay 20% of their second loan obligation on or before June 4, 1992, failing which the securing items shall be auctioned as scheduled. Unlike in the first loan, however, a new pawn ticket was not issued for the second loan. In the meantime, Ever Pawnshop issued a notice announcing the public auction sale on June 4, 1992 of all January 1 to 31, 1992 unredeemed pledges. The notice appeared in the Classified Ads Section of the Manila Bulletin on June 4, 1992, the very day of the auction itself. On July 1, 1992, the Salvadors repaired to the pawnshop in a bid to renew the second loan by tendering the aforesaid 20% of the amount due thereon, only to be informed that the pledged jewelry had already been auctioned as scheduled on June 4, 1992. As found by the CA, however, pieces of the pawned jewelry items were still in the shop, indicating that Ever Pawnshop either bought some of the unredeemed pledges or did not sell them.

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A month after, Mrs. Salvador attempted to redeem the jewelry items pledged for the first loan, as renewed, but all she got in response were unclear information as to their whereabouts. On August 7, 1992, Mr. Salvador tendered payment of the amount due on both loans, with a demand for the return of the jewelry thus pledged. Ever Pawnshop, however, refused to accept the tender. Such was the state of things when, on August 11, 1992, at the RTC-Pasig City, the Salvadors filed a complaint for damages against Villanueva and Ever Pawnshop arising from the sale without notice of the two (2) sets of jewelry pledged as security for both loans. The complaint, docketed as Civil Case No. 62334, was eventually raffled to Branch 164 of the court. Eventually, in a decisiondated January 25, 1995, the trial court, on its finding that the set of jewelry covered by the renewed first and second loans were sold without the necessary notice, rendered judgment for the Salvadors. CA affirmed. Issue: (1) Whether the items under the first loan were actually sold by Ever Pawnshop & Villanueva (2) Whether there was a valid notice of sale for the pledged jewelry was effected. (3) Whether the award of 20K as moral damages and 5K as attorneys fees was proper. Held: NO VALID NOTICE. Villanueva argues that the Salvadors were effectively put on notice of the sale of the pledged jewelries, the maturity date and expiry date of redemption period of the two loans being indicated on the face of each of the covering pawnshop tickets. Pressing the point, petitioners invite attention to the caveat printed on the dorsal side of the tickets stating that the pledged items shall be auctioned off in the event they are not redeemed before the expiry date of the redemption period. Section 13 of the Pawnshop Regulation Act, and even the terms and conditions of the pledge itself, accord the pawner a 90-day grace period from the date of maturity of the loan obligation within which to redeem the pawn. But even before the lapse of the 90-day period, the same Decree requires the pawnbroker to notify the defaulting debtor of the proposed auction sale. However, over and above the foregoing prescription is the mandatory requirement for the publication of such notice once in at least 2 daily newspapers during the week preceding the date of the auction sale. The CA cannot really be faulted for making short shrift of petitioners‘ posture respecting their alleged compliance with the notice requirement in question. As it were, Ever Pawnshop only caused publication of the auction in one newspaper, i.e., the Manila Bulletin, and on the very day of the scheduled auction sale itself, instead of a week preceding the sale as prescribed by Section 15 of P.D. 114. Verily, a notice of an auction sale made on the very scheduled auction day itself defeats the purpose of the notice, which is to inform a pawner beforehand that a sale is to occur so that he may have that last chance to redeem his pawned items. DAMAGES While proof of pecuniary loss is unnecessary to justify an award of MORAL DAMAGES, the amount of indemnity being left to the sound discretion of the court, it is, nevertheless, essential that the claimant satisfactorily proves the existence of the FACTUAL BASIS of the damages and its CAUSAL CONNECTION to defendant‘s wrongful act or omission. This is so because moral damages, albeit incapable of pecuniary estimation, are designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer.There is thus merit on petitioners‘ assertion that proof of MORAL SUFFERING MUST PRECEDE A MORAL DAMAGE AWARD. The CONDITIONS REQUIRED IN AWARDING MORAL DAMAGES are: (1) there must be an injury, whether physical, mental or psychological, clearly sustained by the claimant; (2) there must be a culpable act or omission factually established; (3) the wrongful act or omission of the defendant must be the proximate cause of the injury sustained by the claimant; and (4) the award of damages is predicated on any of the cases stated in Article 2219 of the Civil Code. While there need not be a showing that the defendant acted in a wanton or malevolent manner, as this is a requirement for an award of exemplary damages, there must still be proof of fraudulent action or bad faith for a claim for moral damages to succeed. Then, too, moral damages are generally not recoverable in culpa contractual except when bad faith supervenes and is proven. As aptly pointed out by petitioners, the trial court concluded that the respondents‘ ―cause of action arose merely from the negligence of the herein [petitioners].‖ It may be that gross negligence may sometimes amount to bad faith. But what is before us is a matter of simple negligence only, it being the trial court‘s categorical finding that the case came about owing to petitioners‟ mistake in renewing the loan when the sale of the article to secure the loan had already been effected. 326 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

The CA‘s reliance on Article 2220 of the Civil Code in affirming the award of moral damages is misplaced. Said article provides: Art. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith. Clear it is from the above that before moral damages may be assessed thereunder, the defendant‟s act must be vitiated by bad faith or that there is willful intent to injure. Simply put, MORAL DAMAGES CANNOT ARISE FROM SIMPLE NEGLIGENCE. The award of ATTORNEY‘S FEES should, likewise, be struck down. As a matter of sound practice, an award of attorney‟s fee has always been regarded as the exception rather than the rule. Counsel‘s fees are, to be sure, not awarded every time a party prevails in a suit because of the policy that no premium should be placed on the right to litigate. Attorney‘s fees, as part of damages, are assessed only in the instances specified in Article 2208 of the Civil Code. And it is necessary for the trial court to make express findings of fact and law that would bring the case within the exception. The final issue relating to the question of whether or not both respondents are liable for damages has, for all intent and purposes, been rendered moot and academic by the disposition just made. We need not dwell on it any further. Besides, this particular issue has only made its debut in the present recourse. And it is a well-entrenched rule that issues not raised below cannot be resolved on review in higher courts.[24] A question that was never raised in the court below cannot be allowed to be raised for the first time on appeal without offending basic rules of fair play, justice and due process. 35. Eastern Shipping v. Court of Appeals, 234 SCRA 78 (1994) Facts: This is an action against defendants shipping company, arrastre operator and broker-forwarder for damages sustained by a shipment while in defendants‘ custody, filed by the insurer-subrogee who paid the consignee the value of such losses/damages. Two fiber drums of riboflavin were shipped from Yokohama, Japan for delivery vessel ‗SS EASTERN COMET‘ owned by defendant Eastern Shipping Lines, Inc. under Bill of Lading. The shipment was insured under plaintiff‟s Marine Insurance Policy. Upon arrival of the shipment in Manila, it was discharged unto the custody of defendant Metro Port Service. The latter excepted to one drum, said to be in bad order, which damage was unknown to plaintiff. Allied Brokerage Corporation received the shipment from defendant Metro Port Service, Inc., one drum opened and without seal. Allied Brokerage Corporation made deliveries of the shipment to the consignee‘s warehouse. The latter excepted to one drum which contained spillages, while the rest of the contents was adulterated/fake Plaintiff contended that due to the losses/damage sustained by said drum, the consignee suffered losses totaling P19,032.95, due to the fault and negligence of defendants. Claims were presented against defendants who failed and refused to pay. Plaintiff was compelled to pay the consignee P19,032.95 under the aforestated marine insurance policy, so that it became subrogated to all the rights of action of said consignee against defendants Eastern Shipping alleged that the shipment was discharged in good order from the vessel unto the custody of Metro Port Service so that any damage/losses incurred after the shipment was incurred after the shipment was turned over to the latter, is no longer its liability. Metroport averred that although subject shipment was discharged unto its custody, portion of the same was already in bad order. Allied Brokerage alleged that plaintiff has no cause of action against it, not having negligent or at fault for the shipment was already in damage and bad order condition when received by it. Lower court : A.Ordering defendants to pay plaintiff, jointly and severally: 1. The amount of P19,032.95, with the present legal interest of 12% per annum from October 1, 1982, the date of filing of this complaints, until fully paid (the liability of defendant Eastern Shipping, Inc. shall not exceed US$500 per case or the CIF value of the loss, whichever is lesser, while the liability of defendant Metro Port Service, Inc. shall be to the extent of the actual invoice value of each package, crate box or container in no case to exceed P5,000.00 each, pursuant to Section 6.01 of the Management Contract); 2. P3,000.00 as attorney‘s fees, and 3. Costs. There is sufficient evidence that the shipment sustained damage while in the successive possession of appellants, and therefore they are liable Court of Appeals thus affirmed in toto. Issues: 327

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

(1) whether or not a claim for damage sustained on a shipment of goods can be a solidary, or joint and several, liability of the common carrier, the arrastre operator and the customs broker; (2) whether the payment of legal interest on an award for loss or damage is to be computed from the time the complaint is filed or from the date the decision appealed from is rendered; and (3) whether the applicable rate of interest, referred to above, is twelve percent (12%) or six percent (6%) Held: The common carrier‘s duty to observe the requisite diligence in the shipment of goods lasts from the time the articles are surrendered to or unconditionally placed in the possession of, and received by, the carrier for transportation until delivered to, or until the lapse of a reasonable time for their acceptance by, the person entitled to receive them. When the goods shipped either are lost or arrive in damaged condition, a presumption arises against the carrier of its failure to observe that diligence, and there need not be an express finding of negligence to hold it liable. In Fireman‘s Fund Insurance, Co. vs. Metro Port Service, Inc., we held that the relationship between the consignee and the common carrier is similar to that of the consignee and the arrastre operator. Since it is the the goods that are in its custody and to deliver them in good condition to the consignee, such responsibility also devolves upon the CARRIER. Both the ARRASTRE and the CARRIER are therefore charged with the obligation to deliver the goods in good condition to the consignee. We do not, of course, imply by the above pronouncement that the arrastre operator and the customs broker are themselves always and necessarily liable solidarily with the carrier, or vice-versa. Eastern Shipping Lines which, being the carrier and not having been able to rebut the presumption of fault, is, in any event, to be held liable in this particular case. The factual finding of both the court a quo and the appellate court is that ―there is sufficient evidence that the shipment sustained damage while in the successive possession of appellants‖ ON THE ISSUE OF LEGAL INTEREST The basic issue focuses on the application of either the 6% (under the Civil Code) or 12% (under the Central Bank Circular) interest per annum. There has been a consistent holding that the Central Bank Circular imposing the 12% INTEREST PER ANNUM applies only to loans or forbearance of money, goods or credits, as well as to judgments involving such loan or forbearance of money, goods or credits. Also, the 6% INTEREST under the Civil Code governs when the transaction involves the payment of indemnities in the concept of damage arising from the breach or a delay in the performance of obligations in general. Observe, too, that in these cases, a common time frame in the computation of the 6% interest per annum has been applied, i.e., from the time the complaint is filed until the adjudged amount is fully paid. The following rules of thumb for future guidance: I. 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 damages. The provisions under Title XVIII on ―Damages‖ of the Civil Code govern in determining the measure of recoverable damages. II. With regard particularly to an award of interest in the concept of ACTUAL and COMPENSATORY damages, the rate of interest, as well as the accrual thereof, is imposed, as follows: LOAN OR FOREBEARANCE OF MONEY 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 (12%) 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 116923 of the Civil Code. NOT A LOAN/FOREBEARANCE OF MONEY 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.

328

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

FINAL JUDGMENT 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. The appealed decision is AFFIRMED with the MODIFICATION that the legal interest to be paid is (6%) on the amount due computed from the decision. A (12%) interest, in lieu of SIX PERCENT (6%), shall be imposed on such amount upon finality of this decision until the payment thereof. C.

Moral Damages

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Civil Code o Articles 2216 to 2220 (Memorize)

1. Mayo v. People, G.R. No. 91201, December 5, 1991 DOCTRINE: We agree that complainant Linda Navarette is entitled to moral damages. She suffered injuries as a result of the criminal offense of the petitioner. Moreover, her injuries resulting in a permanent scar at her forehead and the loss of her right eye undoubtedly gave her mental anguish, wounded feelings and shock. The psychological effect on her as regards the scar on her forehead and her false eye must have devastated her considering that women in general are fastidious on how they Iook. Nevertheless, we find no justification to award moral damages in favor of Linda Navarette for the loss of her boyfriend. No doubt, the loss of her boyfriend after the accident added to her mental and emotional sufferings and psychologically affected and disturbed her. Moreover, there is no clear evidence on record to show that her boyfriend left her after the accident due to her physical injuries. He may have left her even if she did not suffer the slightest injury. The reasons for the break-up of a courtship are too many and too complicated such that they should not form the basis of damages arising from a vehicular accident Moreover, granting that her boyfriend left her due to her physical injuries, we still find no legal basis for the award of moral damages in favor of complainant Navarette because of the loss of a boyfriend. Article 2719 quoted earlier enumerates cases wherein moral damages may be granted. Loss of a boyfriend as a result of physical injuries suffered after an accident is not one of them. Neither can it be categorized as an analogous case. This discretion is, however, conditioned in that the ―amount awarded should not be palpably and scandalously excessive‖ so as to indicate that it was the result of prejudice or corruption on the part of the trial court. In determining the amount of moral damages, the actual losses sustained by the aggrieved party and the gravity of the injuries must be considered. Finally, ―moral damages are emphatically not intended to enrich a complainant at theexpense of the defendant. They are awarded only to enable the injured party to obtain means, diversion or amusements that will serve to alleviate the moral suffering he has undergone, by reason of the defendant‘s culpable action.‖ 2. Samson v. Bank of the Philippine Islands, G.R. No. 150487, July 10, 2003 DOCTRINES: Moral damages are meant to compensate the claimant for any physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injuries unjustly caused. Although incapable of pecuniary estimation, the amount must somehow be proportional to and in approximation of the suffering inflicted. Moral damages are not punitive in nature and were never intended to enrich the claimant at the expense of the defendant. There is no hard-and-fast rule in determining what would be a fair and reasonable amount of moral damages, since each case must be governed by its own peculiar facts. Trial courts are given discretion in determining the amount, with the limitation that it ―should not be palpably and scandalously excessive.‖ Indeed, it must be commensurate to the loss or injury suffered. The SOCIAL STANDING of the aggrieved party is essential to the determination of the proper amount of the award. Otherwise, the goal of enabling him to obtain means, diversions, or amusements to restore him to the status quo ante would not be achieved. 3. Villanueva v. Salvador, G.R. No. 139436, January 25, 2006 DOCTRINE: While proof of pecuniary loss is unnecessary to justify an award of moral damages, the amount of indemnity being left to the sound discretion of the court, it is, nevertheless, essential that the claimant satisfactorily proves the existence of the factual basis of the damages AND its causal connection to defendant‘s wrongful act or omission. This is so because moral damages, albeit incapable of pecuniary estimation, are designed to compensate the claimant for 329

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

actual injury suffered and not to impose a penalty on the wrongdoer. There is thus merit on petitioners‘ assertion that proof of moral suffering must precede a moral damage award. CONDITIONS REQUIRED IN AWARDING MORAL DAMAGES: (1) there must be an injury, whether physical, mental or psychological, clearly sustained by the claimant; (2) there must be a culpable act or omission factually established; (3) the wrongful act or omission of the defendant must be the proximate cause of the injury sustained by the claimant; and (4) the award of damages is predicated on any of the cases stated in Article 2219. While there need not be a showing that the defendant acted in a wanton or malevolent manner, as this is a requirement for an award of exemplary damages, there must still be proof of fraudulent action or bad faith for a claim for moral damages to succeed. Then, too, moral damages are generally not recoverable in culpa contractual EXCEPT when bad faith supervenes and is proven. 4. Mahinay v. Velasquez, G.R. No. 152753, January 13, 2004 DOCTRINE: In order that moral damages may be awarded, there must be PLEADING and PROOF of moral suffering, mental anguish, fright and the like. While respondent alleged in his complaint that he suffered mental anguish, serious anxiety, wounded feelings and moral shock, he failed to prove them during the trial. Mere allegations do not suffice; they must be substantiated by clear and convincing proof. The award of moral damages must be anchored to a clear showing that respondent actually experienced mental anguish, besmirched reputation, sleepless nights, wounded feelings or similar injury. 5. Mercury Drug Corporation v. Huang, G.R. No. 172122, June 22, 2007 Facts: The award of moral damages is aimed at a restoration, within the limits of the possible, of the spiritual status quo ante.‖ 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, bears no relation whatsoever with the wealth or means of the offender. 6. Kierulf v. Court of Appeals, 269 SCRA 433 (1997) Facts: On the evening of February 28, 1987, a Pantranco bus was travelling along EDSA towards Balintawak. Then, the driver lost control of the bus, causing it to swerve to the left, and then to fly over the center island occupying the eastbound lane of EDSA. The front of the bus bumped the front portion of an Isuzu pickup driven by Porfirio Legaspi. As a result, the points of contact of both vehicles were damaged and physical injuries were inflicted on Legaspi and his passenger Lucila Kierulf, both of whom were treated at the QC General Hospital. The bus also hit and injured a pedestrian who was then crossing EDSA. Despite the impact, said bus continued to move forward and its front portion rammed against a Caltex gasoline station, damaging its building and gasoline dispensing equipment. As a consequence of the incident, Lucila suffered injuries which required major surgeries like tracheotomy, open reduction, mandibular fracture, intermaxillary repair of multiple laceration‖ and prolonged treatment by specialists. Per medical report of Dr. Alex L. Castillo, Legaspi also suffered injuries. The front portion of the pickup truck, owned by Spouses Kierulf was smashed to pieces. The cost of repair was estimated at P107,583.50. Sps Kierulf and their driver Legaspi filed an action to recover damages against Pantranco. According to Pantranco, the bus driven by Jose Malanum, while cruising along EDSA, a used engine differential accidentally and suddenly dropped from a junk truck in front of the bus. Said differential hit the underchassis of the bus, throwing Malanum off his seat and making him lose control of said bus. The bus swerved to the left, hit the center island, and bumped the pickup of the spouses. RTC awarded the ff: (1) Actual, moral, and exemplary damages in favor of Lucila Kierulf. (2) Indemnification in favor of Victor Kierulf for the damage to the Isuzu vehicle (3) Moral damages in favor of driver Legaspi and also reimbursement to Sps. Kierulf for incurring medical expenses for the treatment of Legaspi. On appeal, CA modified the RTC decision as follows: 330

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Under the first cause of action, the defendant is hereby ordered to pay Lucila H. Kierulf the following: (1) For actual damages incurred for hospitalization, medical case (sic) and doctor‘s fees, the sum of P241,861.81; (2) For moral damages the sum of P200,000.00; (3) For exemplary damages the amount of P100,000.00. Under the second cause of action, to pay Victor Kierulf, by way of indemnification damage to the Isuzu Carry All with plate No. UV PGS 798, the amount of P96,825.15. Under the third cause of action, to pay Porfirio Legaspi the following: (1) For moral damages in the amount of P25,000.00; (2) To reimburse the plaintiff the amount of P6,328.19 for actual damages incurred in the treatment and hospitalization of the driver Porfirio Legaspi. The defendant is further ordered to pay the amount of P50,000.00 as fair and reasonable attorney‘s fees. And to pay costs of suit. Hence, this petition. Essentially, Spouses Kierulf and Legaspi argue that the damages awarded were inadequate while Pantranco counters that they were astronomical, bloated and not duly proved. Issue: How much moral, exemplary, and actual damages are the victims entitled to. (Omitted the discussion on negligence. Basta, Pantranco still disputed the finding of negligence against its driver but since the SC is not a trier of facts... lam na.) Held: MORAL DAMAGES: ―LOSS OF RIGHT TO CONSORTIUM / IMPAIRMENT OF SEXUAL LIFE‖ The established guideline in awarding moral damages takes into consideration several factors, some of which are the SOCIAL AND FINANCIAL STANDING of the injured parties and their WOUNDED MORAL FEELINGS and PERSONAL PRIDE. The Kierulf spouses add that the CA should have considered another factor: the LOSS OF THEIR CONJUGAL FELLOWSHIP and the IMPAIRMENT OR DESTRUCTION OF THEIR SEXUAL LIFE. The spouses aver that the disfigurement of Lucila‘s physical appearance cannot but affect their marital right to “consortium” which would have remained normal were it not for the accident. Thus, the moral damages awarded in favor of Lucila should be increased to P1,000,000.00, not only for Lucila but also for her husband Victor who also suffered ―Psychologically.‖ A California case, Rodriguez vs. Bethlehem Steel Corporation, is cited as authority for the claim of damages by reason of loss of marital consortium, i.e. loss of conjugal fellowship and sexual relations.\ Pantranco rebuts that Victor‘s claim of moral damages on alleged loss of consortium is without legal basis. Article 2219 provides that only the person suffering the injury may claim moral damages. Additionally, no evidence was adduced to show that the consortium had indeed been impaired and the Court cannot presume that marital relations disappeared with the accident. Rodriguez v. Bethlehem DOES NOT APPLY The Court notes that the Rodriguez case clearly reversed the original common law view first enunciated in the case of Deshotel vs. Atchison, that a wife could not recover for the loss of her husband‘s services by the act of a third party. Rodriguez ruled that when a person is injured to the extent that he/she is no longer capable of giving love, affection, comfort and sexual relations to his or her spouse, that spouse has suffered a direct and real personal loss. The loss is immediate and consequential rather than remote and unforeseeable; it is personal to the spouse and separate and distinct from that of the injured person. Rodriguez involved a couple in their early 20s, who were married for only 16 months and full of dreams of building a family of their own, when the husband was struck and almost paralyzed by a falling 600-pound pipe. The wife testified how her life had deteriorated because her husband became a lifelong invalid, confined to the home, bedridden and in constant need of assistance for his bodily functions; and how her social, recreational and sexual life had been severely restricted. It also deprived her of the chance to bear their children. As a constant witness to her husband‘s pain, mental anguish and frustration, she was always nervous, tense, depressed and had trouble sleeping, eating and concentrating. Thus, the California court awarded her damages for loss of consortium. 331

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Whether Rodriguez may be cited as authority to support the award of moral damages to Victor and/or Lucila Kierulf for ―loss of consortium,‖ however, cannot be properly considered in this case. Victor‘s claim for deprivation of his right to consortium, although argued before the CA, is not supported by the evidence on record. His wife might have been badly disfigured, but he had not testified that, in consequence thereof, his right to marital consortium was affected. Clearly, Victor (and for that matter, Lucila) had failed to make out (pun intended?) a case for loss of consortium, unlike the Rodriguez spouse. Again, we emphasize that THIS CLAIM IS FACTUAL IN ORIGIN and must find basis not only in the evidence presented but also in the findings of the CA. For lack of factual basis, such claim cannot be ruled upon by this Court at this time. ―NO CONSIDERATION OF SOCIAL & FINANCIAL STANDING‖ The social and financial standing of Lucila cannot be considered in awarding moral damages. The factual circumstances prior to the accident show that no ―rude and rough‖ reception, no ―menacing attitude,‖ no ―supercilious manner,‖ no ―abusive language and highly scornful reference‖ was given her. The social and financial standing of a claimant of moral damages may be considered in awarding moral damages ONLY if he or she was subjected to contemptuous conduct despite the offender‟s knowledge of his or her social and financial standing. Be that as it may, it is still proper to award moral damages to Lucila for her physical sufferings, mental anguish, fright, serious anxiety and wounded feelings. She sustained multiple injuries on the scalp limbs and ribs. She lost all her teeth (wild). She had to undergo several corrective operations and treatments. Despite treatment and surgery, her chin was still numb and thick. She felt that she has not fully recovered from her injuries. She even had to undergo a second operation on her gums for her dentures to fit. She suffered sleepless nights and shock as a consequence of the vehicular accident. In this light and considering further the length of time spent in prosecuting the complaint and this appeal, we find the sum of P400,000.00 as moral damages for Petitioner Lucila to be fair and just under the circumstances. You may jump to the Epilogue for further discussion on Moral Damages. EXEMPLARY DAMAGES: Exemplary damages are designed to permit the courts to mould behavior that has socially deleterious consequences, and its imposition is required by public policy to suppress the wanton acts of an offender. However, it cannot be recovered as a matter of right. It is based entirely on the discretion of the court. Jurisprudence sets certain REQUIREMENTS BEFORE EXEMPLARY DAMAGES MAY BE AWARDED, to wit: (1) They may be imposed by way of example or correction only in addition, among others, to compensatory damages, and cannot be recovered as a matter of right, their determination depending upon the amount of compensatory damages that may be awarded to the claimant; (2) The claimant must first establish his right to moral, temperate, liquidated or compensatory damages; and (3) The wrongful act must be accompanied by bad faith, and the award would be allowed only if the guilty party acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. The claim of Lucila has been favorably considered in view of the finding of gross negligence by CA on the part of Pantranco. Public utility operators like Pantranco, have made a mockery of our laws, rules and regulations governing operations of motor vehicles and have ignored either deliberately or through negligent disregard of their duties to exercise extraordinary degree of diligence for the safety of the travelling public and their passengers. To give teeth to this warning, the exemplary damages awarded to Lucila is increased to P200,000.00. The fact of gross negligence duly proven, we believe that Legaspi, being also a victim of gross negligence, should also receive exemplary damages. Under the facts proven, the Court awards him P25,000 as exemplary damages. LOSS OF EARNINGS Lost income in the amount of P16,500.00 is also claimed by Legaspi stating that his ―whole future has been jeopardized.‖ This, in turn, is not rebutted by Pantranco. Thus, the claim of Legaspi that he had been incapacitated for 10 months and that during said period he did not have any income. Considering that, prior to the accident, he was employed as a driver and was earning P1,650.00 a month, his claim for P16,500.00 as compensation for loss of earning capacity for said period is amply supported by the records and is demandable under Article 2205. CA already considered this when it stated that the award of P25,000.00 included compensation for ―mental anguish and emotional strain of not earning anything with a family to support.‖ Moral damages, THOUGH INCAPABLE OF PECUNIARY 332

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

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. As for Lucila, her claim of loss of earning capacity has not been duly proven. The alleged loss must be established by factual evidence for it partakes of actual damages. A party is entitled to adequate compensation for such pecuniary loss actually suffered and duly proved. Such damages, to be recoverable, must not only be capable of proof, but must actually be shown with a reasonable degree of certainty. These may not be presumed. Mere proof of Lucila‘s earnings consisting of her 1983 and 1984 income tax returns would not suffice to prove earnings for the years 1985 and 1986. The incident happened on February 28, 1987. If indeed Lucila had been earning P50,000.00 every month prior to the accident, as she alleged, there are evidentiary proofs for such earnings other than income tax returns such as, but not limited to, PAYROLL RECEIPTS, PAYMENTS TO THE SSS, or WITHHOLDING TAX PAID EVERY MONTH. Sad to say, these other proofs have not been presented, and we cannot presume that they exist on the strength of the word of Lucila alone. REDUCTION OF ACTUAL DAMAGES ON THE ISUZU PICKUP BASED ON AN ESTIMATE Kierulfs contend that the reduction of 10% from the written estimate of the cost of repairs by the trial court is pure speculation. An ESTIMATE, as it is categorized, is not an actual expense incurred or to be incurred in the repair. The reduction made by CA is reasonable considering that in this instance such estimate was secured by the complainants themselves. EPILOGUE In order that moral damages may be awarded, there must be pleading and proof of moral suffering, mental anguish, fright and the like. While no proof of pecuniary loss is necessary in order that moral damages may be awarded, the amount of indemnity being left to the discretion of the court, it is nevertheless essential that the claimant should satisfactorily show the existence of the factual basis of damages and its causal connection to defendant‘s acts. This is so because moral damages, though incapable of pecuniary estimation, are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer. In Francisco vs. GSIS, the Court held that there must be clear testimony on the anguish and other forms of mental suffering. Thus, if the plaintiff fails to take the witness stand and testify as to his/her social humiliation, wounded feelings and anxiety, moral damages cannot be awarded. In Cocoland Development Corporation vs. NLRC, the Court held that ―additional facts must be pleaded and proven to warrant the grant of moral damages under the Civil Code, these being, social humiliation, wounded feelings, grave anxiety, etc. that resulted therefrom.‖ 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. Since each case must be governed by its own peculiar circumstances, there is no hard and fast rule in determining the proper amount. The yardstick should be that the amount awarded should not be so palpably and scandalously excessive as to indicate that it was the result of passion, prejudice or corruption on the part of the trial judge.Neither should it be so little or so paltry that it rubs salt to the injury already inflicted on plaintiffs. WHEREFORE, premises considered, the petition for review in G.R. No. 99301 is PARTIALLY GRANTED, while that of Pantranco North Express, Inc., in G.R. No. 99343 is DISMISSED. The Decision appealed from is AFFIRMED with MODIFICATION. The award of moral damages to Lucila and Legaspi is hereby INCREASED to P400,000.00 and P50,000.00 respectively; exemplary damages to Lucila is INCREASED to P200,000.00. Legaspi is awarded exemplary damages of P50,000.00. The amount of P16,500.00 as actual or compensatory damages is also GRANTED to Legaspi. All other awards of CA are AFFIRMED. Pantranco shall also PAY legal interest of 6% per annum on all sums awarded from the date of promulgation of the decision of the trial court, May 24, 1989, until actual payment. 7. People v. Iroy, G.R. No. 187743, March 3, 2010 DOCTRINE: Moral damages are automatically granted in a rape case without need of further proof other than the fact of its commission. For it is assumed that a rape victim has actually suffered moral injuries entitling her to such an award. The appellate court correctly ruled when it modified that, in addition to the award of civil indemnity of Seventy-Five Thousand Pesos (P75,000.00), appellant is likewise ordered to pay the victim, AAA, another Seventy-Five Thousand Pesos (P75,000.00) as moral damages. 8. People v. Pareja, G.R. No. 188979, September 5, 2012 DOCTRINE: (1) we find appellant Christopher Pareja y Velasco GUILTY of the crime of ATTEMPTED RAPE; (2) we SENTENCE him to suffer the indeterminate penalty of six (6) years of prision correccional, as minimum, to 10 years of prision mayor, as maximum; and 333 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

(3) we ORDER him to PAY the victim the amounts of P30,000.00 as civil indemnity; P25,000.00 as moral damages; and P10,000.00 as exemplary damages. 9. People v. Rarugal, G.R. No. 188603, January 16, 2013 DOCTRINE: When death occurs due to a crime, the following may be recovered: (1) civil indemnity ex delicto for the death of the victim; (2) actual or compensatory damages; (3) moral damages; (4) exemplary damages; (5) attorney‘s fees and expenses of litigation; and (6) interest, in proper cases. We sustain the RTC‘s award for moral damages in the amount of P50,000.00 even in the absence of proof of mental and emotional suffering of the victim‘s heirs. As borne out by human nature and experience, a violent death invariably and necessarily brings about emotional pain and anguish on the part of the victim‟s family. 10. Fores v. Miranda, G.R. No. L-12163, March 4, 1959 DOCTRINE: As ruled in Cachero v. Manila Yellow Taxicab, moral damages are not recoverable in damage actions predicated on a breach of the contract of transportation, in view of Articles 2219 and 2220. By contrasting the provisions of these two articles it immediately becomes apparent that: (a) In case of breach of contract (including one of transportation) proof of bad faith or fraud (dolus), i.e., wanton or deliberately injurious conduct, is essential to justify an award of moral damages; and (b) That a breach of contract cannot be considered included in the descriptive term "analogous cases" used in Art. 2219; not only because Art. 2220 specifically provides for the damages that are caused by contractual breach, but because the definition of quasi-delict in Art. 2176 expressly excludes the cases where there is a "pre-existing contractual relation between the parties." The EXCEPTION TO THE BASIC RULE OF DAMAGES now under consideration is a mishap resulting in the death of a passenger, in which case Article 1764 makes the common carrier expressly subject to the rule of Art. 2206, that entitles the spouse, descendants and ascendants of the deceased passenger to "demand moral damages for mental anguish by reason of the death of the deceased. But the exceptional rule of Art. 1764 makes it all the more evident that where the injured passenger does NOT die, moral damages are not recoverable unless it is proved that the carrier was guilty of malice or bad faith. To award moral damages for BREACH OF CONTRACT, therefore, without proof of bad faith or malice on the part of the defendant, as required by Art. 2220, would be to violate the clear provisions of the law, and constitute unwarranted judicial legislation. It is also suggested that a carrier's violation of its engagement to safely transport the passenger involves a breach of the passenger's confidence, and therefore should be regarded as a breach of contract in bad faith, justifying recovery of moral damages under Art. 2220. This THEORY IS UNTENABLE, for under it the carrier would always be deemed in bad faith, in every case its obligation to the passenger is infringed, and it would be never accountable for simple negligence; while under the law (Art. 1756). The presumption is that common carriers acted negligently (and not maliciously), and Art. 1762 speaks of negligence of the common carrier. 11. Sulpicio Lines, Inc., v. Curso, G.R. No. 157009, March 17, 2010 DOCTRINE: As a general rule, moral damages are not recoverable in actions for damages predicated on a breach of contract, unless there is fraud or bad faith. As an EXCEPTION, moral damages may be awarded in case of breach of contract of carriage that results in the death of a passenger, in accordance with Article 1764, in relation to Article 2206 (3). The foregoing legal provisions set forth the persons entitled to moral damages. The OMISSION from Article 2206 (3) of the BROTHERS and SISTERS of the deceased passenger reveals the legislative intent to exclude them from the recovery of moral damages for mental anguish by reason of the death of the deceased. The purpose of moral damages is indemnity or reparation, that is, to enable the injured party to obtain the means, diversions, or amusements that will serve to alleviate the moral suffering he has undergone by reason of the tragic event. To be entitled to moral damages, the respondents must have a right based upon law. It is true that under Article 1003, they succeeded to the entire estate of the late Dr. Curso in the absence of the latter‘s descendants, ascendants, illegitimate 334

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Atty. Jess Lopez

children, and surviving spouse. However, they were not included among the persons entitled to recover moral damages, as enumerated in Article 2219. Article 2219 circumscribes the instances in which moral damages may be awarded. The provision does not include succession in the collateral line as a source of the right to recover moral damages. The usage of the phrase analogous cases in the provision means simply that the situation must be held similar to those expressly enumerated in the law in question following the ejusdem generis rule. Hence, Article 1003 is not concerned with recovery of moral damages. In fine, moral damages may be recovered in an action upon breach of contract of carriage only when: (a) where death of a passenger results, or (b) it is proved that the carrier was guilty of fraud and bad faith, EVEN IF DEATH DOES NOT RESULT. 12. Bagumbayan v. Intermediate Appellate Court, 132 SCRA 441 (1984) Facts: Spouses Lelisa Seña and Arturo Seña and their 4 children went to the Tropical Palace Hotel, Metro Manila to see the Reycard Duet Show. They occupied a table and ordered drinks before the show started. Lelisa‘s version was that when a waiter named Baez was going to serve them, the tray containing the drinks was overturned and fell on her. She was drenched. Later, she felt some chill. The drinks and the splinters from the broken glasses allegedly destroyed her dress which, with her handbag and shoes, cost 1K. She sensed that some persons were laughing at or pitying her. Lawyer Gatchalian, who was at the same table, commented that it was one of those unavoidable things. A waitress took Lelisa to the ladies‟ room. She had to remove her dress and underwear which were wet. She was not given any towel to cover herself. She remained standing as there was no chair. She returned to the hall after about 30 minutes later when the show had started. Lelisa testified that she was claiming MORAL DAMAGES OF P100,000 for herself and her husband due to embarrassment and the fact that the management did not even offer any apology on that night. She was claiming exemplary damages in the same amount to teach the management a lesson. The husband, Arturo Seña , testified that the incident infuriated him. There was no apology from the management. Rudy Tanchanco, the food and beverage manager apologized in open court to the plaintiffs in behalf of the management for the inconvenience caused to them. The Señas sued the corporation, as employer of the waiter, for ACTUAL DAMAGES OF P200,000 plus attorney‘s fees of P10,000 and such moral and exemplary damages as might be fixed by the court. Cause of action was QUASIDELICT based on articles 2176 and 2180 of the Civil Code. The corporation in its answer alleged that it came to know of the incident only when it was served with summons and had the incident been brought to its attention on that same night, it would have apologized immediately to the plaintiffs, made appropriate amends and taken steps to discipline the waiter and his supervisor. In its answer it apologized to the plaintiffs and labelled the incident as a fortuitous event. Corporation alleged that it observed diligentissimi patris-familias to prevent the damage. It reiterated that it was sorry for what had happened. It manifested its desire to make the proper amends in any reasonable manner or form. Trial court awarded the Señas P1,540 as actual damages consisting of the value of Mrs. Seña‘s outfit and P 540, the cost of the six tickets used by the Seña family which was considered a loss because of their alleged failure to enjoy the show. It also awarded the Señas P50,000 as moral damages, P10,000 as exemplary damages and P5,000 as attorney‘s fees. (The trial court sensibly noted that court action could have been avoided had the matter been taken up directly with the corporation before the action was filed. No extrajudicial demand preceded the action.) IAC affirmed the judgment with the modification that the moral and exemplary damages were reduced to P15,000 and P5,000, respectively. Issue: Whether the damages awarded were proper. Held: NO BASIS FOR MORAL & EXEMPLARY DAMAGES. While the award for actual damages has some basis, the grant of moral and exemplary damages is devoid of legal justification because it was not predicated upon any of the cases enumerated in the Civil Code. ART. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant‘s wrongful act or omission.

335

ART. 2219. Moral damages may be recovered in the following and analogous cases: Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Atty. Jess Lopez

(1) A criminal offense resulting in physical injuries; (2) Quasi-delicts causing physical injuries; (3) Seduction, abduction, rape, or other lascivious acts; (4) Adultery or concubinage; (5) Illegal or arbitrary detention or arrest; (6) Illegal search; (7) Libel, slander or any other form of defamation; (8) Malicious prosecution; (9) Acts mentioned in article 309; (10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this article, may also recover moral damages. ―The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned in No. 9 of this article, in the order named. ART. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith. The instant case is not specifically mentioned in article 2219 which refers to quasi-delicts causing physical injuries. IAC erred in considering it as analogous to the cases mentioned therein without indicating what specific case the instant case resembles or is analogous to. (SC cited an example: an unfounded complaint with a baseless imputation of forgery is analogous to defamation mentioned in article 2219(7). It justified an award of P2,000 as moral damages.) Generally, there can be no recovery of moral damages if the case is not mentioned in articles 2219 and 2220. What we call moral damages are treated in American jurisprudence as compensatory damages awarded for mental pain and suffering or mental anguish resulting from a wrong. ―MENTAL SUFFERING means distress or serious pain as distinguished from annoyance, regret or vexation. MENTAL ANGUISH is intense mental suffering.‖ ―Generally, damages for mental anguish are limited to cases in which there has been a personal physical injury or where the defendant wilfully, wantonly, recklessly, or intentionally caused the mental anguish.‖ ―Nor will damages generally be awarded for mental anguish which is not accompanied by a physical injury, at least where maliciousness, wantonness, or intentional conduct is not involved.‖ ―Damages for mental anguish and suffering have been held recoverable where the act complained of was done with such gross carelessness or recklessness as to show an utter indifference to the consequences.‖ ―Under Ohio law, damages for emotional distress consisting of embarrassment and mental suffering and dire threats, are not recoverable unless intentionally caused‖ We hold that the ―EMBARRASSMENT‖ to which Mrs . Seña was exposed by the incident is not the mental anguish contemplated in article 2217 for which moral damages can be recovered. In the case of People vs. Plaza: Genoveva de Soriano was a passenger in a riverboat which was bumped by another boat manned by Berchman Plaza and caused the first boat to capsize and sink but did not drown Genoveva. She did not know how to swim. Her life was endangered. She suffered fright and mental anguish during those moments when her fate was uncertain. Her claim for P500 as moral damages was not allowed. In this case, it would not be just and proper to include moral damages in the corporation‘s vicarious liability as employer. The award of P5,000 as exemplary or corrective damages cannot also be sustained because there was no gross negligence in this case. The petitioner is ordered to pay Lelisa Seña the sum of P 5,000 to cover her actual damages, litigation expenses and attorney‘s fees. The award of moral and exemplary damages is eliminated. 13. United Coconut Planters Bank v. Ramos, 415 SCRA 596 (2003) Facts: Teofilo Ramos Sr. was held liable for a loan with UCPB from a decision which became final. A writ of execution was issued wherein in a twist of events, a notice of levy was issued on the property of Teofilo Ramos, someone who was the namesake of Teofilo Ramos Sr., but a totally different person. Teofilo Ramos‘ company, Ramdustrial Corporation intended to secure a loan with the UCPB, using the same property as collateral. Naturally, UCPB denied the loan, because of the levy. Teofilo Ramos executed an affidavit, claiming that he and Teofilo Ramos Sr. were not the same person. UCPB eventually granted the loan with the property as collateral. Ramdustrial, facing difficulty to pay the loan, applied with the PDB for a loan (with the said property as collateral) to pay the UCPB loan. PDB agreed on the condition that the mortgage on the property be cancelled. Pending negotiations 336 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Atty. Jess Lopez

however, PDB noticed the notice of levy annotated on the title of the property, and thus refused to release the proceeds of the loan. However, via a motion, the notice of levy was cancelled and PDB released the loan. Despite the cancellation of the notice of levy, the Ramos filed a complaint for damages against petitioner UCPB and Sheriff Villapaña. While petitioner admitted that it made a mistake in causing the annotation of notice of levy on the TCT of the respondent, denied that it was motivated by malice and bad faith. The petitioner alleged that after ascertaining that it indeed made a mistake, it proposed that the respondent file a motion to cancel levy with a promise that it would not oppose the said motion. However, the respondent dilly-dallied and failed to file the said motion; forthwith, if any damages were sustained by the respondent, it was because it took him quite a long time to file the motion. The petitioner should not thus be made to suffer for the consequences of the respondent‘s delay. The RTC ruled in favor of respondent Ramos. The complaint against Sheriff Villapaña was dismissed. It awarded P800,000.00 AS MORAL DAMAGES, P100,000.00 as exemplary damages and P100,000.00 as attorney‘s fees. The CA affirmed ruling that the petitioner was negligent in causing the annotation of notice of levy on the title of the petitioner for its failure to determine with certainty whether the defendant Teofilo Ramos, Sr. in Civil Case No. 16453 was the registered owner of the property covered by TCT No. 275167, and to inform the sheriff that the registered owners of the property were the respondent and his wife Rebecca Ramos, and thereafter request for the cancellation of the motion of levy on the property. Issue: Whether Ramos is entitled to moral, exemplary damages, and attorney‘s fees. Held: UCPB, as a bank and a financial institution engaged in the grant of loans, is expected to ascertain and verify the identities of the persons it transacts business with. In this case, UCPB knew that the sureties to the loan granted to ZDC and the defendants in Civil Case No. 94-1822 were the Spouses Teofilo Ramos, Sr. and Amelita Ramos. The names of the Spouses Teofilo Ramos, Sr. and Amelita Ramos were specified in the writ of execution issued by the trial court. In determining whether or not the petitioner acted negligently, the constant test is: ―Did the defendant in doing the negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? The petitioner has access to more facilities in confirming the identity of their judgment debtors. It should have acted more cautiously, especially since some uncertainty had been reported by the appraiser whom the petitioner had tasked to make verifications. It appears that the petitioner treated the uncertainty raised by appraiser Eduardo C. Reniva as a flimsy matter. It placed more importance on the information regarding the marketability and market value of the property, utterly disregarding the identity of the registered owner thereof. DAMAGES For the award of MORAL DAMAGES TO BE GRANTED, the following must exist: (1) there must be an injury clearly sustained by the claimant, whether physical, mental or psychological; (2) there must be a culpable act or omission factually established; (3) the wrongful act or omission of the defendant is the proximate cause of the injury sustained by the claimant; and (4) the award for damages is predicated on any of the cases stated in Article 2219 of the Civil Code. IN THE CASE AT BAR, although the Ramos was not the loan applicant and the business opportunities lost were those of Ramdustrial Corporation, all 4 requisites were established. FIRST, the Ramos sustained injuries in that his physical health and cardio-vascular ailment were aggravated; his fear that his one and only property would be foreclosed, hounded him endlessly; and his reputation as mortgagor had been tarnished. SECOND, the annotation of notice of levy on the TCT of the Ramos was wrongful, arising as it did from the petitioner‘s negligent act of allowing the levy without verifying the identity of its judgment debtor. THIRD, such wrongful levy was the proximate cause of the Ramos‘ misery. FOURTH, the award for damages is predicated on Article 2219 (10).. Although the respondent was able to establish the petitioner‘s negligence, we cannot, however, allow the award for exemplary damages, absent the private respondent‟s failure to show that the petitioner acted with malice and bad faith. It is a requisite in the grant of exemplary damages that the act of the offender must be accompanied by bad faith or done in a wanton, fraudulent or malevolent manner. Attorney‘s fees may be awarded when a party is compelled to litigate or to incur expenses to protect his interest by reason of an unjustified act of the other party. In this case, Ramos was compelled to engage the services of counsel and to incur expenses of litigation in order to protect his interest to the subject property against the petitioner‘s unlawful levy. The award is reasonable in view of the time it has taken this case to be resolved. 337 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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Atty. Jess Lopez

In sum, we rule that the petitioner acted negligently in levying the property of the respondent despite doubts as to the identity of the respondent vis-à-vis its judgment debtor. By reason of such negligent act, a wrongful levy was made, causing physical, mental and psychological injuries on the person of the respondent. Such injuries entitle the respondent to an award of moral damages in the amount of P800,000.00. No exemplary damages can be awarded because the petitioner‘s negligent act was not tainted with malice and bad faith. By reason of such wrongful levy, the respondent had to hire the services of counsel to cause the cancellation of the annotation; hence, the award of attorney‘s fees. 14. Filipinas Broadcasting Network, Inc., v. AGO Medical and Educational Center, G.R. 141994, Jan.17, 2005  Supra Facts: On 14 December 1992, the trial court rendered a Decision finding FBNI and Alegre liable for libel except Rima. The trial court held that the broadcasts are libellous per se. The trial court rejected the broadcasters‘ claim that their utterances were the result of straight reporting because it had no factual basis. The broadcasters did not even verify their reports before airing them to show good faith. In holding FBNI liable for libel, the trial court found that FBNI failed to exercise diligence in the selection and supervision of its employees. In absolving Rima from the charge, the trial court ruled that Rima‘s only participation was when he agreed with Alegre‘s exposé. The trial court found Rima‘s statement within the ―bounds of freedom of speech, expression, and of the press.‖ The dispositive portion of the decision reads: WHEREFORE, premises considered, this court finds for the plaintiff. Considering the degree of damages caused by the controversial utterances, which are not found by this court to be really very serious and damaging, and there being no showing that indeed the enrollment of plaintiff school dropped, defendants Hermogenes ―Jun‖ Alegre, Jr. and Filipinas Broadcasting Network (owner of the radio station DZRC), are hereby jointly and severally ordered to pay plaintiff Ago Medical and Educational Center-Bicol Christian College of Medicine (AMECBCCM) the amount of P300,000.00 moral damages, plus P30,000.00 reimbursement of attorney‘s fees, and to pay the costs of suit. CA affirmed. Issue: Whether AGO Medical is entitled to moral damages. Held: YES. A juridical person is generally not entitled to moral damages because, unlike a natural person, it cannot experience physical suffering or such sentiments as wounded feelings, serious anxiety, mental anguish or moral shock. The CA cites Mambulao Lumber Co. v. PNB, et al. to justify the award of moral damages. However, the Court‘s statement in Mambulao that ―a corporation may have a good reputation which, if besmirched, may also be a ground for the award of moral damages‖ is an obiter dictum. NEVERTHELESS, AMEC‘s claim for moral damages falls under item 7 of Article 2219 of the Civil Code. This provision expressly authorizes the recovery of moral damages in cases of libel, slander or any other form of defamation. Article 2219(7) does not qualify whether the plaintiff is a natural or juridical person. Therefore, a juridical person such as a corporation can validly complain for libel or any other form of defamation and claim for moral damages. Moreover, where the broadcast is libelous per se, the law implies damages. In such a case, evidence of an honest mistake or the want of character or reputation of the party libeled goes only in mitigation of damages. Neither in such a case is the plaintiff required to introduce evidence of actual damages as a condition precedent to the recovery of some damages. In this case, the broadcasts are libelous per se. Thus, AMEC is entitled to moral damages. However, we find the award of P300,000 moral damages unreasonable. The record shows that even though the broadcasts were libelous per se, AMEC has not suffered any substantial or material damage to its reputation. Therefore, we reduce the award of moral damages from P300,000 to P150,000. ATTORNEY‘S FEES The award of attorney‘s fees is not proper because AMEC failed to justify satisfactorily its claim for attorney‟s fees. AMEC did not adduce evidence to warrant the award of attorney‘s fees. Moreover, both the trial and appellate courts failed to explicitly state in their respective decisions the rationale for the award of attorney‘s fees. While it mentioned about the award of attorney‘s fees by stating that it ―lies within the discretion of the court and depends upon the circumstances of each case,‖ the CA failed to point out any circumstance to justify the award. 338

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

15. Lagman v. Intermediate Appellate Court, G.R. No. 72281, October 28, 1988 Facts: Michael Lagman was employed as janitor of Puzon Building where private respondent Antonio Fernandez was a tenant. On April 19, 1975, at about 10AM, Michael Lagman went down from the Puzon Building to the parking lot behind it where he met Eduardo Liputan, driver of Fernandez. The latter offered for a valuable consideration to teach him how to drive using private respondent's car. In the course of the instructions, Michael Lagman bumped two cars parked on the parking lot causing damages thereto. Eduardo Liputan thereafter went up the building and reported the incident to his employer. Antonio Fernandez in turn reported the matter to the QCPD Traffic Bureau which dispatched an investigator to the scene of the accident. Michael Lagman was requested by the investigator to go with him to the Traffic Bureau for investigation where his written statements were taken. The matter was subsequently referred by the QCPD Investigation Division to the Metrocom Staff Judge Advocate, Camp Crame, in a referral letter which denominated the offense committed as "Qualified Theft" or "Carnapping." On the basis of such referral, Camp Crame authorities caused the detention of Michael Lagman. He was later transferred to Sampaguita Station, Muntinlupa where he languished in jail for more than 4 months his whereabouts initially unknown to his father and co-petitioner, Macario Lagman who had to look for him at different places until he was finally located at said place of confinement. Upon referral of the case to the Fiscal's Office of QC for preliminary investigation, the qualified theft or carnapping aspect of the case was dismissed on the ground that Michael Lagman could not commit carnapping because he cannot even drive and that it was actually while trying to learn how to drive that he caused damage to the two cars. A case for damage to property through reckless imprudence was instead filed against Michael Lagman by the Fiscal's office. Because of Michael's detention for four months in jail, the anxiety suffered by his father and the expenses incurred in trying to locate and have him released from detention, petitioners filed a Civil Case before the CFI against private respondent for damages suffered by them as a consequence of the alleged malicious prosecution instituted against Michael Lagman by private respondent Antonio Fernandez. In the course of the trial, it was revealed that Atty. Pablito Roxas was INSTRUMENTAL in the preparation of the affidavits as well as the referral of the case to the QCOD where a charge for carnapping was recommended against Michael Lagman. Consequently, Atty. Pablito Roxas was impleaded as defendant in the damage suit. The CFI rendered judgment exonerating Atty. Pablito Roxas but finding Fernandez liable for damages (P40,000.00 as moral damages; Pl,600.00 to Macario Lagman as compensatory damages in looking for his son, unaware that he was under detention; P960.00 as actual damages plus three (3) years salary at the rate of P240.00 a month and the sum of P200.00 representing the loss of articles belonging to said plaintiff Michael Lagman while he was under detention plus attorney's fees amounting to P5,000.00 and costs of this suit. Fernandez asserts that not all the elements of MALICIOUS PROSECUTION are present in the instant case and its ruling that the private respondent is not liable for damages to petitioners. Issue: Whether there was malicious prosecution. Held: NONE. Statutory recognition of an action for damages based on malicious prosecution (false accusation or denuncia falsa) is found in article 2219(8) which allows recovery of moral damages for malicious prosecution. Articles 21 and 2176 of the same Code may also be invoked to justify the action. To support such action, the PLAINTIFF MUST PROVE 1) 2) 3) 4) 5)

the fact of prosecution that the defendant was himself the prosecutor or that he instigated its commencement; that it finally terminated in his acquittal; that in bringing it the prosecutor acted without probable cause, and that he was actuated by legal malice, that is, by improper and sinister motives.

Not all the elements of a malicious prosecution are present in this case. In its assailed resolution, the CA correctly found that while it is not disputed that it was private respondent who complained to the authorities, such action was apparently for purposes of investigation only. It was the investigating officer and not private respondent who charged petitioner Michael Lagman with qualified theft. The mere act of submitting a case to the authorities for prosecution does not make one liable for malicious prosecution for generally, it is the Government or representative of the State that takes charge of the prosecution of the offense. There must be proof that the prosecution was prompted by a sinister design to vex and humiliate a person for if the rule were otherwise, every acquitted person can turn against the complainant in a civil action for damages. The acquittal of Michael Lagman did not discount the presence of probable cause nor would it be a ground to impute 339 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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malice upon private respondent in filing charges against Michael because such acquittal was not based on his innocence of any wrongdoing but on the erroneous charging of the offense of carnapping or qualified theft. As earlier stated, the fiscal dismissed the complaint for carnapping or qualified theft and instead filed a case for damage to property thru reckless imprudence. This goes to show that there was probable cause for private respondent to file charges against Michael for the use of his car without his knowledge and permission resulting in damage not only to his car but also to two more cars parked in the premises of the Puzon Building. The foregoing facts show that in filing the criminal charge against petitioner Michael Lagman, private respondent was not actuated by malice. He had been the victim of a wrong committed by Michael Lagman and whether such wrong constituted qualified theft or carnapping was a legal question properly submitted to the police authorities and subsequently referred to the fiscal for preliminary investigation. The very fact that a charge for damage to property thru reckless imprudence was filed in place of the carnapping charge demonstrates that private respondent was justified in submitting his grievance to the said authorities for ruling and possible redress. The detention of petitioner Michael Lagman for more than four months is indeed lamentable. For this sad experience, however, private respondent cannot be held accountable since his act in instituting a complaint against petitioner Michael Lagman was done in the exercise of a right to seek redress for a wrong without any ill-motive on his part. When an action is filed in good faith, there should be no penalty on the right to litigate. One may have erred but error alone is not a ground for moral damages. 16. City Government of Tagaytay v. Guerrero, G.R. Nos. 140743 & 140745, September 17, 2009 Facts: Tagaytay-Taal Tourist Development Corporation (TTTDC) is the registered owner of (2) parcels of land. TTTDC incurred real estate tax liabilities for failure of TTTDC to settle its delinquent real estate tax obligations, the City Government of Tagaytay. City of Tagaytay offered the properties for sale at public auction. Being the only bidder, a certificate of sale was executed in favor of the City of Tagaytay. New certificates of title in favor of the Tagaytay, the trial court ratiocinated that whatever rights TTTDC had over the properties had been lost by laches for its failure to question the validity of the auction sale. It also ruled that, as of April 30, 1989, the unpaid real estate tax obligations of TTTDC to the Tagaytay amounted to P3,307,799.00. TTTDC appealed to the CA. The Melencios purchased the subject properties pursuant to Section 8111 in relation to Section7812 of P.D. No. 464. The Melencios bought the properties for 3.5m representing the total amount of taxes and penalties due on the same. TTTDC filed a petition for nullification of the public auction involving the disputed properties on the ground that the properties were not within the jurisdiction of the Tagaytay and, thus, beyond its taxing authority. The sole issue in Civil Case No. TG1196 was whether the parcels of land were within the territorial jurisdiction of the City of Tagaytay. Despite the fact that the Melencios had already purchased the subject properties, they were not impleaded in Civil Case No. TG1196. They filed a Motion to Intervene. RTC denied the motion on the ground that the authority of the court to permit a person to intervene is delimited by the provisions of Section 2, Rule 12 of the Rules of Court—‗before or during trial.‘ ‖ And, trial is here used in a restricted sense and refers to ‗the period for the introduction of evidence by both parties.‘ ‖ The Melencios did not further pursue their cause. This was allegedly due to the assurances of Tagaytay that it would file a motion for reconsideration and an appeal if the motion for reconsideration was denied. However, Tagaytay filed a defective motion for reconsideration which was denied by the RTC and the City of Tagaytay did not file an appeal from the decision of the trial court. The RTC rendered a Decision in Civil Case No. TG1196 wherein the trial court directed the annulment of the public sale of the contested properties. Civil Case No. TG1196 became final and executory. The Melencios filed before the CA a petition for annulment of judgment of the RTC Decision in Civil Case No. TG1196. The Melencios questioned the final and executory decision of the trial court on the ground that Tagaytay allegedly committed extrinsic fraud and that was the ultimate reason why they were deprived of property without due process of law. Tagaytay also filed before the CA a petition for annulment of judgment of the RTC Decision in Civil Case No. TG1196. In the interregnum, the Supreme Court rendered a Decision in G.R. No. 106812 (G.R. No. 24933), ―The ―Petition for Entry of New Certificates of Title‖ of respondent City of Tagaytay is DENIED. The RTC of Cavite, sitting as a land registration or cadastral court, could not have ordered the issuance of new certificates of title over the properties in the name of respondent City if the delinquency sale was invalid because said properties are actually located in the municipality of Talisay, Batangas, not in Tagaytay City. Stated differently, respondent City could not have validly collected real taxes over properties that are outside its territorial jurisdiction. The public auction sale of the properties of the petitioner, both covered by TCT Nos. T9816 and T 9817 of the Registry of Deeds of Tagaytay City, as well as the Certificates of Sale and the Final Bills of Sale of said properties in favor of the respondent Tagaytay City, and all proceedings held in connection therewith are hereby annulled and set aside‖ Hence, the instant consolidated petitions Issue: (1) Whether the RTC had jurisdiction to settle the boundary dispute. (2) Whether Tagaytay committed extrinsic fraud against the Melencios. 340

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Held: (1) JURISDICTION There is no boundary dispute in the case at bar. The RTC did not amend the existing territorial limits of the City of Tagaytay and the Province of Batangas. The entire Barrio Birinayan was transferred to the Municipality of Talisay, Province of Batangas, by virtue of R.A. No. 1418. At present, Barrio Birinayan forms part of the Municipality of Laurel, also in the Province of Batangas, pursuant to R.A. No. 5689. The RTC acted well within its powers when it passed judgment on the nullification of the auction sale of the contested properties, considering that the City of Tagaytay has no right to collect real estate taxes on properties that are not within its territorial jurisdiction. Tagaytay acted in bad faith when it levied real estate taxes on the subject properties. R.A. No. 1418 became law as early as 1956. Tagaytay is conclusively presumed to know the law that delineates its jurisdiction. The entire Barrio Birinayan, not only portions thereof, was transferred to the Province of Batangas. (2) EXTRINSIC FRAUD Fraud is of two categories. It may either be: (a) ACTUAL OR CONSTRUCTIVE Actual or positive fraud proceeds from an intentional deception practiced by means of the misrepresentation or concealment of a material fact. Constructive fraud is construed as such because of its detrimental effect upon public interest and public or private confidence, even though the act is not done with an actual design to commit positive fraud or injury upon other persons. (b) EXTRINSIC OR INTRINSIC. There is intrinsic fraud where the fraudulent acts pertain to an issue involved in the original action, or where the acts constituting the fraud were or could have been litigated therein. Fraud is regarded as extrinsic where the act prevents a party from having a trial or from presenting his entire case to the court, or where it operates upon matters pertaining not to the judgment itself but to the manner in which it is procured, so that there is not a fair submission of the controversy. Extrinsic fraud is also actual fraud, but collateral to the transaction sued upon. The Melencios allege extrinsic fraud on the part of Tagaytay for its failure to implead them in Civil Case No. TG1196. They allege that they are indispensable parties. This contention does not persuade. Extrinsic fraud refers to any fraudulent act of the prevailing party in the litigation which is committed outside of the trial whereby the unsuccessful party has been prevented from exhibiting fully his case, by fraud or deception practiced on him by his opponent. The fraud or deceit cannot be of the losing party‘s own doing, nor must such party contribute to it. The extrinsic fraud must be employed against it by the adverse party, who, because of some trick, artifice, or device, naturally prevails in the suit. It affects not the judgment itself but the manner in which the said judgment is obtained. Extrinsic fraud is also present where the unsuccessful party has been prevented by his opponent from exhibiting fully his case by keeping the former away from court or giving him a false promise of a compromise; or where the defendant never had knowledge of the suit, having been kept in ignorance by the acts of the plaintiff; or where an attorney fraudulently or without authority assumed to represent a party and connived at his defeat; or where the attorney regularly employed corruptly sold out his client‘s interest to the other side. The overriding consideration is that the fraudulent scheme of the prevailing litigant prevented a party from having his day in court. The action or inaction of Tagaytay does not amount to extrinsic fraud. Tagaytay is not the prevailing party in the assailed decision. Moreover, the Melencios were not totally without fault in protecting their interest. They were aware of the pendency of Civil Case No. TG1196, as shown by their filing of a motion to intervene in the case. When their motion was denied by the trial court, they no longer pursued their cause. The alleged assurances and representations of certain officials of the City of Tagaytay that they would file the necessary motion for reconsideration or appeal in case of an unfavorable decision in Civil Case No. TG1196 was not an impediment to the Melencios protecting their rights over the disputed properties. There is no allegation that the City of Tagaytay prevented them from, or induced them against, acting on their own. Its failure to implead the Melencios did not prevent the latter from having their day in court. Tagaytay acted in bad faith when it levied real estate taxes on the subject properties, and should be held accountable for all the consequences including the void sale of the properties to the Melencios. The City of Tagaytay is accountable for erroneously assessing taxes on properties outside its territorial jurisdiction. It is presumed to know that Barrio Birinayan, in which the subject properties are situated, is no longer within its territorial jurisdiction and beyond its taxing powers. Under the doctrine of respondeat superior, the principal is liable for the negligence of its agents acting within the scope of their assigned tasks. Tagaytay is liable for all the necessary and natural consequences of the negligent acts of its city officials. It is liable for the tortious acts committed by its agents who sold the subject lots to the Melencios despite the clear mandate of R.A. No. 1418, separating Barrio Birinayan from its jurisdiction

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Torts & Damages 2013

Atty. Jess Lopez

The negligence of the officers of the City of Tagaytay in the performance of their official functions gives rise to an action ex contractu and quasi ex delictu. However, the Melencios cannot recover twice for the same act or omission of the City of Tagaytay. Negligence is the failure to observe protection of the interests of another person, that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury. Thus, negligence is the want of care required under circumstances. Before the City of Tagaytay may levy a certain property for sale due to tax delinquency, the subject property should be under its territorial jurisdiction. The failure of the city officials of Tagaytay to verify if the property is within its jurisdiction before levying taxes on the same constitutes gross negligence. DAMAGES Tagaytay is liable to return the full amount paid by the Melencios during the auction sale of the subject properties by way of actual damages. The amount paid at the auction sale shall earn interest at the rate of six percent (6%) per annum from the time of the finality of the RTC decision in Civil Case No. TG1196, when the claim was judicially demanded. Thereafter, interest at the rate of twelve percent (12%), in lieu of the 6%, shall be imposed on such amount upon finality of this decision until full payment thereof. The gross negligence of the Tagaytay in levying taxes and auctioning properties to answer for real property tax deficiencies outside its territorial jurisdiction amounts to bad faith that calls for the award of moral damages. Moral damages are meant to compensate the claimant for any physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injuries unjustly caused. Although incapable of pecuniary estimation, the amount must somehow be proportional to and in approximation of the suffering inflicted. Moral damages are awarded to enable the injured party to obtain means, diversions or amusements that will serve to alleviate the moral suffering the person has undergone, by reason of defendant‘s culpable action. The award is aimed at restoration, as much as possible, of the spiritual status quo ante. Thus, it must be proportionate to the suffering inflicted. Since each case must be governed by its own peculiar circumstances, there is no hard and fast rule in determining the proper amount. The social standing of the aggrieved party is essential to the determination of the proper amount of the award. Otherwise, the goal of enabling him to obtain means, diversions, or amusements to restore him to the status quo ante would not be achieved. The Melencios are likewise entitled to exemplary damages. Exemplary or corrective damages are imposed by way of example or correction for the public good, in addition to the moral, temperate, liquidated, or compensatory damages. Article 2229 of the Civil Code grants the award of exemplary or corrective damages in order to deter the commission of similar acts in the future and to allow the courts to mould behavior that can have grave and deleterious consequences to society. In the instant case, the gross negligence of the City of Tagaytay in erroneously exacting taxes and selling properties outside its jurisdiction, despite the clear mandate of statutory law, must be rectified. D.

Nominal Damages

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Civil Code o Artic les 2221 to 2223 (Memorize)

1. Ventanilla v. Centeno, G.R. No. L-14333, January 28, 1961 Facts: In a civil case of the CFI of Manila, entitled ―Oscar Ventanilla vs. Edilberto Alejandrino and Aida G. Alejandrino,‖ plaintiff retained the service of Atty. Gregorio Centeno to represent him and prosecute the case. This case was an action for the recovery of P4,000.00 together with damages. Decision unfavorable to the plaintiff was received by Atty. Gregorio Centeno on July 21, 1955, and a notice of appeal was filed by Atty. Centeno on July 25, 1955. On July 30, 1955, Atty. Centeno wrote to the plaintiff the letter, enclosing copies of the decision and that notice of appeal, and stating that he was not conformable to the decision and had not hesitated to file the notice of appeal. Plaintiff Oscar Ventanilla after receiving the letter and copy of the decision went to see Atty. Centeno in his Office in Manila about August 5, 1955. Atty. Centeno informed him that he intended to appeal and plaintiff agreed. Plaintiff, however, did not have with Atty. Centeno at that time the amount for the appeal bond. About the middle of August 1955, Atty. Centeno wrote a letter to the plaintiff enclosing therein forms for an appeal bond. The plaintiff Ventanilla, however, instead of executing an appeal bond, and because of his reluctance to pay the premium on the appeal bond, decided to file a cash appeal bond of P60.00. He went to the office of Atty. Centeno at about 4 o'clock on August 18, 1955, but was informed by the clerk, Leonardo Sanchez, that Atty. Centeno was in Laguna campaigning for his candidacy as member of the Provincial Board. Plaintiff then issued the check, for P60.00 as appeal bond, and delivered the same to Leonardo Sanchez with instruction to give the same to Atty. Centeno upon his arrival.

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Atty. Jess Lopez

Held: The Court does not believe plaintiff's testimony that Sanchez had contacted Atty. Centeno by telephone and that he issued the check upon instruction of Atty. Centeno. Leonardo Sanchez had informed the plaintiff that Atty. Centeno was in Laguna, and if he were in Manila, Sanchez could not have known the whereabouts of Atty. Centeno. It was, therefore improbable that he could contact Atty. Centeno that afternoon. On August 17, Atty. Centeno prepared the motion for extension of time to file the record on appeal, Exhibit D, which was filed only on August 20, 1955. Atty. Centeno returned to Manila and went to his office at about 10 o'clock in the morning of August 22. He cashed the check, with the Marvel Building Corporation, and then went to the office of the Clerk of Court to file the appeal bond. According to Atty. Centeno it was not accepted because the period of appeal had already expired, and that it was only at that time he came to know that the period of appeal had expired. The Court does not likewise believe the testimony of Atty. Centeno. Neither the Clerk of Court, or any of the employees had the 'right to refuse an appeal bond that is being filed, for it is not in his power to determine whether or not the appeal bond has been filed within the time prescribed by law. In fact the record on appeal was accepted and filed on September 5, 1955, but no appeal bond has been filed by Atty. Centeno. The fact that the record on appeal was admitted for filing is the best evidence that Atty. Centeno had not in fact filed any appeal bond. The record on appeal was disapproved because it was filed out of time and no appeal bond had been filed by the plaintiff. The appellant claims that the trial court erred in not ordering the appellee to pay him actual or compensatory, moral, temperate or moderate, and exemplary or corrective damages; in ordering the appellee to pay the appellant only the sum of P200, and not P2,000 as nominal damages; and in not ordering the appellee to pay the appellant the sum of P500 as attorney's fee. Article 2199 of the new Civil Code provides: Except 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. Such compensation is referred to as actual or compensatory damages. He who claims actual or compensatory damages must establish and prove by competent evidence actual pecuniary loss. The appellant's bare allegation that by reason of the appellee's indifference, negligence and failure to perfect within the reglementary period his appeal from an adverse judgment rendered in civil case No. 18833, by not paying the appeal bond of P60, he lost his chance to recover from the defendants therein the sum of P4,000 and moral and actual damages, which he could have recovered if the appeal had duly been perfected, indicates that his claim for actual or compensatory damages is highly speculative. Hence he is not entitled to such damages. The appellant claims that he suffered mental anguish upon learning that his appeal had not been perfected within the reglementary period due to the appellee's negligence; serious anxiety upon learning that his adversary had won by a mere technicality; besmirched reputation for losing the opportunity to substantiate his claim made while testifying in open court that he was entitled to collect the sum of P4,000 and damages from the defendants in civil case No. 18833; and wounded feelings for the appellee's failure to remain faithful to his client and worthy of his trust and confidence. The provisions of the new Civil Code on moral damages state: ART. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act or omission. Art. 2219. Moral damages may be recovered in the following and analogous cases: (1) A criminal offense resulting in physical injuries; (2) Quasi-delicts causing physical injuries; (3) Seduction, abduction, rape, or other lascivious acts; (4) Adultery or concubinage; (5) Illegal or arbitrary detention or arrest; (6) Illegal search; (7) Libel, slander or any other form of defamation; (8) Malicious prosecution; (9) Acts mentioned in article 309; (10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this article, may also recover moral damages. The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned in No. 9 of this article, in the order named. Art. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith. Moral damages are recoverable only when physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury are the proximate result of a criminal offense resulting in physical injuries, quasi-delicts causing physical injuries, seduction, abduction, rape, or other lascivious acts, adultery or concubinage, illegal or arbitrary detention or arrest, illegal search, libel, slander or any other form of defamation, malicious prosecution, disrespect for the dead or wrongful interference with funerals, violation of 343 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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specific provisions of the Civil Code on human relations, and willful injury to property. To this we may add that where a mishap occurs resulting in the death of a passenger being transported by a common carrier, the spouse, descendants and ascendants of the deceased passenger are entitled to demand moral damages for mental anguish by reason of the passenger's death. In Malonzo vs. Galang, this Court categorically stated that— Art. 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). Since the appellant's cause of action for recovery of moral damages is not predicated upon any of those specifically enumerated, the trial court did not err in declining to award moral damages to him. Concerning temperate or moderate damages claimed by the appellant, considering that he is not entitled to actual or compensatory damages but has been awarded nominal damages by the trial court, such award precludes the recovery of temperate or moderate damages, and so the trial court did not err in refusing to award temperate or moderate damages to the appellant. As regards exemplary or corrective damages also claimed by the appellant, since it cannot be recovered as a matter of right and the court will decide whether or not they should be adjudicated, if the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner, the trial court has judiciously, wisely and correctly exercised its discretion in not awarding them to the appellant. NOMINAL DAMAGES Relative to the sufficiency of the sum of P200 as nominal damages awarded by the trial court to the appellant, article 2221 of the new Civil Code provides: NOMINAL DAMAGES are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. The assessment of nominal damages is left to the discretion of the court, according to the circumstances of the case. Considering the circumstances, as found by the trial court, and the degree of negligence committed by the appellee, a lawyer, in not depositing on time the appeal bond and filing the record on appeal within the extension period granted by the court, which brought about the refusal by the trial court to allow the record on appeal, the amount of P200 awarded by the trial court to the appellant as nominal damages may seem exiguous. Nevertheless, considering that nominal damages are not for indemnification of loss suffered but for the vindication or recognition of a right violated or invaded; and that even if the appeal in civil case No. 18833 had been duly perfected, it was not an assurance that the appellant would succeed in recovering the amount he had claimed in his complaint, the amount of P2,000 the appellant seeks to recover as nominal damages is excessive. After weighing carefully all the considerations, the amount awarded to the appellant for nominal damages should not be disturbed. As regards attorney's fees, since the appellant's claim does not fall under any of those enumerated in article 2208, new Civil Code, the appellee may not be compelled to satisfy it. 2. China Airlines v. Court of Appeals, G.R. No. 129988, July 14, 2003 Facts: In June 1990, respondents Lao planned to travel to L.A., Cali to pursue a cable business deal concerning the distribution of Filipino films in L.A. Morelia Travel Agency booked their flight with CAL for 13 June 1990, but their services were dropped since they charged higher rates compared to American Express Travel Service (―Amexco‖). They thus got Amexco, since Lao was an Amexco cardholder. On 11 June, Lao called up Amexco, informing them of their CAL booking. Amexco called up CAL, which confirmed the booking; they were then issued their confirmed tickets. Later that day, CAL called up Morelia to reconfirm the reservations. Morelia cancelled the reservations. (Totes kups.) On 13 June, they were at the airport, but were expectedly prevented from boarding; their reservations were cancelled by CAL. They were able to leave for L.A. only on the following day on Northwest Airlines. They sent a demand letter to CAL on 13 August for P500,000 of moral damages. CAL replied, explaining that respondents failed to pick up their tickets from Amexco‟s office; CAL invoked respondents‘ negligence. Respondents then replied, stating that they presented their tickets at the airport. CAL replied, stating that since Morelia booked it, CAL accepted its cancellation. On 13 December 1990, they then sent a demand letter to Amexco. On 11 June 1992, they filed with the RTC a complaint for damages against CAL and Amexco for actual, moral, and exemplary damages. The RTC ruled in their favor, and the CA affirmed. Issue: (1) Whether laches had set in. NO. 344

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(2) Whether Lao‘s improper and abusive language in their Comment should result in its being stricken out. NO. (3) Whether award of damages is proper. PARTLY NO, Held: Breach of its Contract of Carriage The confusion with the confirmation and cancellation of the reservations began when Lao gave to Amexco the record locator number that CAL had already assigned to Morelia. A record locator number is a combination of letters and numbers issued by an airline to a travel agency when the airline confirms the travel agency‘s booking. The record locator number in question is No. 4RJ2CJ. Based on the testimonies of the witnesses of Amexco and CAL, industry practice prohibits a travel agency to use the record locator number of another travel agency, as this will usurp the booking of another travel agency. Morelia was the assignee of the record locator number used by Amexco. CAL issued the record locator number to Morelia when it confirmed the booking of Morelia for private respondents‘ reservations. However, since private respondents found the rates of Morelia to be steeper than those offered by Amexco and Lao happened to be an Amexco card member, private respondents decided instead to secure their reservations through Amexco. It would have been perfectly all right for private respondents to switch to Amexco, until Lao gave to Amexco the record locator number CAL had already assigned to Morelia. This now set into motion the events leading to the cancellation of private respondents‘ reservations. Curiously, the trial and appellate courts failed to point out that prior to Amexco‘s confirmation with CAL, Amexco had tried in vain to book private respondents‘ flight with CAL and the other airlines, as it was the peak season then. Amexco was only able to book private respondents‘ flight with CAL when it used the record locator number of Morelia. In short, on its own account, Amexco could not have successfully booked the reservations of private respondents with CAL. Thus, Amexco had no recourse but to use Morelia‘s record locator number in booking private respondents with CAL. The trial and appellate courts ruled that Amexco did not misrepresent itself to CAL when Amexco used the record locator number of Morelia. Thus, Amexco was not liable to private respondents. There was also no categorical finding of Lao‘s intention in giving the record locator number to Amexco, or if he indeed disclosed to Amexco that the record locator number was already assigned to Morelia. Lea, the booking agent of Amexco who dealt with Lao, testified that Lao did not inform her that the record locator number was from Morelia. Lea further declared that had she known that the record locator number belonged to Morelia, she would not have used the record locator number or she would have requested private respondents to ask Morelia to endorse the same to Amexco. On the other hand, private respondents claimed in their answer to CAL‘s written interrogatories that they informed Amexco that they made their original booking with Morelia and that Lea of Amexco checked this matter with CAL. Private respondents also declared that they informed Morelia through Ms. Gavelino Gironella that they were dropping Morelia‘s services. The trial and appellate courts did not pass upon the two conflicting versions of Lao and Amexco. Nevertheless, Lao should have made it known to Amexco that the record locator number belonged to another travel agency, Morelia. On the other hand, Amexco should not have hastily presumed that private respondents themselves obtained the record locator number from CAL and that they engaged the services of Amexco purely for ticketing purposes since Lao was an Amexco card member. Amexco should have inquired how Lao got hold of the record locator number considering that it was difficult for a travel agency at that time to secure reservations with the various airlines including CAL. Lao and Amexco are not blameless. Lao‘s act in giving Morelia‘s record locator number to Amexco, after deciding to terminate Morelia‘s services, amounted to accepting the benefit of Morelia‘s services without paying for it. Amexco used Morelia‘s record locator number when Amexco found out it could no longer book private respondents without Morelia‘s record locator number. However, the greater blame falls on CAL. When CAL confirmed the reservations of private respondents, a contract of carriage arose between CAL and private respondents, even if Amexco, not Morelia, confirmed the reservations of private respondents. Because of CAL‘s confirmation, Amexco issued to private respondents the confirmed tickets. The nature of an airline‘s contract of carriage partakes of two types, namely: (1) a contract to deliver a cargo or merchandise to its destination, and (2) a contract to transport passengers to their destination. In this case, when CAL confirmed the reservations, it bound itself to transport private respondents on its flight on 13 June 1990. The airline business is intended to serve the traveling public primarily and is thus imbued with public interest. The law governing common carriers consequently imposes an exacting standard. Thus, in an action based on a breach of contract of carriage, the aggrieved party does not have to prove that the common carrier was at fault or was negligent. All that he has to prove is the existence of the contract and the fact of its non-performance by the carrier. CAL does not deny its confirmation of the reservations made by Amexco. The confirmed tickets issued by Amexco to private respondents upon CAL‘s confirmation of the reservations are undeniable proof of the contract of carriage between CAL and private respondents. In Alitalia Airways v. CA, et al., we held that when an airline issues a ticket to a passenger 345 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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confirmed for a particular flight on a certain date, a contract of carriage arises. The passenger then has every right to expect that he would fly on that flight and on that date. If he does not, then the carrier opens itself to a suit for breach of contract of carriage. CAL did not allow private respondents, who were then in possession of the confirmed tickets, from boarding its airplane because their names were not in the passengers‘ manifest. Clearly, CAL breached its contract of carriage with private respondents. We, however, rule out bad faith by CAL. ABSENCE OF BAD FAITH Bad faith does not simply connote bad judgment or negligence. It imports a dishonest purpose or some moral obliquity and conscious doing of a wrong. It means breach of a known duty through some motive, interest or ill will that partakes of the nature of fraud. A finding of bad faith entitles the offended party to moral damages. The trial and appellate courts believed that the confluence of the following circumstances proves that CAL cancelled private respondents‘ reservations in bad faith: (1) Lea, the booking agent of Amexco identified herself as ―Lea-Amexco‖ when she called up CAL to confirm the reservations of private respondents; (2) Lea was not a familiar caller of Morelia and yet CAL entertained her call; (3) CAL called up Morelia on the very same afternoon that CAL had already confirmed the reservations of private respondents although the confirmation was made by another travel agent, Amexco; (4) CAL called up Morelia looking for a certain Joel to re-confirm the reservations of private respondents; (5) CAL told Joel that it was hesitant to cancel the reservations of private respondents because the seating arrangements had already been finalized with Lea; and (6) CAL did not notify private respondents or Amexco that it was cancelling the reservations even though ―Lea-Amexco‖ left a telephone number with CAL. As a rule, the factual findings of the trial and appellate courts are binding on the Court. However, there are recognized exceptions to this rule. These are: (1) when the findings are grounded on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion in the appreciation of facts; (4) when the factual findings of the trial and appellate courts are conflicting; (5) when the Court of Appeals, in making its findings, has gone beyond the issues of the case and such findings are contrary to the admissions of both appellant and appellee; (6) when the judgment of the appellate court is premised on a misapprehension of facts or when it has failed to consider certain relevant facts which, if properly taken into account, will justify a different conclusion; (7) when the findings of fact are conclusions without citation of specific evidence upon which they are based; and (8) when findings of fact of the Court of Appeals are premised on the absence of evidence but are contradicted by the evidence on record. The settled rule is bad faith should be established by clear and convincing evidence since the law always presumes good faith. Thus, the person who seeks damages due to the acts of another has the burden of proving that the latter acted in bad faith or with ill motive. Bad faith is in essence a question of intention. In ascertaining the intention of the person accused of acting in bad faith, the courts must carefully examine the evidence as to the conduct and outward acts from which the inward motive may be determined. Since bad faith is a question of intention, a clear understanding of the confirmation and pre-flight checking procedure of CAL is vital to determine if CAL indeed bumped off private respondents in favor of other passengers. The factual findings of the trial and appellate courts are wanting in this regard. The two courts only made passing references to the testimonies of CAL‘s witnesses who were CAL‘s former reservations officers. Their narration of their respective duties and transactions with Amexco and Morelia is crucial in ascertaining the presence of bad faith in CAL‘s cancellation of the reservations. We have held that in a case for recovery of damages arising from a breach of contract, the trial court cannot totally disregard the testimonies of the officers of an airline on the basis alone of the employment relationship. When the trial and appellate courts commit this grievous error, their factual findings lose their binding effect on the Court, and we will again weigh and evaluate the evidence presented by the parties. We were thus compelled to examine anew the testimonial evidence in this case. Based on the testimonies of the reservations officers of CAL, not one but two officers made the confirmation and preflight checking of the airline. Amity Chang (―Chang‖), a reservation officer of CAL, received Amexco‘s call confirming the reservations of private respondents. Melo, another reservation officer of CAL, was in charge of the pre-flight checking of private respondents‘ reservations. Melo called up Morelia to reconfirm the reservations. The trial and appellate courts accepted private respondents‘ theory that CAL cancelled their reservations under the pretext that CAL had not authorized Amexco to use the record locator number of Morelia. Private respondents assert that in reality CAL just wanted them bumped off to accommodate other passengers. However, private respondents failed to substantiate this particular allegation. We will now point out why the circumstances mentioned by the trial and appellate courts are inadequate to prove CAL‘s bad faith in cancelling private respondents‘ reservations.

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First, the trial and appellate courts stress that Lea, the booking agent of Amexco, identified herself as ―Lea-Amexco‖ when she called up CAL to confirm the reservations of private respondents. However, the testimonies of Chang and Melo do not show that they heard or recorded that ―Lea-Amexco‖ made the confirmation. Melo unequivocally stated in open court that what the computer monitor recorded was the name Lea and not ―Lea-Amexco.‖ Accordingly, when Melo called up Morelia to reconfirm the booking, she asked if there was a person named Lea in Morelia. Second, we agree with the trial and appellate courts that CAL should not have accepted the confirmation of Lea who is not a familiar caller from Morelia. CAL should have screened and verified the name of the person or travel agency confirming the reservations. Assuming that Lea indeed identified herself as ―Lea-Amexco,‖ CAL all the more should not have confirmed the reservations made by Amexco using the record locator number of another travel agency. CAL should have informed Amexco to secure first the endorsement of Morelia. CAL‘s negligence at this stage of the confirmation process is clear. However, both courts erred in readily imputing bad faith when CAL was only guilty of simple negligence. Third, it is the standard practice of CAL to re-confirm reservations by calling up the travel agency or passenger two days or even as close as a day before the intended departure date. This is the pre-flight checking procedure of CAL. There is therefore nothing unusual or suspicious in CAL‘s ―initiative‖ in calling up Morelia. Melo was not aware that ―LeaAmexco‖ made the confirmation. As far as Melo was concerned, a certain ―Lea‖ made the confirmation and Melo assumed she was from Morelia because Lea used the record locator number that CAL had assigned to Morelia. Since Morelia is the assignee of the record locator number, CAL dealt with Morelia. The trial court termed the confirmation of Amexco as a ―final confirmation‖ of the reservations that should not have required another re-confirmation from CAL. The trial court believed that CAL‘s re-confirmation of the reservation on the same day that Amexco made the confirmation is suspicious. Suspicion, however, cannot take the place of evidence. Obviously, CAL did not consider private respondents‘ confirmation through Amexco as a ―final confirmation.‖ CAL still went on with its pre-confirmation procedure precisely because the name Lea registered on its computer was not a familiar caller from Morelia. Thus, when Melo called up Morelia, she asked if there was a certain ―Lea‖ with Morelia. Fourth, Melo testified that she assumed that a certain telephone number was the contact number of private respondents. Melo dialed the number and a certain Gemma answered the phone.] Gemma denied any knowledge of the booking made by private respondents or by Lea. Melo then decided to call up Morelia. Melo indeed looked for a certain Joel when she called up Morelia. Melo admitted that Joel has been with Morelia ―ever since.‖] Melo‘s admission indicates that Joel is the familiar caller from Morelia with whom CAL regularly transacted in confirming the bookings of Morelia. Understandably, it was Joel whom Melo looked for when Melo called up Morelia. Melo first tried to contact private respondents, showing CAL‘s lack of malice. Since the number was not the contact number of private respondents and Lea, Melo had no recourse but to check with Joel of Morelia. Fifth, Melo did express to Joel her reluctance to cancel the reservations because a certain Lea had already ended the seating arrangements. Despite Melo‘s hesitation, the cancellation still pushed through for three reasons: (1) Joel insisted on it; (2) Lea was not from Morelia; and (3) Melo failed to contact private respondents and Lea. The Court of Appeals took Melo‘s reluctance to cancel the reservations as an indication of CAL‘s bad faith when such fact is a badge of good faith. CAL cancelled the reservations with trepidation. CAL, therefore, did not make the cancellation wantonly and recklessly. Lastly, CAL did not have the addresses of private respondents. Melo first tried to notify private respondents through a telephone number presumably given by Lea. However, the telephone number turned out to be a wrong number. To its credit, CAL still exerted its best efforts to notify private respondents. In reconfirming the reservations, Melo called up Morelia twice. The first time was two days before the scheduled flight of CAL. In that first telephone call, Joel told Melo that he would first check if private respondents were definite in taking the 13 June 1990 flight. Melo called up Morelia the next day or a day before the scheduled flight. Joel informed Melo that Morelia was cancelling the reservations because private respondents did not return to Morelia. Melo then asked Joel if he was sure of the cancellation because a certain Lea had finalized the reservations. Joel said that he did not know of a certain Lea and had no knowledge of Lea‘s booking. Melo then accepted Morelia‘s cancellation because Joel seemed confident that there was basis in cancelling the reservations. CAL did not deliberately bump off private respondents to accommodate other passengers. Amexco‘s unauthorized use of the record locator number of Morelia was not just a convenient excuse that CAL used to conceal a supposed malicious intent. There were three reasons CAL cancelled the reservations and did not notify private respondents of the cancellation. First was Amexco‘s unauthorized use of the record locator number. Second was CAL‘s negligence in confirming the reservations of Amexco. Third was the absence of the correct contact numbers of private respondents and Lea.

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Torts & Damages 2013

Atty. Jess Lopez

There was no concerted effort on the part of CAL‘s employees to cancel private respondents‘ reservations in favor of other passengers. In fact, Melo testified that while she knew that the 13 June 1990 flight was fully booked, she was not aware if there were other prospective passengers who wanted to get booked for that flight because of the computerized booking. Melo also had no way of knowing if the cancelled reservations of private respondents were given to other passengers since another officer was in charge of this function. The peculiar circumstances in this case set it apart from Zalamea v. Court of Appeals, the case lengthily quoted by the Court of Appeals in justifying the award of moral damages. The petitioners in Zalamea were passengers of TransWorld Airlines, Inc. (―TWA‖) who held confirmed discounted tickets. Petitioners were, however, wait-listed and eventually prevented from boarding the airplane because TWA had overbooked the flight and gave preference to other passengers who were holders of full-fare tickets. TWA observed the practice of overbooking and the system of boarding priorities. We held TWA liable for moral damages because TWA did not stipulate these policies in the contract and did not inform the petitioners of the overbooked condition of the flight or of the hierarchy of priorities in booking passengers. TWA was in bad faith when, failing to thus inform petitioners when it could have easily done so, TWA kept them as passengers up to the last minute. TWA‘s conscious disregard of petitioners‘ rights made it liable not only for actual but moral damages as well. Unlike in Zalamea, bad faith is not evident in this case. It was CAL‘s hasty confirmation of the reservations of Amexco that established the contract of carriage between CAL and private respondents as evidenced by the tickets issued by Amexco to private respondents. CAL failed to honor its contract of carriage. However, CAL was not wanton or reckless in cancelling private respondents‘ reservations. CAL made the cancellation in conformity with its usual procedure, which was neither unreasonable nor arbitrary considering that CAL cancelled the reservations at the behest of Morelia. While Morelia did not issue any ticket to private respondents, on record Morelia still stood as the travel agent that booked the reservations of private respondents since neither CAL nor Morelia endorsed the booking to Amexco. Thus, when Morelia cancelled the reservations, CAL had to accede as if private respondents themselves had asked for the cancellation. Private respondents‘ names were consequently not included in the passenger‘s manifest. DAMAGES CAL‘s negligence caused it to breach its contract of carriage. CAL‘s negligence is, however, not so gross to amount to bad faith. Mere negligence, even if it causes the plaintiff to suffer mental anguish or serious fright, is not a ground for awarding moral damages. The law distinguishes a contractual breach effected in good faith from one attended by bad faith. Absent fraud or bad faith on defendant‘s part in breaching his contract, his liability for damages is limited to the natural and probable consequences of the breach of the obligation, which the parties had foreseen or could have reasonably foreseen. In such a case, the liability would not include moral damages. For this reason, not every case of mental anguish, fright or serious anxiety calls for the award of moral damages. As for exemplary damages, Article 2232 of the Civil Code provides that in a contractual or quasi-contractual relationship, exemplary damages may be awarded only if the defendant had acted in ―a wanton, fraudulent, reckless, oppressive or malevolent manner." CAL was not in bad faith and its employees did not act in a wanton, fraudulent, reckless, oppressive or malevolent manner. The award of exemplary damages is therefore unwarranted in this case. Private respondents‘ remaining claim is for actual damages. However, private respondents did not shell out any money for their CAL tickets. Amexco voided the CAL tickets when private respondents requested Amexco to book them in another airline. Amexco eventually booked their flight with Northwest. Private respondents would have been entitled to the price difference between the tickets of CAL and Northwest had the latter cost more than the former. The price difference would have been a damage reasonably attributed to CAL‘s breach of its contract of carriage because private respondents would not have flown via Northwest were it not for CAL‘s non-performance of its obligation. The evidence, however, shows that the Northwest tickets at US$625 each cost less than the CAL tickets priced at US$629 each. We cannot also order a reimbursement of the Northwest tickets because this would have enabled private respondents to fly to Los Angeles without paying any fare. As correctly pointed out by the trial and appellate courts, the costs of the airplane tickets were a necessary expense that private respondents could not pass on to CAL. Undeniably, however, private respondents suffered some form of injury. CAL confirmed the reservations of private respondents carelessly. Private respondents relied on this confirmation. Private respondents went through the trouble of going to the airport at the appointed time expecting that they would be able to board CAL Flight 632. To their consternation, CAL personnel prevented them from boarding because Morelia cancelled their reservations. When plaintiff suffers some species of injury not enough to warrant an award of actual damages, the court may award nominal damages. The court may award nominal damages PURELY TO VINDICATE a right of a plaintiff which defendant has violated and not to indemnify any loss the plaintiff has suffered. The court may award nominal damages in every obligation arising from any source enumerated in Article 1157 of the Civil Code, or in any case where there is an invasion of any property right. We find P5,000 as a reasonable award of nominal damages to each of the private respondents. 348

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Torts & Damages 2013

Atty. Jess Lopez

The fact that private respondents were compelled to litigate and incur expenses to protect and enforce their claim does not justify the award of attorney‘s fees. The court may award attorney‘s fees only in the instances mentioned in Article 2208 of the Civil Code, and this case is not one of them. Moreover, when there is no basis to award moral and exemplary damages, there is also no basis to award attorney‘s fees. 3. Sang-An v. Equator Knights Detective and Security Agency, Inc., G.R. No. 173189, February 13, 2013 Facts: Jonathan was the Assistant Operation Manager of Equator. He was tasked, among others, with the duty of assisting in the operations of the security services; he was also in charge of safekeeping Equator‟s firearms. Equator discovered that two firearms were missing from its inventory. The investigation revealed that it was Jonathan who might have been responsible for the loss. Jonathan was temporarily suspended from work pending further investigation. While Jonathan was under suspension, a security guard from Equator was apprehended by policemen for violating the Commission on Elections‘ gun ban rule. The security guard stated in his affidavit that the unlicensed firearm had been issued to him by Jonathan. Jonathan filed with the NLRC a complaint for illegal suspension with prayer for reinstatement. In his position paper, however, he treated his case as one for illegal dismissal and alleged that he had been denied due process when he was dismissed. Equator, on the other hand, argued that Jonathan‟s dismissal was not illegal but was instead for a just cause under Article 282 of the Labor Code. LA: Valid dismissal NLRC: Illegal dismissal – Just cause present but no procedural due process. CA: Valid dismissal Issue: Whether Jonathan Sang-An was validly dismissed. Held: NO. Jonathan was not merely suspended but was dismissed from the service. While Jonathan initially filed an action for illegal suspension, the position papers both parties filed treated the case as one for illegal dismissal. Jonathan did not file his complaint for illegal suspension on May 2, 2001. The records of the case disclose that the receiving date stamped on the complaint is May 24, 2001. The date relied upon by the CA, May 2, 2001, was the date when the complaint was subscribed and sworn to before a notary public. Due to the second offense committed by Jonathan on May 8, 2001, Equator decided to dismiss him. Therefore, when the LA tried the case, Jonathan had already been dismissed. b. EQUATOR FAILED TO COMPLY WITH THE PROCEDURAL DUE PROCESS. To validly dismiss an employee, it is fundamental that the employer observe both substantive and procedural due process – the termination of employment must be based on a just or authorized cause and the dismissal can only be effected, after due notice and hearing. EQUATOR COMPLIED WITH THE SUBSTANTIVE REQUIREMENTS of due process when Jonathan committed the two offenses. Article 282(A) of the Labor Code provides that an employee may be dismissed on the ground of SERIOUS MISCONDUCT or WILLFUL DISOBEDIENCE of the lawful orders of his employer or representative in connection with his work. Misconduct is improper or wrongful conduct; it is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment. The misconduct, to be serious within the meaning of the Labor Code, must be of such grave and aggravated character and not merely trivial or unimportant. It is also important that the misconduct be in connection with the employee's work to constitute just cause for his separation. By losing two firearms and issuing an unlicensed firearm, Jonathan committed serious misconduct. He did not merely violate a company policy; he violated the law itself and placed Equator and its employees at risk of being made legally liable. Thus, Equator had a valid reason that warranted Jonathan‘s dismissal from employment as Assistant Operation Manager. HOWEVER, Equator FAILED TO OBSERVE THE PROPER PROCEDURE in terminating Jonathan‘s services. Section 2, Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code provides that: 349

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Section 2. Standard of due process: requirements of notice. – In all cases of termination of employment, the following standards of due process shall be substantially observed. I. For termination of employment based on just causes as defined in Article 282 of the Labor Code: (a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; (b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence, or rebut the evidence presented against him; and (c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. Jurisprudence has expounded on the guarantee of due process, requiring the employer to furnish the employee with two written notices before termination of employment can be effected: a FIRST WRITTEN NOTICE that informs the employee of the particular acts or omissions for which his or her dismissal is sought, and a SECOND WRITTEN NOTICE which informs the employee of the employer's decision to dismiss him. In considering whether the charge in the first notice is sufficient to warrant dismissal under the second notice, the employer must afford the employee ample opportunity to be heard. Jonathan was not furnished with any written notice that informed him of the acts he committed justifying his dismissal from employment. The notice of suspension given to Jonathan only pertained to the first offense, i.e., the loss of Equator‘s firearms under Jonathan‘s watch. With respect to his second offense (i.e., the issuance of an unlicensed firearm to Equator‘s security guard – that became the basis for his dismissal), Jonathan was never given any notice that allowed him to air his side and to avail of the guaranteed opportunity to be heard. That Equator brought the second offense before the LA does not serve as notice because by then, Jonathan had already been dismissed. In order to validly dismiss an employee, the observance of both substantive and procedural due process by the employer is a condition sine qua non. Procedural due process requires that the employee be given a notice of the charge against him, an ample opportunity to be heard, and a notice of termination. Since Jonathan had been dismissed in violation of his right to procedural due process but for a JUST CAUSE, Equator should pay him NOMINAL DAMAGES of P30,000.00, in accordance with Agabon v. NLRC. 4. De Jesus v. Aquino, G.R. No. 164662, February 18, 2013 Facts: Ma. Lourdes De Jesus (De Jesus for brevity) filed with the LA a complaint for illegal dismissal against private respondents Supersonic Services Inc., Pakistan Airlines, Gil Puyat, Jr. and Divina Abad Santos praying for the payment of separation pay, full backwages, moral and exemplary damages, etc. De Jesus alleged that: she was employed by Supersonic from 1976 to 1992, she held the position of reservation staff, and from 1992 until her illegal dismissal on March 15, 2001, she held the position of Sales Promotion Officer where she solicited clients for Supersonic and sold plane tickets to various travel agencies on credit; she had an emergency hysterectomy operation preceded by continuous bleeding; she stayed at the Makati Medical Center for 3 days and applied for a (60) day leave in the meantime; on June 1, 2001, she went to Supersonic and found the drawers of her desk opened and her personal belongings packed, without her knowledge and consent; while there, Divina Abad Santos (Santos for brevity), the company‘s general manager, forced her to execute a promissory note which she merely copied from a prepared draft; was also forced to indorse to Supersonic her SSS check in the amount of P25,000.00 which represents her benefits from the hysterectomy operation; there was no notice and hearing nor any opportunity given her to explain her side prior to the termination of her employment; Supersonic even filed a case for Estafa against her for her alleged failure to remit collections despite the fact that she had completely remitted all her collections; and the termination was done in bad faith and in violation of due process. Supersonic countered that: as Sales Promotion Officer, De Jesus was fully authorized to solicit clients and receive payments for and in its behalf, and as such, she occupied a highly confidential and financially sensitive position in the company; De Jesus was able to solicit several ticket purchases for Pakistan International Airlines (PIA) routed from Manila to various destinations abroad and received all payments for the PIA tickets in its behalf; for the period starting May 30, 2000 until September 28, 2000, De Jesus issued PIA tickets to Monaliza Placement Agency, a client under her special solicitation and account, in the amount of U.S.$15,085.00; on January 24, 2001, the company‘s general manager sent a memorandum to De Jesus informing her of the official endorsement from clients under her account; in March 2001, another memorandum was issued to De Jesus reminding her to collect payments of accounts guaranteed by her and which had been past due since the year 2000; based on the company records, an outstanding balance of U.S.$36,168.39 accumulated under the account of De Jesus; after verifications with its clients, it discovered that the amount of 350 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

U.S.$36,168.39 were already paid to De Jesus but this was not turned over and duly accounted for by her; hence, another memorandum was issued to De Jesus directing her to explain in writing why she should not be dismissed for cause for failure to account for the total amount of U.S.$36,168.39; De Jesus was informed that her failure to explain in writing shall be construed that she misappropriated said amount for her own use and benefit to the damage of the company; De Jesus was likewise verbally notified of the company‘s intention to dismiss her for cause; after due investigation and confrontation, De Jesus admitted that she received the U.S.$36,168.39 from their clients and even executed a promissory note in her own handwriting acknowledging her obligation; she was fully aware of her dismissal and even obligated herself to offset her obligation with any amount she would receive from her retirement; when De Jesus failed to comply with her promise to settle her obligation, a demand letter was sent to her; because of her persistent failure to settle the unremitted collections, it was constrained to suspend her as a precautionary measure and to protect its interests; despite demands, De Jesus failed to fulfill her promise, hence, a criminal case for estafa was filed against her; and in retaliation to the criminal case filed against her, she filed this illegal dismissal case. Labor Arbiter ruled against De Jesus, declaring her dismissal to be for just cause. NLRC affirmed the Labor Arbiter‘s Decision. CA held that while the dismissal was valid, the same must be declared ineffectual and as a consequence thereof, Supersonic is hereby required to pay petitioner Maria Lourdes De Jesus full backwages from the time her employment was terminated up to the finality of this decision. Issue: (1) Whether or not Supersonic was justified in terminating De Jesus‘ employment; YES. (2) Whether or not Supersonic complied with the two-written notice rule; and (3) Whether or not De Jesus was entitled to full backwages and damages. Held: (1) Anent the FIRST ISSUE, Supersonic substantially proved that De Jesus had failed to remit and had misappropriated the amounts she had collected in behalf of Supersonic. In that regard, the factual findings of the Labor Arbiter and NLRC on the presence of the just cause for terminating her employment, being already affirmed by the CA, are binding if not conclusive upon this Court. (2) A careful consideration of the records persuades us to affirm the decision of the CA holding that Supersonic had not complied with the two written notice rule. She was still entitled to due process in order to effectively safeguard her security of tenure. The law affording to her due process as an employee imposed on Supersonic as the employer the obligation to send to her two written notices before finally dismissing her. Contrary to Supersonic‘s contention, however, the aforequoted memoranda did not satisfy the requirement for the two written notices under the law. The March 26, 2001 memorandum did not specify the grounds for which her dismissal would be sought, and for that reason was at best a mere reminder to De Jesus to submit her report on the status of her accounts. The May 12, 2001 memorandum did not provide the notice of dismissal under the law because it only directed her to explain why she should not be dismissed for cause. The latter memorandum was apparently only the first written notice under the requirement. CA ruled: As the Supreme Court held in Serrano, the violation of the notice requirement is not strictly a denial of due process. This is because such notice is precisely intended to enable the employee not only to prepare himself for the legal battle to protect his tenure of employment, but also to find other means of employment and ease the impact of the loss of his job and, necessarily, his income. Conformably with the doctrine laid down in Serrano vs. NLRC, the dismissal of De Jesus should therefore be struck (down) as ineffectual. In Serrano, the Court pronounced as follows: ―x x x, with respect to dismissals for cause under Art. 282, if it is shown that the employee was dismissed for any of the just causes mentioned in said Art. 282, then, in accordance with that article, he should not be reinstated. However, he must be paid backwages from the time his employment was terminated until it is determined that the termination of employment is for a just cause because the failure to hear him before he is dismissed renders the termination of his employment without legal effect. ― The violation by Supersonic of the two-written notice requirement rendered ineffectual the dismissal of De Jesus for just cause under Article 282 of the Labor Code, and entitled her to be paid full backwages from the time of her dismissal until the finality of its decision. The Court cannot ignore that the applicable case law when the CA promulgated its decision on July 23, 2004, and when it denied Supersonic‘s motion for reconsideration on October 21, 2004 was still Serrano. As a rule, a judicial interpretation becomes a part of the law as of the date that the law was originally passed, subject only to the qualification that when a doctrine of the Court is overruled and the Court adopts a different view, and more so when there is a reversal of the doctrine, the new doctrine should be applied prospectively and should not apply to parties who relied on the old doctrine and acted in good faith. To hold otherwise would be to deprive the law of its quality of fairness and justice, for, then, there is no recognition of what had transpired prior to such adjudication. 351

Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Although Agabon, being promulgated only on November 17, 2004, ought to be prospective, not retroactive, in its operation because its language did not expressly state that it would also operate retroactively, the Court has already deemed it to be the wise judicial course to let its abandonment of Serrano be retroactive as its means of giving effect to its recognition of the unfairness of declaring illegal or ineffectual dismissals for valid or authorized causes but not complying with statutory due process. Under Agabon, the NEW DOCTRINE is that the failure of the employer to observe the requirements of due process in favor of the dismissed employee (that is, the two-written notices rule) SHOULD NOT INVALIDATE or render ineffectual the dismissal for just or authorized cause. The Agabon Court plainly saw the likelihood of Serrano producing unfair but far-reaching consequences, such as, but not limited to, encouraging frivolous suits where even the most notorious violators of company policies would be rewarded by invoking due process; to having the constitutional policy of providing protection to labor be used as a sword to oppress the employers; and to compelling the employers to continue employing persons who were admittedly guilty of misfeasance or malfeasance and whose continued employment would be patently inimical to the interest of employers. The Agabon Court still deplored the employer‘s violation of the employee‘s right to statutory due process by directing the payment of indemnity in the form of nominal damages, the amount of which would be addressed to the sound discretion of the labor tribunal upon taking into account the relevant circumstances. Thus, the Agabon Court designed such form of damages as a deterrent to employers from committing in the future violations of the statutory due process rights of employees, and, at the same time, as at the very least a vindication or recognition of the fundamental right granted to the employees under the Labor Code and its implementing rules. Accordingly, consistent with precedent the amount of P50,000.00 as nominal damages is hereby fixed for the purpose of indemnifying De Jesus for the violation of her right to due process. E.

Temperate Damages

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Civil Code o Articles 2224 to 2225 (Memorize)

1. Equitable PCI Bank v. Tan, G.R. No. 165339, August 23, 2010 Facts: Respondent Arcelito B.Tan maintained a current and savings account with Philippine Commercial International Bank (PCIB), now petitioner Equitable PCI Bank. On May 13, 1992, respondent Tan issued a check, postdated May 30, 1992 in favor of Sulpicio Lines Inc. in the amount of P34,588.72. As of May 14, 1992, respondent's balance with PCI was P35,147.59. On May 14, 1992, Sulpicio Lines, Inc. deposited the aforesaid check. After clearing, the amount of the check was immediately debited by petitioner from respondent's account thereby leaving him with a balance of only P558.87. Meanwhile, Tan issued 3 checks from May 9 to May 16, 1992, payable to Agusan Del Sur Electric Cooperative Inc. (ASELCO) & Agusan Del Norte Electric Cooperative Inc. (ANECO). However, when presented for payment, were dishonored for being drawn against insufficient funds. As a result of the dishonour, the electric power supply for the two mini-sawmills owned and operated by respondent, located in Talacogon, Agusan del Sur; and in Golden Ribbon, Butuan City, was cut off. Respondent filed with the RTC a complaint against PCI, praying for payment of losses consisting of unrealized income in the amount of P1,864,500.00. He also prayed for payment of moral damages, exemplary damages, attorney's fees and litigation expenses. Tan contended that the check issued to Sulpicio Lines Inc. was a postdated check, and that his account with petitioner would have had sufficient funds to cover payment of the three other checks were it not for the negligence of petitioner in immediately debiting from his account the amount under the postdated check. As a consequence of petitioner's error, which brought about the dishonor of the two checks paid to ASELCO and ANECO, the electric supply to his two mini-sawmills was cut off, the business operations thereof were stopped, and purchase orders were not duly served causing tremendous losses to him. PCI, in its defense, denied that the questioned check was postdated May 30, 1992 and claimed that it was a current check dated May 3, 1992. It alleged further that the disconnection of the electric supply to respondent's sawmills was not due to the dishonor of the checks, but for other reasons not attributable to the bank. The RTC ruled in favor of PCI. Naturally the CA reversed, wherein it directed PCI to pay Tan the sum of P1,864,500.00 as actual damages, P50,000.00 by way of moral damages, P50,000.00 as exemplary damages and attorney's fees in the amount of P30,000.00.

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Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

Issue: (1) Whether the check issued to Sulpicio Lines was indeed a post-dated check (2) Whether the award of damages was proper. Held: (1) YES. Negotiable Instruments mumbo jumbo. (2) AWARD OF DAMAGES NOT PROPER ACTUAL DAMAGES Actual or compensatory damages are those awarded in order to compensate a party for an injury or loss he suffered. To recover actual damages, not only must the amount of loss be capable of proof; it must also be actually proven with a reasonable degree of certainty, premised upon competent proof or the best evidence obtainable. Respondent's claim for damages was based on purchase orders from various customers which were allegedly not met due to the disruption of the operation of his sawmills. However, aside from the purchase orders and his testimony, respondent failed to present competent proof on the specific amount of actual damages he suffered during the entire period his power was cut off. No other evidence was provided by respondent to show that the foregoing purchase orders were not met or were canceled by his various customers. The Court cannot simply rely on speculation, conjecture or guesswork in determining the amount of damages. Moreover, an examination of the purchase orders and job orders reveal that the orders were due for delivery prior to the period when the power supply of respondent's two sawmills was cut off. Given the dearth of respondent's evidence on the matter, the Court resolves to delete the award of actual damages rendered by the CA in favor of respondent for his unrealized income. TEMPERATE DAMAGES Nonetheless, in the absence of competent proof on the actual damages suffered, respondent is entitled to temperate damages. Under Article 2224, temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty. The allowance of temperate damages when actual damages were not adequately proven is ULTIMATELY A RULE DRAWN FROM EQUITY, the principle affording relief to those definitely injured who are unable to prove how definite the injury. It is apparent that respondent suffered pecuniary loss. The negligence of petitioner triggered the disconnection of his electrical supply, which temporarily halted his business operations and the consequent loss of business opportunity. However, due to the insufficiency of evidence before Us, We cannot place its amount with certainty. Article 2216 of the Civil Code instructs that assessment of damages is left to the discretion of the court according to the circumstances of each case. Under the circumstances, the sum of P50,000.00 as temperate damages is reasonable. MORAL DAMAGES Anent the award of moral damages, it is settled that moral damages are meant to compensate the claimant for any physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injuries unjustly caused. In Philippine National Bank v. Court of Appeals, the Court held that a bank is under obligation to treat the accounts of its depositors with meticulous care whether such account consists only of a few hundred pesos or of millions of pesos. Responsibility arising from negligence in the performance of every kind of obligation is demandable. While petitioner's negligence in that case may not have been attended with malice and bad faith, the banks' negligence caused respondent to suffer mental anguish, serious anxiety, embarrassment and humiliation. In that case, it was ruled that respondent therein was entitled to recover reasonable moral damages. In this case, the unexpected cutting off of respondent's electricity, which resulted in the stoppage of his business operations, had caused him to suffer humiliation, mental anguish and serious anxiety. The award of P50,000.00 is reasonable, considering the reputation and social standing of respondent. As found by the CA, as an accredited supplier, respondent had been reposed with a certain degree of trust by various reputable and well- established corporations. EXEMPLARY DAMAGES On the award of exemplary damages, Article 2229 of the Civil Code states: Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages. The law allows the grant of exemplary damages to set an example for the public good. The banking system has become an indispensable institution in the modern world and plays a vital role in the economic life of every civilized society. Whether as mere passive entities for the safekeeping and saving of money or as active instruments of business and commerce, banks have attained an ubiquitous presence among the people, who have come to regard them with respect and even gratitude and most of all, confidence. For this reason, banks should guard against injury attributable to negligence or bad faith on its part. Without a doubt, it has been repeatedly emphasized that since the banking business 353 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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is impressed with public interest, of paramount importance thereto is the trust and confidence of the public in general. Consequently, the highest degree of diligence is expected, and high standards of integrity and performance are even required of it. Petitioner, having failed in this respect, the award of exemplary damages in the amount of P50,000.00 is in order. ATTORNEY‘S FEES As to the award of attorney's fees, Article 2208 of the Civil Code provides, among others, that attorney's fees may be recovered when exemplary damages are awarded or when the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest. Respondent has been forced to undergo unnecessary trouble and expense to protect his interest. The Court affirms the appellate court‘s award of attorney‘s fees in the amount of P30,000.00. 2. People v. Murcia, G.R. No. 182460, March 9, 2010 Facts: Eulogio Quilates owns a 2-storey house in La Union. It is occupied by his sisters Felicidad and Alicia, nephew Herminio, and Murcia who was Felicidad‘s adopted son. On March 24, 2004, Murcia was having a drinking spree with Herminio and other relatives in front of their house. Murcia and Herminio had an argument over who would take care of Felicidad. Thereafer, Murcia went inside the house to get a bolo and emerged 10 minutes later to chase Herminio who was able to escape. After Murcia was pacified by his other drinking buddies, he went inside the house. Then, smoke was seen building up from the Murcia‘s room. Awitness testified that Murcia started burning his clothes. When the occupants outside the house went inside to save their belongings from the fire, they found Felicidad and Alicia bloodied from stab wounds. The fire spread quickly and 8 neighboring houses were razed. Alicia survived but Felicidad died due to the burns sustained from the fire as indidcated by her autopsy. Two informations were filed. One for ARSON and one for FRUSTRATED HOMICIDE as regards Alicia. On May 2006, RTC ruled that Murcia was guilty beyond reasonable doubt for both. Thus: WHEREFORE, in Crim. Case No. 2979-Bg., the Court FINDS and DECLARES the accused JESSIE VILLEGAS MURCIA, guilty beyond reasonable doubt of the crime of arson as charged and defined under Art. 320 of the Revised Penal Code, as amended by R.A. No. 7659, and he is hereby sentenced to suffer the extreme penalty of death; to indemnify the heirs of the victim Felicidad Quilates, the amount of Php50,000.00 as moral damages; Php50,000.00 as death indemnity; Php10,000.00 as actual damages and another Php10,000.00 as temperate damages. Further, the accused is ordered to indemnify Eulogio Quilates the amount of P250,000.00, representing the value of the burned house. The Court likewise FINDS and DECLARES the accused JESSIE VILLEGAS MURCIA guilty beyond reasonable doubt of the crime of frustrated homicide as charged and he is hereby sentenced to suffer the indeterminate penalty of FOUR (4) YEARS of prision correccional as minimum, to TEN (10) YEARS of prision mayor as maximum; to pay the victim Alicia Q. Manlupig the amount of Php10,000.00 as temperate damages; and to pay the costs. The trial court found that the corpus delicti in arson, as well as the identity of the perpetrator, were established beyond reasonable doubt by the prosecution. While there was no evidence to directly link appellant to the crime, the trial court relied on circumstantial evidence. In view of the penalty imposed, the case was forwarded to the CA for automatic review and judgment. The CA affirmed the trial court‘s findings but reduced the penalty from death to reclusion perpetua. Hence, this appeal which is only limited to the crime of arson since Murcia already admitted to the frustrated homicide. Issue: (1) Whether the conviction for arson was proper considering there was no direct evidence presented. (2) Whether the amount of damages are proper. (Relevant portion) Held: (1) YES. Direct evidence is not the sole means of establishing guilt beyond reasonable doubt. Established facts that form a chain of circumstances can lead the mind intuitively or impel a conscious process of reasoning towards a 354

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conviction. Indeed, rules on evidence and principles in jurisprudence have long recognized that the accused may be convicted through circumstantial evidence. In order to justify a conviction upon circumstantial evidence, the combination of circumstances must be such as to leave no reasonable doubt in the mind as to the criminal responsibility of the accused. Indeed, Murcia was last seen inside the house before the fire started. Eulogio and Ricky saw smoke emanating from the room of appellant. Herminio testified that he saw appellant burning clothes in his room. Murcia then went on a stabbing rampage while the house was on fire. While nobody directly saw appellant burn the house, these circumstances would yield to a logical conclusion that the fire that gutted 8 houses was authored by Murcia. Thus, the conviction and the penalty imposed is sustained. (2) NO. With respect to the heirs of Felicidad, We modify the amount of TEMPERATE DAMAGES from P10,000.00 to P25,000.00, and accordingly delete the amount of actual damages, in line with the ruling in People v. Villanueva. In said case, the Court held that when actual damages proven by receipts during the trial amount to less than P25,000.00, the award of temperate damages for P25,000.00 is justified in lieu of actual damages of a lesser amount. Anent the actual damages awarded to Eulogio amounting to P250,000.00, as indemnification for the burned house, We note that said amount representing the value of the burned house was merely given by Eulogio as an estimate. It was not substantiated by any document or receipt. For one to be entitled to actual damages, it is necessary to prove the actual amount of loss with a reasonable degree of certainty, premised upon competent proof and the best evidence obtainable by the injured party. Instead, We award TEMPERATE DAMAGES in accordance with Art. 2224 of the Civil Code, providing that temperate damages may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proven with certainty. It is thus reasonable to expect that the value of the house burned down amounted to at least P200,000.00. WHEREFORE, the appealed decision finding appellant JESSIE VILLEGAS MURCIA guilty beyond reasonable doubt of the crime of arson and sentencing him to reclusion perpetua is AFFIRMED with MODIFICATIONS: (1) Appellant is ordered to indemnify the heirs of Felicidad Quilates the amount of P50,000.00 as moral damages; P50,000.00 as death indemnity; and P25,000.00 as temperate damages. (2) The award of P10,000.00 as actual damages in favor of the heirs of Felicidad Quilates is deleted. (3) Appellant is ordered to pay Eulogio Quilates the amount of P200,000.00 as temperate damages. The award of P250,000.00 as actual damages in favor of Eulogio Quilates is deleted. 3. People v. Gutierrez, G.R. No. 188602, February 4, 2010 Facts: On August 15, 2003, 5 separate Informations for murder, frustrated murder and 3 counts of attempted murder were filed against appellant. When arraigned, appellant, with the assistance of counsel de oficio, entered a plea of not guilty to the charges. Trial on the merits then ensued. Prosecution‘s version as follows: On May 17, 2003 at nine o‘clock in the evening, the deceased Leo Salvador Regis, private complainants Randy Marcelo, Jefferson Gallemit, Jaypee Boneo and Alexis Dalit were talking to each other in front of the house of the deceased at 477 Narra St., Cembo, Makati City. They noticed the presence of appellant along the street and thought that appellant would just pass by. However, when appellant was two (2) arms length away in front of them, appellant suddenly raised his arm and shot the deceased Regis with a .45 caliber pistol. After he was hit on the chest, Regis said ―ARAY!,‖ embraced Randy Marcelo who was seated on his left, and fell off his chair to the ground.

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Jefferson Gallemit, Jaypee Boneo and Alexis Dalit stood from their seats. Appellant fired several shots thereafter, one of which hit Dalit‘s arm. Boneo and Gallemit ran up the street while Dalit ran in the opposite direction and hid behind a car. In the meantime, the deceased Leo Salvador Regis and Randy Marcelo were still huddled together at the spot where the deceased fell. Appellant stayed at the same spot where he fired the first shot even after the three ran away . Appellant then pursued Dalit down the street but did not catch him, prompting appellant to say: ―Pagnaabutan ko kayo, pagpapatayin ko kayo!‖ Dalit then sought refuge at Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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BLISS Makati and contacted the police from there. The police arrived at the scene after twenty (20) minutes. Dalit was brought to the Ospital ng Makati where his wound was dressed. He was operated on at the Philippine Orthopedic Hospital. Regis was brought to the Ospital ng Makati by Randy Marcelo where he died that night. Appellant for his part asserted self-defense. He testified that: At around 8 o‘clock p.m. of May 17, 2003, he went to an ihaw-ihaw restaurant with live band in Guadalupe in order to relax. After taking two (2) bottles of beer, he decided to go home, took a jeepney ride and alighted in front of a bakery owned by Barangay Captain Leo Magbantay, one hundred twenty (120) meters away from his house. While passing by, he noticed a group of five youngsters who were at the right side of the street. Among them, he only knew Loloy (Jaypee) Boneo, whom he used to babysit when the latter was still young. While walking, one in the group cursed him and shouted ―TANG INA MO!‖ Since he was the only passerby, he stopped and looked at them, but two (2) from the group approached him. He was suddenly boxed by Regis Ado, while Dalit was just beside Ado. When he fell on the ground, Ado continuously beat him, then suddenly, a gun fell from Leo Regis. He immediately got hold of it, and when Leo Regis was supposed to attack him again, he kicked Leo which made him [to fall] down. When he stood up and saw Regis standing up, he fired a shot at him. He continuously fired the gun, which was directed towards the ground so as to warn the others. Thereafter, he fled the scene, and threw the gun on a vacant lot. Since he did not know what to do, and confused, he took a jeepney going to Pateros, but since, he had no money, he alighted somewhere, and rested. When he finally regained his senses, he went to Cubao and borrowed money from one of their retailers. Not finding credence in appellant's claim of self-defense, the RTC convicted him of murder, frustrated murder and attempted murder on three (3) counts: 1) in murder case 1: for murder of Leo Salvador E. Regis, the court hereby sentences him to suffer the penalty of imprisonment reclusion perpetua, to pay the heirs of the victim the sum of P50,000.00 as civil indemnity and the amount of Php 102,337.25 as actual damages; 2) in case 2: for the frustrated murder committed against Alexis B. Dalit, the [c]ourt hereby sentences him to suffer the penalty of imprisonment of 8 years and 20 days as minimum to 14 years, 10 months and 20 days as maximum and to indemnify the sum of Php 22,596.50, representing the victim‘s expenses for medical services and medicine; (di ko na sinama ung decision sa case 3-5) Appeal. On March 12, 2009, the CA rendered the assailed Decision, affirming, but with modifications, the RTC decision, viz.: WHEREFORE, premises considered, the 7 August 2006 decision of the Regional Trial Court of Makati City (Branch 62) in Criminal Case No. 03-3639 for murder is AFFIRMED with MODIFICATION as to the award of damages. The award of actual damages in favor of the heirs of Leo Salvador E. Regis is reduced to P42,337.25. Moral damages of P50,000.00, temperate damages of P10,000.00, and exemplary damages of P10,000.00 are additionally awarded to the heirs of Leo Salvador E. Regis. The 7 August 2006 decision of the Regional Trial Court of Makati City (Branch 62) in Criminal Case No. 03-3640 for frustrated murder is MODIFIED. Accused-appellant Ford D. Gutierrez is found GUILTY of committing the crime of ATTEMPTED MURDER and sentenced to suffer the indeterminate imprisonment of two (2) years, four (4) months and one (1) day of prision correccional, as minimum, to eight (8) years and one (1) day of prision mayor, as maximum. The award of actual damages in favor of the victim Alexis B. Dalit is AFFIRMED. Issue: Whether the conviction was proper and whether the damages awarded was proper. Held: CRIM PART 356

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Appellant assails the trial court and the CA for giving credence to the prosecution‘s evidence. He admits having killed Regis and wounding Dalit, but insists that he did so in self-defense. Self-defense is an affirmative allegation and offers exculpation from liability for crimes only if satisfactorily proved. It requires (a) unlawful aggression on the part of the victim; (b) reasonable necessity of the means employed by the accused to repel it; and (c) lack of sufficient provocation on his part. By invoking self-defense, the burden is placed on the accused to prove its elements clearly and convincingly. While all three elements must concur, self-defense relies first and foremost on proof of unlawful aggression on the part of the victim. If no unlawful aggression is proved, no self-defense may be successfully pleaded. In this case, appellant utterly failed to discharge the burden of proving unlawful aggression. His version of the events was uncorroborated, and his testimony was found to be less credible by the trial court. On the other hand, the surviving victims were unanimous that appellant suddenly fired at them, without any provocation on their part. The credibility of the prosecution witnesses had been weighed by the trial court, and it found their testimonies to be more convincing. The trial court and the CA cannot, therefore, be faulted for rejecting appellant‘s plea of self-defense. This Court also agrees with the trial court in appreciating treachery as a qualifying circumstance. The pieces of evidence gleaned by the trial court, the facts, are enough to show that treachery was employed by appellant. The attack was sudden, as testified to by the witnesses, and unexpected. Provocation on the part of the victims was not proven, and appellant‘s testimony that the victims were about to attack him cannot be given credence. The victims had no inkling that an attack was forthcoming and had no opportunity to mount a defense. Thus, treachery was correctly appreciated as a circumstance to qualify the crime to murder. We also affirm the CA ruling that appellant is guilty of attempted murder, not of frustrated murder, in Criminal Case No. 03-3640 for the injury sustained by Dalit. No convincing proof was offered to show that the wound inflicted on Dalit was fatal and would have caused his death had medical help not been provided. It is well settled that where the wounds inflicted on the victim are not sufficient to cause his death, the crime is only attempted murder, as the accused had not performed all the acts of execution that would have brought about the victim's death. DAMAGES PART And now, the award of damages. When death occurs due to a crime, the following may be recovered: (1) civil indemnity ex delicto for the death of the victim; (2) actual or compensatory damages; (3) moral damages; (4) exemplary damages; (5) attorney's fees and expenses of litigation; and (6) interest, in proper cases. The CA awarded P42,337.25 as actual damages and P10,000.00 as temperate damages to the heirs of Regis. In People v. Villanueva and People v. Abrazaldo, we ruled that temperate and actual damages are mutually exclusive in that BOTH MAY NOT BE AWARDED AT THE SAME TIME. Hence, no temperate damages may be awarded if actual damages have already been granted. The award of P10,000.00 as temperate damages must, therefore, be deleted. The grant of P50,000.00 as civil indemnity and P50,000.00 as moral damages is proper, and thus, we sustain the same. In murder, the grant of civil indemnity, which has been fixed by jurisprudence at P50,000.00, requires no proof other than the fact of death as a result of the crime and proof of the accused's responsibility therefor. Moral damages, on the other hand, are awarded in view of the violent death of the victim. There is no need for any allegation or proof of the emotional sufferings of the heirs. Likewise, the award of exemplary damages is warranted when the commission of the offense is attended by an aggravating circumstance, whether ordinary or qualifying, as in this case. Accordingly, we sustain the CA‘s award of exemplary damages to the heirs of Regis, but we increase the award to P30,000.00. Similarly, we affirm the award of P22,596.50 as actual damages to Dalit, who is, likewise, entitled to moral damages, which this Court fixes in the amount of P40,000.00. Ordinary human experience and common sense dictate that the wounds inflicted on the surviving victims would naturally cause physical suffering, fright, serious anxiety, moral shock, and similar injuries. Finally, the award in the amount of P20,000.00, as exemplary damages to Dalit, is also in order considering that the crime was attended by the qualifying circumstance of treachery.

4. Ramos v. Court of Appeals, 321 SCRA 584 (1999) I ASSUME THAT YOU KNOW THE FACTS. DAMAGES Petitioners seek the reversal of the decision of the Court of Appeals. Finding private respondents liable for damages arising from negligence in the performance of their professional duties towards petitioner Erlinda Ramos resulting in her comatose condition. Petitioners filed a civil case for damages with the Regional Trial Court of Quezon City against herein 357 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

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private respondents alleging negligence in the management and care of Erlinda Ramos. Regional Trial Court rendered judgment in favor of petitioners. The defendants were guilty of, at the very least, negligence in the performance of their duty to plaintiffpatient Erlinda Ramos. Accordingly, the latter are ordered to pay, jointly and severally, the former the following sums of money, to wit: 1) the sum of P8,000.00 as actual monthly expenses for the plaintiff Erlinda Ramos reckoned from November 15, 1985 or in the total sum of P632,000.00 as of April 15, 1992, subject to its being updated; 2) thesumofP100,000.00asreasonableattorney‘sfees; 3) the sum of P800,000.00 by way of moral damages and the further sum of P200,000.00 by way of exemplary damages; and, 4) the costs of the suit. Court of Appeals reversing amount of damages due petitioners. WHEREFORE, for the foregoing premises the appealed decision is hereby REVERSED, and the complaint below against the appellants is hereby ordered DISMISSED. The counterclaim of appellant De Los Santos Medical Center is GRANTED but only insofar as appellees are hereby ordered to pay the unpaid hospital bills amounting to P93,542.25, plus legal interest for justice must be tempered with mercy. Held: The trial court awarded a total of P632,000.00 pesos (should be P616,000.00) in compensatory damages to the plaintiff, ―subject to its being updated‖ covering the period from 15 November 1985 up to 15 April 1992, based on monthly expenses for the care of the patient estimated at P8,000.00. At current levels, the P8,000/monthly amount established by the trial court at the time of its decision would be grossly inadequate to cover the actual costs of homebased care for a comatose individual. The calculated amount was not even arrived at by looking at the actual cost of proper hospice care for the patient. What it reflected were the actual expenses incurred and proved by the petitioners after they were forced to bring home the patient to avoid mounting hospital bills. And yet ideally, a comatose patient should remain in a hospital or be transferred to a hospice specializing in the care of the chronically ill for the purpose of providing a proper milieu adequate to meet minimum standards of care. In the instant case for instance, Erlinda has to be constantly turned from side to side to prevent bedsores and hypostatic pneumonia. Feeding is done by nasogastric tube. Food preparation should be normally made by a dietitian. She has to be seen on a regular basis by a physical therapist to avoid muscle atrophy, and by a pulmonary therapist to prevent the accumulation of secretions which can lead to respiratory complications. The amount of actual damages recoverable in suits arising from negligence should at least reflect the correct minimum cost of proper care, not the cost of the care the family is usually compelled to undertake at home to avoid bankruptcy. However, the provisions of the Civil Code on actual or compensatory damages present us with some difficulties. Actual damages which may be claimed by the plaintiff are those suffered by him as he has duly proved. Art. 2199.—Except 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. Such compensation is referred to as actual or compensatory damages. Our rules on actual or compensatory damages generally assume that at the time of litigation, the injury suffered as a consequence of an act of negligence has been completed and that the cost can be liquidated. However, these provisions neglect to take into account those situations, as in this case, where the resulting injury might be continuing and possible future complications directly arising from the injury, while certain to occur, are difficult to predict. In these cases, the amount of damages which should be awarded, if they are to adequately and correctly respond to the injury caused, should be one which compensates for pecuniary loss incurred and proved, up to the time of trial; and one which would meet pecuniary loss certain to be suffered but which could not, from the nature of the case, be made with certainty. In other words, temperate damages can and should be awarded on top of actual or compensatory damages in instances WHERE THE INJURY IS CHRONIC AND CONTINUING. And because of the unique nature of such cases, no incompatibility arises when both actual and temperate damages are provided for. The reason is that these damages cover two distinct phases. As it would not be equitable for the victim in such cases to constantly come before the courts and invoke their aid in seeking adjustments to the compensatory damages previously awarded — temperate damages are appropriate. The amount given as temperate damages, though to a certain extent speculative, should take into account the cost of proper care. Petitioners were able to provide only homebased nursing care for a comatose patient who has remained in that condition for over a decade. Having premised our award for compensatory damages on the amount provided by petitioners at the onset of litigation, it would be now much more in step with the interests of justice if the value awarded for temperate damages would allow petitioners to provide optimal care for their loved one in a facility which generally specializes in such care. 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professionals, for anything less would be grossly inadequate. Under the circumstances, an award of P1,500,000.00 in temperate damages would therefore be reasonable. In Valenzuela vs. Court of Appeals, the injury suffered by the plaintiff would have led to expenses which were difficult to estimate because while they would have been a direct result of the injury (amputation), and were certain to be incurred, they were likely to arise only in the future. We awarded P1,000,000.00 in moral damages. She will be required to undergo adjustments in her prosthetic devise due to the shrinkage of the stump from the process of healing. These adjustments entail costs, prosthetic replacements and months of physical and occupational rehabilitation and therapy. During her lifetime, the prosthetic devise will have to be replaced and readjusted. In other words, the damage done to her would not only be permanent and lasting, it would also be permanently changing and adjusting to the physiologic changes which her body would normally undergo through the years. The injury suffered by Erlinda as a consequence of private respondents‘ negligence is certainly much more serious than the amputation in the Valenzuela case. Ramos was in her midforties when the incident occurred. She has been in a comatose state for over fourteen years now. The burden of care has so far been heroically shouldered by her husband and children. The actual physical, emotional and financial cost of the care of petitioner would be virtually impossible to quantify. Even the temperate damages herein awarded would be inadequate if petitioner‘s condition remains unchanged for the next ten years. We recognized, in Valenzuela that a discussion of the victim‘s actual injury would not even scratch the surface of the resulting moral damage because it would be highly speculative to estimate the amount of emotional and moral pain, psychological damage and injury suffered by the victim or those actually affected by the victim‘s condition. They have fashioned their daily lives around the nursing care of petitioner, altering their long term goals to take into account their life with a comatose patient. They, not the respondents, are charged with the moral responsibility of the care of the victim. For the foregoing reasons, an award of P2,000,000.00 in moral damages would be appropriate. Finally, by way of example, exemplary damages in the amount of P100,000.00 are hereby awarded. Attorney‘s fees valued at P100,000.00 are likewise proper. WHEREFORE, the decision and resolution of the appellate court appealed from are hereby modified so as to award in favor of petitioners, and solidarily against private respondents the following: 1) P1,352,000.00 as actual damages computed as of the date of promulgation of this decision plus a monthly payment of P8,000.00 up to the time that petitioner Erlinda Ramos expires or miraculously survives; 2) P2,000,000.00 as moral damages; 3) P1,500,000.00 as temperate damages; 4) P100,000.00 each as exemplary damages and attorney‘s fees; and, 5) the costs of the suit. Liquidated Damages -

Civil Code o Articles 2226 to 2228 (Memorize)

1. Azcuna v. Court of Appeals, G.R. No. 116665, March 20, 1996 DOCTRINE: The rule that ―the only damages that can be recovered in an ejectment suit are the fair rental value or the reasonable compensation for the use and occupation of the real property‖ does not apply where the additional award consists of stipulated liquidated damages. The freedom of the contracting parties to make stipulations in their contract provided they are not contrary to law, morals, good customs, public order or public policy is settled. F.

Exemplary Damages

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Civil Code o Articles 2229 to 2235 (Memorize)

1. Makabali v. Court of Appeals, G.R. No. L-46877, January 22, 1988 DOCTRINE: 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.

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MORAL V. EXEMPLARY DAMAGES While moral damages have to do with injury personal to the awardee, such as physical suffering and the like, exemplary damages are imposed by way of example or correction for the public good. In the award of damages that the claimant must have SATISFACTORILY PROVEN during the trial the existence of the factual basis of the damages and its causal connection to defendant‘s acts. 2. People v. Catubig, 363 SCRA 62 (2001) DOCTRINE: Also known as ―punitive‖ or ―vindictive‖ damages, exemplary or corrective damages are intended to serve as a deterrent to serious wrongdoings and as a vindication of undue sufferings and wanton invasion of the rights of an injured or a punishment for those guilty of outrageous conduct. These terms are generally, but not always, used interchangeably. In COMMON LAW, there is preference in the use of exemplary damages when the award is to account for injury to feelings and for the sense of indignity and humiliation suffered by a person as a result of an injury that has been maliciously and wantonly inflicted, the theory being that there should be compensation for the hurt caused by the highly reprehensible conduct of the defendant — associated with such circumstances as willfulness, wantonness, malice, gross negligence or recklessness, oppression, insult or fraud or gross fraud — that intensifies the injury. The terms punitive or vindictive damages are often used to refer to those species of damages that may be awarded against a person to punish him for his outrageous conduct. In either case, these damages are intended in good measure to deter the wrongdoer and others like him from similar conduct in the future. CIVIL LAW CONCEPT OF ―AGGRAVATING CIRCUMSTANCES‖ The term ―aggravating circumstances‖ used by the Civil Code, the law not having specified otherwise, is to be understood in its broad or generic sense. Unlike the criminal liability which is basically a State concern, the award of damages, however, is likewise, if not primarily, intended for the offended party who suffers thereby. It would make little sense for an award of exemplary damages to be due the private offended party when the aggravating circumstance is ordinary but to be withheld when it is qualifying. Withal, the ordinary or qualifying nature of an aggravating circumstance is a distinction that should only be of consequence to the criminal, rather than to the civil, liability of the offender. In fine, relative to the civil aspect of the case, an aggravating circumstance, whether ordinary or qualifying, should entitle the offended party to an award of exemplary damages within the unbridled meaning of Article 2230 of the Civil Code. 3. People v. Dalisay, G.R. No. 188106, November 25, 2009 DOCTRINE: Prior to the effectivity of the Revised Rules of Criminal Procedure, courts generally awarded exemplary damages in criminal cases when an aggravating circumstance, whether ordinary or qualifying, had been proven to have attended the commission of the crime, EVEN IF THE SAME WAS NOT ALLEGED IN THE INFORMATION. This is in accordance with the aforesaid Article 2230. HOWEVER, with the promulgation of the Revised Rules, courts no longer consider the aggravating circumstances not alleged and proven in the determination of the penalty and in the award of damages. Thus, even if an aggravating circumstance has been proven, but was not alleged, courts will not award exemplary damages. Being corrective in nature, exemplary damages, therefore, can be awarded, not only in the presence of an aggravating circumstance, but also where the circumstances of the case show the HIGHLY REPREHENSIBLE or OUTRAGEOUS CONDUCT OF THE OFFENDER. In much the same way as Article 2230 prescribes an instance when exemplary damages may be awarded, Article 2229, the main provision, lays down the very basis of the award. Examples: (1) To deter other fathers with perverse tendencies or aberrant sexual behavior from sexually abusing their own daughters. (2) Moral corruption, perversity and wickedness of the accused in sexually assaulting a pregnant married woman. (3) To set a public example, to serve as deterrent to elders who abuse and corrupt the youth, and to protect the latter from sexual abuse. 4. Mecenas v. Court of Appeals, 180 SCRA 83, December 14, 1989 DOCTRINE: Exemplary damages are designed by our civil law to permit the courts to reshape behaviour that is socially deleterious in its consequence by creating negative incentives or deterrents against such behaviour.

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Torts & Damages 2013

Atty. Jess Lopez

In requiring compliance with the standard of extraordinary diligence, a standard which is in fact that of the highest possible degree of diligence, from common carriers and in creating a presumption of negligence against them, the law seeks to compel them to control their employees, to tame their reckless instincts and to force them to take adequate care of human beings and their property. 5. Munsayac v. De Lara, G.R. No. L-21151, June 26, 1968 Facts: As a result of injuries suffered by the Munsayac while riding as a passenger on a jeepney owned and operated by the De Lara, this action for recovery of damages was filed in the CFI of Rizal (Pasig). The trial Judge found the driver recklessly negligent: he drove at an excessive speed, unmindful of the fact that the road was under repair and heedless of the passengers‘ pleas that he go more slowly. Besides the award of compensatory damages for actual expenses incurred and loss of income, the defendant was ordered to pay P1,000.00 as exemplary damages and P500.00 as attorney‟s fees. On these last 2 items the De Lara appealed to the CA, which rendered a judgment of affirmance, quoting the trial Court‘s justification for the award as follows: The defendant‘s admission that the accident happened and the plaintiff‘s extensive injuries as a result thereof, despite which the defendant failed, or even refused, to placate the sufferings of plaintiff, necessitating the filing of this action, entitled plaintiff to exemplary damages — to set an example to others — and attorney‘s fees. DE LARA POINTS OUT that the act referred to in Article 2232 must be one which is coetaneous with and characterizes the breach of the contract on which the suit is based, and not one which is subsequent to such breach and therefore has no causal relation thereto, such as the failure of De Lara to placate the sufferings of the plaintiff. De Lara relies on the case of Rotea vs. Halili, where this Court held: According to the rule adopted by many courts, a principal or master can be held liable for exemplary or punitive damages based upon the wrongful act of his agent or servant ONLY where he participated in the doing of such wrongful act or has previously authorized or subsequently ratified it with full knowledge of the facts. Reasons given for this rule are that since damages are penal in character, the motive authorizing their infliction will not be imputed by presumption to the principal when the act is committed by an agent or servant, and that since they are awarded not by way of compensation, but as a warning to others, they can only be awarded against one who has participated in the offense, and the principal therefore cannot be held liable for them merely by reason of wanton, oppressive or malicious intent on the part of the agent. Issue: Whether the award of exemplary damages and attorney‘s fees are proper. Held: As regards exemplary damages, NO. We believe the point of the De Lara is well-taken. EXEMPLARY DAMAGES The Civil Code provides that ―exemplary or corrective damages are imposed, by way of example or correction for the public good‖ and that IN CONTRACTS ―the Court may award exemplary damages if the defendant acted in wanton, fraudulent, reckless, oppressive or malevolent manner.‖ It is difficult to conceive how De Lara, in a breach of contract case, could be held to have acted in a wanton, fraudulent, reckless, oppressive or malevolent manner within the meaning of Article 2232 for something he did or did not do after the breach, which had no causal connection therewith. The law does not contemplate a vicarious liability on his part: the breach is his as party to the contract, and so if he is to be held liable at all for exemplary damages by reason of the wrongful act of his agent, it must be shown that he had previously authorized or knowingly ratified it thereafter, in effect making him a co-participant. From the decision under review, however, there is nothing to show previous authority or subsequent ratification by De Lara insofar as the recklessness of the driver was concerned. The mere statement that the defendant failed, even refused, to placate the suffering of the plaintiff, necessitating the filing of the action, is too tenuous a basis to warrant the conclusion that the defendant approved of the wrongful act of his servant with full knowledge of the facts. It is NOT ENOUGH TO SAY THAT AN EXAMPLE SHOULD BE MADE, or corrective measures employed, for the public good, especially in accident cases where public carriers are involved. For the causative negligence in such cases is PERSONAL TO THE EMPLOYEES ACTUALLY IN CHARGE OF THE VEHICLES, and it is they who should be made to pay this kind of 361 Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013

Atty. Jess Lopez

damages by way of example or correction, unless by the demonstrated tolerance or approval of the owners they themselves can be held at fault and their fault is of the character described in Article 2232 of the Civil Code. Otherwise there would be practically no difference between their liability for exemplary damages and their liability for compensatory damages, which needs no proof of their negligence since the suit is predicated on breach of contract and due diligence on their part does not constitute a defense. 6. Kapalaran Bus Line v. Coronado, G.R. No. 85331, August 25, 1989 DOCTRINE: In requiring the highest possible degree of diligence from common carriers and creating a presumption of negligence against them, the law compels them to curb the recklessness of their drivers. The law seeks to stop and prevent the slaughter and maiming of people (whether passengers or not) and the destruction of property (whether freight or not) on our highways by buses, the very size and power of which seem often to inflame the minds of their drivers. Article 2231 of the Civil Code explicitly authorizes the imposition of exemplary damages in cases of quasi-delicts ―if the defendant acted with gross negligence.‖ Thus we believe that the award of exemplary damages by the trial court was quite proper, although granted for the wrong reason, and should not only be restored but augmented in the present case. 7. Quezon City Government v. Dacara, G.R. No. 150304, June 15, 2005  Supra DOCTRINE: 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. 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. The negligence must amount to a reckless disregard for the safety of persons or property. EXEMPLARY DAMAGES MAY BE AWARDED TO LGUS 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. Public policy requires such imposition to suppress wanton acts of an offender. 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. G.

Mitigation of Damages

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Civil Code o Articles 2203 to 2204, and 2214 to 2215 (Memorize)

1. Velasco v. Manila Electric Co., G.R. No. L-18390, August 6, 1971 DOCTRINE: The general rule is that everyone is bound to bear the habitual or customary inconveniences that result from the proximity of others, and so long as this level is not surpassed, he may not complain against them. But if the prejudice exceeds the inconveniences that such proximity habitually brings, the neighbor who causes such disturbance is held responsible for the resulting damage, being guilty of causing nuisance. NOISE AS ACTIONABLE NUISANCE A noise may constitute an actionable nuisance, but it must be a noise which affects injuriously the health or comfort of ordinary people in the vicinity to an unreasonable extent. Injury to a particular person in a peculiar position or of specially sensitive characteristics will not render the noise an actionable nuisance. In the conditions of present living noise seems inseparable from the conduct of many necessary occupations. Its presence is a nuisance in the popular sense in which that word is used, but in the absence of statute noise becomes actionable only when it passes the limits of reasonable adjustment to the conditions of the locality and of the needs of the listener. What those limits are cannot be fixed by any definite measure of quantity or quality. They depend upon the circumstances of the particular case. They may be affected, but are not controlled, by zoning ordinances. The delimitation of designated areas to use for manufacturing, industry or general business is not a license to emit every noise profitably attending the conduct of any one of them. Commercial and industrial activities which are lawful in themselves may become nuisances if they are so offensive to the senses that they render the enjoyment of life and property uncomfortable. The DETERMINING FACTOR when noise alone is the cause of complaint is not its intensity or volume. It is that the noise is of such character as to produce actual physical discomfort and annoyance to a person of ordinary sensibilities, 362

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Torts & Damages 2013

Atty. Jess Lopez

rendering adjacent property less comfortable and valuable. If the noise does that it can well be said to be substantial and unreasonable in degree; and reasonableness is a question of fact dependent upon the circumstances and conditions. There can be no fixed standard as to what kind of noise constitutes a nuisance. CASE AT BAR The noise continuously emitted by a Meralco substation, day and night, constitutes an actionable nuisance for which the appellant is entitled to relief, by requiring the appellee company to adopt the necessary measures to deaden or reduce the sound at the plaintiff‟s house, by replacing the interlink wire fence with a partition made of sound absorbent material, since the relocation of the substation is manifestly impracticable and would be prejudicial to the cus tomers of the Electric Company who are being serviced from the substation. MITIGATION OF DAMAGES Article 2203 of the Civil Code clearly obligates the INJURED PARTY to undertake measures that will alleviate and not aggravate his condition after the infliction of the injury, and places upon him the burden of explaining why he could not do so. There are several factors that mitigate defendant‘s liability in damages. The first is that the noise from the substation does not appear to be an exclusive causative factor of plaintiff-appellant‟s illnesses. Financial worries can affect unfavorably the debtor‘s disposition and mentality. The other factor militating against full recovery by the petitioner Velasco is his passivity in the fact of the damage caused to him by the noise of the substation. Realizing as a physician that the latter was disturbing or depriving him of sleep and affecting both his physical and mental well being, he did not take any steps to bring action to abate the nuisance or to remove himself from the affected area as soon as the deleterious effects became noticeable. 2. Cerrano v. Tan Chuoco, G.R. No. 12907, August 1, 1918 DOCTRINE: It is a well recognized principle of law that damages resulting from AVOIDABLE CONSEQUENCES of the breach of a contract or other legal duty are not recoverable. It is the duty of one injured by the unlawful act of another to take such measures as prudent men usually take under such circumstances to reduce the damages as much as possible. It is equally well settled, however, that the burden of proof rests upon the defendant to show that the plaintiff might have reduced the damages. 3. Lim v. Court of Appeals, G.R. No. 125817, January 16, 2002 DOCTRINE: We have observed that private respondent left his passenger jeepney by the roadside at the mercy of the elements. Article 2203 of the Civil Code exhorts parties suffering from loss or injury to exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission in question. One who is injured then by the wrongful or negligent act of another should exercise reasonable care and diligence to minimize the resulting damage. Anyway, he can recover from the wrongdoer MONEY LOST IN REASONABLE EFFORTS TO PRESERVE THE PROPERTY INJURED and FOR INJURIES INCURRED IN ATTEMPTING TO PREVENT DAMAGE TO IT. 4. Sotelo v. Behn, Meyer & Co., G.R. No. 35489, December 29, 1932 DOCTRINE: An employee who is improperly discharged is under an obligation to use reasonable diligence to obtain other suitable employment and that in assessing the damages for the period which is still to run after the breach, the court may properly take into account the probability that the discharged employee will be able to earn money in other employment. 5. Lemoine v. Alkan, G.R. No. 10422, January 11, 1916 DOCTRINE: The fact that the plaintiff in such an action could have obtained by the use of reasonable diligence like employment under similar conditions in the same locality, or that the employer who wrongfully discharged him offered to permit him to return to his employment under substantially the same conditions as formerly and at the same rate of wages, does not constitute a defense to the action but are MATTERS IN MITIGATION. In order that the defendant in such an action may take advantage of the fact that the plaintiff could have obtained like employment under similar conditions in the same locality, he must show the rate of wages which plaintiff would have received if he had obtained such employment. Defendant cannot be allowed a sum to reduce plaintiff's damages unless he has proved what that sum is. Where, under such circumstances, the plaintiff refused to return to the employ of the defendant, the latter is entitled to offset plaintiff's damages with the wages which he would have received if he had returned, from the time when the offer was made.

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Agas, Anzures, Buan, Cusi, Navarrete, Ongchuan, Reposo, & Roco 3B

Torts & Damages 2013 X.

Atty. Jess Lopez

GRADING Recitation and Quizzes* Midterm exam Final exam** Total

40% 20% 40% 100%

* Recitation will be conducted every session. Expect quizzes covering assigned and/or previously-discussed lessons to be given every session. ** The Final exam will cover all topics and cases identified above.

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