Torts and Damages

GREENSTAR EXPRESS, INC. AND FRUTO L. SAYSON, JR. vs. NISSIN-UNIVERSAL ROBINA CORPORATION G.R. No. 205090, October 17, 2016, J. Del Castillo Employers shall be liable for the damages caused by their employees acting within the scope of their assigned tasks. 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. Facts: Greenstar Express, Inc. is the owner of a passenger bus, driven by Fruto Sayson, which collided head on with an L-300 van, owned by Unoversal Robina and Nissin Universal Robina Corporation and driven by Renante Bicomong, NURC’s Operations Manager, in Maharlika Highway, Laguna. As a result of the collision, Bicomong died instantly, while the passenger bus owned by Greenstar sustained damages. Greenstar and Fruto filed a case for damages against the respondents, based on the negligence of Bicomong, an employee of the respondents. During trial, it was established that Bicomong used the L300, a vehicle owned by the respondents, in transporting bulky material to his home, despite the fact that he himself was issued an executive car. The incident also happened on a holiday, and the employee did not use the vehicle for official company use. The RTC ruled in favor of the respondents. It held that for the employer to be liable for the damages caused by his employee, the latter must have caused the damage in the course of doing his assigned tasks or in the-performance of his duties. In this case, Bicomong was not in the performance of his duty on the day of the accident because it was a holiday; there were no plants of the company in Quezon and Laguna; the deceased was issued an executive car for his own use, and merely preferred using the L300 for transporting bulky materials to his home. Because the accident occurred outside Bicomong’s assigned tasks, defendant employers cannot be held liable to the plaintiffs, even assuming that it is the fault of defendants’ employee that was the direct and proximate cause of their damages. Court.

CA affirmed the RTC judgment, thus the petitioners appealed to the Supreme

Issue: Whether or not the respondents are liable for the negligence of their employee even though the accident occurred not in the performance of the employee’s duty to the company. Ruling:

Respondents are not liable for the negligence of their employee. The resolution of this case must consider 2 rules. First, Article 2180's specification that '[e]mployers shall be liable for the damages caused by their employees acting within the scope of their assigned tasks. Second, the operation of the registered-owner rule that registered owners are liable for death or injuries caused by the operation of their Vehicles. When by evidence the ownership of the van and Bicomong's employment were proved, the presumption of negligence on respondents' part attached, as the registered owner of the van and as Bicomong's employer. The burden of proof then shifted to respondents to show that no liability under Article 2180 arose. This may be done by proof of any of the following: 1. That they had no employment relationship with Bicomong; or 2. That Bicomong acted outside the scope of his assigned tasks; or 3. That they exercised the diligence of a good father of a family in the selection and supervision of Bicomong. Respondents succeeded in overcoming the presumption of negligence, having shown that when the collision took place, Bicomong was not in the performance of his work; that he was in possession of a service vehicle that did not belong to his employer NURC, and which vehicle was not officially assigned to him; that his use of the URC van was unauthorized; that the accident occurred on a holiday and while Bicomong was on his way home to his family; and that Bicomong had no official business whatsoever in his hometown in Quezon, or in Laguna where the collision occurred, his area of operations being limited to the Cavite area. On the other hand, the evidence suggests that the collision could have been avoided if Sayson exercised care and prudence. Despite having seen Bicomong drive the URC van in a precarious manner while the same was still a good 250 meters away from his bus, Sayson did not take the necessary precautions, as by reducing speed and adopting a defensive stance to avert any untoward incident. Instead, he maintained his current speed. An experienced driver who is presented with the same facts would have adopted an attitude consistent with a desire to preserve life and property; for common carriers, the diligence demanded is of the highest degree. The law exacts from common carriers (i.e., those 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) the highest degree of diligence (i.e., extraordinary diligence) in ensuring the safety of its passengers. Articles 1733 and 1755 of the Civil Code state: Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary, diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. Art. 1755. A common carrier is bound to carry the passengers safely as far as

human care arid foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. In this relation, Article 1756 provides that '[i]n case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and 1755. 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. COCA-COLA BOTTLERS PHILIPPINES, INC. vs. SPOUSES JOSE R. BERNARDO AND LILIBETH R. BERNARDO, DOING BUSINESS UNDER THE NAME AND STYLE “JOLLY BEVERAGE ENTERPRISES” G.R. No. 190667, November 7, 2016, C.J. Sereno The use of unjust, oppressive, or high-handed business methods resulting in unfair competition also gives a right of action to the injured party. Facts: Respondents, doing business under the name "Jolly Beverage Enterprises," are distributors of petitioner under an exclusive dealership contract. Sometime in late 1998 or early 1999, before the contract expired, petitioner required respondents to submit a list of their customers on the pretext that it would formulate a policy defining its territorial dealership in Quezon City. It assured respondents that their contract would be renewed for a longer period, provided that they would submit the list. However, despite their compliance, the promise did not materialize. Respondents later discovered that petitioner has been reaching out to respondents’ clients. Petitioner also employed pricing schemes that caused respondents to lose their major customers. As a result, respondents filed a Complaint for damages, alleging that the acts of petitioner constituted dishonesty, bad faith, gross negligence, fraud, and unfair competition in commercial enterprise. Petitioner denied the allegations and claimed that the Complaint was a mere ploy resorted to by respondents to evade the payment of the deliveries. The RTC held petitioner liable for damages for abuse of rights in violation of Articles 19, 20, and 21 of the Civil Code and for unfair competition under Article 28. The CA affirmed the RTC ruling.

Issue: Whether the award of damages and attorney's fees was proper. Ruling: Articles 19, 20, and 21 of the Civil Code provide the legal bedrock for the award of damages to a party who suffers damage whenever another person commits an act in violation of some legal provision; or an act which, though not consitituting a transgression of positive law, nevertheless violates certain rudimentary rights of the party aggrieved. Under any of these provisions, an act that causes injury to another may be made the basis for an award of damages. Meanwhile, the use of unjust, oppressive, or high-handed business methods resulting in unfair competition also gives a right of action to the injured party, pursuant to Article 28 of the Civil Code. Here, petitioner had employed oppressive and high-handed schemes to unjustly limit the market coverage and diminish the investment returns of respondents. Petitioner took advantage of the information provided by respondents to facilitate its takeover of the latter's usual business area. Distributors like respondents, who had assisted petitioner in its marketing efforts, suddenly found themselves with fewer customers. The CA correctly ruled that the award of temperate damages was justified, even if it was not specifically prayed for, because 1) respondents prayed for the grant of "other reliefs," and 2) the award was clearly warranted under the circumstances. Indeed, the law permits judges to award a different kind of damages as an alternative to actual damages. Article 2224 of the Civil Code provides that 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 can not, from the nature of the case, be provided with certainty. Compensatory damages may be awarded in the concept of temperate damages for injury to business reputation or business standing, loss of goodwill, and loss of customers who shifted their patronage to competitors. In this case, both the RTC and the CA found that respondents had suffered pecuniary loss by reason of petitioner's high-handed machinations to eliminate competition in the market. However, the unpaid obligation of respondents shall be offset against the temperate damages due them from petitioner. The award of moral damages, on the other hand, finds legal basis under Article 2219(10) of the Civil Code, which states that moral damages may be recovered in acts and actions referred to in Articles 21 and 28. Similarly, the award of exemplary damages is justified by Article 2229 of the Civil Code to caution powerful business owners against the use of oppressive and high-handed commercial strategies to target and trample on the rights of small business owners, who are striving to make a decent living. The grant of attorney's fees was also warranted because of the award of exemplary damages. WILLIAM ENRIQUEZ AND NELIA-VELA ENRIQUEZ vs. ISAROG LINE TRANSPORT, INC. AND VICTOR SEDENIO

G.R. No. 212008, November 16, 2016, J. Peralta The indemnification for loss of earning capacity partakes of the nature of actual damages, which must be duly proven by competent proof and the best obtainable evidence thereof. Facts: Sonny Enriquez was a passenger of a bus owned and operated by respondent Isarog Line Express Transport, Inc. driven by Victor Sedenio. While on the road the bus collided with another bus owned by Philtranco Service Enterprises, Inc. which was being driven by Primitivo Aya-ay. As a result, several passengers died, including Sonny. Sonny's parents, petitioners Spouses Enriquez, filed a complaint for damages against Isarog Line and Philtranco and their drivers before the RTC. The RTC found all the defendants solidarily liable. The CA affirmed the RTC but modified the monetary award by removing the award for unrealized income. The Spouses Enriquez then filed a Motion for Partial Reconsideration, which the CA denied. Issue: Whether the Spouses Enriquez are entitled damages for their son's loss of earning capacity. Ruling: Petitioners are entitled to damages for their son’s loss of earning capacity. Under Article 2206 of the Civil Code, the heirs of the victim are entitled to indemnity for loss of earning capacity. Compensation of this nature is awarded not for loss of earnings, but for loss of capacity to earn. The indemnification for loss of earning capacity partakes of the nature of actual damages, which must be duly proven by competent proof and the best obtainable evidence thereof. Thus, 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 was 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 was employed as a daily wage worker earning less than the 'minimum wage under current labor laws. The Spouses Enriquez were able to present competent proof and the best obtainable evidence of their departed son's income since the defendants did not object when they presented the certification from ASLAN Security Systems, Inc. (ASLAN) during the trial.

Contrary to the CA’s claim that the said document had no probative value because the signatory was never presented to testify, the rule is that evidence not objected to is deemed admitted and may be validly considered. Hence, the heirs were entitled to a monetary award for the loss of earning capacity. Using the settled formula, the amount of damages for loss of earning capacity is P1,038,960.00, thus: Net Earning Capacity = Life expectancy x Gross Annual Income - Living Expenses = [2/3 (80 - age at death)] x GAI - [50% of GAI] = [2/3 (80 - 26)] x P57,720.00 - P28,860.00 = [2/3 (54)] x P28,860.00 = 36 x P28,860.00 Net Earning Capacity = P1,038,960.00 of the award of exemplary damages. NANITO EVANGELISTA (SUBSTITUTED BY HIS HEIRS, REPRESENTED BY THE SURVIVING SPOUSE, LEOVIGILDA C. EVANGELISTA) vs. SPOUSES NEREO V. ANDOLONG III, ET AL. G.R. No. 221770, November 16, 2016, J. Perlas-Bernabe Temperate or moderate 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 provided with certainty. Facts: The Spouses Andolong are the majority shareholders of RAII, a domestic corporation engaged in the business of operating amusement centers. On various dates, Nanito and respondents entered into various memoranda of agreement (MOA), as well as deeds of assignment/sale with right to repurchase over machines, equipment, and amenities, which were used in the operations of amusement centers in different malls. In the subject MOA, the parties agreed that they would equally share, the net profits of said amusement centers. Claiming that respondents failed to comply with their obligation to remit his share of the net profits, Nanito filed the instant complaint. During the pendency of the case, Nanito died and, consequently, was substituted by his heirs (petitioners). The RTC dismissed petitioners' complaint for insufficiency of evidence. Essentially, the RTC found that Nanito failed to establish his claim against respondents. The CA later affirmed the RTC’s decision. Issue: Whether petitioners are entitled to temperate damages. Ruling:

Petitioners are entitled to temperate damages. Under Article 2224 of the Civil Code, temperate or moderate 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 provided with certainty. Consequently, in computing the amount of temperate or moderate damages, it is usually left to the discretion of the courts, but the amount must be reasonable, bearing in mind that temperate damages should be more than nominal but less than compensatory. Respondents' failure to remit the net profits to Nanito pursuant to the subject MOA caused some pecuniary loss on the part of the latter, albeit he failed to prove the exact amount of such loss. In view of such circumstance, the Court deems it reasonable to award temperate damages to petitioners in the amount of P1,100,000.00, which is roughly half of P2,241,632.00, or the amount of gross revenue claimed to have been earned by the amusement centers. Notably, the award of P1,100,000.00 shall earn legal interest at the rate of six percent (6%) per annum from the finality of this Decision until fully paid. ROSITA B. LIM vs. LUIS TAN, ET AL. / LUIS TAN, ET AL. vs. ROSITA B. LIM / ANG TIAT CHUAN VS. ROSITA B. LIM G.R. No. 177422 / G.R. No. 177676, November 28, 2016, J. Reyes 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 case. Temperate damages may also 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. Facts: This case spawned from the death of Florentino Lim, a scion of the wealthy Lim Ket Kai family of Cagayan de Oro City. Upon investigation, the Tan brothers and Chuan together with eight others, were charged with murder before Military Commission No. 1. The Military Commission found Luis, Chuan, and four of their co-accused, namely, Mariano Velez, Jr., Antonio Ocasiones, Leopoldo Nicolas, and Marciano Benemerito, guilty of murder. On the other hand, the other brothers of Luis were acquitted. The said judgment, however, simply concluded the criminal prosecution of those already haled to court but it did not entomb the indignant feelings instigated by the death of Florentino. Thus, Rosita, wife of the deceased Florentino, together with her then minor children (collectively, the petitioners), commenced a civil action for damages against all those charged with the slaying of Florentino. The RTC rendered judgment ordering the surviving Defendants and the heirs and successors-in-interest of the deceased Defendants, who have been substituted in their place as Defendants, to pay to the [petitioners], jointly and severally, the following amounts: a) P15 Million as actual and compensatory damages; b) P25Million as moral damages; c) P10

Million as exemplary damages; d) P1 Million as attorney's fees; e) P500,000.00 for litigation expenses; and f) costs of suit. The CA modified the RTC decision by directing the payment of the following amounts: a) P50,000.00 as civil indemnity; b) P350,000.00 as temperate damages; c) P150,000.00 as moral damages; d) P150,000.00 as exemplary damages; e) P100,000.00 as attorney's fees; and P100,000.00) as litigation expenses. Issue: Whether the CA erred in modifying the damages, attorney's fees and litigation expenses awarded to the heirs of Florentino. Ruling: No. However, the amount of civil indemnity awarded to the heirs of Florentino must be modified. It is jurisprudentially settled that 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 case. In imposing the proper amount of damages, the principal consideration is the penalty provided by law or imposable for the offense because of its heinousness and not the public penalty actually imposed on the offender. Here, the Court sustains the award of civil indemnity but increases its amount to P100,000.00 in accordance with recent jurisprudence. Civil indemnity is awarded to the offended party as a kind of monetary restitution or compensation to the victim for the damage or infraction that was done to the latter by the accused, which in a sense only covers the civil aspect. Thus, in a crime where a person dies, in addition to the penalty of imprisonment imposed to the offender, the accused is also ordered to pay the victim a sum of money as restitution. The CA's deletion of the award of actual and compensatory damages which included the loss of earning capacity of the victim is also proper. The indemnification for loss of earning capacity partakes of the nature of actual damages. 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. Here, although Rosita testified as to the annual income of Florentino, she failed to substantiate the same by documentary evidence. Nevertheless, the CA properly awarded temperate damages. According to Article 2224 of the Civil Code, temperate 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. Here, pecuniary expenses were incurred in the funeral and burial of Florentino.

Moral damages are awarded to allow them to obtain means for diversion that could serve to alleviate their moral and psychological sufferings. In cases of murder, the award of moral damages is mandatory without need of allegation and proof other than the death of the victim. The award of moral damages of P150,000.00 in the present case is proper. Corollarily, exemplary damages are awarded in addition to moral damages by way of example or correction for the public good. The purpose of exemplary damages is to serve as a deterrent to serious wrong doings 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. Here, the Court upholds the amount of P150,000.00 as exemplary damages. Finally, as a general rule, the parties may stipulate the recovery of attorney's fees. In the absence of such stipulation, Article 2208 of the Civil Code enumerates the legal grounds which justify or warrant the grant of attorney's fees and expenses of litigation, and this case qualifies for the 1sr and 11th reasons why attorney's fees are awarded, namely: (a) when exemplary damages are awarded; and (b) in any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered. Considering that the Court has awarded exemplary damages in this case, attorney's fees can likewise be awarded. Lastly, the heirs of Florentino should likewise be granted an interest at the legal rate of six percent (6%) per annum on all the damages awarded from the date of finality of this Decision until fully paid. ROSALIE SY AYSON vs. FIL-ESTATE PROPERTIES, INC. AND FAIRWAYS AND BLUEWATER RESORT AND COUNTRY CLUB, INC. G.R. No. 223269, December 1, 2016, J. Perlas-Bernabe When the act of one party is tainted with bad faith, and such act causes injury to another; the party guilty of bad faith shall be liable for moral damages, exemplary damages, and attorney's fees. Facts: This case arose from a Complaint for recovery of possession and damages filed by Ayson against Fil-Estate and Fairways before the RTC, alleging that she is the registered owner of a 1,000-square meter parcel of land, more or less, located in Yapak, Malay, Aklan (subject land). Sometime in June 1997, she discovered that Fil-Estate and Fairways illegally entered into the subject land and included it in the construction of its golf course without her prior consent and authorization. Despite receipt of a Notice to Cease and Desist from Ayson, Fil-Estate and Fairways continued their encroachment and development of the subject land making it now a part of the entire golf course. Thus, she was constrained to file the instant complaint. Fil-Estate and Fairways maintain that the subject land was formerly owned by one Divina Marte Villanueva (Villanueva), with whom they entered into a Joint Venture

Agreement (JVA) for the development of the Fairways and Bluewater Resort Golf and Country Club. Fil-Estate and Fairways explained that prior to the JVA, Villanueva sold portions of her property to various buyers, including Ayson, with the caveat that such portions may be used in a development project. In this light, Villanueva allegedly convinced her buyers to agree to a land swap should such development push through. When the project commenced, the other buyers readily agreed to said land swaps. Unfortunately, talks with Ayson stalled, prompting Fil-Estate and Fairways to "exclude" development work on the subject land. Nevertheless, Fil-Estate and Fairways commenced construction on the subject land, allegedly relying in good faith upon Villanueva's assurance that her other former buyers, e.g., Ayson, would eventually agree with the land swap agreements. According to Fil-Estate and Fairways, Ayson only signified her objection to the inclusion of the subject land in the development project when construction was almost finished. The RTC ruled in Ayson's favor and, accordingly, ordered Fil-Estate and Fairways to pay her the following amounts: (a) US$100,000.00 or its Philippine Peso equivalent, representing the value of the subject land, plus P50,000.00 monthly rentals for the use and occupancy of said land starting December 1997 until the aforesaid value has been fully paid; (b) P900,000.00 as actual damages; (c)Pl,000,000.00 as moral damages; (d) Pl,000,000.00 as exemplary damages; (e) P300,000.00 as attorney's fees and other litigation expenses; and (f) the costs of suit. The CA affirmed the RTC ruling with modification reducing the award of damages as follows: (a) US$40,000.00 or its Philippine Peso equivalent, representing the value of the subject land, plus Pl,000.00 monthly rentals for the use and occupancy of said land starting December 1997 until the aforesaid value has been fully paid; ( b) P52,666.00 plus US$4,316.06 or its Philippine Peso equivalent as actual damages; (c) PS00,000.00 as moral damages; (d) P300,000.00 as exemplary damages; and (e) P200,000.00 as attorney's fees and other litigation expenses. Issue: Whether the awards of moral damages, exemplary damages, and attorney's fees in Ayson's favor and the corresponding amounts thereof, as well as the correctness of the valuation of the subject land at US$40,000.00 and the monthly rental therefor proper. Ruling: Fil-Estate and Fairways knew that Ayson is the undisputed owner of the subject land but nevertheless chose to rely on Villanueva's empty assurances that she will be able to convince Ayson to agree on a land swap arrangement; and thereafter, proceeded to enter the subject land and introduce improvements thereon. Such acts were without Ayson's knowledge and consent, she, thus: (a) suffered sleepless nights and mental anguish knowing that the property she and her husband had invested for their future retirement had been utilized by Fil-Estate and Fairways for their own sake; and (b) had to seek legal remedies to vindicate her rights. Thus, Fil-Estate and Fairways' acts were done in bad faith and resulted in injury to Ayson; hence, they are liable for, inter alia, moral damages, exemplary damages, and attorney's fees.

Relatedly, the CA correctly reduced the awards for moral damages, exemplary damages, and attorney's fees in light of the evidence adduced as well as the prevailing circumstances of the instant case. It must be stressed that "[m]oral damages are not meant to be punitive but are designed to compensate and alleviate the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar harm unjustly caused to a person." Similarly, exemplary damages are imposed "by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages" and are awarded "only if the guilty party acted in a wanton, fraudulent, reckless, oppressive or malevolent manner." Lastly, attorney's fees should be reasonable in all cases where an award thereof is warranted under the circumstances. In addition, a legal interest at the rate of six percent (6%) per annum should be imposed on all monetary awards to Ayson from the time of the finality of this Decision until fully paid. EDDIE CORTEL Y CARNA & YELLOW BUS LINE, INC. vs. CECILE GEPAYA-LIM G.R. No. 218014, Deceber 7, 2016, J. Carpio The elements of res ipsa loquitur are: (1) the accident is 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 rule is when an employee causes damage due to his own negligence while performing his own duties, there arises a presumption that his employer is negligent. This presumption can be rebutted only by proof of observance by the employer of the diligence of a good father of a family in the selection and supervision of its employees. Facts: A bus operated by Yellow Bus Line and driven by Eddie Cortel y Carna (Cortel) hit from behind a motorcycle driven by SPO3 Robert Lim, who was driving towards the same direction of the bus. Upon impact, Lim was thrown upward and then slammed into the bus, hitting the base of its right windshield wiper. The motorcycle got entangled with the broken bumper of the bus. Respondent Cecile Gepaya-Lim, Lim's widow, filed a complaint for damages against petitioners. The trial court found that the bus was running fast when it bumped the motorcycle ridden by Lim. The trial court ruled that the accident is the proximate cause of Lim's death. The trial court also ruled that Yellow Bus Line failed to present sufficient evidence to prove that it exercised due diligence in the selection and supervision of Cortel.

In affirming the ruling of the trial court, the Court of Appeals applied the doctrine of res ipsa loquitur. However, the Court of Appeals recomputed Lim's lost earning capacity using the formula: Life expectancy

2/3 x [80- age of deceased at the time of death] 2/3 x (80-41] 2/3 x [39] FORMULA – NET EARNING CAPACITY (NEC)

Issues: 1) 2) 3)

Whether res ipsa loquitur applies. Whether Yellow Bus Line exercised diligence of a good father of a family in the selection and supervision of its employees. Whether the award of loss of earning capacity and damages to respondent is proper.

Ruling: 1)

Res ipsa loquitur applies to this case.

The elements of res ipsa loquitur are: (1) the accident is 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. In this case, Cortel had the exclusive control of the bus, including its speed. The bus and the motorcycle were running in the same traffic direction and as such, the collision would not have happened without negligence on the part of Cortel. It was established that the collision between the bus and the motorcycle caused Lim's death. Aside from bare allegations that petitioners failed to prove, there was nothing to show that Lim had contributory negligence to the accident. 2)

Yellow Bus Line did not exercise diligence of a good father of a family in the selection and supervision of its employees.

The rule is when an employee causes damage due to his own negligence while performing his own duties, there arises a presumption that his employer is negligent. This presumption can be rebutted only by proof of observance by the employer of the diligence of a good father of a family in the selection and supervision of its employees. In this case, Yellow Bus Line failed to prove that it exercised due diligence of a good father of a family in the selection and supervision of its employees. Cortel's certificates of attendance to seminars, which Yellow Bus Line did not even present as evidence in the trial court, are not enough to prove otherwise.

3)

The award of loss of earning capacity and damages to respondent is proper due to the computation of the award in accordance with the following formula: Net earning capacity Life Expectancy x [Gross Annual IncomeLiving Expenses (50% of gross annual income)], where life expectancy 2/3 (80 - the age of the deceased). PHILIPPINE NATIONAL BANK vs. PABLO V. RAYMUNDO G.R. No. 208672, December 7, 2016, J. Peralta A bank's disregard of its own banking policy amounts to gross negligence.

Facts: Pablo V. Raymundo, then Department Manager of PNB San Pedro Branch, approved for deposit a foreign draft check in the amount of $172,549.00 issued by Solomon Guggenheim Foundation, drawn against Morgan Guaranty Company of New York, payable to Merry May Juan in the opening of the latter's checking account with PNB San Pedro Branch. Consequent to the approval for deposit of the foreign draft check, a checking account and a check booklet were issued to Juan. On even date, Juan drew 6 PNB Checks, all in the aggregate amount of Php4 Million. The 6 checks were negotiated by Ms. Juan and were approved for payment on the same day by Raymundo, without waiting for the foreign draft check, intended to fund the issued check, to be cleared by the PNB Foreign Currency Clearing Unit. The foreign draft check was later dishonored for being fraudulent. As a result, the Ombudsman charged Raymundo with violation of Section 3(e) of RA No. 3019. The RTC acquitted Raymundo of the charge of violation of Section 3(e) of R.A. No. 3019. CA affirmed the RTC’s Decision. Issues: 1) 2)

Whether Raymundo is civilly liable for the amount of the checks. Whether PNB is entitled to actual damages.

Ruling: 1) Raymundo is civilly liable for the amount of the checks due to his gross negligence in a) in allowing the peso conversion of the foreign check to be credited to Juan’s newlyopened peso checking account, even before the lapse of the 21-day clearing period, and (b) in issuing Juan a check booklet, all on the very same day the said account was opened. Raymundo disregarded the bank's foreign check clearing policy, and risked his trust and confidence on Juan's and her cohorts' assurance that the foreign check was good and that they would not negotiate any check until the former check is cleared.

Since their business and industry are imbued with public interest, banks are required to exercise extraordinary diligence, which is more than that of a Roman pater familias or a good father of a family, in handling their transactions. Banks are also expected to exercise the highest degree of diligence in the selection and supervision of their employees. A bank's disregard of its own banking policy amounts to gross negligence, which is described as "negligence characterized by the want of even slight care, acting or omitting to act in a situation where there is duty to act, not inadvertently but willfully and unintentionally with a conscious indifference to consequences insofar as other persons may be affected." Payment of the amounts of checks without previously clearing them with the drawee bank, especially so where the drawee bank is a foreign bank and the amounts involved were large, is contrary to normal or ordinary banking practice. Before the check shall have been cleared for deposit, the collecting bank can only assume at its own risk that the check would be cleared and paid out. As a bank Branch Manager, Raymundo is expected to be an expert in banking procedures, and he has the necessary means to ascertain whether a check, local or foreign, is sufficiently funded. Raymundo's act of approving the deposit to Juan's newly-opened peso checking account of the peso conversion of the foreign check prior to the lapse of the 21-day clearing period is the proximate cause why the 6 checks worth Php4 Million were later encashed, thereby causing the PNB undue injury. Defined as that cause which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces injury and without which the result would not have occurred, the proximate cause can be determined by asking a simple question: "If the event did not happen, would the injury have resulted? If the answer is no, then the event is the proximate cause. If Raymundo did not disregard the bank's foreign check clearing policy, PNB would not have suffered losses. 2)

PNB is entitled to actual damages.

It is well settled that actual damages, to be recoverable, must not only be capable of proof, but must actually be proved with a reasonable degree of certainty. 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, and courts cannot simply rely on speculation, conjecture or guesswork in determining the fact and amount of damages. While the PNB claims having suffered damages to the extent of Php4 Million due to the encashment of checks drawn against uncollected deposit, the testimonial and documentary evidence on record show that it only incurred losses of around Php2 Million.