32. Vicente Josefa v Meralco.

July 18, 2014

FACTS:

At around 1:45 p.m. on April 21, 1991, a dump truck, a jeepney and a car figured in a vehicular accident along Ortigas
Avenue, Pasig City. As a result of the accident, a 45-foot wooden electricity post, three 75 KVA transformers, and other
electrical line attachments were damaged. Upon investigation, respondent Manila Electric Company (Meralco)
discovered that it was the truck with plate number PAK-874 and registered in Josefa's name that hit the electricity post.
Meralco demanded from Josefa reimbursement for the replacement cost of the electricity post and its attachments, but
Josefa refused to pay. Thus, on September 28, 1993, Meralco sued Josefa and Pablo Manoco, the truck driver, for
damages before the Regional Trial Court (RTC) of Pasig City.

The RTC Ruling

In a decision dated April 10, 2006, the RTC dismissed the complaint for insufficiency of evidence. The RTC held that
Meralco failed to establish that it was the truck that hit the electricity post. The RTC ruled that SPO2 Galang's account
of the accident was merely hearsay since he did not personally witness the incident. It also did not give probative value
to the police blotter entry dated January 7, 1994 since the accident had long occurred in 1991. The RTC likewise denied
Meralco's claim for actual damages for lack of evidentiary support.[30]

The CA Ruling

The CA reversed the RTC ruling and held that the RTC erred in disregarding the parties' stipulation at the pre-trial that
it was the truck that hit the electricity post. The CA also found that Bautista was Josefa's employee when the accident
occurred since Josefa did not specifically deny this material allegation in the amended complaint. It likewise noted that
the sheriff's return stated that Bautista was under Josefa's employ until 1993.

The CA concluded that the fact that the truck hit the electricity post was sufficient to hold Josefa vicariously liable
regardless of whether Bautista was negligent in driving the truck. In the same breath, the CA also stated that the
employer's presumptive liability in quasi-delicts was anchored on injuries caused by the employee's negligence. It
further ruled that Josefa failed to rebut the presumption that he negligently selected and supervised Bautista in
employment since he did not present his evidence-in-chief during trial. Even assuming that Bautista was not Josefa's
employee, the CA maintained that Josefa would still be liable for damages since the law presumes that the registered
owner has control of his vehicle and its driver at the time of the accident. It thus ordered Josefa to pay Meralco: (1)
P384,846.00 as actual damages; (2) P50,000.00 as attorney's fees; (3) P10,000.00 as expenses of litigation; and (4)
double the costs of the suit.

Josefa filed the present petition after the CA denied his motion for reconsideration.

The Petition

Josefa argues that the CA gravely erred in reversing the RTC's factual findings. He insists that the finding that it was
the truck that hit the electricity post lacks evidentiary support. Furthermore, Meralco failed to substantiate its claim for
actual damages by competent testimonial and documentary evidence. Josefa likewise asserts that Meralco is not
entitled to attorney's fees since it also contributed to the delay in the proceedings. He points out that Meralco sought
for postponements of hearings during trial and failed to assist the sheriff in serving the summons to Bautista.[33]

The Issues

This case presents to us the following issues:

(1) Whether the truck with plate number PAK-874 hit the electricity post;

(2) Whether Bautista exercised due diligence in driving when the truck hit the electricity post;

(3) Whether Josefa is vicariously liable for Bautista's negligence under paragraph 5, Article 2180 of the Civil Code;
(a) Whether there is an employer-employee relationship between Bautista and Josefa;

(b) Whether Josefa exercised the diligence of a good father of a family in the selection and supervision of Bautista; and

(4) Whether Meralco is entitled to actual damages, attorney's fees, and expenses of litigation.

Our Ruling

We partially affirm the CA's ruling.

1. YES. The truck hit the electricity post

Contrary to the CA's finding, the parties did not stipulate that the truck hit the electricity post. The pre-trial order shows
that the parties merely agreed that the truck "was involved in an accident on April 21, 1991 at around 1:45 o'clock in
the afternoon along Ortigas Avenue, Rosario, Pasig City." The parties in fact posed the issue of whether the truck
rammed the electricity post as one of the factual questions to be resolved by the trial court during the pre-trial
conference.[38]

We also agree with Josefa that Fernandez and SPO2 Galang's testimonies regarding the truck hitting the electricity
post are hearsay and should not be given credence. Fernandez and SPO2 Galang merely testified and conveyed to
the court matters only narrated to them by other people who were not presented in court. Hearsay evidence has no
probative value because it is merely the witness' recitation of what someone else has told him, whether orally or in
writing. A witness can testify only to those facts which are derived from his own perception.[39]

Nonetheless, Meralco has sufficiently established the direct causal link between the truck and the electricity post
through Abio's testimony. Abio categorically stated during trial that he saw the truck hit the electricity post. We find his
first-hand account of the incident during the direct-examination frank and straightforward. More importantly, Josefa
failed to impeach the veracity of Abio's testimony during the cross-examination. Abio even reiterated that it was Josefa's
truck that rammed the electricity post.[40] We thus give full faith and credence to his positive, unrebutted, and
categorical declaration on the witness stand, made under solemn oath, that it was the truck that caused damage to
Meralco's property.

2. NO. There is a finding of fault against Bautista for the doctrine of Res Ipsa Loquitur
Contrary to the CA's opinion, the finding that it was the truck that hit the electricity post would not immediately result in
Josefa's liability. It is a basic rule that it is essentially the wrongful or negligent act or omission that creates
the vinculum juris in extra-contractual obligations. In turn, the employee's negligence established to be the proximate
cause of the damage would give rise to the disputable presumption that the employer did not exercise the diligence of
a good father of a family in the selection and supervision of the erring employee.

Nonetheless, in some cases where negligence is difficult to prove, the doctrine of res ipsa loquitur permits an
inference of negligence on the part of the defendant or some other person who is charged with negligence
where the thing or transaction speaks for itself.[48] This doctrine postulates that, as a matter of common knowledge
and experience and in the absence of some explanation by the defendant who is charged with negligence, the very
nature of occurrences may justify an inference of negligence on the part of the person who controls the instrumentality
causing the injury. In other words, res ipsa loquitur is grounded on the superior logic of ordinary human experience that
negligence may be deduced from the mere occurrence of the accident itself.[49]

The procedural effect of res ipsa loquitur in quasi-delict cases is that the defendant's negligence is presumed.
In other words, the burden of evidence shifts to the defendant to prove that he did not act with
negligence.[50] This doctrine thus effectively furnishes a bridge by which the complainant, without knowledge of the
cause of the injury, reaches over to the defendant, who knows or should know the cause, for any explanation of care
exercised by him to prevent the injury.[51] For this doctrine to apply, the complainant must show that: (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.

3. YES. Josefa is vicariously liable under paragraph 5, Article 2180 of the Civil Code

A. YES. There is an employer-employee relations between Bautista and Josefa

Josefa cannot evade his responsibility by mere denial of his employment relations with Bautista in the absence of proof
that his truck was used without authorization or that it was stolen when the accident occurred.[53] In quasi-delict cases,
the registered owner of a motor vehicle is the employer of its driver in contemplation of law.[54] The registered owner
of any vehicle, even if not used for public service, would primarily be responsible to the public or to third persons for
injuries caused while the vehicle was being driven on highways or streets. The purpose of motor vehicle registration is
precisely to identify the owner so that if any injury is caused by the vehicle, responsibility can be imputed to the
registered owner.[55]

B. Josefa failed to show that he exercised the diligence of a good father of a family in the selection and
supervision of Bautista
Josefa should show by competent object or documentary evidence that he examined Bautista as to the latter's
qualifications, experience and service records prior to employment. He should likewise prove by competent object or
documentary evidence that he formulated standard operating procedures, monitored their implementation and imposed
disciplinary measures for breach of these procedures.[56] However, Josefa failed to overcome the presumption of
negligence against him since he waived his right to present evidence during trial.

IV. Meralco is only entitled to temperate damages with interest at legal rate

A. Meralco failed to prove its entitlement to actual damages

Actual damages cannot be presumed; they must be pleaded and proven in court in order to be recoverable. One is
entitled to an adequate compensation only for the pecuniary loss that he has adequately proved based upon competent
proof and on the best evidence obtainable by him.[59] We cannot give weight to Exhibit "D" as to the amount of actual
damages for being hearsay. Exhibit "D" constitutes hearsay evidence since it was derived on alleged pieces of
documentary evidence that were not identified and authenticated in court during trial. The trial court thus erred in even
admitting Exhibit "D" in evidence whose contents were offered without any other competent evidence to corroborate
them. Consequently, we delete the CA's award of actual damages for lack of evidentiary support.

B. Meralco is entitled to temperate damages because it clearly suffered pecuniary loss as a result of
Bautista and Josefa’s negligence

Nonetheless, Meralco is entitled to temperate damages because there is no doubt that it suffered pecuniary loss as a
result of Bautista and Josefa's negligence.[60] When the court finds that some pecuniary loss has been suffered but
the amount cannot, from the nature of the case, be proven with certainty, the court may award temperate damages in
the exercise of its sound discretion.[61] Considering the attendant circumstances of this case, we find the amount of
P200,000.00 to be a fair and sufficient award by way of temperate damages.

C. Meralco is not entitled to attorney’s fees and expenses of litigation

The CA likewise erred in awarding Meralco attorney's fees and expenses of litigation without explaining its basis.
In Buan v. Camaganacan,[62] we held that the text of the decision should state the reason why attorney's fees are
being awarded; otherwise, the award should be disallowed. Besides, no bad faith has been imputed to Josefa that
would warrant the award of attorney's fees under Article 2208 (5) of the Civil Code. It is a settled rule that attorney's
fees shall not be recovered as cost where the party's persistence in litigation is based on his mistaken belief in the
righteousness of his cause.

D. The award of temperate damages is subject to 6% per annum reckoned from the promulgation of the
decision until fully paid

DISPOSITIVE PORTION: WHEREFORE, premises considered, we PARTIALLY GRANT the petition. The January 31,
2008 decision and the April 29, 2008 resolution of the Court of Appeals in CA-G.R. CV. No. 87512
is AFFIRMED with MODIFICATION. Petitioner Vicente Josefa is ordered to pay respondent Manila Electric Company
the amount of P200,000.00 as temperate damages with legal interest at 6% per annum from the promulgation of this
decision until full payment has been effected. Costs against petitioner Vicente Josefa. SO ORDERED.