1

PHILIPPINE BANK OF COMMERCE, now absorbed by PHILIPPINE

COMMERCIAL INTERNATIONAL BANK, ROGELIO LACSON, DIGNA DE
LEON, MARIA ANGELITA PASCUAL, et al., petitioners,
vs.
THE COURT OF APPEALS, ROMMEL'S MARKETING CORP., represented by
ROMEO LIPANA, its President & General Manager, respondents
G.R. No. 97626 March 14, 1997

Facts:

On May 5, 1975 to July 16, 1976, Romeo Lipana claims to have entrusted RMC funds in the
form of cash totaling P304, 979.74 to his secretary, Irene Yabut, for the purpose of depositing
said funds in the current accounts of RMC with Philippine Bank of Commerce (PBC). They were
not credited to RMC's account but were instead deposited to Yabut's husband, Bienvenido Cotas.
Lipana never checked their monthly statements of account reposing complete trust and
confidence on PBC.

Yabut's modus operandi was to furnish 2 copies of deposit slip upon and both are always
validated and stamped by the teller Azucena Mabayad; original showed the name of her
husband as depositor and his current account number - retained by the bank; duplicate copy
was written the account number of her husband but the name of the account holder was lef
blank; afer validation, Yabut would then fill up the name of RMC in the space lef blank in
the duplicate copy and change the account number to RMC's account number. This went on in a
span of more than 1 year without private respondent's knowledge. Upon discovery of the loss of
its funds, RMC demanded from PBC the return of its money.

Issues:

1. Whether applying the last clear chance, PBC's teller is negligent for failing to
avoid the injury by not exercising the proper validation procedure.
2. Whether there was contributory negligence by RMC.

Ruling:

1. Yes. Under the doctrine of "last clear chance" (also referred to, at times as "supervening
negligence" or as "discovered peril"), petitioner bank was indeed the culpable party. This
doctrine, in essence, states that where both parties are negligent, but the negligent act of one is
appreciably later in time than that of the other, or when it is impossible to determine whose
fault or negligence should be attributed to the incident, the one who had the last clear
opportunity to avoid the impending harm and failed to do so is chargeable with the
consequences thereof. Stated differently, the rule would also mean that an antecedent
negligence of a person does not preclude the recovery of damages for the supervening
negligence of, or bar a defense against liability sought by another, if the latter, who had the last
fair chance, could have avoided the impending harm by the exercise of due diligence. Here,
assuming that private respondent RMC was negligent in entrusting cash to a dishonest
employee, thus providing the latter with the opportunity to defraud the company, as advanced
by the petitioner, yet it cannot be denied that the petitioner bank, thru its teller, had the last
clear opportunity to avert the injury incurred by its client, simply by faithfully observing their
self-imposed validation procedure.

2. Yes. While it is true that had private respondent checked the monthly statements of
account sent by the petitioner bank to RMC, the latter would have discovered the loss
early on, such cannot be used by the petitioners to escape liability. This omission on the
part of the private respondent does not change the fact that were it not for the wanton and
reckless negligence of the petitioners' employee in validating the incomplete duplicate
deposit slips presented by Ms. Irene Yabut, the loss would not have occurred.
 2

Considering, however, that the fraud was committed in a span of more than one (1) year
covering various deposits, common human experience dictates that the same would not
have been possible without any form of collusion between Ms. Yabut and bank teller
Mabayad. Ms. Mabayad was negligent in the performance of her duties as bank teller
nonetheless. Thus, the petitioners are entitled to claim reimbursement from her for
whatever they shall be ordered to pay in this case.
 3

PHILIPPINE LONG DISTANCE TELEPHONE CO., INC., petitioner,

vs.
COURT OF APPEALS and SPOUSES ANTONIO ESTEBAN and GLORIA
ESTEBAN, respondents
G.R. No. L-57079 September 29, 1989

Facts:

Spouses Esteban were riding their jeep along the inside lane of Lacson Street where they
resided [at 25km/hr as Antonio Esteban claimed; CA said jeep ran fast; if the jeep braked at that
speed, the spouses would not have been thrown against the windshield]. The jeep abruptly
swerved from the inside lane, then it 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 failed to notice the open trench which was lef uncovered because of the darkness and
the lack of any warning light or signs. The spouses were thrown against the windshield. Gloria
Esteban allegedly sustained injuries on her arms, legs and face, leaving a permanent scar on her
cheek, while Antonio suffered cut lips. The jeep’s windshield was also shattered.

PLDT denies liability, contending that the injuries sustained by the spouses were due to
their own negligence, and that it should be the independent contractor L.R. Barte and Co.
[Barte] who should be held liable. PLDT filed a third-party complaint against Barte, alleging that
under the terms of their agreement, PLDT should not be answerable for any accident or injuries
arising from the negligence of Barte or its employees. Barte claimed that it was not aware, nor
was it notified of the accident, and that it complied with its contract with PLDT by installing the
necessary and appropriate signs.

RTC ruled in favor of the spouses. CA reversed RTC and dismissed the spouses’ complaint,
saying that the spouses were negligent. Later, it set aside its earlier decision and affirmed in toto
RTC’s decision.

Issue:

Whether PLDT is liable for the injuries sustained by Spouses Esteban.

Ruling:

No. The negligence of Antonio was not only contributory to his and his wife’s injuries but
goes to the very cause of the occurrence of the accident, as one of its determining factors, and
thereby precludes their right to recover damages. The perils of the road were known to the
spouses. By exercising reasonable care and prudence, Antonio could have avoided the injurious
consequences of his act, even assuming arguendo that there was some alleged negligence on
the part of PLDT.

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. As a resident of Lacson Street, he passed on that street almost every
day and had knowledge of the presence and location of the excavations there; hence, the
presence of warning signs could not have completely prevented the accident. Furthermore,
Antonio had the last clear chance to avoid the accident, notwithstanding the negligence he
imputes to PLDT.

A person claiming damages for the negligence of another has the burden of proving the
existence of such fault or negligence causative thereof, otherwise, his action must fail. The facts
constitutive of negligence must be affirmatively established by competent evidence. In this case,
there was insufficient evidence to prove any negligence on the part of PLDT. What were
presented were just the self-serving testimony of Antonio and the unverified photograph of a
 4

portion of the scene of the accident. The absence of a police report and the non-submission of a
medical report from the hospital where the spouses were allegedly treated have not even been
explained.
 5

SERGIO AMONOY, petitioner, vs. Spouses JOSE GUTIERREZ and ANGELA

FORNILDA, respondents.
[G.R. No. 140420. February 15 , 2001]

Facts:

Amonoy was the counsel of the successors of the deceased Julio Cantolos for the
settlement of the latter’s estate. On January 1965, the lots were adjudicated to Asuncion
Pasamba and Alfonso Fornilda. On January 20, 1965, Pasamba and Fornilda executed a
deed of real estate mortgage on the said two lots adjudicated to them, in favor of Amonoy
to secure the payment of his attorney’s fees. But on August 6, 1969, after the taxes had
been paid, the claims settled and the properties adjudicated, the estate was declared
closed and terminated. When Pasamba and Fornilda passed away, Fornilda was
succeeded by the spouses Gutierrez. On January 21, 1970, Amonoy filed for the closure
of the two lots alleging the non-payment of attorney’s fees. The herein respondents
denied the allegation, but judgment was rendered in favor of Amonoy.

Still for failure to pay attorney’s fees, the lots were foreclosed. Amonoy was able to
buy the lots by auction where the house of the spouses Gutierrez was situated. On
Amonoy’s motion of April 24, 1986, orders were implemented for the demolition of
structures in the said lot, including herein respondents’ house. On September 27, 1985,
David Fornilda petitioned to the Supreme Court for a TRO for the suspension of the
demolition, which was granted, but the houses have already been demolished. A
complaint for damages was filed by respondents, which was denied by RTC but granted
by CA, thus this case.

Issue:

Whether or not the CA erred in ruling that Amonoy was liable for damages to
respondents.

Ruling:

Petitioner invokes that it is well-settled that the maxim of 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, saying he is not liable for damages. The
precept of Damnum Absque Injuria has no application is this case. Petitioner did not heed
the TRO suspending the demolition of structures. Although the acts of petitioner may
have been legally justified at the outset, their continuation after the issuance of the TRO
amounted to an insidious abuse of his right. Indubitably, his actions were tainted with bad
faith.

Article 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; and to observe honesty and good faith. This
must be observed. Clearly then, the demolition of respondents’ house by petitioner,
despite his receipt of the TRO, was not only an abuse but also an unlawful exercise of
such right. The petition is denied. The decision of CA is affirmed.
 6

FGU INSURANCE CORPORATION, petitioner, vs. G.P. SARMIENTO TRUCKING CORPORATION and
LAMBERT M. EROLES, respondents.
G.R. No. 141910. August 6, 2002.

Facts:

G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver units of

refrigerators aboard its truck. While traversing the road, it collided with an unidentified
truck, causing it to fall into a deep canal, resulting in damage to the cargoes.

FGU Insurance Corporation (FGU), an insurer of the shipment, paid the value of the
covered cargoes to Concepcion Industries, Inc., (CII). Being subrogee of CII’s rights &
interests, FGU, in turn, sought reimbursement from GPS. Since GPS failed to heed the
claim, FGU filed a complaint for damages & breach of contract of carriage against GPS
and the driver with the RTC. In its answer, respondents asserted that GPS was only the
exclusive hauler of CII since 1988, and it was not so engaged in business as a common
carrier. Respondents further claimed that the cause of damage was purely accidental.

GPS filed a motion to dismiss the complaint by way of demurrer to evidence on the
ground that petitioner had failed to prove that it was a common carrier. The RTC granted
the motion to dismiss on April 30, 1996. It subsequently dismissed the complaint holding
that GPS was not a common carrier defined under the law & existing jurisprudence. The
subsequent motion for reconsideration having been denied, FGU interposed an appeal to
the CA. The CA rejected the FGU’s appeal & ruled in favor of GPS. It also denied
petitioner’s motion for reconsideration. Hence, FGU filed this petition for review on
certiorari.

Issue:

WON the doctrine of Res ipsa loquitur is applicable in the instant case.

Ruling:

Res ipsa loquitur holds a defendant liable where the thing which caused the injury
complained of is shown to be under the latter’s management and the accident is such that, in
the ordinary course of things, cannot be expected to 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 want of care. It is not a rule of substantive law and, as
such, it does not create an independent ground of liability. Instead, it is regarded as a mode of
proof or a mere procedural convenience since it furnishes a substitute for, and relieves the
plaintiff of, the burden of producing specific proof of negligence. The maxim simply places on the
defendant the burden of going forward with the proof. Resort to the doctrine, however, may be
allowed only when (a) the event is of a kind which does not ordinarily occur in the absence of
negligence; (b) other responsible causes, including the conduct of the plaintiff and third persons,
are sufficiently eliminated by the evidence and (c) the indicated negligence is within the scope of
the defendant’s duty to the plaintiff. Thus, it is not applicable when an unexplained accident may
be attributable to one of several causes, for some of which the defendant could not be
responsible. Petition denied.
 7

PHILIPPINE RABBIT BUS LINES, INC. vs. THE HONORABLE INTERMEDIATE APPELLATE COURT, ET
AL.
G.R. Nos. 66102-04 August 30, 1990

Facts:

A jeep was carrying passengers when its right rear wheel became detached, causing it to be
unbalanced. The driver stepped on the brake, which made the jeep turn around, encroaching on the opposite
lane. The passenger jeepney was bumped from behind by a speeding truck with such violence that three of
its passengers died whereas two other passengers suffered injuries. The representatives of the dead and of
the injured passengers filed suits to recover damages against the driver and the owners of the truck and also
against the driver and the owners of the jeepney.

The trial court rendered judgment absolving the driver and the owners of the jeepney but required the
driver and the owners of the truck to compensate the victims. The Plaintiffs appealed insisting that the
driver and the owners of the jeepney should also be made liable. The Intermediate appellate court (now
Court of Appeals), relying primarily on the doctrine of last clear chance, affirmed the trial court's decision.
The plaintiffs then filed a petition for review on certiorari before the Court.

Issue:

WON the doctrine of “last clear chance” is applicable.

Ruling:

No. Citing the landmark case of Anuran, et al. v. Buño et. al., THE Supreme Court reiterated
that "[t]he 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."

The Intermediate Appellate Court committed an error of law in applying the doctrine of last
clear chance as between the defendants, since the case at bar is not a suit between the owners
and drivers of the colliding vehicles but a suit brought by the heirs of the deceased passengers
against both owners and drivers of the colliding vehicles.

In view of the foregoing, the Supreme Court modified the questioned decision by making all the
defendants’ solidarity liable.

ROSITO Z. BACARRO, WILLIAM SEVILLA, and FELARIO MONTEFALCON, petitioners, vs.

GERUNDIO B. CASTAÑO, and the COURT OF APPEALS, respondents.
G.R. No. L-34597, November 05, 1982
 8

Facts:

A passenger jeepney driven by petitioner Montefalcon and where private respondent was a
passenger was sideswiped by a cargo truck as both vehicles were approaching the Sumasap
Bridge at Oroquieta, Misamis Occidental. The jeepney fell into a ditch and private respondent
was thrown off, his right leg crushed by the weight of the jeepney. He sued petitioners. It was
undisputed that the cargo truck blew its horn to overtake the jeepney; that the jeepney gave
way but did not reduce its speed; that for a distance of 20 meters, the truck and the jeepney ran
side by side; and that the jeepney was sideswiped when the truck was in the process of
overtaking the said jeepney. The trial court rendered judgment in favor of private respondent
finding contributory negligence on the part of the jeepney's driver and the proximate cause of
the accident being the negligence of the truck driver. The decision of the trial court was affirmed
on appeal to the Court of Appeals. Hence, this petition.

Issue:

WON the jeepney driver is guilty of contributory negligence.

Ruling:

There is contributory negligence on the part of jeepney driver appellant Montefalcon for
having raced with the overtaking cargo truck to the bridge instead of slackening its speed. The
fact is, petitioner-driver Montefalcon did not slacken his speed but instead continued to run the
jeep at about forty (40) kilometers per hour even at the time the overtaking cargo truck was
running side by side for about twenty (20) meters and at which time he even shouted to the
driver of the truck.

Thus, had Montefalcon slackened the speed of the jeep at the time the truck was overtaking
it, instead of running side by side with the cargo truck, there would have been no contact and
accident. He should have foreseen that at the speed he was running, the vehicles were getting
nearer the bridge and as the road was getting narrower the truck would be too close to the jeep
and would eventually sideswipe it. Otherwise stated, he should have slackened his jeep when he
swerved it to the right to give way to the truck because the two vehicles could not cross the
bridge at the same time.

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

INTERMEDIATEAPPELLATE COURT and LEONARDO DIONISIO, respondents.
G.R. No. L-65295, March 10, 1987
 9

Facts:

Sometime on November 1975, at about 1:30am, private respondent Leonardo Dionisio was
on his way home from a cocktails-and-dinner meeting with his boss, the general manager of a
marketing corporation, where he had taken "a shot or two" of liquor. He had just crossed an
intersection and while driving down the street, his headlights were turned off. When he
switched on his headlights to “bright”, he suddenly saw a Ford dump truck some 2 ½
meters away from his Volkswagen car. The dump truck belonged to petitioner Phoenix, and was
parked there by the company driver, co-petitioner Carbonel. It was parked on the right hand side
of the lane that Dionisio was driving on, but it was parked facing the oncoming traffic. It was
parked askew so it was sticking out onto the street, partly blocking the way of oncoming traffic.
There were no lights nor were there any “early warning” reflector devices set anywhere near the
truck, front or rear. Phoenix permitted Carbonel to take home the truck, which was scheduled to
be used the next morning. Dionisio, upon seeing the truck, tried to avoid a collision by swerving
to the lef, but it was too late. His car smashed into the truck. Dionisio suffered physical injuries,
including permanent facial scars, “a nervous breakdown” and loss of two gold bridge
dentures. Dionision filed an action for damages against Carbonel and Phoenix. Petitioners
countered the claim by imputing the accident to respondent’s own negligence in driving at a
high speed without curfew pass and headlights, and while intoxicated. It invoked the Last Clear
Chance. Accordingly, Dionisio had the Last Clear Chance of avoiding the accident and so he,
having failed to take the last clear chance, must bear his own injuries alone.
The trial court and the Court of Appeals ruled in favor of private respondent.

Issue:

Whether the collision was brought by respondent’s own negligence.

Ruling:

No. Dionisio is guilty of contributory negligence but the legal and proximate cause of the
collision was brought about by the way the truck was parked. The legal and proximate cause of
the accident was the wrongful or negligent manner in which the dump truck was parked. The
collision of Dionisio's car with the dump truck was a natural and foreseeable consequence of the
truck driver's negligence.

The defendant cannot be relieved from liability by the fact that the risk or a substantial and
important part of the risk, to which the defendant has subjected the plaintiff has indeed come to
pass. Foreseeable intervening forces are within the scope original risk, and hence of the
defendant's negligence. The courts are quite generally agreed that intervening causes which fall
fairly in this category will not supersede the defendant's responsibility. Thus, a defendant who
blocks the sidewalk and forces the plaintiff to walk in a street where the plaintiff will be exposed
to the risks of heavy traffic becomes liable when the plaintiff is run down by a car, even though
the car is negligently driven; and one who parks an automobile on the highway without lights at
night is not relieved of responsibility when another negligently drives into it.

We hold that private respondent Dionisio's negligence was "only contributory," that the
"immediate and proximate cause" of the injury remained the truck driver's "lack of due care"
and that consequently respondent Dionisio may recover damages though such damages are
subject to mitigation by the courts.

EMMA ADRIANO BUSTAMANTE, in her own behalf as Guardian-Ad-Litem of minors: ROSSEL,

GLORIA, YOLANDA, ERIC SON and EDERIC, all surnamed BUSTAMANTE, Spouses SALVADOR
JOCSON and PATRIA BONE-JOCSON, Spouses JOSE RAMOS and ENRIQUETA CEBU-RAMOS,
Spouses NARCISO-HIMAYA and ADORACION MARQUEZ-HIMAYA, and Spouses JOSE
 10

BERSAMINA and MA. COMMEMORACION PEREA-BUSTAMANTE, petitioners,

vs.
THE HONORABLE COURT OF APPEALS, FEDERICO DEL PILAR AND EDILBERTO
MONTESIANO, respondents.
G.R. No. 89880, February 6, 1991

Facts:

On April 20, 1983 a collision occurred between gravel and sand truck Driven by defendant
Montesiano and owned by Del Pilar and a Mazda passenger Bus driven by Defendant Susulin,
along the national road at Kalibuyao Tanza, Cavite. The front lef side portion of the body of the
truck sideswiped the lef sidewall of the passenger bus which resulted to the death of five
individuals. The passenger bus was owned and operated by Magtibay and Serrado.several
passengers of the bus were thrown out and died as a result of the injuries they sustained. The
bus was registered in the name of Novelo but was owned and/or operated as a passenger bus
jointly by Magtibay and Serrado. Before the collision, the cargo truck and the passenger bus
were approaching each other, coming from the opposite directions of the highway. While the
truck was still about 30 meters away, Susulin, the bus driver, saw the front wheels of the vehicle
wiggling. He also observed that the truck was heading towards his lane. Not minding this
circumstance due to his belief that the driver of the truck was merely joking, Susulin shifed from
fourth to third gear in order to give more power and speed to the bus, which was ascending the
inclined part of the road, in order to overtake or pass a Kubota hand tractor being pushed by a
person along the shoulder of the highway.

The Regional Trial Court ruled that the two drivers is liable are solidarily liable for their
negligence.

On appeal, the Court of Appeals decided that the bus driver had the clear chance to avoid
the collision and his reckless negligence in proceeding to overtake the hand tractor was the
proximate cause of the collision. Plaintiffs -appellees filed a motion for reconsideration, but was
denied by the CA. Hence this petition for review on certiorari seeking the reversal of the decision
o the respondent Court of appeals.

Issue:

Whether or not the Last Clear Chance Apply.

Ruling:

No. Petition is granted. CA reversed. The doctrine of last clear chance means that even
though a person's own acts may have placed him in a position of peril, and an injury results, the
injured person is entitled to recovery. Further, a person who has the last clear chance or
opportunity of avoiding an accident, notwithstanding the negligent acts of his opponent or that
of a third person imputed to the opponent is considered in law solely responsible for the
consequences of the accident.

In the case at bar, the suit is not between the owners and drivers of the colliding vehicles
but a suit brought by the heirs of the deceased passengers against both owners and drivers of
the colliding vehicles. Therefore, the court erred in absolving the owner and driver of the cargo
truck from liability.

VICENTE CALALAS, petitioner, vs. COURT OF APPEALS, ELIZA JUJEURCHE SUNGA and
FRANCISCO SALVA, respondents.
G.R. No. 122039 May 31, 2000

Facts:
 11

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

On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a passenger
off. As she was seated at the rear of the vehicle, Sunga gave way to the outgoing passenger. Just
as she was doing so, an Isuzu truck driven by Iglecerio Verena and owned by Francisco Salva
bumped the lef rear portion of the jeepney. As a result, Sunga was injured.

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

The Regional Trial Court of Dumaguete rendered judgment against Salva holding that the
driver of the Isuzu truck was responsible.

The Court of Appeals reversed the RTC, awarding damages instead to Sunga as plaintiff in an
action for breach of contract of carriage since the cause of action was based on such and not
quasi delict. Hence, current petition for review on certiorari.

Issues:
(1)Whether the decision in the Civil Case No 3490 for quasi-delict between Calalas on one
hand and Salva and Verena on the other, is res judicata to the issue in this case.

(2) Whether the ruling in Civil Case No 3490 that the negligence of Verena was the
proximate cause of the accident negates Calalas’ liability.

Ruling:

1. No. There is no basis for the contention that the ruling in Civil Case No 3490,
finding Salva and his driver Verena liable for the damage to Calalas’ jeepney, should be binding
on Sunga. The latter was never a party to the Civil Case. Nor are the issues in Civil Case No. 3490
and in the present case the same. The issue in Civil Case No. 3490 was whether Salva and his
driver Verena were liable for quasi-delict for the damage caused to petitioner's jeepney. On the
other hand, the issue in this case is whether petitioner is liable on his contract of carriage. The
first, quasi-delict, also known as culpa aquiliana or culpa extra contractual, has as its source the
negligence of the tortfeasor. The second, breach of contract or culpa contractual, is premised
upon the negligence in the performance of a contractual obligation. Consequently, in quasi-
delict, the negligence or fault should be clearly established because it is the basis of the action,
whereas in breach of contract, the action can be prosecuted merely by proving the existence of
the contract and the fact that the obligor, in this case the common carrier, failed to transport his
passenger safely to his destination.
2. No. 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.
 12

THE ILOCOS NORTE ELECTRIC COMPANY

vs.
HONORABLE COURT OF APPEALS, (First Division) LILIAN JUAN LUIS,
JANE JUAN YABES, VIRGINIA JUAN CID, GLORIA JUAN CARAG, and
PURISIMA JUAN
G.R. No. L-53401 November 6, 1989
 13

Facts:

In the evening of June 28 until the early morning of June 29, 1967, typhoon
"Gening" buffeted the Province of Ilocos Norte, bringing heavy rains and consequent
flooding in its wake. Between 5:30 and 6:00 A.M. on June 29, 1967, after the typhoon
had abated and when the floodwaters were beginning to recede, the deceased Isabel Lao
Juan, fondly called Nana Belen, ventured out of the house of her son-in-law, Antonio
Yabes, on No. 19 Guerrero Street, Laoag City, and proceeded northward 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 on Guerrero, the deceased was followed by Aida Bulong and Linda Alonzo
Estavillo. 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 two girls attempted to help, but fear dissuaded them from 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 four
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. Yabes passed by the City Hall of Laoag to request the police to ask the
people of Ilocos Norte Electric Company or INELCO to cut off the electric current. Then
the party waded to the house on Guerrero Street. The floodwater was receding and the
lights inside the house were out indicating that the electric current had been cut off in
Guerrero. Yabes instructed his boys to fish for the body of the deceased. The body was
recovered about two meters from an electric post.

Meanwhile, on the same day the incident happen, Engr. Antonio Juan of the National
Power Corporation set out on an inspection trip between 6:00 and 6:30 A.M., he saw
grounded and disconnected electric lines owned by such electric company but saw
no INELCO lineman. The INELCO Office at the Life theatre on Rizal Street was still
closed.

An action for damages was instituted by the heirs of the deceased before the CFI of
Ilocos Norte a year after the incident. At the trial, petitioner’s witnesses testified in a
general way about their duties and the measures which defendant usually adopts to
prevent hazards to life and limb. From these testimonies, the lower court found that the
electric lines and other equipment of the electric company were properly maintained by a
well-trained team of lineman, technicians and engineers working around the clock to
insure that these equipment’s were in excellent condition at all times. The petitioner then,
prays that the company be exonerated from liability since typhoons and floods are
fortuitous events and that the acts of the private respondents falls within the sphere of the
maxim of "volenti non fit injuria"

Issue:

Can the petitioner-company, in this case, be exonerated from liability on the contention that
typhoons and floods are fortuitous events?

Ruling:

No. While it is true that typhoons and floods are considered Acts of God for which no
person may be held responsible, it was not said eventuality which directly caused the victim's
death. It was through the intervention of petitioner's negligence that death took place. The
finding of the lower court was based on what the defendant's(petitioner-company) 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.
 14

In times of calamities such as the one which occurred in Laoag City on the night of June 28
until the early hours of June 29, 1967, 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 defendant-company did that. On the contrary, evidence discloses
that there were no men policing the area, nor even manning its office. Indeed, under the
circumstances of the case, petitioner was negligent in seeing to it that no harm is done to the
general public. Considering that electricity is an agency, subtle and deadly, 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 (Astudillo vs. Manila Electric, 55 Phil. 427). The negligence of petitioner 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.

Likewise, the maxim "volenti non fit injuria" relied upon by petitioner finds no application in
the case at bar. 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 by Linda
Alonzo Estavillo and Aida Bulong, the deceased, accompanied by the former two, 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 petitioner'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 petitioner's
negligence.

AVELINO CASUPANAN and ROBERTO CAPITULO

vs.
 15

MARIA LLAVORE LAROYA

G.R. No. 145391. August 26, 2002

Facts:
Two vehicles, one driven by respondent Mario Llavore Laroya (Laroya for brevity)
and the other owned by petitioner Roberto Capitulo (Capitulo for brevity) and driven by
petitioner Avelino Casupanan (Casupanan for brevity), figured in an accident. As a result,
two cases were filed with the Municipal Circuit Trial Court (MCTC for brevity) of Capas,
Tarlac. Laroya filed a criminal case against Casupanan for reckless imprudence resulting
in damage to property, docketed as Criminal Case No. 002-99. On the other hand,
Casupanan and Capitulo filed a civil case against Laroya for quasi-delict, docketed as
Civil Case No. 2089.
When the civil case was filed, the criminal case was then at its preliminary
investigation stage. Laroya, defendant in the civil case, filed a motion to dismiss the civil
case on the ground of forum-shopping considering the pendency of the criminal case. The
MCTC granted the motion in the Order of March 26, 1999 and dismissed the civil case.
On Motion for Reconsideration, Casupanan and Capitulo insisted that the civil case
is a separate civil action which can proceed independently of the criminal case. The
MCTC denied the motion for reconsideration in the Order of May 7, 1999. Casupanan
and Capitulo filed a petition for certiorari under Rule 65 before the Regional Trial Court
(Capas RTC for brevity) of Capas, Tarlac, assailing the MCTCs Order of dismissal but
the Capas RTC dismissed the petition for certiorari for lack of merit.
Issue:
Can an accused in a pending criminal case for reckless imprudence can validly file,
simultaneously and independently, a separate civil action for quasi-delict against the
private complainant in the criminal case?
Ruling:
Yes. The criminal case is based on culpa criminal punishable under the Revised
Penal Code while the civil case is based on culpa aquiliana actionable under Articles
2176 and 2177 of the Civil Code. Laroya filed the criminal case for reckless imprudence
resulting in damage to property based on the Revised Penal Code while Casupanan and
Capitulo filed the civil action for damages based on Article 2176 of the Civil Code.
Although these two actions arose from the same act or omission, they have different
causes of action. Article 2176 provides that whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the damage done. Such fault
or negligence, if there is no pre-existing contractual relation between the parties, is called
a quasi-delict and is governed by the provisions of this Chapter. Further, Art. 2177 reads
that 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. Any
aggrieved person can invoke these articles provided he proves, by preponderance of
evidence, that he has suffered damage because of the fault or negligence of another.
There is nothing in the law or rules that state only the private complainant in a criminal
case may invoke these articles. Hence, either the private complainant or the accused can
file a separate civil action under these articles.
 16

SCHMITZ TRANSPORT & BROKERAGE CORPORATION v. TRANSPORT VENTURE, INC.,

INDUSTRIAL INSURANCE COMPANY, LTD., et al.
G.R. No. 150255. April 22, 2005

Facts:

SYTCO Pte Ltd. Singapore shipped from the port of Ilyichevsk, Russia on board
M/V ―Alexander Saveliev‖ (a vessel of Russian registry and owned by respondent Black
Sea) 545 hot rolled steel sheets. The vessel arrived at the port of Manila and the
Philippine Ports Authority (PPA) assigned it a place of berth at the outside breakwater at
the Manila South Harbor. Petitioner Schmitz Transport, engaged to secure the requisite
clearances, to receive the cargoes from the shipside, and to deliver them to Little Giant
Steelpipe Corporation‘s warehouse at Cainta, Rizal. It likewise engaged the services of
respondent Transport Venture Inc. (TVI) to send a barge and tugboat at shipside.

The tugboat, after positioning the barge alongside the vessel, left and returned to the
port terminal. Later on, arrastre operator commenced to unload 37 of the 545 coils from
the vessel unto the barge. By noon the next day, during which the weather condition had
become inclement due to an approaching storm, the unloading unto the barge of the 37
coils was accomplished. However, there was no tugboat that pulled the barge back to the
pier. Eventually, because of the strong waves, the crew of the barge abandoned it and
transferred to the vessel. The barge capsized, washing the 37 coils into the sea. Earnest
efforts on the part of both the consignee Little Giant and Industrial Insurance to recover
the lost cargoes proved futile.

Industrial Insurance later filed a complaint against Schmitz Transport, TVI and Black
Sea through its representative Inchcape (the defendants) before the RTC of Manila, for
the recovery of the amount it paid to Little Giant plus adjustment fees, attorney‘s fees,
and litigation expenses. Industrial Insurance won and the Schmitz et al.’s motion for
reconsideration is denied.

In effect, Schmitz now filed charges against TVI et al. It asserts that in chartering the
barge and tugboat of TVI, it was acting for its principal, consignee Little Giant, hence,
the transportation contract was by and between Little Giant and TVI. The Court rendered
a decision holding Schmitz and TVI liable.

Issues:

1. Was the loss of the cargoes due to a fortuitous event, independent of any act of
negligence on the part of petitioner Black Sea and TVI?

2. Assuming that there is negligence, who is/are liable for such loss?

Ruling:

1. No. The failure of TVI to tow the barge back in the pier was the proximate cause
of the loss of the cargoes. Settled is the rule that an act of God doctrine strictly
requires that the act must be occasioned solely by the violence of nature. Human
intervention is to be excluded from creating or entering into the cause of the
mischief. When the effect is found to be in part the result of the participation of
man, whether due to his active intervention or neglect or failure to act, the whole
occurrence is then humanized and removed from the rules applicable to the acts of
God. Had the barge been towed back promptly to the pier, the deteriorating sea
conditions notwithstanding, the loss could have been avoided. But the barge was
left floating in open sea until big waves set in at 5:30 a.m., causing it to sink along
with the cargoes. The loss thus falls outside the act of God doctrine.
 17

2. Schmitz and TVI are solidarily liable for the loss of the cargoes. TVI‘s failure to
promptly provide a tugboat did not only increase the risk that might have been
reasonably anticipated during the shipside operation, but was the proximate cause
of the loss. A man of ordinary prudence would not leave a heavily loaded barge
floating for a considerable number of hours, at such a precarious time, and in
the open sea, knowing that the barge does not have any power of its own and is
totally defenseless from the ravages of the sea. That it was nighttime and,
therefore, the members of the crew of a tugboat would be charging overtime pay
did not excuse TVI from calling for one such tugboat. As for Schmitz, for it to be
relieved of liability, it should, following Article 1739 of the Civil Code, prove that
it exercised due diligence to prevent or minimize the loss, before, during and after
the occurrence of the storm in order that it may be exempted from liability for the
loss of the goods. While Schmitz sent checkers and a supervisor on board the
vessel to counter-check the operations of TVI, it failed to take all available and
reasonable precautions to avoid the loss. After noting that TVI failed to arrange
for the prompt towage of the barge despite the deteriorating sea conditions, it
should have summoned the same or another tugboat to extend help, but it did not.
As for Black Sea, its duty as a common carrier extended only from the time the
goods were surrendered or unconditionally placed in its possession and received
for transportation until they were delivered actually or constructively to consignee
Little Giant. Since Black Sea had constructively delivered the cargoes to Little
Giant, through Schmitz, it had discharged its duty. In fine, no liability may thus
attach to Black Sea.
 18

Samsung Construction Company Philippines, Inc. vs. Far East Bank and Trust Company and CA
G.R. No. 129015, August 13, 2004

Facts:

Samsung Construction Company Philippines, Inc. (Samsung Construction) had a deposit

account with Far East Bank and Trust Company (FEBTC). A certain Robert Gonzaga presented a
check for payment before the FEBTC branch in Makati. The check was payable to Cash and drawn
against Samsung Construction's current account in the amount of P999,500.00. The bank teller
then compared the signature appearing on the check with the specimen signature of Jong as
contained in the specimen signature card with the bank. The teller was satisfied that it was
Jong’s signature on the check. She then asked Gonzaga to submit proof of his identity, which the
latter did through three identification cards. At the same time, she forwarded the check to
branch Senior Assistant Cashier Gemma Velez who counter checked the signature on the check
with the specimen. She then forwarded the check to Shirley Syfu, another bank branch officer,
for approval. Syfu noticed that Jose Sempio III, the assistant accountant of Samsung
Construction, was also in the bank. Syfu showed the check to Sempio, who verified Jong’s
signature and vouched for the identity of Gonzaga. Syfu then authorized the bank's encashment
of the check to Gonzaga. The following day, accountant Kyu examined the balance of the bank
account of Samsung Construction and discovered that a check worth P999,500 had been
encashed. Aware that he had not prepared such check he reported the matter to Jong, who
learned of the encashment of the check, and realized that his signature had been forged.
Samsung Construction sued FEBTC before the Regional Trial Court (RTC) for violation of Section
23 of the Negotiable Instruments Law. The RTC gave more weight to the NBI examiner’s findings,
and found in favor of Samsung Construction. On appeal, the Court of Appeals (CA) reversed the
RTC decision and absolved FEBTC from any liability. Hence, the present petition.

Issues:

1. Whether or not the bank was negligent when it encashed the forged check.

Ruling:

Yes, the bank is negligent in encashing the forged check. The Court rules that while it is true
that the bank complied with its internal rules prior to paying out the questionable check, there
are several troubling circumstances that led the Court to believe that the bank itself was remiss
in its duty. The Supreme Court reiterates that the highest degree of care and diligence is
required of banks. Banks are engaged in a business impressed with public interest, and it is their
duty to protect 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. Given the circumstances, extraordinary diligence
dictates that FEBTC should have ascertained from Jong personally that the signature in the
questionable check was his.
 19

LIBI VS IAC
G.R. No. 70890. September 18, 1992

Facts:

Julie Ann Gotiong and Wendell Libi, both minors, are sweethearts for more than two years
until Julie (for brevity) broke up her relationship with Wendell afer she found him to be sadistic
and irresponsible. Wendell wanted reconciliation but Julie persisted in her refusal. This
prompted the former to resort to threats against her. One day Julie Ann and Wendell died
from a single gunshot wound each coming from the same
Smith and Wesson revolver licensed in the name of petitioner Cresencio Libi, Wendell’s father.

As a result of the tragedy, the parents of Julie Ann filed Civil Case against the parents of
Wendell to recover damages arising from the latter’s vicarious liability under Article 2180 of the
Civil Code. Afer trial, the court rendered judgment dismissing plaintiffs’ complaint for
insufficiency of the evidence. CA set aside the decision of the lower court.

Issue:

1. Whether or not Wendell’s parents should be held liable for damages.

Ruling:

The civil liability of parents for quasi-delicts of their minor children, is contemplated in
Article 2180 of the Civil Code. Accordingly, such parental liability is primary and not subsidiary, as
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 damages." In other words, the parents' liability as being primary
and not subsidiary and liability shall ceased if the parents can prove that they observe all the
diligence of a good father to prevent damage.

However, defendants-appellees utterly failed to exercise all the diligence of a good father of
the family in preventing their minor son from committing this crime by means of the gun which
was freely accessible to Wendell Libi for they have not regularly checked whether said gun was
still under lock, but learned that it was missing from the safety deposit box only afer the crime
had been committed. Wendell could have not gotten hold of the gun if the key was not lef
negligently lying around.
 20

Valenzuela vs. CA
253 SCRA 303, February 7, 1996

Facts:

Plaintiff Valenzuela was driving at Marcos highway to her home, at around 2:00 in the
morning. 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, and
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 lef 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 car driven by
defendant Richard Li and registered in the name of defendant Alexander Commercial, Inc.
Because of the impact plaintiff was thrown against the windshield of the car of the defendant,
which was destroyed, and then fell to the ground. She was confined in the hospital for twenty
days and was eventually fitted with an artificial leg.

Issues:

1. Whether or not Li was negligent.

2. Whether or not Valenzuela was guilty of contributory negligence.
3. Whether or not Alexander Commercial, Inc. as Li's employer should be held
liable.

Ruling:

1. Yes. Valenzuela's version of the incident was fully corroborated by an uninterested

witness. As between Li's "self-serving" asseverations and the observations of a witness
who did not even know the accident victim personally and who immediately gave a
statement of the incident similar to his testimony to the investigator immediately after the
incident, the latter's testimony deserves greater weight.

2. No. Under the "emergency rule", 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. The emergency which led her
to park her car on a sidewalk was not of her own making, and it was evident that she had
taken all reasonable precautions.

3. Yes. Utilizing the bonus pater familias standard expressed in Article 2180 of the
Civil Code, we are of the opinion that Li's employer, Alexander Commercial, Inc. is
jointly and solidarily liable for the damage caused by the accident. Based on the principle
of pater familias, the liability ultimately falls upon the employer for his failure to
exercise the diligence of a good father of the family in the selection and supervision of
his employees.
 21

MACARIO TAMARGO, CELSO TAMARGO and AURELIA TAMARGO vs.HON. COURT OF APPEALS,
THE HON. ARISTON L. RUBIO, RTC Judge, Branch 20, Vigan, Ilocos Sur; VICTOR BUNDOC; and
CLARA BUNDOC
G.R. No. 85044 June 3, 1992

Facts:

On October 20, 1982, Adelberto Bundoc, then a minor of 10 years of age, shot
Jennifer Tamargo with an air rifle causing injuries which resulted in her death.
Accordingly, a civil complaint for damages was filed with the Regional Trial Court by
petitioner Macario Tamargo, Jennifer's adopting parent, and petitioner spouses Celso and
Aurelia Tamargo, Jennifer's natural parents against respondent spouses Victor and Clara
Bundoc, Adelberto's natural parents with whom he was living at the time of the tragic
incident.

Prior to the incident, the spouses Sabas and Felisa Rapisura had filed a petition to
adopt the minor Adelberto Bundoc before the then Court of First Instance of Ilocos Sur.
This petition for adoption was granted after Adelberto had shot and killed Jennifer. In
their Answer, respondent spouses Bundoc, Adelberto's natural parents, reciting the result
of the foregoing petition for adoption, claimed that not they, but rather the adopting
parents, namely the spouses Sabas and Felisa 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. Petitioners in their Reply contended 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. The trial court dismissed petitioners' complaint, ruling that respondent natural
parents of Adelberto indeed were not indispensable parties to the action.

Issue:

Whether or not the effects of adoption, insofar as parental authority is concerned may
be given retroactive effect so as to make the adopting parents the indispensable parties in
a damage case filed against their adopted child, for acts committed by the latter, when
actual custody was yet lodged with the biological parents?

Ruling:

No. 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 physical custody over the adopted child. Retroactive
effect 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.
 22

JOSE AMADORA, ET. AL vs. HONORABLE COURT OF APPEALS

G. R. NO. L-47745 April 15, 1988

Facts:

On April 13, 1972, while they were in the auditorium of their school, the Colegio de
San Jose-Recoletos, a classmate, Pablito Daffon, fired a gun that mortally hit and killed
the seventeen years old, Alfredo Amadora. Daffon was convicted of homicide thru
reckless imprudence. Additionally, the herein petitioners, Amadora, 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. After trial, the Court of First
Instance of Cebu held the remaining defendants liable to the plaintiffs. On appeal to the
respondent court, the school averred that the students were not in the custody of the
school at the time of the incident as the semester had already ended. 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
Court of Appeals ruled in favor of the school. It found that Article 2180 was not
applicable as the Colegio de San Jose-Recoletos was not a school of arts and trades but an
academic institution of learning.

Issue:

Whether Colegio de San Jose-Recoletos, an academic school, is liable under Article

2180 of the Civil Code for the tortuous act of Daffon.

Ruling:

No. Although the Supreme Court ruled that (1) ALL schools, academic or not,
may be held liable under the provision of Article 2180 which provides that: “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” and
that (2) such liability does not cease when the school year ends or when the semester ends
and the responsibility of the school authorities over the student continues so 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
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 the case at bar, the Physics
teacher in charge was not properly named, and there was no sufficient evidence presented
to make the said teacher-in-charge liable. Thus, absent the direct liability of the teachers
because of the foregoing reason, the school cannot be held subsidiarily liable too.
 23

ST. FRANCIS HIGH SCHOOL vs. THE HONORABLE COURT OF APPEALS

G.R. No. 82465 February 25, 1991

Facts:

Ferdinand Castillo, a freshman student at the St. Francis High School, wanted to join
a school picnic at Talaan Beach, Sariaya, Quezon. Ferdinand's parents, respondents
spouses Dr. Romulo Castillo and Lilia Cadiz Castillo, because of short notice, did not
allow their son to join but merely allowed him to bring food to the teachers for the picnic,
with the directive that he should go back home after doing so. However, because of
persuasion of the teachers, Ferdinand went on with them to the beach. During the picnic,
one of the female teachers was apparently drowning. Some of the students, including
Ferdinand, came to her rescue, but in the process, it was Ferdinand himself who drowned
and later on died.

Thereupon, respondent spouses filed a complaint in the Regional Trial Court against
the St. Francis High School, and the teachers contending that the death of their son was
due to the failure of the petitioners to exercise the proper diligence of a good father of the
family in preventing their son's drowning. The trial court found the teachers liable but
dismissed the case against the school. The Court of Appeals declared that the teachers
failed to exercise the diligence of a good father of the family to guard against the foreseen
harm. Also, the school and the principal Benjamin Illumin was declared jointly and
solidarily liable with the teachers for the death of Ferdinand Castillo, under Article 2180
of the Civil Code of the Philippines.

Issue:

Whether the school St. Francis High School, principal, teachers were liable for the death of
Ferdinand.

Ruling:

No. Under Article 2180 of the Civil Code, 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/petitioners 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 which 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. Also, 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.
 24

Finally, no negligence could be attributable to the petitioners-teachers to warrant the award

of damages to the respondents-spouses. The class adviser of 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.

JARCO MARKETING CORPORATION V. CA

G.R. No. 129792, 21 December 1999

Facts:

On May 9, 1983, Criselda and her 6 year old daughter Zhieneth were at the second floor of
Syvel’s Department Store, Makati City. While Criselda was signing her credit card slip at the
counter, suddenly she felt a sudden gust of wind and heard a loud thud. As she looked behind
her, she saw Zhieneth's body pinned by the entire structure of the store's gif-wrapping counter.
Zhieneth was quickly rushed to the Makati Medical Center where she was operated on.

The following day, Zhieneth lost her speech and can only communicate through a magic
slate. Unfortunately, she died 14 days later because of the severity of her injuries. Afer the
burial, Crisielda demanded upon Jarco Marketing the reimbursement of the hospitalization,
medical bills and wake and funeral expenses which they had incurred. But, they refused to pay
hence, Crisielda filed for a complaint for damages.

In Jaco’s counterclaim, they denied any liability. They claimed that Criselda was negligent in
exercising care and diligence over her daughter by allowing her to freely roam around in a store
filled with glassware and appliances. Further, they contended that Zhieneth too, was guilty of
contributory negligence since she climbed the counter, triggering its eventual collapse on her.
Petitioners also emphasized that the counter was made of sturdy wood with a strong support; it
never fell nor collapsed for the past fifeen years since its construction.

Issue:

Whether Jarco marketing was negligent or it was an accident.

Ruling:

Yes, Jaco Marketing was negligent. What transpired was not an unforeseen event in which
would attach no fault on the part of the defendant. Jaco Marketing failed to observe for the
protection of the interest of another person and show that degree of care, precaution and
vigilance. Under the circumstances thus described, it is unthinkable for Zhieneth, a child of such
tender age is incapable of contributory negligence. In our jurisdiction, a person under nine years
of age is conclusively presumed to have acted without discernment, and is, on that account,
exempt from criminal liability. The same presumption and a like exemption from criminal liability
obtains in a case of a person over nine and under fifeen years of age, unless it is shown that he
has acted with discernment.
 25

Further, even if we attribute contributory negligence to Zhieneth and assume that she
climbed over the counter, no injury should have occurred if we accept petitioners' theory that
the counter was stable and sturdy.

PHIL. SCHOOL OF BUSINESS ADMINISTRATION V. CA

G.R. No. 84698, 4 February 1992

Facts:

Carlos Bautista is a third-year commerce student of Philippine School of Business

Administration. He was stabbed to death by assailants who were not members of the school’s
academic community while on the second floor premises of their school.

The parents of Carlos Bautista filed a civil action against the school authorities alleging that
the school is negligent, reckless and with failure to take security precautions during and afer the
attack. The case was elevated in the court of appeals, and the CA favored the claim of the
parents of Baustista.

Issue:

Whether the appellate court was correct in deciding the case based on Article 2180- in loco
parentis

Whether the application of the law on quasi-delicts is proper when there is a pre-existing
contract

Ruling:

The SC did not agree with the premises of the CA’s ruling. Article 2180, in conjunction with
Article 2176 of the Civil Code, establishes the rule in in loco parentis. 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 custody.

Hoewever, this material situation does not exist in the present case for the assailants of
Carlitos were not students of PSBA, for whose acts the school could have been made liable.

As to whether PSBA is exculpated for liability, it does not necessarily follows. It does not
necessarily follow. 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.
 26

Moreover, there is that “built-in” obligation to provide students with an atmosphere that
promotes or assists in attaining its primary undertaking of imparting knowledge. The school
must ensure that adequate steps are taken to maintain the peace and order inside the school.
Because of the circumstances of the present case shows a contractual relation between the
school and Carlitos, the rule on quasi-delict do not really govern but it does not relieve the
school from extra contractual liability to Carlitos. In the present case, there is no finding that the
contract between the school and Carlitos had been breached thru the school’s negligence in
providing proper security measures.

ST. MARY’S ACADEMY V. CARPITANOS

G.R. No. 143363, 6 February 2002

Facts:

Herein petitioner, conducted an enrollment drive for the school year 1995-1996 They visited
schools from where prospective enrollees were studying. Sherwin Carpitanos joined the
campaign. Along with the other high school students, they rode a Mitsubishi jeep owned by
Vivencio Villanueva on their way to Larayan Elementary School. Such jeep was driven by James
Daniel II, a 15 year old student of the same school. It was alleged that he drove the jeep in a
reckless manner which resulted for it to turned turtle. Sherwin died due to this accident.

Issue:

Whether the petitioner should be held liable for the damages.

Ruling:

The petitioner liable for the death of Sherwin under Article 218 and 219 of the Family Code
where it was pointed that they were negligent in allowing a minor to drive and not having a
teacher accompany the minor students in the jeep. However, for them to be held liable, the act
or omission to be considered negligent must be the proximate cause of the injury caused thus,
negligence needs to have a causal connection to the accident. It must be direct and natural
sequence of events, unbroken by any efficient intervening causes.

The parents of the victim failed to show such negligence on the part of the petitioner. The
spouses Villanueva admitted that the immediate cause of the accident was not the reckless
driving of James but the detachment of the steering wheel guide of the jeep. Further, there was
no evidence that petitioner allowed the minor to drive the jeep of Villanueva. The mechanical
defect was an event over which the school has no control hence they may not be held liable for
the death resulting from such accident.

The registered owner of any vehicle, even if not used for public service, would primarily be
responsible to the public or to 3rd persons for injuries caused while it is being driven on the road.
It is not the school, but the registered owner of the vehicle who shall be held responsible for
damages for the death of Sherwin. Case was remanded to the trial court for determination of
the liability of the defendants excluding herein petitioner.
 27

Castilex Industrial Corporation v. Vicente Vasquez, Jr.

G.R. No. 132266, December 21, 1999

Facts:
On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So Vasquez, was driving a
motorcycle around Fuente Osmeña Rotunda. He was traveling counter-clockwise, but without
any protective helmet. He was also only carrying a Student's Permit to Drive at that time. Upon
the other hand, Benjamin Abad, manager of Castilex Industrial Corporation, registered owner of
a pick-up, drove the said company car out of a parking lot. But instead of going around the
Osmeña rotunda, he made a shortcut against the flow of the traffic.

In the process, the motorcycle of Vasquez and the pick-up of Abad collided with each other
causing severe injuries to the former. Abad stopped his vehicle and brought Vasquez to the
Southern Islands Hospital and later to the Cebu Doctor's Hospital. On September 5, 1988,
Vasquez died at the Cebu Doctor's Hospital. It was there that Abad signed an acknowledgment
of Responsible Party wherein he agreed to pay whatever hospital bills, professional fees and
other incidental charges Vasquez may incur.

Afer the police authorities had conducted the investigation of the accident, a Criminal Case
was filed against Abad but which was subsequently dismissed for failure to prosecute. The
present action for damages was commenced by Vicente Vasquez, Jr. and Luisa So Vasquez,
parents of the deceased Romeo So Vasquez, against Abad and Castilex Industrial Corporation. In
the same action, Cebu Doctor's Hospital intervened to collect unpaid balance for the medical
expense given to Romeo So Vasquez.

Issue:

WON Castilex Industrial Corporation may be held vicariously liable for the death of
Romeo So Vasquez resulting from the negligent operation by Abad of a company-issued
vehicle.

Ruling:

NO. The mere fact that Abad was using a service vehicle at the time of the injurious
incident is not of itself sufficient to charge petitioner 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.
 28

In the case at bar, Abad did some overtime work at the petitioner's office. Thereafer, he
went to Goldie's Restaurant which is about seven kilometers away from petitioner's place of
business. 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.

To the mind of the Court, Abad was engaged in affairs of his own or was carrying out a
personal purpose not in line with his duties at the time he figured in a vehicular accident. It was
about 2:00 a.m., way beyond the normal working hours. Abad's working day had ended; his
overtime work had already been completed. Since there is paucity of evidence that Abad was
acting within the scope of the functions entrusted to him, petitioner Castilex Industrial
Corporation 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.

Petitioner Castilex Industrial Corporation is absolved of any liability for the damages
caused by its employee, Jose Benjamin Abad.
2/2
 29

Philippine Rabbit Bus Lines, Inc., et.al. V. Phil-American Forwarders et.al.

G.R. No. L-25142, March 25, 1975

Facts:

On November 24, 1962, Fernando Pineda drove recklessly a freight truck, owned by
Phil-American Forwarders, Inc., along the national highway at Sto. Tomas, Pampanga.
The truck bumped the bus driven by Pangalangan, which was owned by Philippine
Rabbit Bus Lines, Inc. As a result of the bumping, Pangalangan suffered injuries and the
bus was damaged and could not be used for seventy-nine days, thus depriving the
company of earnings amounting to P8,665.51. Balingit was the manager of Phil-
American Forwarders, Inc.
Among the defenses interposed by the defendants in their answer was that Balingit
was not Pineda's employer. Balingit moved that the complaint against him be dismissed
on the ground that the bus company and the bus driver had no cause of action against
him.

Issue:

Whether the terms "employers", "owners and “managers” of an establishment or

enterprise" used in Article 2180 of the Civil Code, embrace the manager of a corporation
owning a truck, the reckless operation of which allegedly resulted in the vehicular
accident from which the damage arose.

Ruling:

NO. Those terms do not include the manager of a corporation. Under Article 2180
the term "manager" is used in the sense of "employer" and does not embrace a "manager"
who may himself be regarded as an employee or dependiente of his employer.

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 because he himself may be regarded as an employee of his
employer, Phil-American Forwarders, Inc.
 30

Ernesto Martin v. Hon. Court of Appeals and Manila Electric Company

G. R. No. 82248, January 30, 1992

Facts:

The private car of Ernesto Martin was being driven by Nestor Martin when it crashed
into a Meralco electric post. The car was wrecked and the pole severely damaged. Thus,
Meralco demanded reparation from Ernesto Martin, but the demand was rejected. It
thereupon sued him for damages, alleging inter alia that he was liable as the employer of
Nestor Martin. The petitioner's main defense was that Nestor Martin was not his
employee.
The complaint for damages was filed by the private respondent against Ernesto Martin
only as alleged employer of Nestor Martin, the driver of the car at the time of the
accident. Nestor Martin was not impleaded. The action was based on tort under Article
2180 of the Civil Code.

The defendant moved to dismiss the complaint on the ground that no evidence had
been adduced to show that Nestor Martin was his employee. The motion was denied. The
RTC held in favor of the plaintiff. The CA affirmed it in toto.

Issue:

WON Ernesto is liable for the damage caused by Nestor.

Ruling:

NO. 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.

In the case at bar, no evidence whatsoever was adduced by the plaintiff to show that
the defendant 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 petitioner 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”.

The ownership of the car and the circumstances of the accident, are not enough
bases for the inference that the petitioner is the employer of Nestor Martin.

As the employment relationship between Ernesto Martin and Nestor Martin could not 4/1
be presumed, it was necessary for the plaintiff to establish it by evidence. Meralco had
the burden of proof, or the duty "to present evidence on the fact in issue necessary to
establish his claim" as required by Rule 131, Section 1 of the Revised Rules of Court.
Failure to do this is fatal to its action.
 31

It was enough for the defendant to deny the alleged employment relationship,
without more, for he was not under obligation to prove this negative averment.

It is unnecessary to examine the question of the driver's alleged negligence or the

lack of diligence on the part of the petitioner in the selection and supervision of his
employee. These questions have not arisen because the employment relationship has not
been established.

HEIRS OF DIAZ-LEUS v MELVIDA

G.R. No. 77716-25; February 17, 1988

Facts:

Accused Melvida and Rosas, being then the persons in charge of Plymouth car and a
Victory Liner bus, respectively, did then and there wilfully, unlawfully and feloniously
drive and operate their respective motor vehicles in a negligent, careless and imprudent
manner, without due regard to traffic laws, rules and regulations and the weather
conditions, and without taking the necessary precaution to avoid injuries to persons and
damage to property, causing the said Plymouth car driven by the said accused Melvida to
swerve to its left, cross the island, and move onto the lane for the opposite traffic, and the
said Victory Liner bus to hit and bump the said Plymouth car, thereby inflicting on Diaz-
Leus which directly caused her death. The trial court found the accused Hernani Melvida
guilty beyond reasonable doubt of the offense charged (Reckless Imprudence resulting in
Double Homicide, Serious and Slight Physical Injuries and Damage to Property. For
failure to establish the guilt of accused Rosas beyond reasonable doubt, he is hereby
acquitted of the offense charged. From said decision the legal heirs appealed to the CA
only with respect to the civil aspect.

Issue:

WON accused-appellee Rosas could still be held civilly liable despite his acquittal in
the criminal case.
Ruling:

The findings of the Court of Appeals were a complete exoneration of Rosas. Since
petitioner's appeal on the civil aspect is predicated upon Rosas' alleged negligence which
has been found not to exist, this Court must likewise uphold the Court of Appeals' ruling
that Rosas' acquittal in the criminal case carries with it the extinction of his civil liability
which bars herein petitioners from recovering damages from Rosas. Since Rosas is
absolved from any act of negligence which in effect prevents further recovery of any
damages, the same is likewise true with respect to his employer victory Liner, Inc. which
at most would have been only subsidiarily liable.Nor can the spouses Jesus Gali and
Leonisa Gali as employers of respondent Hernani Melvida be subsidiarily liable. Art. 103
of the Revised Penal Code provides. The subsidiary liability established in the next
preceding article shall also apply to employers, 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.In order that
employers may be held liable under the above-quoted provision of law, the following
requisites must exist.
(1) That an employee has committed a mime in the discharge of his duties;
 32

(2) that said employee is insolvent and has not satisfied his civil liability;
and
(3) that the employer is engaged in some kind of industry. 6
The preceding requisites are not present in the case of the Gali spouses. They are not
engaged in any kind of industry. Industry has been defined as any department or branch
of art, occupation or business, especially, one which employs much labor and capital and
is a distinct branch of trade, as the sugar industry. 7
Thus, the Gali spouses cannot be held subsidiarily liable. As We stated in a previous case:
"Where the defendant is admittedly a private person who has no business or industry, and
uses his automobile for private purposes, he is not also subsidiarily liable to the plaintiff
for the damages to the latter's car caused by the reckless imprudence of his insolvent
driver." 8

DUAVIT v COURT OF APPEALS

G.R. No. 82318; May 18, 1989

Facts:

The jeep being driven by defendant Sabiniano collided with another jeep, which had then
two passengers on it. As a result of the collision the passengers of the other jeep suffered injury
and the automobile itself had to be repaired because of the extensive damage. A case was filed
against Sabiniano as driver and against Duavit as owner of the jeep. Duavit admitted ownership
of the jeep but denied that Sabiniano was his employee. Sabiniano himself admitted that he
took Duavit’s jeep from the garage without consent or authority of the owner. He testified
further that Duavit even filed charges against him for thef of the jeep, but which Duavit did not
push through as the parents of Sabiniano apologized to Duavit on his behalf. Trial Court found
Sabiniano negligent in driving the vehicle but absolved Duavit on the ground that there was no
employer-employee relationship between them, and that former took the vehicle without
consent or authority of the latter. CA held the two of them jointly and severally liable.

Issue:

WON the owner of a private vehicle which figured in an accident can be held liable under
Article 2180 of the CC when the said vehicle was neither driven by an employee of the owner
nor taken with the consent of the latter.

Ruling:

NO. In Duquillo v Bayot (1939), SC ruled that an owner of a vehicle cannot be held liable for
an accident involving a vehicle if the same was driven without his consent or knowledge and by a
person not employed by him. This ruling is still relevant and applicable, and hence, must be
upheld.

CA’s reliance on the cases of Erezo v Jepte and Vargas v Langcay is misplaced and cannot be
sustained. In Erezo v Jepte case, defendant Jepte was held liable for the death of Erezo even if he
was not really the owner of the truck that killed the latter because he represented himself as its
owner to the Motor Vehicles Office and had it registered under his name; he was thus estopped
from later on denying such representation. In Vargas, Vargas sold her jeepney to a third person,
but she did not surrender to the Motor Vehicles Office the corresponding AC plates. So when the
 33

jeepney later on figured in an accident, she was held liable by the court holding that the
operator of record continues to be the operator of vehicle incontemplation of law, as regards the
public and third persons.

The circumstances of the above cases are entirely different from those in the present case.
Herein petitioner does not deny ownership of vehicle but denies having employed or authorized
the driver Sabiniano. The jeep was virtually stolen from the petitioner’s garage.

Decision and resolution annulled and set aside.

BANAL v JUDGE TADEO and CLAUDIO

G.R. No. 78911-25; December 11, 1987

Facts:

Fifteen separate informations for violation of BP 22 were filed against respondent

Claudio before the RTC of Quezon City. On January 1987, the respondent court issued an
order rejecting the appearance of Atty. Nicolito L. Bustos as private prosecutor on the
ground that the charge is for the violation of BP 22 which does not provide for any civil
liability or indemnity and hence, "it is not a crime against property but public order." The
petitioner, through counsel filed a motion for reconsideration of the order. Respondent
Claudio filed her opposition to the motion. In an order, the respondent court denied
petitioner's MR. Hence, this petition questioning the orders of the respondent Court.

Issue:

WON the respondent Court acted with grave abuse of discretion or in excess of its
jurisdiction in rejecting the appearance of a private prosecutor.

Ruling:

Article 20 of the New Civil Code provides:

“Every person who, contrary to law, wilfully or negligently causes damage
to another, shall indemnify the latter for the same.”
Regardless, therefore, of whether or not a special law so provides, indemnification of the
offended party may be had on account of the damage, loss or injury directly suffered as a
consequence of the wrongful act of another. The indemnity which a person is sentenced
to pay forms an integral part of the penalty imposed by law for the commission of a crime
(Quemel v. Court of Appeals citing Bagtas v. Director of Prison). Every crime gives rise
to a penal or criminal action for the punishment of the guilty party, and also to civil action
for the restitution of the thing, repair of the damage, and indemnification for the losses.
(United States v. Bernardo). Indeed one cannot disregard the private party in the case at
bar who suffered the offenses committed against her. Not only the State but the petitioner
too is entitled to relief as a member of the public which the law seeks to protect. She was
assured that the checks were good when she parted with money, property or services. She
suffered with the State when the checks bounced.
 34

Civil liability to the offended private party cannot thus be denied, The payee of the
check is entitled to receive the payment of money for which the worthless check was
issued. Having been caused the damage, she is entitled to recompense.

The petitioner's intervention in the prosecution of Criminal Cases 40909 to 40913 is

justified not only for the protection of her interests but also in the interest of the speedy
and inexpensive administration of justice mandated by the Constitution (Section 16,
Article III, Bill of Rights, Constitution of 1987).

WHEREFORE the petition is hereby GRANTED. The respondent court is ordered to

permit the intervention of a private prosecutor in behalf of petitioner Charmina B. Banal,
in the prosecution of the civil aspect of the criminal cases.

SPOUSES FRANCISCO M. HERNANDEZ and ANICETA ABEL-

HERNANDEZ and JUAN GONZALES, petitioners, vs. SPOUSES
LORENZO DOLOR and MARGARITA DOLOR, FRED
PANOPIO, JOSEPH SANDOVAL, RENE CASTILLO, SPOUSES
FRANCISCO VALMOCINA and VIRGINIA VALMOCINA,
SPOUSES VICTOR PANOPIO and MARTINA PANOPIO, and
HON. COURT OF APPEALS, respondents.
[G.R. No. 160286 July 30, 2004.]

Facts:

At about 3:00 p.m. of December 19, 1986, Lorenzo Menard "Boyet" Dolor, Jr. was
driving an owner-type jeepney with plate no. DEB 804 owned by her mother, Margarita,
towards Anilao, Batangas. As he was traversing the road at Barangay Anilao East,
Mabini, Batangas, his vehicle collided with a passenger jeepney bearing plate no. DEG
648, driven by petitioner Juan Gonzales and owned by his co-petitioner Francisco
Hernandez, which was travelling towards Batangas City. Boyet Dolor and his passenger,
Oscar Valmocina, died as a result of the collision. Fred Panopio, Rene Castillo and Joseph
Sandoval, who were also on board the owner-type jeep, which was totally wrecked,
suffered physical injuries. The collision also damaged the passenger jeepney of Francisco
Hernandez and caused physical injuries to its passengers.

Consequently, respondents commenced an action for damages against petitioners

before the Regional Trial Court of Batangas City, alleging that driver Juan Gonzales was
guilty of negligence and lack of care and that the Hernandez spouses were guilty of
negligence in the selection and supervision of their employees.

Petitioners countered that the proximate cause of the death and injuries sustained by
the passengers of both vehicles was the recklessness of Boyet Dolor, the driver of the
owner-type jeepney, who was driving in a zigzagging manner under the influence of
alcohol. Petitioners also alleged that Gonzales was not the driver-employee of the
Hernandez spouses as the former only leased the passenger jeepney on a daily basis. The
Hernandez spouses further claimed that even if an employer-employee relationship is
 35

found to exist between them, they cannot be held liable because as employers they
exercised due care in the selection and supervision of their employee.

During the trial of the case, it was established that the drivers of the two vehicles
were duly licensed to drive and that the road where the collision occurred was asphalted
and in fairly good condition. The owner-type jeep was travelling uphill while the
passenger jeepney was going downhill. It was further established that the owner-type jeep
was moderately moving and had just passed a road bend when its passengers, private
respondents Joseph Sandoval and Rene Castillo, saw the passenger jeepney at a distance
of three meters away. The passenger jeepney was traveling fast when it bumped the
owner type jeep. Moreover, the evidence presented by respondents before the trial court
showed that petitioner Juan Gonzales obtained his professional driver's license only on
September 24, 1986, or three months before the accident. Prior to this, he was holder of a
student driver's permit issued on April 10, 1986.

Issue:

WON the Court of Appeals was correct when it pronounced the Hernandez spouses as
solidarily liable with Juan Gonzales, although it is of record that they were not in the passenger
jeepney driven by latter when the accident occurred

Ruling:

Yes. Court held that an employer-employee relationship exists between the

Hernandez spouses and Julian Gonzales hence making them solidarily liable. The court
was not persuaded when the Hernandez spouses argued that since they were not inside
the jeepney at the time of the collision, the provisions of Article 2180 of the Civil Code,
which does not provide for solidary liability between employers and employees, should
be applied.
 36

ERNESTO SYKI, petitioner, vs. SALVADOR BEGASA, respondent.

[G.R. No. 149149. October 23, 2003]

Facts:

Respondent Salvador Begasa and his three companions flagged down a passenger jeepney
driven by Joaquin Espina and owned by Aurora Pisuena. While respondent was boarding the
passenger jeepney (his right foot already inside while his lef foot still on the boarding step of
the passenger jeepney), a truck driven by Elizalde Sablayan and owned by petitioner Ernesto Syki
bumped the rear end of the passenger jeepney. Respondent fell and fractured his lef thigh
bone. Respondent filed a complaint for damages for breach of common carrier‘s contractual
obligations and quasi-delict against Aurora Pisuena, the owner of the passenger jeepney;, herein
petitioner Ernesto Syki, theowner of the truck;, and Elizalde Sablayan, the driver of the truck.
Afer hearing, the trial court dismissed the complaint against Aurora Pisuena, the owner and
operator of the passenger jeepney, but ordered petitioner Ernesto Syki and his truck driver,
Elizalde Sablayan, to pay respondent Salvador Begasa, jointly and severally

Issue:

1. Whether or not petitioner is liable for the act of his employee.

2. Whether he exercised the diligence of a good father of a family.

Ruling:

In the present case, was respondent partly negligent and thus, should not recover the full
amount of the damages awarded by the trial court? We rule in the negative. In sum, the sole and
proximate cause of the accident was the negligence of petitioners driver who, as found by the
 37

lower courts, did not slow down even when he was already approaching a busy intersection
within the city proper. The passenger jeepney had long stopped to pick up respondent and his
three companions and, in fact, respondent was already partly inside the jeepney, when
petitioners driver bumped the rear end ofrear-ended it. The impact was so strong such that
respondent fell and fractured his lef thigh bone (femur), and suffered severely woundeds in his
lef knee and leg. No doubt that respondentpetitioners driver was reckless speeding.

Since the negligence of petitioners driver was the sole and proximate cause of the accident,
in the present case, petitioner is liable, under Article 2180 of the Civil Code, to pay damages to
respondent Begasa for the injuries sustained by latterhim. Petition denied.

SCHMITZ TRANSPORT & BROKERAGE CORPORATION vs. TRANSPORT

VENTURE, INC., INDUSTRIAL INSURANCE COMPANY, LTD., and BLACK
SEA SHIPPING AND DODWELL now INCHCAPE SHIPPING SERVICES
[G.R. No. 150255. April 22, 2005]

Facts:

On September 25, 1991, SYTCO Pte Ltd. Singapore shipped from the port of
Ilyichevsk, Russia on board M/V “Alexander Saveliev” 545 hot rolled steel sheets in coil
weighing 6,992,450 metric tons. The cargoes, which were to be discharged at the port of
Manila in favor of the consignee, Little Giant Steel Pipe Corporation (Little Giant), were
insured against all risks with Industrial Insurance Company Ltd. (Industrial Insurance)
under Marine Policy No. M-91-3747-TIS. The vessel arrived at the port of Manila and
the Philippine Ports Authority (PPA) assigned it a place of berth at the outside breakwater
at the Manila South Harbor.

Schmitz Transport, whose services the consignee engaged to secure the requisite
clearances, to receive the cargoes from the shipside, and to deliver them to its (the
consignee’s) warehouse at Cainta, Rizal, in turn engaged the services of TVI to send a
barge and tugboat at shipside. TVI’s tugboat “Lailani” towed the barge “Erika V” to
shipside. The tugboat, after positioning the barge alongside the vessel, left and returned
to the port terminal. Arrastre operator Ocean Terminal Services Inc. commenced to
unload 37 of the 545 coils from the vessel unto the barge. By 12:30 a.m. of October 27,
1991 during which the weather condition had become inclement due to an approaching
storm, the unloading unto the barge of the 37 coils was accomplished. No tugboat pulled
the barge back to the pier, however. At around 5:30 a.m. of October 27, 1991, due to
strong waves, the crew of the barge abandoned it and transferred to the vessel. The barge
pitched and rolled with the waves and eventually capsized, washing the 37 coils into the
sea.
 38

Little Giant thus filed a formal claim against Industrial Insurance which paid it the
amount of P5,246,113.11. Little Giant thereupon executed a subrogation receipt in favor
of Industrial Insurance. Industrial Insurance later filed a complaint against Schmitz
Transport, TVI, and Black Sea through its representative Inchcape (the defendants)
before the RTC of Manila, they faulted the defendants for undertaking the unloading of
the cargoes while typhoon signal No. 1 was raised. The RTC held all the defendants
negligent. Defendants Schmitz Transport and TVI filed a joint motion for reconsideration
assailing the finding that they are common carriers. RTC denied the motion for
reconsideration. CA affirmed the RTC decision in toto, finding that all the defendants
were common carriers — Black Sea and TVI for engaging in the transport of goods and
cargoes over the seas as a regular business and not as an isolated transaction, and Schmitz
Transport for entering into a contract with Little Giant to transport the cargoes from ship
to port for a fee.
Issue:
If there was negligence, whether liability for the loss may attach to Black Sea,
petitioner and TVI.
Ruling:
This Court holds then that petitioner and TVI are solidarily liable for the loss of the
cargoes. The following pronouncement of the Supreme Court is instructive:

In the discharge of its commitment to ensure the safety of passengers, a carrier may
choose to hire its own employees or avail itself of the services of an outsider or an
independent firm to undertake the task. In either case, the common carrier is not relieved
of its responsibilities under the contract of carriage.

The liability of the common carrier and an independent contractor would be solidary
(Art. 2194). 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 had no
contract existed between the parties, the contract can be said to have been breached by
tort, thereby allowing the rules on tort to apply.

As for Black Sea, its duty as a common carrier extended only from the time the
goods were surrendered or unconditionally placed in its possession and received for
transportation until they were delivered actually or constructively to consignee Little
Giant.
 39

SAMSUNG CONSTRUCTION COMPANY PHILIPPINES, INC., Petitioner, vs. FAR EAST BANK AND
TRUST COMPANY AND COURT OF APPEALS, Respondents.
2004-08-13 | G.R. No. 129015
Facts:

Samsung Construction maintained a current account with defendant Far East Bank and Trust
Company(FEBTC). The sole signatory to Samsung Construction's account was Jong Kyu Lee , its
Project Manager, while the checks remained in the custody of the company's accountant, Kyu
Yong Lee.

A certain Roberto Gonzaga presented to FEBTC a check payable to cash and drawn against
Samsung current account amounting to P999,500.00. The bank teller Cleofe Justiani checked the
balance and ascertained that there were enough funds to cover the check. Afer ascertaining the
authenticity of the signature of Jong she then asked Gonzaga to submit proof of his identity and
the latter presented 3 ID cards.

It was bank policy that two bank branch officers approve checks exceeding P100,000.00
thus it was checked by Senior Assistant Cashier Gemma Velez and Shirley Syfu.
Syfu then noticed that Jose Sempio III, the assistant accountant of Samsung Construction, was
also in the bank. Sempio was well-known to Syfu and the other bank officers, he being the
assistant accountant of Samsung Construction. Syfu showed the check to Sempio, who vouched
that Jong’s signature is genuine. Sempio said that the check was for the purchase of equipment
 40

for Samsung Construction. Satisfied, Syfu authorized the bank's encashment of the check to
Gonzaga.

The next day, Kyu, Samsung’s Accountant examined the balance of the bank account and
discovered that an amount of P999,500.00 had been encashed. Kyu perused the checkbook and
found out that the last page was missing. Kyu reported to Jong who proceeded to the bank and
found out that his signature was forged. He then filed a criminal case against Sempio for
qualified thef.

Samsung demanded that FEBTC credit said amount, it responded that it was still conducting
an investigation. During trial, both sides presented their respected expert witness to testify that
Jong’s signature was forged. Samsung presented Senior NBI Roda B. Flores and testified that it
was forged, FEBTC presented PNP Crime Lab document examiner Rosario Perez and showed that
it was genuine.

The RTC held that Jong’s signature was forged and directed FEBTC to pay back Samsung said
amount. On appeal, CA revered and absolved FEBTC of liability, concluding there was no forgery
and Samsung negligent.

Issue:

Whether or not FEBTC is negligent in ascertaining the genuineness of Jong’s signature in the
check.

Ruling:

The court ruled that FEBTC is negligent. Even assuming that FEBTC had a standing habit of
dealing with Sempio, acting in behalf of Samsung Construction, the irregular circumstances
attending the presentment of the forged check should have put the bank on the highest degree
of alert. The Court emphasized the highest degree of care and diligence is required of banks.

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.

Given the circumstances, extraordinary diligence dictates that FEBTC should have
ascertained from Jong personally that the signature in the questionable check was his.
 41

SPOUSES CRISTINO and BRIGIDA CUSTODIO and SPOUSES LITO and MARIA CRISTINA SANTOS,
petitioners, vs. COURT OF APPEALS, HEIRS OF PACIFICO C. MABASA and REGIONAL TRIAL
COURT OF PASIG, METRO MANILA, BRANCH 181, respondents.
1996-02-09 | G.R. No. 116100

Facts:

Original plaintiff Pacifico Mabasa died during the pendency of this case and was substituted
by Ofelia Mabasa, his surviving spouse [and children].

The plaintiff owns a parcel of land with a two-door apartment erected thereon situated at
Interior P. Burgos St., Palingon, Tipas, Tagig, Metro Manila. Said property may be described to be
surrounded by other immovables pertaining to defendants herein. Taking P. Burgos Street as the
point of reference, on the lef side, going to plaintiff's property, the row of houses will be as
follows: That of defendants Custodio, then that of Lito and Maria Cristina Santos and then that of
Ofelia Mabasa. On the right side (is) that of defendant Rosalina Morato and then a Septic Tank.
As an access to P. Burgos Street from plaintiff's property, there are two possible passageways.
The first passageway is approximately one meter wide and is about 20 meters distant from
Mabasa's residence to P. Burgos Street. Such path is passing in 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.
 42

Defendant Santoses constructed an adobe fence along their property which is also along the
first passageway making it narrower. Defendant Morato constructed her adobe fence and even
extended said fence in such a way that the entire passageway was enclosed. Tenants of said
apartment vacated the area. Defendant Ma. Cristina 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. She also mentioned
some other inconveniences of having at the front of her house a pathway such as when some of
the tenants were drunk and would bang their doors and windows. Some of their footwear were
even lost.

The trial court ordered the defendants to give plaintiff permanent egress and ingress to the
public street and ordered plaintiff to pay defendants P8,000.00 as indemnity for the permanent
uses of the streets.

Not satisfied, plaintiff’s heirs, herein respondents, appealed and raised that the trial court
erred in not awarding damages in their favor. The CA affirmed the decision with modifications
ordering defendants-appellees to pay plaintiffs-appellants the sum of Sixty Five Thousand
(P65,000) Pesos as Actual Damages, Thirty Thousand (P30,000) Pesos as Moral Damages, and
Ten Thousand (P10,000) Pesos as Exemplary Damages. The rest of the appealed decision is
affirmed to all respects

Issue:

Whether or not the award of damages by the CA is in order.

Ruling:

The CA erred in awarding damages in favor of private respondents. The award of damages
has no substantial legal basis. The CA’s award of damages was based solely on the fact that the
original plaintiff, Pacifico Mabasa, incurred losses in the form of unrealized rentals.

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 ofen called damnum
absque injuria.

In the case at bar, although there was damage, there was no legal injury. Contrary to the claim
of private respondents, 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, hence not contrary to morals, good customs or public policy. The law recognizes in the
owner the right to enjoy and dispose of a thing, without other limitations than those established
by law. It is within the right of petitioners, as owners, to enclose and fence their property.
 43

MARITER MENDOZA, Petitioner, vs. ADRIANO CASUMPANG, JENNIFER ADRIANE and JOHN
ANDRE, all surnamed CASUMPANG, Respondents.
2012-03-19 | G.R. No. 197987

Facts:

Josephine Casumpang underwent hysterectomy and myomectomy that Dr. Mendoza

performed on her at the Iloilo Doctors’ Hospital. Afer her operation, Josephine experienced
recurring fever, nausea, and vomiting. Three months afer the operation, she noticed while
taking a bath something protruding from her genital. She tried calling Dr. Mendoza to report it
but the latter was unavailable. Josephine instead went to see another physician, Dr. Edna
Jamandre-Gumban, who extracted a foul smelling, partially expelled rolled gauze from her
cervix.

This prompted Josephine to file a damage suit against Dr. Mendoza before the RTC of Iloilo.
She died before the trial could end thus her husband Adriano and their children Jennifer Adriane
and John Andre, substituted her in the case. She was a housewife and 40 years old when she
died.

The RTC found Dr. Mendoza guilty of neglect that caused Josephine’s illness and eventual
death and order to pay the plaintiff’s heirs actual damage of P50,000.00, moral damages of
P200,000.00, and attorney’s fees P20,000.00 plus cost of suit.

The RTC reversed itself upon motion for reconsideration and dismissed the complaint. The
CA reinstated the RTC’s original decision and held that Dr. Mendoza committed a breach of her
 44

duty as a physician when a gauze remained in the body of her patient afer surgery. The CA
denied her motion for reconsideration.

Issue:

Whether or not Dr. Mendoza is negligent and committed breach of her duty as a physician.

Ruling:

The court ruled that she is negligent. Dr. Mendoza claims that no gauze or surgical material
was lef in Josephine’s body as evidenced by the surgical sponge count in the hospital record.
The court pointed out that Josephine did not undergo any other surgical operation and it is
unlikely for her to inject a roll of gauze into her cervix. The court held in Professional Services,
Inc. vs. Agana:

“An operation requiring the placing of sponges in the incision is not complete until the
sponges are properly removed, and it is settled that the leaving of sponges or other foreign
substances in the wound afer the incision has been closed is at least prima facie negligence by
the operating surgeon. To put it simply, such act is considered so inconsistent with due care as to
raise an inference of negligence. There are even legions of authorities to the effect that such act
is negligence per se.”

A surgical operation is the responsibility of the surgeon performing it. He must personally
ascertain that the counts of instruments and materials used before the surgery and prior to
sewing the patient up have been correctly done.

To provide an example to the medical profession and to stress the need for constant
vigilance in attending to a patient’s health, the award of exemplary damages in this case is in
order. In view of Josephine’s death resulting from petitioner’s negligence, civil indemnity under
Article 2206 of the Civil Code should be given to respondents as heirs. The amount of P50,000.00
is fixed by prevailing jurisprudence for this kind.

The Court also deems it just and equitable under Article 2208 of the Civil Code to increase
the award of attorney’s fees from P20,000.00 to P50,000.00.
 45

ACHEVARA VS. RAMOS

G.R. No. 175172, September 29, 2009

Facts:

In their Complaint, respondents alleged that Benigno Valdez was driving a passenger
jeep heading north on the national highway in a reckless, careless, and negligent manner.
He tried to overtake a motorcycle, causing the passenger jeep to encroach on the opposite
lane and bump the oncoming vehicle driven by Arnulfo Ramos. The injuries sustained by
Arnulfo Ramos caused his death, notwithstanding prompt medical assistance.
Respondents alleged that Crescencia Achevara failed to exercise due diligence in the
selection and supervision of Benigno Valdez as driver of the passenger jeep. Respondents
sought to recover actual damages for medical expenses and funeral expenses, as well as
moral and exemplary damages, lost earnings, attorney's fees and litigation expenses.
Alfredo Achevara was impleaded as the husband of the operator and as the administrator
of the conjugal partnership properties of the Spouses Achevara. In their Answer,
petitioners denied respondents’ allegation that Benigno Valdez overtook a motorcycle and
bumped the vehicle driven by Arnulfo Ramos. They alleged that Benigno Valdez was
driving southward at a moderate speed when he saw an owner-type jeep coming from the
south and heading north, running in a zigzag manner, and encroaching on the west lane of
the road. To avoid a collision, Valdez drove the passenger jeep towards the shoulder of
the road, west of his lane, but the owner-type jeep continued to move toward the western
lane and bumped the left side of the passenger jeep. Petitioners alleged that it was
Arnulfo Ramos who was careless and negligent in driving a motor vehicle, which he very
 46

well knew had a mechanical defect. Hence, respondents had no cause of action against
petitioners.
The RTC ruled in favor of the petitioners applying the doctrine of last clear chance which
was then affirmed by the CA with modifications.
.
Issue:

Whether or not petitioners are liable to respondents for damages incurred as a result
of the vehicular accident.

Ruling:

No. Foreseeability is the fundamental test of negligence. To be negligent, a defendant

must have acted or failed to act in such a way that an ordinary reasonable man would
have realized that certain interests of certain persons were unreasonably subjected to a
general but definite class of risks. 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. However, 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. The doctrine of last clear chance does
not apply to this case, because 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. In
this case, 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.
 47

FLORES VS. PINEDA,

G.R. No. 158996, November 14, 2008

Facts:

Teresita Pineda consulted her town mate Dr. Fredelicto Flores regarding her medical
condition, complaining about general body weakness, loss of appetite, frequent urination
and thirst, and on-and-off vaginal bleeding. After interviewing Teresita, Dr. Fredelicto
advised her to go to United Doctors Medical Center (UDMC) in Quezon City for a
general check-up the following week but the former did not. As for her other symptoms,
he suspected that Teresita might be suffering from diabetes and told her to continue her
medications. When her conditions persisted, she went to UDMC where Dr. Fredelictor
check-up her and ordered her admission and further indicate on call Dilation and
Curettage (D&C) operation to be performed by his wife, Dra. Felicisima Flores, an Ob-
Gyne. Laboratory tests were done on Teresita including internal vaginal examination,
however, only the blood sugar and CBC results came out prior to operation which
indicated of diabetes. D&C operations were still done and thereafter, Dra. Felicisima
advised her that she can go home and continue to rest at home but Teresita opted
 48

otherwise. Two days after the operation, her condition worsened prompting further test to
be done which resulted that Teresita have diabetes melitus type II. Insulin was
administered but it might have arrived late, she died.

Issue:

Whether or not spouses petitioners are liable for medical negligence.

Ruling:

Yes. A medical negligence case is a type of claim to redress a wrong committed by a

medical professional, that caused a bodily harm to or the death of a patient. There are
four elements involved in a medical negligence case, namely: duty, breach, injury, and
proximate cause. Duty refers to the standard of behavior which imposes restrictions on
one’s conduct. The standard in turn refers to the amount of competence associated with
the proper discharge of the profession. A physician is expected to use at least the same
level of case that any other reasonably competent doctor would use under the same
circumstances. Breach of duty occurs when the physician fails to comply with those
professional standards. If injury results to the patient as a result of this breach, the
physician is answerable for negligence.
If a patient suffers from some disability that increases the magnitude of risk to him, that
disability must be taken into account as long as it is or should have been known to the
physician. Stress, whether physical or emotional, is a factor that can aggravate diabetes; a
D&C operation is a form of physical stress. Dr. Mendoza explained how surgical stress
can aggravate the patient’s hyperglycemia: when stress occurs, the diabetic’s body,
especially the autonomic system, reacts by secreting hormones which are counter-
regulatory; she can have prolonged hyperglycemia which, if unchecked, could lead to
death. Medical lecture further explains that if the blood sugar has become very high, the
patient becomes comatose (diabetic coma). When this happens over several days, the
body uses its own fats to produce energy, and the result is high level of waste products in
the blood and urine. These findings lead us to the conclusion that the decision to proceed
with the D&C operation notwithstanding Teresita’s hyperglycemia and without
adequately preparing her for the procedure, was contrary to the standards observed by the
medical profession. Deviation from this standard amounted to a breach of duty which
resulted in the patient’s death. Due to this negligent conduct, liability must attach to the
petitioner spouses.

BANK OF AMERICA VS. PHILIPPINE RACING CLUB

G.R. No. 150228, July 30, 2009

Facts:

Defendant PRC is a domestic corporation which maintains a current account with petitioner
Bank of America. Its authorized signatories are the company President and Vice-President. By
virtue of a travel abroad for these officers, they pre-signed checks to accommodate any
expenses that may come up while they were abroad for a business trip. The said pre-signed
checks were lef for safekeeping by PRC’s accounting officer. Unfortunately, the two (2) of said
checks came into the hands of one of its employees who managed to encash it with petitioner
bank. The said check was filled in with the use of a check-writer, wherein in the blank for the
'Payee', the amount in words was written, with the word 'Cash' written above it. Clearly there
was an irregularity with the filling up of the blank checks as both showed similar infirmities and
irregularities and yet, the petitioner bank did not try to verify with the corporation and
proceeded to encash the checks. PRC filed an action for damages against the bank. The lower
 49

court awarded actual and exemplary damages. On appeal, the CA affirmed the lower court's
decision and held that the bank was negligent. Hence this appeal. Petitioner contends that it was
merely doing its obligation under the law and contract in encashing the checks, since the
signatures in the checks are genuine.

Issue:

Whether or not the petitioner can be held liable for negligence and thus should pay
damages to PRC.

Ruling:

Both parties are held to be at fault but the bank has the last clear chance to prevent the
fraudulent encashment hence it is the one foremost liable. There was no dispute that the
signatures in the checks are genuine but the presence of irregularities on the face of the check
should have alerted the bank to exercise caution before encashing them. It is well-settled that
banks are in the business impressed with public interest that they are duty bound to protect
their clients and their deposits at all times. They must treat the accounts of these clients with
meticulousness and a highest degree of care considering the fiduciary nature of their
relationship. The diligence required of banks are more than that of a good father of a family.

In the case at bar, petitioner cannot evade responsibility for the loss by attributing
negligence on the part of respondent because, even if we concur that the latter was indeed
negligent in pre-signing blank checks, the former had the last clear chance to avoid the loss. To
reiterate, petitioners own operations manager admitted that they could have called up the client
for verification or confirmation before honoring the dubious checks. Verily, petitioner had the
final opportunity to avert the injury that befell the respondent. 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. Petitioners negligence has been undoubtedly established and, thus, pursuant to Art.
1170 of the NCC, it must suffer the consequence of said negligence.

CORINTHIAN GARDENS ASSOCIATION, INC V. TANJANGCO

G.R. No 160795, 27 June 2008

Facts:

Spouses Reynaldo and Maria Luisa Tanjangco (the Tanjangcos) own Lots 68 and 69 covered
by Transfer Certificates of Title (TCT) No. 2422454 and 2829615 respectively, located at
Corinthian Gardens Subdivision, Quezon City, which is managed by petitioner Corinthian Gardens
Association, Inc. (Corinthian). On the other hand, respondents-spouses Frank and Teresita Cuaso
(the Cuasos) own Lot 65 which is adjacent to the Tanjangcos’ lots.

Before the Cuasos constructed their house, it was surveyed by De Dios Realty the surveyor
as per recommendation of the petitioner association. Later on, Corinthian Gardens Association
approved the plans made by the builder CB Paras Construction.
 50

Corinthian conducted periodic ocular inspections in order to determine compliance with the
approved plans pursuant to the Manual of Rules and Regulations of Corinthian (MRRC).
Unfortunately, afer construction, the perimeter fence of the Cuasos’ encroached upon
Tanjancos’ lot.

The Cuasos ascribed negligence to C.B. Paraz for its failure to ascertain the proper
specifications of their house, and to Engr. De Dios for his failure to undertake an accurate
relocation survey, thereby, exposing them to litigation. The Cuasos also faulted Corinthian for
approving their relocation survey and building plans without verifying their accuracy and in
making representations as to Engr. De Dios' integrity and competence. The Cuasos alleged that
had Corinthian exercised diligence in performing its duty, they would not have been involved in a
boundary dispute with the Tanjangcos. Thus, the Cuasos opined that Corinthian should also be
held answerable for any damages that they might incur as a result of such construction.

Issue:

Whether Corinthian was negligent under the circumstances and, if so, other such negligence
contributed to the injury suffered by the Tanjangcos.

Ruling:

Corinthian is negligent. Its approval of the plan is tainted with negligence.

Petitioner is found negligent. The MRRC provides that no new constructions can be started
without the approval of the petitioner association. Thus, it is reasonable to assume that
Corinthian, through its representative, in the approval of building plans, and in the conduct of
periodic inspections of on-going construction projects within the subdivision, is responsible in
insuring compliance with the approved plans, inclusive of the construction of perimeter walls.

Corinthian’s failure to prevent the encroachment of the Cuasos’ perimeter wall into
Tanjancos’ property-despite the inspection conducted-constituted negligence and, at the very
least, contributed to the injury suffered by the Tanjangcos.

LIGHT RAIL TRANSIT V. NAVIDAD

G.R. No. 145804. February 6, 2003

Facts:

Navidad was drunk when he entered the boarding platform of the LRT. He got into an
altercation with the SG Escartin. They had a fistfight and Navidad fell onto the tracks and was
killed when a train came and ran over him.

The Heirs of Navidad filed a complaint for damages against Escartin, the train driver who is
Rodolfo Roman, the LRTA, the Metro Transit Organization and Prudent Security Agency
(Prudent). The trial court found Prudent and Escartin jointly and severally liable for damages to
the heirs. The CA exonerated Prudent and instead held the LRTA and the train driver Romero
 51

jointly and severally liable as well as removing the award for compensatory damages and
replacing it with nominal damages.

The reasoning of the CA was that a contract of carriage already existed between Navidad
and LRTA by virtue of his having purchased train tickets and the liability was caused by the mere
fact of Navidad's death afer being hit by the train being managed by the LRTA and operated by
Roman. The CA also blamed LRTA for not having presented expert evidence showing that the
emergency brakes could not have stopped the train on time.

Issues:

(1) Whether or not LRTA and/or Roman is liable for the death.
(2) Whether or not Escartin and/or Prudent are liable.
(3) Whether or not nominal damages may coexist with compensatory damages.

Ruling:

(1) Yes. The foundation of LRTA's liability is the contract of carriage and its obligation to
indemnify the victim arising from the breach of that contract by reason of its failure to exercise
the high diligence required of a common carrier.

(2) Fault was not established. Liability will be based on Tort under Art. 2176 of the New Civil
Code.

(3) No. It is an established rule that nominal damages cannot co-exist with compensatory
damages.

A common carrier is required by these above statutory provisions to use utmost diligence in
carrying passengers with due regard for all circumstances. This obligation exists not only during
the course of the trip but for so long as the passengers are within its premises where they ought
to be in pursuance to then contract of carriage.

Art. 1763 of the Civil Code, renders a common carrier liable for death of or 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.

If Prudent is to be held liable, it would be for a tort under Art. 2176 in conjunction with Art.
2180. Once the fault of the employee Escartin is established, the employer, Prudent, would be
held liable on the presumption that it did not exercise the diligence of a good father of the family
in the selection and supervision of its employees.

The award of nominal damages in addition to actual damages is untenable. 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. It is an established rule that nominal damages cannot co-
exist with compensatory damages. The award was deleted.
 52

OSCAR DEL CARMEN JR. V GERONIMO BACOY

GR No. 17738770 April 25, 2012

Facts:

Spouses Monsalud and their daughter died from being run over by a jeepney driven by a
certain Allan Maglasang. The jeepney was owned by Oscar del Carmen Jr. Allan was declared
guilty beyond reasonable doubt in a criminal case while the father of the late Mrs. Monsalud,
Geronimo Bacoy, filed an independent civil action againt the former in behalf of the minor
children lef by the Monsalud spouses.

Del Carmen Jr. claimed he was a victim as well as Allan stole the jeep and was not hired as a
driver by the former; he was a conductor and had been released from employment lately and it
 53

was the brother of Allan, Rodrigo who was hired as a driver. Del Carmen Jr. filed a carnapping
case against Allan but was dismissed by the court for insufficient evidence.

RTC held Del Carmen Jr. subsidiary liable and held the doctrine of res ipsa loquitur. The CA
adjudged Oscar Jr. liable to the heirs of the victims based on the principle that the registered
owner of a vehicle is directly and primarily responsible for the injuries or death of third parties
caused by the operation of such vehicle. It disbelieved Oscar Jr.’s defense that the jeep was
stolen not only because the carnapping case filed against Allan and his companions was
dismissed but also because, given the circumstances, Oscar Jr. is deemed to have given Allan the
implied permission to use the subject vehicle because the brothers were assigned to said jeep.
Afer a day’s work, the jeepney would be parked beside the brothers’ house and not returned to
Del Carmen’s residence; the jeep could easily be started even without the use of an ignition key;
the said parking area was not fenced or secured to prevent the unauthorized use of the vehicle
which can be started even without the ignition key

Issue:

W/N owner of vehicle is directly and primarily liable for injuries caused by the operation of
such

Ruling:

Del Carmen Jr. was held to be primarily liable and not merely subsidiary liable.
Del Carmen Jr.’s own evidence cast doubt that Allan stole the jeepney. Given the dismissal of the
carnapping case filed by del Carmen Jr. against Allan, the former also admitted to such dismissal
in the SC. Under the doctrine of res ipsa loquitur , “where the thing that caused the injury
complained of is shown to be under the management of the defendant or his servants; and the
accident, in the ordinary course of things, would not happen if those who had management or
control used proper care, it affords reasonable evidence – in the absence of a sufficient,
reasonable and logical explanation by defendant – that the accident arose from or was caused
by the defendant’s want of care. All three are present in the case at bar.

SPS. Alfredo Bontilao and Sherlina Bontilao Vs. Dr. Carlos Gerona
GR No. 176675 September 15, 2010

Facts:

On December 28, 1991, respondent Dr. Carlos Gerona, an orthopedic surgeon at the Vicente
Gullas Memorial Hospital, treated petitioner’s son, 8 y/o Allen Roy Bontilao, for a fractured right
wrist. Respondent administered a “U-spint” and immobilized Allen’s wrist with a cast, then sent
Allen home. On June 4, 1992, Alen re-fractured the same wrist and was brought back to the
hospital. The x-ray examination showed a complete fractured and displacement bone, with the
fragments overlapping each other. Respondent performed a closed reduction procedure, with
Dr. Vicente Jabagat as the anesthesiologist. Then he placed Allen’s arm in a plaster cast to
immobilize it. He allowed Allen to go home afer the post reduction x-ray showed that the bones
were properly aligned, but advised Allen’s mother, petitioner Sherlina Bontilao, to bring Allen
 54

back for re-tightening of the cast not later than June 15, 1992. Allen was however, only brought
back afer the said date. By then, because the cast had not be re-tightened, a rotational
deformity had developed in Allen’s arm. The x-ray examination showed that the deformity was
caused by a re-displacement of the bone fragments, so it was agreed that an open reduction
surgery will be conducted on June 24, 1992 by the respondent, again with Dr. Jabagat as the
anesthesiologist. On the said date, Sherlina was allowed to observe the operation behind a glass
panel. Dr. Jabagat failed to intubate the patient afer 5 attempts so anesthesia was administered
through a gas mask. Respondent asked Dr. Jabagat if the operation should be postponed given
the failure to intubate, but Dr. Jabagat said that it was alright to proceed. Respondent verified
that Allen was breathing properly before proceeding with the surgery. As respondent was about
to finish the suturing, Sherlina decided to go out of the operating room to make a telephone call
and wait for her son. Later, she was informed that her son died on the operating table. The cause
of death was asphyxia due to the congestion and edema of the epiglottis. Hence, a criminal,
administrative and civil case was filed by the parents of Allen against the doctors for the
negligence that caused Allen’s death.

Issue:

Whether or not respondent is liable for medical negligence due to the death of Allen.

Ruling:

No. The trial court erred in applying the doctrine of res ipsa liquitor to pin liability on
respondent for Allen’s death. Res ipsa liquitor is a rebuttable presumption or influence that the
defendant was negligent. The presumption only arises upon proof that the instrumentality
causing injury was in the defendant’s exclusive control, and that the accident was one which
ordinarily does not happen in the absence of negligence. It is a rule of evidence whereby
negligence of the alleged wrong does may be inferred from the mere fact that the accident
happened, provided that the character of the accident and circumstances attending it lead
reasonably to the belief that in the absence of negligence it would not have occurred and that
the thing which caused injury is shown to have been under the management and control of the
alleged wrong doer.
Res ipsa liquitor is not a rigid or ordinary doctrine to be perfunctorily used but a rule to be
cautiously applied defending upon the circumstances of each case. In malpractice case, the
doctrine is generally restricted to situations where a layman is able to say, as a matter of
common knowledge and observation, that the consequence of professional care were not as
such as would ordinarily have followed if due care had been exercised.

Benjamin Salvosa and Baguio College Foundation Vs. The Intermediate Appellate Court,
Eduardo B. Castro, Diomedes B. Castro, Virgina Castro and Rodolfo Castro
G.R. No. 70458 October 5, 1988

Facts:

Baguio Colleges Foundation (BCF) is an academic institution. However, it is also an

institution of arts and trade because BCF has a full-fledged technical-vocational
department offering Communication, Broadcast and Teletype Technician courses as well
as Electronics Serviceman and Automotive Mechanics courses.

Within the premises of the BCF is an ROTC Unit. The Baguio Colleges Foundation
ROTC Unit had Jimmy B. Abon as its duly appointed armorer. As armorer of the ROTC
Unit, Jimmy B. Abon received his appointment from the AFP. Not being an employee of
 55

the BCF, he also received his salary from the AFP, as well as orders from Captain
Roberto C. Ungos. Jimmy B. Abon was also a commerce student of the BCF.

On 3 March 1977, at around 8:00 p.m., in the parking space of BCF, Jimmy B. Abon
shot Napoleon Castro a student of the University of Baguio with an unlicensed firearm
which the former took from the armory of the ROTC Unit of the BCF. As a result,
Napoleon Castro died and Jimmy B. Abon was prosecuted for, and convicted of the crime
of Homicide.

Subsequently, the heirs of Napoleon Castro sued for damages, impleading Jimmy B.
Abon and the BCF .

Issue:

Whether or not petitioners can be held solidarity hable with Jimmy B. Abon for
damages under Article 2180 of the Civil Code, as a consequence of the tortious act of
Jimmy B. Abon

Ruling:

Under the paragraph of Art. 2180 of the Civil Code, 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 attendancein the school, including
recess time.” 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.

Joseph Saludaga Vs. FEU and Edilberto C. De Jesus

G.R. No. 179337, April 30, 2008

Facts :

Petitioner Joseph Saludaga was a sophomore law student of (FEU) when he was shot by
Alejandro Rosete, one of the security guards on duty at the school premises on August 18, 1996.
Petitioner was rushed to FEU Hospital due to the wound he sustained. Meanwhile, Rosete was
brought to the police station where he explained that the shooting was accidental. He was
eventually released considering that no formal complaint was filed against him.
Saludaga thereafer filed with RTC Manila a complaint for damages against respondents
on the ground that they breached their obligation to provide students with a safe and secure
environment and an atmosphere conducive to learning.
 56

Respondents, in turn, filed a Third-Party Complaint against Galaxy Dvpt and Mgt Corp.
(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, if any; and to pay attorney's fees and cost of the suit. On the
other hand, Galaxy and Imperial filed a Fourth-Party Complaint against AFP General Insurance.

On Nov.10, 2004, the trial court ruled in favor of Saludaga .Respondents then appealed to
the CA which ruled in its favor, reversing the RTC decision, dismissing the complaint, and also
denying Saludaga’s subsequent Motion for reconsideration. Hence, the instant petition.

Issue:

Whether or not respondent is liable under article 2180 of the Civil Code?

Ruling:

Incidentally, 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. The
latter 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.

HEIRS OF REPENDOR COMPLETO AND ELPIDIO ABIAD VS. SGT. AMANDO C. ALBAYDA
G.R. NO. 172200, JULY 6, 2010. J. NACHURA

Facts:

On August 27, 1997, Respondent Albayda was on his way to the office to report for duty as
Master Sergeant of the Philippine Air Force, riding a bicycle along the streets. The taxi driver
Completo, the petitioner, bumped and side swiped him, causing respondent Albayda suffered
from serious physical injuries. Albayda was brought to the hospital and was confined twice
therein from August 27, 1997 to February 11, 1998 and February 23, 1998 until March 22, 1998,
respectively, due to fracture in his lef knee which necessitated his stay in the hospital for several
months. Then afer, he underwent medical physiotherapy for more than a year. A barangay
conciliation was effected between the parties, but failed. Thus, this prompted Albayda to file a
 57

complaint for physical injuries through reckless imprudence against Completo. On the other
hand, Completo filed a counter-charge of damage to property through reckless imprudence
against Albayda. Albayda manifested his reservation to file a separate civil action for damages
against petitioners Completo and taxi owner/operator Abiad in the MTC. The RTC rendered
judgment in favor of Albayda and against the driver and taxi owner/operator. They are ordered
to pay actual damages, moral damages and Attorney’s fee. Completo and Abiad filed an appeal,
however, CA affirmed the MTC’s decision with modification on the award of damages.

Issue:

(1) Whether or not petitioner driver Completo liable for negligence against Albayda.
(2)Whether or not taxi owner/operator Abiad is solidarily liable with driver Completo for
quasi-delict.
(3)Whether or not award of moral and temperate damages and attorney’s fee had basis.

Ruling:

It was proven by a preponderance of evidence that Completo failed to exercise reasonable

diligence in driving the taxicab because he was over-speeding at the time he hit the bicycle
ridden by Albayda. Such negligence was the sole and proximate cause of the serious physical
injuries sustained by Albayda. Completo did not slow down even when he approached the
intersection of 8th and 11th Streets of VAB. It was also proven that Albayda had the right of way,
considering that he reached the intersection ahead of Completo. Further, considering the fact
that usually more diligence will be required of a motorist than a bicyclist in discharging his duty
of care to the other because of the physical advantages the automobile has over the bicycle.
Article 2176 of the Civil Code provides that whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no preexisting contractual relation between the parties, is called a quasi-
delict.

As to the liability of taxi owner/operator Abiad, the court declared that when an when an
injury is caused by the negligence of an employee, a legal presumption instantly arises that the
employer was negligent. This presumption may be rebutted only by a clear showing on the part
of the employer that he exercised the diligence of a good father of a family in the selection and
supervision of his employee. However, in this case, the protestation of Abiad to escape liability is
short of the diligence required under the law. Abiad’s evidence consisted entirely of testimonial
evidence, and the unsubstantiated and self-serving testimony of Abiad was insufficient to
overcome the legal presumption that he was negligent in the selection and supervision of his
driver. He failed to prove the due diligence required by law as employer, thus he is also primarily
and directly liable with the driver Completo against the respondent.

The CA deleted the award for actual damages because respondent Albayda failed to present
documentary evidence to establish with certainty the amount he incurred during his
hospitalization and treatment. The court finds temperate damages reasonable to award since
pecuniary loss is apparently suffered however the amount cannot be ascertained. Attorney’s fee
is hereby deleted for failure to prove that petitioner acted in bad faith in refusing to satisfy
respondent’s just and valid claim.
 58

FILAMER CHRISTIAN INSTITUTE VS. HONORABLE COURT OF APPEALS

G.R. NO. 75112, OCTOBER 16, 1990. J. FERNAN

Facts:

In the evening of October 20, 1977, private respondent Potenciano Kapunan Sr., an
octogenarian retired school teacher was struck by the Pinoy jeep owned by petitioner Filamer
and driven by Daniel Funtecha, a working student of Filamer Christian Institute. As a
consequence, Kapunan suffered multiple injuries and was hospitalized for 20 days. Funtecha,
who only had a student driver’s permit at that time, was with Allan Masa, the authorized driver
of the said vehicle. Kapunan instituted a criminal case against Funtecha alone for serious physical
injuries through reckless imprudence. And manifested his right to file an independent civil action
against Funtecha. The court found Funtecha guilty as charged and on appeal, his conviction was
 59

affirmed by the appellate court. Pursuant to his reservation, Kapunan, filed a case for damages
against Filamer and Funtecha, including Dr. Agustin Masa, the director and president of Filamer;
as well as Zenith Insurance Corporation (Zenith for brevity) as third party- defendant. However,
Allan Masa, was not impleaded as co-defendant of the case. The court found all of them guilty
and hereby ordered jointly and severally to pay the cost of the suit. Filamer and Zenith appealed
the decision of the lower court, but, the judgment of the lower court was affirmed by the CA.

Issue:

Whether or not Filamer is liable to pay the damages for the tortious act of Funtecha.

Ruling:

Accordingly, Filamer is directly and primarily answerable to the injured party under Article
2180 of the Civil Code would have prospered had if they proceeded against Allan Masa, the
authorized driver of the Pinoy jeep and undisputably an employee of petitioner. 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.

In addition, Funtecha, being a working student of the said school, belongs to a special
category wherein he cannot be considered as Filamer’s employee. He was employed as a janitor,
but at the time of the wrongdoing, Funtecha was not acting within the scope of his supposed
job. Therefore, Funtecha should bear the full drunt of his tortious negligence. Petitioner Filamer
cannot be made liable for the damages he had caused.

SPOUSES BENJAMIN AND SONIA MAMARIL VS. THE BOY SCOUT OF THE PHILIPPINES, ET AL.
G.R. NO. 179382, JANUARY 14, 2013. J. PERLAS- BERNABE.

Facts:
Spouses Mamaril are jeepney operators since 1971. They park their 6 passenger jeepneys
every night at the Boy Scout (BSP) compound for a fee of P300.00 per month for each unit. The
AIB Security Agency, Inc (AIB) was the contracting agency responsible for the security and
protection of the compound and its properties. On May 26, 1995 in the evening, all jeepneys
were parked inside th BSP compound. The following morning, one vehicle was missing and was
never recovered. The security guards namely, Gaddi and Peña, of AIB who were incharged when
the embezzlement was committed said that a male person who looked familiar to them took the
vehicle out of the compound. The spouses filed a complaint for damages before the RTC against
BSP, AIB and security guards Peña and Gaddi for gross negligence. The court rendered judgment
in favor of the spouses Mamaril and defendants were ordered to pay jointly and severally the
 60

cost of the vehicle including the damages. On June 11, 2002, the RTC modified its decision
reducing the cost of the stolen vehicle. Only BSP appealed before the CA. The CA affirmed the
findings of the lower court, but, absolving BSP from any liability. It also deleted the award of
moral and exemplary damages as well as the amount of the accessories of the lost jeepney.
Spouses filed a motion for reconsideration thereof, however, the motion was denied.

Issue:
Whether or not the BSP is jointly and severally liable for gross negligence along with AIB and
security guards Peña and Gaddi.

Ruling:
No. Article 1311 of the Civil Code states that contracts take effect only between the parties,
their assigns and heirs, except in case where the rights and obligations arising from the contract
are not transmissible by their nature, or by stipulation or by provision of law. It is undisputed
that Sps. Mamaril are not parties to the Guard Service Contract between the BSP and
AIB. Neither did the subject agreement contain any stipulation pour autrui that a third party may
demand fulfillment of the either parties’ obligation, provided that the requisites are complied
with. However, in this case no stipulations pour autrui was provided. Thus, under the principle of
relativity of contracts, they cannot validly claim any rights or favor under the said agreement.

The court also declared that what was between BSP and spouses Mamaril is a contract of
lease. Article 1643 of the Civil Code held that the act of parking a vehicle in a garage, upon
payment of a fixed amount, is a lease. As a lessor, Article 1664 of the same Code states that "the
lessor is not obliged to answer for a mere act of trespass which a third person may cause on the
use of the thing leased; but the lessee shall have a direct action against the intruder." Here, BSP
was not remiss in its obligation to provide Sps. Mamaril a suitable parking space for their
jeepneys as it even hired security guards to secure the premises; hence, it should not be held
liable for the loss suffered by Sps. Mamaril. As to the contract of lease and its management, the
parking fee of P300.00 per month or P10.00 a day for each unit is too minimal an amount to
even create an inference that BSP undertook to be an insurer of the safety of plaintiff’s vehicles.
The awards of moral and exemplary damages and attorney's fees were properly disallowed by
the CA for lack of factual and legal bases.

Professional Services Inc., Petitioner, vs. NATIVIDAD and ENRIQUE AGANA, Respondents.
G.R. No. 127590
February 2, 2010

Facts:

Enrique Agana told his wife Natividad Agana to look for their neighbour, Dr. Ampil, a surgeon staff
member of Medical City General Hospital, a prominent and known hospital, owned and operated by
Professional Services Incorporated (PSI). Natividad Agana underwent medical surgery in said Hospital.
The attendant doctors were Dr. Ampil and Dr. Fuentes. Natividad suffered from injury due to two (2)
gauzes left inside her body during the operation. Despite the report of the (2) two missing gauzes, PSI did
not initiate an investigation.

This case consolidated three (3) other cases previously decided and became final and executory.
Hence, this case is limited only to the second motion for reconsideration filed by the PSI in an attempt
absolve itself from liability.

Issue:

Whether or not PSI is liable for tort?

 61

Ruling:

Yes. PSI is liable. Firstly, under the principle of Ostensible Agency, according to the Court, ample
evidence that the hospital held out to the patient that the doctor was its agent. Present are the two factors
that determine apparent authority: first, the hospital's implied manifestation to the patient which led the
latter to conclude that the doctor was the hospital's agent; and second, the patient’s reliance upon the
conduct of the hospital and the doctor, consistent with ordinary care and prudence the decision made by
Enrique for [his wife] Natividad to consult Dr. Ampil was significantly influenced by the impression that
Dr. Ampil was a staff member of Medical City General Hospital, and that said hospital was well known and
prominent. Enrique looked upon Dr. Ampil not as independent of but as integrally related to Medical City.
The Supreme Court also held that the hospital’s “consent for hospital care” - required to be signed prior to
the surgery - affirmed that the surgeon was of the hospital.

Secondly, under the principle of Corporate Negligence, which was self-imposed liability because of
the statements made by the PSI which constituted judicial admission in its Motion for Reconsideration. Its
statements revealed that it had the power to review or cause the review of what may have irregularly
transpired within its walls strictly for the purpose of determining whether some form of negligence may
have attended any procedure done inside its premises, with the ultimate end of protecting its patients.

The Court also noted the hospital admitted “the standards of its corporate conduct under the
circumstances of this case, specifically: (a) that it had a corporate duty to Natividad even after her operation
to ensure her safety as a patient; (b) that its corporate duty was not limited to having its nursing staff note or
record the two missing gauzes and (c) that its corporate duty extended to determining Dr. Ampil's role in it,
bringing the matter to his attention, and correcting his negligence. The Court held that the case 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 doctors-consultants under any and all circumstances.”

ROGELIO NOGALES V. CAPITOL MEDICAL CENTER

G.R. No. 142625, 19 December 2006

Facts:

Pregnant with her fourth child, Corazon Nogales (Corazon), who was then 37 years old, was
under the exclusive prenatal care of Dr. Oscar Estrada (Dr. Estrada) beginning on her fourth
month of pregnancy or as early as December 1975. Around midnight of 25 May 1976, Corazon
started to experience mild labor pains prompting Corazon and Rogelio Nogales (Spouses
Nogales) to see Dr. Estrada at his home. Afer examining Corazon, Dr. Estrada advised her
immediate admission to the Capitol Medical Center (CMC). t 6:13 a.m., Corazon started to
experience convulsionsAt 6:22 a.m., Dr. Estrada, assisted by Dr. Villaflor, applied low forceps to
extract Corazon's baby. In the process, a 1.0 x 2.5 cm. piece of cervical tissue was allegedly
torn.At 6:27 a.m., Corazon began to manifest moderate vaginal bleeding which rapidly became
profuse. Corazon died at 9:15 a.m. The cause of death was uhemorrhage, post partum.

Issue:

Whether or not CMC is vicariously liable for the negligence of Dr. Estrada.

Ruling:

Private hospitals, hire, fire and exercise real control over their attending and visiting
uconsultantu staff. The basis for holding an employer solidarily responsible for the negligence of
its employee is found in Article 2180 of the Civil Code 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.
 62

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
uostensibleu agent of the hospital. This exception is also known as the udoctrine of apparent
authorityu.

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. In the instant case, CMC impliedly held out Dr. Estrada as a
member of its medical staff. Through CMC's acts, CMC clothed Dr. Estrada with apparent
authority thereby leading the Spouses Nogales to believe that Dr. Estrada was an employee or
agent of CMC.

FILCAR TRANSPORT SERVICES V. ESPINAS

GR. No. 174156, 20 June 2012

Facts:

Espinas, while driving, was hit by another car. The other car escaped from the scene of the
incident, but Espinas was able to get its plate number.

Afer verifying with the Land Transportation Office, Espinas learned that the owner of the
other car, with plate number UCF-545 is Filcar.

Afer sending several letters to Filcar and to its President and General Manager Carmen
Flor,demanding payment for the damages sustained by his car without response, Espinas filed a
complaint for damages against Filcar and Carmen Flor demanding the amount of P97,910.00,
representing actual damages sustained by his car. Filcar argued that while it is the registered
owner of the car that hit and bumped Espina’s car, the car was assigned to its Corporate
Secretary Atty. Candido Flor, the husband of Carmen Flor. Filcar furtherstated that when the
incident happened, the car was being driven by Atty. Flor’s personal driver,Timoteo
Floresca.Filcar denied any liability to Espinas and claimed that the incident was not due to its
fault or negligence since Floresca was not its employee but that of Atty. Flor. Filcar and Carmen
Flor.

Issue:

Whether Filcar, as registered owner of the motor vehicle which figured in an accident, may
be held liable for the damages caused to Espinas.

Ruling:
 63

Yes. Filcar, as registered owner, is deemed the employer of the driver, Floresca, and is thus
vicariouslyliable under Article 2-3 in relation with Article 24/ ofhe Civil Code As a general rule,
one is only responsible for his own act or omission.Thus, a person will generally beheld liable
only for the torts committed by himselfand not by another. The law, however, provides
fore5ceptions that an employer is made vicariously liable for the tort committed by his
employee. Article24/ ofhe Civil Code states6Article 24/. The obligation imposed by Article 2-
3 is demandable not only for one0s own acts oromissions, but also for those ofpersons for whom
one is responsible. Employers shall be liable for the damages caused by their employees and
household helpers actingwithin the scope ofheir assigned tas7s, even though the former are not
engaged in any business orindustry.

Under Article 2176, in relation with Article 2180, ofhe Civil Code, an action predicated on
an employee’s act or omission may be instituted against the employer who is held liable for the
negligentact or omission committed by his employee.It is well settled that in case ofmotor
vehicle mishaps, the registered owner ofhe motor vehicle isconsidered as the employer ofhe
tortfeasor'driver, and is made primarily liable for the tort committedby the latter under Article
2176, in relation with Article 2180, ofhe Civil Code.Filcar is not be permitted to evade its liability
for damages by conveniently passing on the blame toanother party8 in this case, its Corporate
Secretary, Atty. Flor and his alleged driver, Floresca. WHEREFORE, the petition is DENIED. The
decision the Court of Appeals are AFFIRMED. Costsagainst petitioner Filcar Transport Services.

CZARINA T. MALVAR VS. KRAFT FOODS PHILS., INC. AND/OR BIENVENIDO BAUTISTA, KRAFT
FOODS INTERNATIONAL
G.R. No. 183952. September 9, 2013

Facts:

In 1988, Kraf Foods Phils., (KRAFT) hired Czarina Malvar as its Corporate Planning Manager.
She rose in the ranks and became the Vice President for Finance in the Southeast Asia region of
Kraf Foods International, KFPI’s mother company. In 1999, the chairman of the board of KFPI
and concurrently the VP and Area Director for SEA, sent Malvar a memo directing her to explain
why no administrative sanctions should be imposed on her for possible breach of trust and
confidence and for willful violation of company rules and regulations. She was places under
preventive suspension and ultimately she was served a notice of termination. Malvar,
aggrieved, filed a complaint for illegal suspension and illegal dismissal against KFPI and Bautista
in the NLRC. The Labor Arbiter found and declared her suspension and dismissal illegal and
ordered her reinstatement. The judegment became final and executory however Malvar’s award
was reduced. Both parties appealed the computation of the NLRC. While pending appeal, Malvar
and the respondents entered into a compromise agreement wherein Malvar would be paid 40
million pesos. Malvar moved to withdraw the case in view of the compromise agreement . But
before the court could act on the motion to dismiss/withdraw, a motion for intervention to
protect the Attorney's rights was filed. It appears that, to the intervenor’s surprise, Malvar
unceremoniously and without any justifiable reason terminated its legal service and required it
to withdraw from the case. The intervenor indicated that Malvar’s precipitate action had baffled,
shocked and even embarrassed the intervenor, because it had done everything legally possible
to serve and protect her interest. It added that it could not recall any instance of conflict or
misunderstanding with her, for on the contrary, she had even commended it for its dedication
and devotion to her case.

Issue:
 64

Whether or not KRAFT is jointly and severally liable to pay the intervenor Law firm?

Ruling:

The respondents would be liable if they were shown to have connived with Malvar in the
execution of the compromise agreement, with the intention of depriving the intervenor of its
attorney’s fees. Therefore they would be solidarily liable with her for the attorney’s fees as
stipulated in the written agreement under the theory that they unfairly and unjustly interfered
with the intervenors’ professional relationship with Malvar.

The respondents were complicit in Malvar's move to deprive the Intervenor of its duly
earned contingent fees. At this juncture, the Court notes that the compromise agreement would
have Malvar waive even the substantial stock options already awarded by the NLRC's decision,
which ordered the respondents to pay to her, among others, the value of the stock options and
all other bonuses she was entitled to or would have been entitled to had she not been illegally
dismissed from her employment. This ruling was affirmed by the CA. But the waiver could not
negate the Intervenor's right to 10% of the value of the stock options she was legally entitled to
under the decisions of the NLRC and the CA, for that right was expressly stated in the written
agreement between her and the Intervenor. Thus, the Intervenor should be declared entitled to
recover full compensation in accordance with the written agreement because it did not assent to
the waiver of the stock options, and did not waive its right to that part of its compensation.

The circumstances show that Malvar and the respondents needed an escape from greater
liability towards the intervenor, and from the possible obstacle to their plan to settle to pay.
Thereby, she and the respondents became joint tort-feasors who acted adversely against the
interests of the Intervenor. Under Article 2194 of the Civil Code, joint tort-feasors are solidarily
liable for the resulting damage.

NATIONAL POWER CORPORATION V. COURT OF APPEALS

G.R. No. 119121. August 14, 1998.

Facts:

A convoy of four (4) dump trucks owned by the National Power Corporation (NPC) lef
Marawi city bound for Iligan city. Unfortunately, enroute to its destination, one of the trucks with
plate no. RFT-9-6-673 driven by a certain Gavino Ilumba figured in a head-on-collision with a
Toyota Tamaraw. The incident resulted in the death of 3 persons riding in the Toyota Tamaraw, as
well as physical injuries to 17 other passengers. The heirs of the victims then filed a complaint
for damages against National Power Corporation (NPC) and PHESCO Incorporated (PHESCO)
before the then Court of First Instance of Lanao del Norte, Marawi City. When defendant
PHESCO filed its answer to the complaint it contended that it was not the owner of the dump
truck which collided with the Toyota Tamaraw but NPC. Moreover, it asserted that it was merely
a contractor of NPC with the main duty of supplying workers and technicians for the latters
projects. On the other hand, NPC denied any liability and countered that the driver of the dump
truck was the employee of PHESCO. Trial court absolved NPC and ordered PHESCO, Inc. and
Gavino Ilumba to pay jointly and severally the plaintiffs thru the Dansalan College the sum of
P954,154.55 representing the actual or compensatory damages incurred by the plaintiffs; and
P50,000.00 representing Attorneys fees. Dissatisfied, PHESCO appealed. CA reversed the trial
courts judgment. Chagrined by the sudden turnaround, NPC filed a motion for reconsideration of
said decision which was, however, denied on February 9, 1995. Hence, this petition.

Issue:
Whether or not NPC is liable for the tort of driver Gavino Ilumba?
Ruling:
YES. In the case at bar, there is no doubt that PHESCO was engaged in labor-only
contracting vis-a-vis NPC and as such, it is considered merely an agent of the latter. So,
even if PHESCO hired driver Gavino Ilumba, as PHESCO is admittedly a labor only
contractor of NPC, the statute itself establishes an employer-employee relationship
 65

between the employer NPC and the employee (driver Ilumba) of the labor only contractor
(PHESCO).

Consequently, we hold PHESCO not liable for the tort of driver Ilumba, as there was
no employment relationship between PHESCO and driver Ilumba. Under Article 2180 of
the Civil Code, to hold the employer liable for torts committed by his employees within
the scope of their assigned task, there must exist an employer-employee relationship.

Also, the position of NPC that even assuming that a labor only contract exists
between it and PHESCO, its liability will not extend to third persons who are injured due
to the tortious acts of the employee of the labor-only contractor, stated otherwise, its
liability shall only be limited to violations of the Labor Code and not quasi-delicts is
misplaced. It bears stressing that the action was premised on the recovery of damages as a
result of quasi-delict against both NPC and PHESCO, hence, it is the Civil Code and not
the Labor Code which is the applicable law in resolving this case.

An implementing rule on labor cannot be used by an employer as a shield to avoid

liability under the substantive provisions of the Civil Code.

In this regard, NPC's liability is direct, primary and solidary with PHESCO and the
driver. Of course, NPC, if the judgment for damages is satisfied by it, shall have recourse
against PHESCO and the driver who committed the negligence which gave rise to the
action.

LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN vs. MARJORIE NAVIDAD, HEIRS OF THE
LATE NICANOR NAVIDAD & PRUDENT SECURITY AGENCY. G.R. No. 145804. February 6, 2003.

Facts:

Navidad was drunk when he entered the boarding platform of the LRT. He got into an
altercation with the Security Guard Junelito Escartin. They had a fistfight and Navidad fell onto
the tracks and was killed instantaneously upon being hit by a moving train operated by Rodolfo
Roman. The Heirs of Navidad filed a complaint for damages against Escartin, the train driver
(Roman), the LRTA, the Metro Transit Organization and Prudent Security Agency (agency of
security guards) for the death of her husband. The trial court found Prudent and Escartin jointly
and severally liable for damages to the heirs. The Court of Appeals however reversed the
decision of the RTC by exonerating Prudent and instead held the LRTA and the train driver
Romero jointly and severally liable as well as removing the award for compensatory damages
and replacing it with nominal damages.

The reasoning of the CA was that a contract of carriage already existed between Navidad
and LRTA by virtue of his having purchased train tickets and the liability was caused by the mere
fact of Navidad's death afer being hit by the train being managed by the LRTA and operated by
Roman. The CA also blamed LRTA for not having presented expert evidence showing that the
emergency brakes could not have stopped the train on time.

Issues:

(1) Whether or not LRTA and/or Roman is liable for the death.

(2) Whether or not Escartin and/or Prudent are liable.

(3) Whether or not nominal damages may coexist with compensatory damages.

Ruling:
 66

(1) Yes. The foundation of LRTA's liability is the contract of carriage and its obligation to
indemnify the victim arising from the breach of that contract by reason of its failure to exercise
the high diligence required of a common carrier.

(2) Fault was not established. If Prudent is to be held liable, it would be for a tort under Art.
2176 in conjunction with Art. 2180. Once the fault of the employee Escartin is established, the
employer, Prudent, would be held liable on the presumption that it did not exercise the diligence
of a good father of the family in the selection and supervision of its employees.

(3) No. It is an established rule that nominal damages cannot co-exist with compensatory
damages. The award of nominal damages in addition to actual damages is untenable. 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. It is an established rule that nominal damages cannot co-
exist with compensatory damages. The award was deleted.

PHILIPPINE NATIONAL RAILWAYS CORPORATION vs

PURIFICACION VIZCARA
G.R. No. 190022, February 15, 2012

Facts:

On May 14, 2004, at about three oclock in the morning, Reynaldo Vizcara was driving a
passenger jeepney headed towards Bicol to deliver onion crops, with companions, namely,
Cresencio, Crispin, Samuel, Dominador and Joel. While crossing the railroad track in Tiaong,
Quezon, a Philippine National Railways (PNR) train, then being operated by respondent Japhet
Estranas (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. The survivors of the mishap, Joel
and Dominador, together with the heirs of the deceased victims, filed an action for damages
against PNR, and the alternate driver of the train. The petitioners 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. The Trial Court
ruled in favor of the private respondents. Unyielding, the petitioners appealed the RTC decision
to the CA. The CA affirmed the RTC decision with modification. Thus this petition.

Issues:

(1)Whether or not the proximate cause of the accident was the negligence of the
petitioners.
(2)Whether or not the doctrine of last clear chance finds no application in the instant
case
(3)Whether or not there was contributory negligence on the part of the respondents.

Ruling:
 67

Yes, the petitioners’ negligence was the proximate cause of the accident. Both courts ruled
that the petitioners fell short of the diligence expected of it, taking into consideration the nature
of its business, to forestall any untoward incident. In particular, the petitioners 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. Having established the fact of negligence on the part of
the petitioners, they were rightfully held liable for damages.

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 petitioners 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.
There was no contributory negligence on the part of the respondents. Contributory
negligence is a 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. It is an act or omission amounting to want of ordinary care on the part of the person
injured which, concurring with the defendants’ negligence, is the proximate cause of the injury.
Hence, we cannot see how the respondents could have contributed to their injury when they
were not even aware of the forthcoming danger.
 68

BANK OF THE PHILIPPINE ISLANDS vs

LIFETIME MARKETING CORPORATION
G.R. No. 176434, June 25, 2008

Facts:

Lifetime Marketing opened a current account with the BPI. In this account, the sales agents
of LMC would have to deposit their collections or payments to the latter. As a result, LMC and
BPI, made a special arrangement that the formers agents will accomplish three (3) copies of the
deposit slips, the third copy to be retained and held by the teller until LMCs authorized
representatives, shall retrieve them on the following banking day. Sometime in 1986, LMC
availed of the BPIs inter-branch banking network services, whereby the formers agents could
make deposit to any BPI branch in Metro Manila under the same account. Under this system,
BPIs bank tellers were no longer obliged to retain the extra copy of the deposit slips instead, they
will rely on the machine-validated deposit slip, to be submitted by LMCs agents. For its part, BPI
would send to LMC a monthly bank statement relating to the subject account. This practice was
observed and complied with by the parties. As a business practice, the registered sales agents or
the Lifetime Educational Consultants of LMC, can get the books from the latter on consignment
basis, then they would go directly to their clients to sell. These agents or Lifetime Educational
Consultants would then pay to LMC, seven (7) days afer they pick up all the books to be sold.
Since LMC have several agents around the Philippines, it required to remit their payments
through BPI, where LMC maintained its current account. It has been LMCs practice to require its
agents to present a validated deposit slip and, on that basis, LMC would issue to the latter an
acknowledgement receipt. Alice Laurel, is one of LMCs Educational Consultants or agents, made
check deposits with the BPI branches and, afer the check deposit slips were machine-validated,
requested the teller to reverse the transactions. Based on general banking practices, however,
the cancellation of deposit or payment transactions upon request by any depositor or payor,
requires that all copies of the deposit slips must be retrieved or surrendered to the bank. This
practice, in effect, cancels the deposit or payment transaction, thus, it leaves no evidence for any
 69

subsequent claim or misrepresentation made by any innocent third person. Notwithstanding

this, the verbal requests of Alice Laurel and her husband to reverse the deposits even afer the
deposit slips were already received and consummated were accommodated by BPI tellers.
Upon discovery of this fraud, LMC made queries from the BPI branches involved. In reply to
said queries, BPI branch managers formally admitted that they cancelled, without the permission
of or due notice to LMC, the deposit transactions made by Alice and her husband, and based
only upon the latters verbal request or representation.

Issues:

Whether or not BPI was negligent in handling LMCs account.

Ruling:

Yes, because the reversal of the transactions in question was unilaterally undertaken by BPIs
tellers without following normal banking procedure which requires them to ensure that all
copies of the deposit slips are surrendered by the depositor. The machine-validated deposit slips
do not show that the transactions have been cancelled, leading LMC to rely on these slips and to
consider Alice Laurels account as already paid.

Negligence is the omission to do something which a reasonable man, guided by those

considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of
something which a prudent and reasonable man would not do. Negligence in this case lies in the
tellers disregard of the validation procedures in place and BPIs utter failure to supervise its
employees. Notably, BPIs managers admitted in several correspondences with LMC that the
deposit transactions were cancelled without LMCs knowledge and consent and based only upon
the request of Alice Laurel and her husband. It is well to reiterate that the degree of diligence
required of banks is more than that of a reasonable man or a good father of a family. In view of
the fiduciary nature of their relationship with their depositors, banks are duty-bound to treat the
accounts of their clients with the highest degree of care. BPI cannot escape liability because of
LMCs failure to scrutinize the monthly statements sent to it by the bank. This omission does not
change the fact that were it not for the wanton and reckless negligence of BPIs tellers in failing
to require the surrender of the machine-validated deposit slips before reversing the deposit
transactions, the loss would not have occurred. BPIs negligence is undoubtedly the proximate
cause of the loss. Proximate cause is that cause which, in a natural and continuous sequence,
unbroken by any efficient intervening cause, produces the injury, and without which the result
would not have occurred.
 70

CRISTINA PENULLAR vs PHILIPPINE NATIONAL BANK

G.R. No. L-32762, January 27, 1983

Facts:

There was a land registration case between Cristina Penullar and Florencio Felix for the
declaration of absolute nullity of judicial proceedings in a land registration case. Genoveva
Miguel filed a civil case against Praxedes Moya et al., predecessors of herein plaintiff Cristina
Penullar, for declaration of ownership over three (3) portions of agricultural land. While the case
was pending, the land was mortgaged to PNB for a loan by the defendants of the case for
declaration of nullity of judicial proceedings. The CA in that case declared the judicial
proceedings void and all Certificates of Title flowing from the proceedings null and void, but at
the same time declared the mortgage of PNB valid on the basis of being a mortgagor in good
faith. Penullar claimed that PNB was negligent in allowing the void title to be mortgaged.

Issues:

Whether or not PNB was negligent in accepting the security of Torrens Title wherein trial
court annulled the titles issued pursuant to the decision of the Land Registration Court.

Ruling:

No, there is no showing, that the Bank was made specifically aware of the fact that the very
property already covered by the free patents were only adjudicated to and Torrens Titles issued
in the name of the heirs of Miguel, who were the parties that aferwards had secured the
mortgages from the Bank, not only this, the declaration of nullity of the titles of the heirs of
Genoveva Miguel due to the fact that there had already been free patents issued in the name of
plaintiff's predecessors Moya and Sison came in only much later and in fact as of the time when
these mortgages were accepted by the Bank, there was as yet no decision declaring the titles of
the mortgagors null and void; stated otherwise there can be no denying the fact that the Bank
 71

was made to rely and had the right to rely upon regular certificates of title first presented to it by
the mortgagors.

The Philippine National Bank relied on the torrens titles of the mortgagors which had been
regularly issued. The torrens titles were the result of regular land registration proceedings duly
registered with the Register of Deeds. There was nothing in the torrens titles which would excite
suspicion that the same were fraudulently processed by the mortgagors. Applying, therefore, the
principles enunciated in the aforecited cases, the respondent Bank was not duty bound to
further investigate the validity and or invalidity of the torrens title.

The court might as well invoke the principle that where one of two innocent parties must
have to suffer due to the act of a third person, he whose negligence had caused the damage
should be made to bear the loss; in the present case if the heirs of Genoveva Miguel, that is to
say herein plaintiff had only been diligent, and had appealed from the decision in the registration
case, no certificate of Title would have been issued just like that in the name of the heirs of
Genoveva Miguel and no mortgage could have been constituted by them in favor of Bank but as
it is, said successors of Praxedes Moya and Josefa Sison failed to do that; instead they let the
decision in the registration case gain the status of finality; allowed without prior protest, the
certificate of title to be issued; did not even as early as possible, annotate an adverse claim on
the titles; and they filed this case only several months aferwards, it was their negligence that
permitted said adjudicatees in the said registration case to apply for and secure mortgages from
the Bank.

OSMUNDO S. CANLAS and ANGELINA CANLAS, petitioner, vs. COURT OF APPEALS, ASIAN
SAVINGS BANK, MAXIMO C. CONTRERAS and VICENTE MAOSCA, respondents.
[G.R. No. 112160. February 28, 2000]

Facts:

Canlas and Maosca agreed to invest together in a business. Canlas sold parcels of land to
Moasca for P 850thousand pesos, P500 thousand payable within a week, whilst the balance of P
350thousand pesos shall be Canlas’ investment in the business. Maosca issued two (2) post-
dated checks for the P500thousand: one for P40 thousand and one for P460 thousand. But the
check for the larger amount was insufficiently funded. More so, Maosca was able to mortgage
the entire parcels of land to Asian Development Bank with the aid of two impostors who
pretended to be Mr and Mrs Canlas. The mortgage being unpaid, ASB extrajudicially foreclosed
the lands mortgaged. Canlas wrote a letter to the bank informing them of the fraud. ASB still
proceeded with the foreclosure. Consequently, on February 3, 1983 the herein petitioners
instituted the present case for annulment of deed of real estate mortgage with prayer for the
issuance of a writ of preliminary injunction; and on May 23, 1983, the trial court issued an Order
restraining the respondent sheriff from issuing the corresponding Certificate of Sheriffs Sale. [8]For
failure to file his answer, despite several motions for extension of time for the filing thereof,
Vicente Maosca was declared in default.[9]On June 1, 1989, the lower court a quo (RTC) came out
with a decision annulling subject deed of mortgage and disposing/ Maosca to pay ASB’s cross-
claim for P350k. From this decision, ASB appealed to CA. CA reversed RTC. Canlas elevated the
case to the SC by Rule 45 (Petition for review on Certiorari)

Issue:

Whether Asian Development Bank is guilty of negligence in not verifying the identity of the
impostors who pretended to be the spouses Canlas?

Ruling:
 72

Yes. Petition is meritorious.The degree of diligence required of banks is more than that of a
good father of a family; [12] in keeping with their responsibility to exercise the necessary care and
prudence in dealing even on a register or titled property. The business of a bank is affected with
public interest, holding in trust the money of the depositors, which bank deposits the bank
should guard against loss due to negligence or bad faith, by reason of which the bank would be
denied the protective mantle of the land registration law, accorded only to purchases or
mortgagees for value and in good faith. [13]In the case under consideration, from the evidence on
hand it can be gleaned unerringly that respondent bank did not observe the requisite diligence
in ascertaining or verifying the real identity of the couple who introduced themselves as the
spouses Osmundo Canlas and Angelina Canlas. It is worthy to note that not even a single
identification card was exhibited by the said impostors to show their true identity and yet, the
bank acted on their representations simply on the basis of the residence certificates bearing
signatures which tended to match the signatures affixed on a previous deed of mortgage to a
certain Atty. Magno, covering the same parcels of land in question.

HEDY GAN y YU, petitioner,

vs.
THE HONORABLE COURT OF APPEALS and the PEOPLE OF THE PHILIPPINES, respondents.
G.R. No. L-44264 September 19, 1988

Facts:

Gan was driving her car one day, when, in order to avoid two incoming vehicle encroaching
her side of the road, one trying to overtake the other, she swerved her car to the right, pinning
an old man trying to cross the street, pinning his body to a jeep, causing the jeep to move
forward and causing damage to other vehicles. Gan was found guilty by the RTC of homicide thru
reckless imprudence. On appeal, the CA found her guilty with homicide thru simple imprudence,
and pursuant to paragraph 2, Article 365 of the Revised Penal Code, she was sentenced to the
indeterminate penalty of 3 months and 11 days of arresto mayor and to indemnify the heirs of
Isidro Casino in the sum of P12,000 without any subsidiary imprisonment in case of insolvency,
and to pay the costs.

Issue:

Was Gan negligent?

SC Ruling:

No. A corollary rule is what is known in the law as the emergency rule. "Under that rule, one
who suddenly finds himself in a place of danger, and is required to act without time to consider
the best means that may be adopted to avoid the impending danger, is not guilty of negligence,
if he fails to adopt what subsequently and upon reflection may appear to have been a better
method, unless the emergency in which he finds himself is brought about by his own
negligence." 6

The course of action suggested by the appellate court (that Gan should have stopped her
vehicle) would seem reasonable were it not for the fact that such suggestion did not take into
account the amount of time afforded petitioner to react to the situation she was in. For it is
undeniable that the suggested course of action presupposes sufficient time for appellant to
 73

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.

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

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

WHEREFORE, judgment is hereby rendered acquitting petitioner HEDY GAN y YU of the

crime of Homicide thru Simple Imprudence. She is no longer liable for the P12,000.00 civil
indemnity awarded by the appellate court to the heirs of the victim.

GEORGE MCKEE and ARACELI KOH MCKEE, petitioners,

vs.
INTERMEDIATE APPELLATE COURT, JAIME TAYAG and ROSALINDA MANALO, respondents.
G.R. No. L-68103 July 16, 1992
CARMEN DAYRIT KOH, LETICIA KOH, JULIETA KOH TUQUERO, ARACELI KOH MCKEE, ANTONIO
KOH and ELIZABETH KOH TURLA, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, JAIME TAYAG and ROSALINDA MANALO, respondents.
G.R. No. L-68102 July 16, 1992

Facts:

The car driven by the relatives of the petitioner were crossing a bridge, when some kids
tried to dart to cross the road, unsure whether to cross or not. The car blew its horn, swerved to
the lef side of the road, switched on its head light to try to warn the driver of the truck and tried
to return to its lane. But the truck did not slow down. As a result, before the car could return to
its side, it got hit by the truck, leading to the death of the driver, his daughter and the baby sitter
[in the front passenger seat], and injury to the rest of the passengers. Witnesses saw the truck
stopped only afer colliding with the car. There were skid marks under the truck, but there were
no skid marks behind the truck.) RTC found Galang liable. CA affirmed RTC. Galang went to the
SC via Appeal by Certiorari under Rule 45.

Issue:

Was Galang negligent?

SC Ruling:

Yes. Galang was negligent. If ever the car driver was guilty of some negligence, it was
excused by “Emergency Rule” and the doctrine of the “Last clear chance”. Galang was driving at
40miles per hour (38 kilometers per hour) when the allowable speed limit when crossing a
bridge is only 30 kilometers per hour. Galang alleged that there was mistake in interpretation,
but regularity of performance of duty by the officers getting his testimony is presumed.
 74

Galang’s employer is also liable under Article 2180 in relation to Article 2176 of the Civil
Code. The employer could have raised the defense of good father of the family in due selection
and supervision of employees, but they did not offer this defense.

For the inattentiveness or reckless imprudence of Galang, the law presumes negligence on
the part of the defendants in the selection of their driver or in the supervision over him.
Appellees did not allege such defense of having exercised the duties of a good father of a family
in the selection and supervision of their employees in their answers. They did not even adduce
evidence that they did in fact have methods of selection and programs of supervision. The
inattentiveness or negligence of Galang was the proximate cause of the mishap. If Galang's
attention was on the highway, he would have sighted the car earlier or at a very safe distance
than (sic) 10 meters. He proceeded to cross the bridge, and tried to stop when a collision was
already inevitable, because at the time that he entered the bridge his attention was not riveted
to the road in front of him.

ORIX METRO LEASING AND FINANCE CORPORATION vs. MANGALINAO

G.R. No. 174089. JANUARY 25, 2012

Facts:

This is a case of multiple-vehicle collision in North Luzon Expressway (NLEX) resulting in

the death of all the passengers in one vehicle, including the Mangalinao spouses and a sibling of
the surviving orphaned minor heirs.

An action for damages based on quasi delict was filed by the minor children of the
Mangalinao spouses through their legal guardian against the registered owners and drivers of
the two 10-wheeler trucks that collided with their parents’ Nissan Pathfinder. The children
imputed recklessness, negligence, and imprudence on the truck drivers for the deaths of their
sister and parents; while they hold 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.

Issue:

Whether or not the defendants are jointly and severally liable.

Ruling:

The finding of negligence of petitioners as found by the lower courts is binding.

Negligence and proximate cause are factual issues. Settled is the rule that this Court is not a trier
of facts, and the concurrence of the findings of fact of the courts below are conclusive.

Orix as the operator on record of the Fuso Truck is liable to the heirs of the victims of
the mishap. Orix cannot point fingers at the alleged real owner to exculpate itself from vicarious
liability under Article 2180 of the Civil Code. 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. 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. Moral damages, it must be
stressed, are not intended to enrich plaintiff at the expense of the defendant. They are awarded
to enable the injured party to obtain means, diversions, or amusements that will serve to
alleviate the moral suffering he/she had undergone due to the other party’s culpable action and
must, perforce, be proportional to the suffering inflicted.
 75

SANITARY STEAM LAUNDRY, INC., vs. THE COURT OF APPEALS

G.R. No. 119092. DECEMBER 10, 1998
Facts:

This case involves a collision between a Mercedes Benz panel truck of petitioner
Sanitary Steam Laundry and a Cimarron which caused the death of three persons and the
injuries of several others. The accident took place at the Aguinaldo Highway in Imus, Cavite on
August 31, 1980. The passengers of the Cimarron were mostly employees of the Project
Management Consultants, Inc. (PMCI). The Cimarron was owned by Salvador Salenga. Driving
the vehicle was Rolando Hernandez. It appears that at about 8:00 p.m., as it 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 which was traveling in the opposite direction. 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 lef and encroach on a portion of the opposite lane. As a result, his panel truck collided with
the Cimarron on the north-bound lane. 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.

Issue:

Whether the driver of the Cimarron was guilty of contributory negligence and,
therefore, the liability of the petitioner should be mitigated, if not totally extinguished.

Ruling:

No. 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. Petitioner 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.”
However, 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.
 76

AMADOR CORPUZ AND ROMEO GONZALES vs. EDISON LUGUE AND CATHERINE BALUYOT
G.R. No. 137772. JULY 29, 2005

Facts:

On 14 September 1984, at around 7:15 in the morning, while an Isuzu KC-20

passenger jeep (KC-20), then being driven by Jimmy Basilio, was traversing the right side of
the Roman Highway in Barangay Pias, Orion, Bataan, it collided with a tanker truck driven by
Gerardo Lim, which was then moving from the right shoulder of the highway. As a
consequence of the accident, passengers of the KC-20, including respondent Lugue, suffered
physical injuries. Respondent Lugue then filed an action for damages arising from the
vehicular incident before the Balanga, Bataan RTC, Branch 2, against herein petitioners
Amador Corpuz and Romeo Gonzales, owner and driver of the minibus, respectively, and
Oscar Jaring and Gerardo Lim, owner and driver of the tanker truck, respectively. Therein
defendants filed a third-party complaint against Ricardo Santiago and Jimmy Basilio,
owner/operator and driver of the KC-20, respectively.

Issue:

Whether or not the appellate court erred in holding them liable for damages based
on the findings of facts adduced by the trial court.

Ruling:

It is clear that the proximate cause of the injuries suffered by respondent Lugue was
the collision between the KC-20 and the tanker truck. As correctly pointed out by the lower
court, 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 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. Certainly, even assuming that petitioner Gonzales had a few seconds
before actual collision, he no longer had any opportunity to avoid it. Petitioner Gonzales
cannot be deemed negligent for failing to prevent the collision even afer applying all means
available to him within the few instants when he had discovered the impending peril.
 77

LAMBERT S. RAMOS VS C.O.L REALTY CORPORATION

G. R. No. 184905

Facts:

Petitioner Ramos is the employer of Rodel Ilustrisimo. While Rodel was driving the Ford
Expedition of petitioner an accident ensued, wherein it bumped with a Corrolla Altis driven by
Aquilino Larin and owned by Respondent COL Realty. Due to the impact of the vehicular mishap,
the passenger of the sedan was injured.

A case was filed against Ramos making him solidarily liable with his driver. Ramos in his
opposition argued that he cannot be held solidarily liable since it is Aquilnio's negligence that is
the proximate cause of the accident. He further argued that when the accident happened,
Aquilino violated an MMDA order, i.e. prohibiting the crossing is the place where the accident
happened.

Issue:

Whether Ramos may be held liable since the proximate cause of the accident is his
employee's negligence.

Ruling:

No. Aquino’s violation of the MMDA prohibition against crossing Katipunan Avenue
Rajah Matanda Street was the proximate cause of the accident. Proximate cause is 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.

If Aquilino heeded the MMDA prohibition against crossing Katipunan Avenue from Rajah
Matanda, the accident would not have happened. This specific untoward event is exactly what
the MMDA prohibition was intended for. Thus, a prudent and intelligent person who resides
within the vicinity where the accident occurred, Aquilino had reasonable ground to expect that
the accident would be a natural and probable result if he crossed Katipunan Avenue since such
crossing is considered dangerous on account of the busy nature of the thoroughfare and the
ongoing construction of the Katipunan-Boni Avenue underpass. It was manifest error for the
Court of Appeals to have overlooked the principle embodied in Article 2179 of the Civil Code,
that when the plaintiff’s own negligence was the immediate and proximate cause of his injury,
he cannot recover damages.

As to the alleged Rodel's contributory negligence, the court finds it unnecessary to delve
into it, since it cannot overcome or defeat Aquilino’s recklessness which is the immediate and
proximate cause of the accident. Rodel’s contributory negligence has relevance only in the event
that Ramos seeks to recover from respondent whatever damages or injuries he may have
suffered as a result; it will have the effect of mitigating the award of damages in his favor.
 78

ELIAS S. CIPRIANO and/or E.S CIPRIANO ENTERPRISES VS THE COURT OF APPEALS and
MACLIN ENTERPRISES
G.R. NO. 107968

Facts:

E.S. Cipriano Enterprises, owned by petitioner Cipriano, is engaged in the

rustproofing of vehicles, under the style Motobilkote. The private respondent, through an
employee brought his car to the petitioner’s shop. However, a fire broke out at the
Lambat restaurant,t which the petitioner also owned, adjoining his Mobilkote
rustproofing shop. The fire destroyed both the shop and the restaurant, including private
respondent’s car.

MACLIN sent a letter to petitioner, demanding reimbursement for the value of the
car. In reply, petitioner denied liability on the ground that the fire was a fortuitous event
(Art. 1174 and 1262, NCC), prompting private respondent to bring this suit for the value
of its vehicle and for damages. Private respondent argued that petitioner was liable for the
loss of the car even if it was caused by a fortuitous event. It contended that the nature of
petitioner’s business required him to assume the risk because under P.D. No. 1572,
petitioner was required to insure his property as well as those of his customers.

RTC ruled in favor of MACLIN stating that the “failure of defendant to comply
with P.D. No. 1572 is in effect a manifest act of negligence which renders defendant
liable for the loss of the car even if the same was caused by fire,” and that rustproffing is
“definitely covered” by P.D. No. 1572. Since petitioner did not register his business and
insure it, he must bear the cost of loss of his customers. CA affirmed the RTC’s decision.

Issue:

Whether petitioner’s failure to abide by PD 1572 constitutes negligence

Ruling:

Yes. The Court held that a violation of a statutory duty is negligence per se. It ruled
that where the very injury which was intended to be prevented by the ordinance has
happened, non-compliance with the ordinance was not only a negligent act but also the
proximate cause.

Indeed, the existence of a contract between petitioner and private respondent does
not bar a finding of negligence under the principles of quasi-delict. Petitioner’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 private
respondent was due to a fortuitous event, since it was petitioner’s negligence in not
insuring against the risk which was the proximate cause of the loss.
 79

PHILIPPINE NATIONAL BANK VS SPS CHEAH CHEE CHONG and OFELIA CAMACHO
CHEAH G.R NO. 170865;
SPS CHEAH CHEE CHONG VS PNB G.R NO 17092

Facts:

Adelina Guarin’s friend, Filipina Tuazon, approached her to ask if she could have her
check cleared and encashed for a service fee of 2.5%. In turn, Adelina approached Ofelia Cheah
and agreed to accommodate Filipina’s request since she has a joint dollar savings account with
her husband, Cheah Chee Chong with PNB Buendia Branch.
The parties went to PNB Loans Department wherein they met Garin, PNB’s Division
Chief, who informed about the 15- day clearing period. On Nov. 4, 1992 Ofelia deposited the said
check. PNB sent the check for clearing through Philadelphia National Banck which had
temporarily credited the same to PNB’s account as of Nov.6, 1992. On the same day, Garin,
PNB’s Division Chief, informed Ofelia that the check has already been cleared and the same was
credited to the account of Sps Cheah. He further allowed the withdrawal of the amount on Nov
17-18, 1992. Filipina Tuazon, thereafer, received the proceeds.
However, the Cable Division of PNB Head Office received a message from Philadelphia
informing PNB for the return of the check for insufficiency of funds. Upon demand by PNB
Buendia to return the money withrdrawn, Ofelia contacted Filipina to get the money back but
the same has been given to several people who asked for the check’s encashment.
PNB filed a complaint against the spouses and froze their peso and dollar deposits. RTC
ruled in favor of the PNB and held the spouses Cheah guilty of contributory negligence. The CA
declared both parties equally negligent and should suffer and shoulder the loss.

Issue:

Whether both parties are equally negligent, hence, should suffer the loss.

Ruling:

Yes. PNB’s act of releasing the proceeds of the check prior to the lapse of the 15-day
clearing was the proximate cause. The disregard of its own banking policy amounts to gross
negligence. It bears stressing that the “diligence required is more than that of a good father of a
family. The highest degree of diligence is expected. PNB failed to do its duty in exercising
extraordinary diligence and reasonable business practice.

The Spouses Cheah is guilty of contributory negligence and hence should suffer the loss.
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 its protection. The fact that the check was cleared only eight banking days, contrary to what
Garin had informed them, they should have verified the hastiness of the transaction considering
that they are the ones would be put at risk and not the accommodated party.
Hence, the Court concurs with the findings of the CA that PNB and spouses Cheah are
equally negligent and should suffer the loss.
 80

PHILTRANCO SERVICE ENTERPRISES, INC. VS FELIX PARAS AND INLANDTRAILWAYS, INC., AND
HON. COURT OF APPEALS
G.R. No. 161909, April 25, 2012

Facts:

Respondent Felix Paras is one of the passengers injured from an accident met by the
bus operated by Inland Trail ways and a bus operated by petitioner Philtranco Service. Felix went
through number operations and was unable to obtain sufficient financial assistance from Inland
for the costs of his operations, hospitalization, doctors’ fees and other miscellaneous expenses,
thus, on 31 July 1989; Paras filed a complaint for damages based on breach of contract of
carriage against Inland. On 02 March 1990, upon leave of court, Inland filed a third-party
complaint against Philtranco and Apolinar Miralles. In this third-party complaint, inland, sought
for exoneration of its liabilities to Paras, asserting that the latter’s cause of action should be
directed against Philtranco considering that the accident was caused by Miralles’ lack of care,
negligence and reckless imprudence. The RTC then rendered a decision declaring Philtranco and
Apolinar liable for moral and actual damages. The said award of damages was also affirmed by
the CA. Ultimately, Philtranco questions the validity of awarding moral damages on the ground
that the basis of such award is based on a breach of contract of carriage, which is not one of the
enumeration provided by the Civil Code.

Issue:

Whether or not the award of damages is proper.

Ruling:

Yes. Section 16, Rule 6 of the Revised Rules of Court defines a third party complaint as a
claim that a defending party may, with leave of court, file against a person not a party to the
action, called the third party defendant, for contribution, indemnification, subrogation, or any
other relief, in respect of his opponent’s claim.

Under this Rule, a person not a party to an action may be impleaded by the defendant
either (a) on an allegation of liability to the latter; (b) on the ground of direct liability to the
plaintiff-; or, (c) both (a) and (b). The situation in (a) is covered by the phrase "for contribution,
indemnity or subrogation;" while (b) and (c) are subsumed under the catch all "or any other
relief, in respect of his opponent’s claim."

The case at bar is one in which the third party defendants are brought into the action as
directly liable to the plaintiffs upon the allegation that the primary and immediate cause as
shown by the police investigation of said vehicular collision between the above-mentioned three
vehicles was the recklessness and negligence and lack of imprudence of the third-party
defendant Virgilio Esguerra y Ledesma then driver of the passenger bus. The effects are that
"plaintiff and third party are at issue as to their rights respecting the claim and the third party is
bound by the adjudication as between him and plaintiff. It is not indispensable in the premises
 81

that the defendant be first adjudged liable to plaintiff before the third-party defendant may be
held liable to the plaintiff, as precisely, the theory of defendant is that it is the third party
defendant, and not he, who is directly liable to plaintiff. The situation contemplated by
appellants would properly pertain to situation (a) above wherein the third party defendant is
being sued for contribution, indemnity or subrogation, or simply stated, for a defendant's
"remedy over".

MERCURY DRUG CORPORATION VS SEBASTIAN M. BAKING

G.R. No. 156037 May 28, 2007

Facts:
Sebastian M. Baking, respondent, went to the clinic of Dr. Cesar Sy for a medical check-
up. On the following day, afer undergoing an ECG, blood, and hematology examinations and
urinalysis, Dr. Sy found that respondent’s blood sugar and triglyceride were above normal levels.
Dr. Sy then gave respondent two medical prescriptions, Diamicron for his blood sugar and
Benalize tablets for his triglyceride. Respondent then proceeded to petitioner Mercury Drug
Corporation (Alabang Branch) to buy the prescribed medicines. However, the saleslady misread
the prescription for Diamicron as a prescription for Dormicum. Thus, what was sold to
respondent was Dormicum, a potent sleeping tablet. Unaware that what was given to him was
the wrong medicine, respondent took one pill of Dormicum on three consecutive days.
On November 8 or on the third day he took the medicine, respondent figured in a
vehicular accident. The car he was driving collided with the car of one Josie Peralta. Respondent
fell asleep while driving. He could not remember anything about the collision nor felt its impact.
Suspecting that the tablet he took may have a bearing on his physical and mental state at the
time of the collision, respondent returned to Dr. Sy’s clinic. Upon being shown the medicine, Dr.
Sy was shocked to find that what was sold to respondent was Dormicum, instead of the
prescribed Diamicron. Thus, on April 14, 1994, respondent filed with the Regional Trial Court
(RTC) a complaint for damages against petitioner. Afer hearing, the trial court rendered its
Decision dated March 18, 1997 in favor of respondent. On appeal, the Court of Appeals, in its
Decision, affirmed in toto the RTC judgment. Petitioner filed a motion for reconsideration but it
was denied, hence, this petition.

Issues:

Whether petitioner was negligent, and if so, whether such negligence was the proximate
cause of respondent’s accident.

Ruling:
Article 2176 of the New Civil Code provides: Art. 2176. Whoever by act or omission
causes damage to another, there being fault or negligence, is obliged to pay for the damage
done. Such fault or negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict and is governed by the provisions of this Chapter. To sustain a
claim based on the above provision, the following requisites must concur: (a) damage suffered
by the plaintiff; (b) fault or negligence of the defendant; and, (c) connection of cause and effect
between the fault or negligence of the defendant and the damage incurred by the plaintiff.

There is no dispute that respondent suffered damages. It is generally recognized that the
drugstore business is imbued with public interest. Inasmuch as the matter of negligence is a
question of fact, we defer to the findings of the trial court affirmed by the Court of Appeals.
Obviously, petitioner’s employee was grossly negligent in selling to respondent Dormicum,
instead of the prescribed Diamicron. Considering that a fatal mistake could be a matter of life
 82

and death for a buying patient, the said employee should have been very cautious in dispensing
medicines. She should have verified whether the medicine she gave respondent was indeed the
one prescribed by his physician. The care required must be commensurate with the danger
involved, and the skill employed must correspond with the superior knowledge of the business
which the law demands. Petitioner contends that the proximate cause of the accident was
respondent’s negligence in driving his car.

NATIONAL POWER CORPORATION VS HEIRS OF NOBLE CASIONAN

G.R. No. 165969 November 27, 2008

Facts:

In the 1970s, NPC installed high-tension electrical transmission lines of 69 kilovolts

traversing the trail leading to Sangilo, Itogon. Eventually, some lines sagged, thereby reducing
their distance from the ground to only about 8-10 f. This posed as a threat to passersby who
were exposed to the danger of electrocution. Nineteen-year-old Noble Casionan worked as a
pocket miner. In 1995, Noble and his co-pocket miner Melchor Jimenez were at Dalicno. Noble
walked ahead as they passed through the trail underneath the NPC high-tension lines on their
way to their work place. As Noble was going uphill and turning lef on a curve, the tip of the
bamboo pole that he was carrying touched one of the dangling high-tension wires. Melchor
narrated that he heard a buzzing sound for only about a second or two, then he saw Noble fall to
the ground. Melchor rushed to him and shook him, but Noble was already dead.

A post-mortem examination by the municipal health officer determined the cause of death to
be cardiac arrest, secondary to ventricular fibulation, secondary to electrocution. Noble’s
parents filed a claim for damages against NPC. NPC denied being negligent in maintaining the
safety of the lines, averring that signs were installed but they were stolen by children, and that
excavations were made to increase the clearance from the ground but some poles sank due to
pocket mining in the area. NPC witnesses testified that the cause of death could not have been
electrocution since Noble did not suffer extensive burns. NPC argued that if Noble did die by
electrocution, it was due to his own negligence.

RTC decided in favor of Noble’s parents. RTC observed that NPC witnesses were biased
because all but one were employees of NPC, and they were not actually present at the time of
the accident. RTC found NPC negligent since the company has not acted upon the requests and
demands made by the community leaders since 1991. CA affirmed RTC with modification–award
of moral damages was reduced from 100k to 50k, and award of attorney fees was disallowed
since the reason for the award was not expressly stated in the decision.

Issue:

WON there was contributory negligence on the part of Noble.

Ruling:

NO; hence, NPC is not entitled to a mitigation of its liability. Negligence is the failure to
observe, for the protection of the interest of another, that degree of care, precaution, and
vigilance which the circumstances justly demand, whereby such other person suffers injury.
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.
 83

The underlying precept 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. NCC 2179 provides that liability will be mitigated in consideration of the injured
party’s contributory negligence. Damages awarded to Noble’s unearned income of 720k;
exemplary damages of 50k, since there is gross negligence and moral damages of 50k.

Allied Banking Corporation v. Bank of the Philippine Islands

G.R. No. 188363, February 27, 2013

Facts:

On October 10, 2002, a check in the amount of P1,000,000.00 payable to "Mateo Mgt.
Group International" (MMGI) was presented for deposit and accepted at petitioner's (Allied
Bank) Kawit Branch. The check, post-dated "Oct. 9, 2003", was drawn against the account of
Marciano Silva, Jr. (Silva) with respondent BPI Bel-Air Branch. Upon receipt, petitioner sent the
check for clearing to respondent through the Philippine Clearing House Corporation (PCHC). The
check was cleared by respondent and petitioner credited the account of MMGI with
P1,000,000.00. On October 22, 2002, MMGI’s account was closed and all the funds therein were
withdrawn. A month later, Silva discovered the debit of P1,000,000.00 from his account. In
response to Silva’s complaint, respondent credited his account with the aforesaid sum. Petitioner
filed a complaint before the Arbitration Committee, asserting that respondent should solely bear
the entire face value of the check due to its negligence in failing to return the check to petitioner
within the 24-hour reglamentary period as provided in Section 20.1of the Clearing House Rules
and Regulations (CHRR) 2000. In its Answer with Counterclaims, respondent charged petitioner
with gross negligence for accepting the post-dated check in the first place. It contended that
petitioner’s admitted negligence was the sole and proximate cause of the loss.

Issue:

Does the Doctrine of Last Clear Chance apply in this case?

Ruling:

YES. In this case, the evidence clearly shows that the proximate cause of the
unwarranted encashment of the subject check was the negligence of respondent who cleared a
post-dated check sent to it thru the PCHC clearing facility without observing its own verification
procedure. As correctly found by the PCHC and upheld by the RTC, if only respondent exercised
ordinary care in the clearing process, it could have easily noticed the glaring defect upon seeing
the date written on the face of the check "Oct. 9, 2003". Respondent could have then promptly
returned the check and with the check thus dishonored, petitioner would have not credited the
amount thereof to the payee’s account. Thus, notwithstanding the antecedent negligence of the
petitioner in accepting the post-dated check for deposit, it can seek reimbursement from
respondent the amount credited to the payee’s account covering the check.
 84

PNR v. Ethel Bunty

G.R. No. 169891, November 2, 2006

Facts:

Ethel Brunty’s late daughter, Rhonda Brunty, an American citizen, visited Philippines
sometime in January 1980 and prior to her departure, she and her Filipino host Juan Manuel
M.Garcia, traveled to Baguio City aboard a Mercedes Benz sedan with plate number FU
799,driven by Rodolfo L. Mercelita. It was about 12:00 midnight, January 25, 1980. By then, PNR
Train No. T-71, driven by Alfonso Reyes, was on its way to Tutuban, Metro Manila4 as it had lef
the La Union station at 11:00 p.m., January 24, 1980.By 2:00 a.m., Rhonda, Garcia and Mercelita
were already approaching the railroad crossing at Barangay Rizal, Moncada, Tarlac. Mercelita,
driving at approximately 70 km/hr, drove past a vehicle, unaware of the railroad track up ahead
and that they were about to collide with PNR Train No. T-71. Mercelita was instantly killed when
the Mercedes Benz smashed into the train; the two other passengers suffered serious physical
injuries. A James Harrow brought Rhonda to the Central Luzon Doctor’s Hospital in Tarlac, where
she was pronounced dead afer ten minutes from arrival. Garcia, who had suffered severe head
injuries, was brought via ambulance to the same hospital. He was transferred to the Manila
Doctor’s Hospital, and later to the Makati Medical Center for further treatment.

Ethel Brunty sent a demand letter to PNR to ask indemnity for the death of her daughter,
but PNR did not respond. As a result, she and Garcia filed a complaint in the RTC Manila (later
tried by Br. 20, Manila RTC). They alleged that it was PNR’s failure to provide necessary
equipment at the railroad crossing in Brgy. Rizal, Moncada. Tarlac which was proximate and
direct cause of Garcia’s injuries and the death of Rhonda. Meanwhile, contrary to
Brunty and Garcia’s allegations, PNR stated that it was not negligent in selection and
supervision of its employees(using the diligence of a good father doctrine) and it was Mercelita’s
negligence which was the immediate and proximate of the accident. It also stated that it had the
right of way, and has no legal duty to put a bar or red light signal at the crossing. Moreover, it
had adequate, visible, and clear warning signs strategically posted on the sides of the road
before the railroad crossing.

The RTC ruled in favor of Brunty and was affirmed by the Court of Appeals. Hence, PNR
appealed to the Supreme Court.

Issue:

Who was guilty of negligence between the parties involved which resulted in the
unfortunate accident?

Ruling:

PNR was guilty of negligence. The Supreme Court affirmed with modifications the
findings of the Manila RTC and Court of Appeals. It held that PNR was indeed negligent by not
providing adequate, visible, clear warnings and safety equipment: (1) absence of flagbars or
safety railroad bars; (2) inadequacy of the installed warning signals; and (3) lack of proper
lighting within the area. Actual damages were however not awarded to respondents Brunty and
Garcia, as they failed to produce evidence for such.
 85

Marcelo Macalinao, Et Al., v. Eddie Medecielo Ong

G.R. No. 146635 December 14, 2005

Facts:

Sometime in April 1992, Sebastian instructed Macalinao, Ong and 2 other truck helpers
to deliver a heavy piece of machinery to Sebastian’s manufacturing plant in Angat, Bulacan.
While delivering, the Genetron’s Isuzu Elf truck driven by Ong bumped the front portion of a
private jeepney. Both vehicles incurred severe damages while the passengers sustained physical
injuries as a consequence of the collision. Macalinao was brought to Sta. Maria District Hospital
for first aid treatment then to Philippine Orthopedic Center then to Capitol Medical Center and
lastly, to Philippine General Hospital due to financial considerations. His body was paralyzed and
immobilized from the neck down. He filed against Ong and Sebastian. A criminal case for
reckless imprudence resulting to serious physical injuries was instituted but was not ensued. In
November 7 1992: Macalinao died and was substituted by his parents. The RTC ruled that Ong
was negligent and Sebastian failed to exercise the diligence of a good father of a family in the
selection and supervision of Ong thus ordering them jointly liable to pay actual, moral, and
exemplary damages as well as civil indemnity for Macalinao’s death. On appeal, the CA however
reversed the RTC’s decision for lack of evidence.

Issue:

Whether Ong may be held liable under the doctrine of Res Ipsa Loquitur

Ruling:

YES. The photographs clearly shows that the road where the mishap occurred is marked
by a line at the center separating the right from the lef lane. Since respondents failed to refute
the contents of the police blotter, the statement therein that the Isuzu truck hit the private
jeepney and not the other way around is deemed established. While not constituting direct
proof of Ong’s negligence, the foregoing pieces of evidence justify the application of res ipsa
loquitur, a Latin phrase which literally means “the thing or the transaction speaks for itself.

Res ipsa loquitur recognizes that parties may establish prima facie negligence without
direct proof, thus, it allows the principle to substitute for specific proof of negligence permits the
plaintiff to present along with proof of the accident, enough of the attending circumstances to
invoke the doctrine, create an inference or presumption of negligence and thereby place on the
defendant the burden of proving that there was no negligence on his part based on the theory
that defendant in charge of the instrumentality which causes the injury either knows the cause
of the accident or has the best opportunity of ascertaining it while the plaintiff has no such
knowledge, and is therefore compelled to allege negligence in general terms and rely upon the
proof of the happening of the accident in order to establish negligence can be invoked only
when under the circumstances, direct evidence is absent and not readily available 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.
 86

RAMOS VS CA 321 SCRA 584

Facts:

Erlinda Ramos underwent a surgical procedure to remove stone from her gall bladder
(cholecystectomy). They hired Dr. Hosaka, a surgeon, to conduct the surgery at the De Los Santos
Medical Center (DLSMC). Hosaka assured them that he would find a good anesthesiologist. But
the operation did not go as planned, Dr. Hosaka arrived 3 hours late for the operation, Dra.
Gutierrez, the anesthesiologist “botched” the administration of the anesthesia causing Erlinda to
go into a coma and suffer brain damage. The botched operation was witnessed by Herminda
Cruz, sister in law of Erlinda and Dean of College of Nursing of Capitol Medical Center.

The family of Ramos (petitioners) sued the hospital, the surgeon and the anesthesiologist
for damages. The petitioners showed expert testimony showing that Erlinda's condition was
caused by the anesthesiologist in not exercising reasonable care in “intubating” Erlinda.
Eyewitnesses heard the anesthesiologist saying “Ang hirap ma-intubate nito, mali yata ang
pagkakapasok. O lumalaki ang tiyan.”

Diagnostic tests prior to surgery showed that Erlinda was robust and fit to undergo surgery.

The RTC held that the anesthesiologist ommitted to exercise due care in intubating the
patient, the surgeon was remiss in his obligation to provide a “good anesthesiologist” and for
arriving 3 hours late and the hospital is liable for the negligence of the doctors and for not
cancelling the operation afer the surgeon failed to arrive on time. The surgeon, anesthesiologist
and the DLSMC were all held jointly and severally liable for damages to petitioners. The CA
reversed the decision of the Trial Court.

Issues:

Whether or not the private respondents were negligent and thereby caused the comatose
condition of Ramos.

Ruling:

Yes, private respondents were all negligent and are solidarily liable for the damages. Private
respondents were not able to disprove the presumption of negligence on their part in the care of
Erlinda and their negligence was the proximate cause of her condition. One need not be an
anesthesiologist in order to tell whether or not the intubation was a success. The Supreme Court
also found that the anesthesiologist only saw Erlinda for the first time on the day of the
operation which indicates unfamiliarity with the patient and which is an act of negligence and
irresponsibility.

The head surgeon, Dr. Hosaka was also negligent. He failed to exercise the proper authority
as the “captain of the ship” in determining if the anesthesiologist observed the proper protocols.
Also, because he was late, he did not have time to confer with the anesthesiologist regarding the
anesthesia delivery.

The hospital failed to adduce evidence showing that it exercised the diligence of a good
father of the family in hiring and supervision of its doctors (Art. 2180). The hospital was
negligent since they are the one in control of the hiring and firing of their “consultants”. While
these consultants are not employees, hospitals still exert significant controls on the selection and
termination of doctors who work there which is one of the hallmarks of an employer-employee
reationship. Thus, the hospital was allocated a share in the liability.
 87

JARCIA JR VS PEOPLE 666 SCRA 336

Facts:

Private complainant Belinda Santiago lodged a complaint with the National Bureau of
Investigation against the petitioners, Dr. Emmanuel Jarcia, Jr. and Dr. Marilou Bastan, for their
alleged neglect of professional duty which caused her son, Roy Alfonso Santiago, to suffer
serious physical injuries.

Upon investigation, the NBI found that Roy Jr. was hit by a taxicab; that he was rushed to
the Manila Doctors Hospital for an emergency medical treatment; that an X-ray of the victim’s
ankle was ordered; that the X-ray result showed no fracture as read by Dr. Jarcia; that Dr. Bastan
entered the emergency room and, afer conducting her own examination of the victim, informed
Mrs. Santiago that since it was only the ankle that was hit, there was no need to examine the
upper leg. despite Mrs. Santiago's protest the doctors did not examine the upper portion of the
leg of Roy. that eleven (11) days later, Roy Jr. developed fever, swelling of the right leg and
misalignment of the right foot; that Mrs. Santiago brought him back to the hospital; and that the
X-ray revealed a right mid-tibial fracture and a linear hairline fracture in the shaf of the bone.

Afer trial and applying the doctrine of res ipsa loquitor the RTC found petitioners to be
guilty of simple negligence. The decision was affirmed in toto by the CA.

Issues:

Whether of not the petitioner physicians are negligent, hence liable for damages.

Ruling:

Petitioners were negligent in their obligation. It was proven that a thorough examination
was not performed on Roy Jr since as residents on duty at the emergency room, Dr. Jarcia and Dr.
Bastan were expected to know the medical protocol in treating leg fractures and in attending to
victims of car accidents.

Thus, simple negligence is resent if: that there is lack of precaution on the part of the
offender, and that the damage impending to be caused is not immediate or the danger is not
clearly manifest.

Dr. Jarcia and Dr. Bastan, explained the court, cannot pass on the liability to the taxi driver
who hit the victim. It may be true that the actual, direct, immediate, and proximate cause of the
injury of Roy Jr. was the vehicular accident when he was hit by a taxi. The petitioners, however,
cannot simply invoke such fact alone to excuse themselves from any liability. If this would be so,
doctors would have a ready defense should they fail to do their job in attending to victims of hit-
and-run, maltreatment, and other crimes of violence in which the actual, direct, immediate, and
proximate cause of the injury is indubitably the act of the perpetrator/s.

In failing to perform an extensive medical examination to determine the extent of Roy Jr.’s
injuries, Dr. Jarcia and Dr. Bastan were remiss of their duties as members of the medical
profession. Assuming for the sake of argument that they did not have the capacity to make such
thorough evaluation at that stage, they should have referred the patient to another doctor with
sufficient training and experience instead of assuring him and his mother that everything was all
right.

Petitioners were absolved in the criminal charge for the reason that a reasonable doubt
existed but the are liable for damages. There is no direct evidence proving that it was their
negligence that caused the suffering of Roy.
 88

BONTILAO VS GERONA 630 SCRA 561

Facts:

On December 28, 1991, respondent Dr. Carlos Gerona, an orthopedic surgeon at the Vicente
Gullas Memorial Hospital, treated petitioner’s son, 8 y/o Allen Roy Bontilao, for a fractured right
wrist. Respondent administered a “U-spint” and immobilized Allen’s wrist with a cast, then sent
Allen home. On June 4, 1992, Alen re-fractured the same wrist and was brought back to the
hospital. The x-ray examination showed a complete fractured and displacement bone, with the
fragments overlapping each other. Respondent performed a closed reduction procedure, with
Dr. Vicente Jabagat as the anesthesiologist. Then he placed Allen’s arm in a plaster cast to
immobilize it. He allowed Allen to go home afer the post reduction x-ray showed that the bones
were properly aligned, but advised Allen’s mother, petitioner Sherlina Bontilao, to bring Allen
back for re-tightening of the cast not later than June 15, 1992. Allen was however, only brought
back afer the said date. By then, because the cast had not be re-tightened, a rotational
deformity had developed in Allen’s arm. The x-ray examination showed that the deformity was
caused by a re-displacement of the bone fragments, so it was agreed that an open reduction
surgery will be conducted on June 24, 1992 by the respondent, again with Dr. Jabagat as the
anesthesiologist. On the said date, Sherlina was allowed to observe the operation behind a glass
panel. Dr. Jabagat failed to intubate the patient afer 5 attempts so anesthesia was administered
through a gas mask. Respondent asked Dr. Jabagat if the operation should be postponed given
the failure to intubate, but Dr. Jabagat said that it was alright to proceed. Respondent verified
that Allen was breathing properly before proceeding with the surgery. As respondent was about
to finish the suturing, Sherlina decided to go out of the operating room to make a telephone call
and wait for her son. Later, she was informed that her son died on the operating table. The cause
of death was asphyxia due to the congestion and edema of the epiglottis. Hence, a criminal,
administrative and civil case was filed by the parents of Allen against the doctors for the
negligence that caused Allen’s death.

Issue:

Whether or not respondent is liable for medical negligence due to the death of Allen.

Ruling:

No. The trial court erred in applying the doctrine of res ipsa liquitor to pin liability on
respondent for Allen’s death. Res ipsa liquitor is a rebuttable presumption or influence that the
defendant was negligent. The presumption only arises upon proof that the instrumentality
causing injury was in the defendant’s exclusive control, and that the accident was one which
ordinarily does not happen in the absence of negligence. It is a rule of evidence whereby
negligence of the alleged wrong does may be inferred from the mere fact that the accident
happened, provided that the character of the accident and circumstances attending it lead
reasonably to the belief that in the absence of negligence it would not have occurred and that
the thing which caused injury is shown to have been under the management and control of the
alleged wrong doer.

Res ipsa liquitor is not a rigid or ordinary doctrine to be perfunctorily used but a rule to be
cautiously applied defending upon the circumstances of each case. In malpractice case, the
doctrine is generally restricted to situations where a layman is able to say, as a matter of
common knowledge and observation, that the consequence of professional care were not as
such as would ordinarily have followed if due care had been exercised.

Moreover, we note that in the instant case, the instrument which caused the injury or
damage was not even within respondent’s exclusive control and management as Dr. Jabagat was
exclusively in control and management of the anesthesia and endotracheal tube. The doctrine of
res ipsa liquitor allows the mere existence of an injury to justify a presumption of negligence or
the part of the person who controls the instrument causing the injury, provided that the
following requisites concur:
 89

The accident is of a kind which ordinarily does not occur in the absence of someone’s
negligence;

It is caused by an instrumentality within the exclusive control of the defendant or co-

defendants;

The possibility of contributing conduct which would make the plaintiff responsible is
eliminated.
 90

OSCAR DEL CARMEN, JR.,petitioner, - versus - Present: GERONIMO BACOY, Guardian and
representing the children, namely: MARY MARJORIE B. MONSALUD,ERIC B. MONSALUD,
METZIE ANN DEL CASTILLO, and B. MONSALUD, KAREEN B. ,Respondents.
G.R. No. 173870,April 25, 2012

Facts:

Spouses Monsalud and their daughter died from being run over by a jeepney driven by a
certain Allan Maglasang. The jeepney was owned by Oscar del Carmen Jr. Allan was declared
guilty beyond reasonable doubt in a criminal case while the father of the late Mrs. Monsalud,
Geronimo Bacou filed an independent civil action againt the former in behalf of the minor
children lef by the Monsalud spouses. Del Carmen Jr. claimed he was a victim as well as Allan
stole the jeep and was not hired as a driver by the former; he was a conductor (and had been
released from employment lately) and it was the brother of Allan, Rodrigo who was hired as a
driver. Del Carmen Jr. filed a carnapping case against Allan but was dismissed by the court for
insufficient evidence. RTC held del Carmen Jr. subsidiary liable and held the doctrine of res ipsa
loquitur. The CA adjudged Oscar Jr. liable to the heirs of the victims based on the principle that the
registered owner of a vehicle is directly and primarily responsible for the injuries or death of third parties
caused by the operation of such vehicle. It disbelieved Oscar Jr.’s defense that the jeep was stolen not
only because the carnapping case filed against Allan and his companions was dismissed but also because,
given the circumstances, Oscar Jr. is deemed to have given Allan the implied permission to use the subject
vehicle because the brothers were assigned to said jeep. Afer a day’s work, the jeepney would be parked
beside the brothers’ house and not returned to del Carmen’s residence; the jeep could easily be started
even without the use of an ignition key; the said parking area was not fenced or secured to prevent the
unauthorized use of the vehicle which can be started even without the ignition key.

Issue:

W/N owner of vehicle is directly and primarily liable for injuries caused by the operation of
such

Ruling:

Del Carmen Jr. was held to be primarily liable and not merely subsidiary liable. Del Carmen
Jr.’s own evidence cast doubt that Allan stole the jeepney. Given the dismissal of the carnapping
case filed by del Carmen Jr. against Allan, the former also admitted to such dismissal in the SC.
Under the doctrine of res ipsa loquitur, “where the thing that caused the injury complained of is shown to
be under the management of the defendant or his servants; and the accident, in the ordinary course of
things, would not happen if those who had management or control used proper care, it affords
reasonable evidence – in the absence of a sufficient, reasonable and logical explanation by defendant –
that the accident arose from or was caused by the defendant’s want of care. All three are present in the
case at bar.
 91

JOAQUINITA P. CAPILI, Petitioner,

vs.
SPS. DOMINADOR CARDAÑA and ROSALITA CARDAÑA, Respondents
G.R. No. 157906, November 2, 2006

Facts:
February 1, 1993: Jasmin Cardaa was walking along 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 Dominador and Rosalita Cardaa filed a case for damages against the school principal
Joaquinita Capili knowing that the tree was dead and rotting did not dispose of it
RTC: dismissed for failing to show negligence on the part of Capili
CA: reversed. Awarded P50,000 as indemnity for the death of Jasmin and P15,010 as reimbursement of
her burial expenses, moral damages P50,000 and attorney's fees and litigation P10,000

Issue:
W/N Capili can be held liable for damages under Res ipsa loquitur.
Ruling:
YES. Negligent act, inadvertent(unintentional) act may be merely carelessly done from a lack of
ordinary prudence and may be one which creates a situation involving an unreasonable risk to another
because of the expectable action of the other, a third person, an animal, or a force of nature 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 school principal, she was tasked to see to the maintenance of the school
grounds and safety of the children within the school and its premises. Moreover, even if petitioner had
assigned disposal of the tree to another teacher, she exercises supervision over her assignee
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.. Once respondents made out a prima facie case of all requisites, the burden shifs to petitioner
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. Under the circumstances, we have to concede that petitioner was not motivated
by bad faith or ill motive vis--vis respondents' daughter's death.. The award of moral damages is therefore
not proper.

LEAH ALESNA REYES, ROSE NAHDJA, JOHNNY, and minors LLOYD

and KRISTINE, all surnamed REYES, represented by their mother, LEAH
ALESNA REYES, petitioners, vs. SISTERS OF MERCY HOSPITAL,
 92

SISTER ROSE PALACIO, DR. MARVIE BLANES, and DR. MARLYN

RICO, respondents.
[G.R. No. 130547. October 3, 2000]

Facts:
Jorge Reyes has been suffering from recurring fever with chills for around days. Home medication
afforded him no relief so he went to Mercy Community Clinic. He was then attended by Dr. Marlyn Rico.
Since typhoid fever was common at that time, the Widal test was performed and he was found positive
for typhoid. Thereafer, Dr. Marlyn Rico indorse Jorge Reyes to Dr. Marvie Blanes. Suspecting that that
Jorge had typhoid fever, Dr. Marvie Blanes ordered that Jorge be tested for compatibility with
chloromycetin, an antibiotic. Such test was conducted by Nurse Pagente. As there was no adverse
reaction, Dr. Blanes administered 500 mg of the antibiotic. Another dose was given 3 hours later.
Subsequently, Jorge Reyes developed high fever and experienced vomiting and convulsions. He then
turned blue due to deficiency in oxygen – cyanosis – and died. The cause of death was stated to be
“ventricular arrhythmia secondary to hyperpyrexia and typhoid fever.”
The heirs of Reyes filed with the RTC a complaint for damages against Sisters of Mercy, Sister Rose Palacio,
Dr. Blanes, Dr. Rico and Mercy Community Clinic contending that the death of Jorge was due to the
wrongful administration of chloromycetin. (NOTE: Petitioner’s action is for medical malpractice.)
RTC ruled in favor of the respondents. The CA affirmed in toto the RTC decision. Hence, this appeal.
Petitioners contend that: Dr. Marlyn Rico hastily and erroneously relied upon the Widal test,
diagnosed Jorge’s illness as typhoid fever, and immediately prescribed the administration of the antibiotic
chloromycetin, Dr. Marvie Blanes erred in ordering the administration of the second dose of 500
milligrams of chloromycetin barely 3 hours afer the first was given. Testimony presented: That of Dr.
Apolinar Vacalares, (Chief Pathologist of the Northern Mindanao Training Hospital) who performed an
autopsy on the body – Dr. Vacalares testified that Reyes did not die of typhoid fever but of shock
undetermined, which could be due to allergic reaction or chloromycetin overdose.
Issue:
WON there was medical malpractice.
Ruling:
NO. Dr. Apolinar Vacalares is not a specialist of typhoid fever and he is thus not qualified to prove that
Dr. Marlyn Rico erred in her diagnosis. 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.
Furthermore, although he may have had extensive experience in performing autopsies, he admitted that
he had yet to do one on the body of a typhoid victim at the time he conducted the postmortem on Jorge
Reyes. It is also plain from his testimony that he has treated only about three cases of typhoid fever.
The two doctors presented by respondents clearly were experts on the subject They vouched for the
correctness of Dr. Marlyn Rico’s diagnosis. Dr. Peter Gotiong, a diplomate whose specialization is infectious
diseases and microbiology and an associate professor at the Southwestern University College of Medicine
and the Gullas College of Medicine, testified that he has already treated over a thousand cases of typhoid
fever.
 93

NATIONAL POWER CORPORATION,

Petitioner, vs. HEIRS OF MACABANGKIT SANGKAY, namely: CEBU, BATOWA-AN, SAYANA,
NASSER, MANTA, EDGAR, PUTRI , MONGKOY *, and AMIR, all surnamed MACABANGKIT,
Respondents.
G.R. No. 165828 August 24, 2011
 94

Facts:

NPC undertook the Agus River Hydroelectric Power Plant Project in the 1970s to
generate electricity for Mindanao. The project included the construction of several underground
tunnels to be used in diverting the water flow from the Agus River to the hydroelectric plants.

The respondents Heirs of Macabangkit, as the owners of land with an area of 221,573
square meters situated in Ditucalan, Iligan City, sued NPC in the RTC for the recovery of damages
and of the property, with the alternative prayer for the payment of just compensation. They
alleged that the underground tunnel had been constructed without their knowledge and
consent.

In its answer with counterclaim, NPC countered that the Heirs of Macabangkit had no
right to compensation under section 3(f) of Republic Act No. 6395, under which a mere legal
easement on their land was established; that their cause of action, should they be entitled to
compensation, already prescribed due to the tunnel having been constructed in 1979.

Issue:

Whether the Heirs of Macabangkits right to claim just compensation had prescribed
under section 3(i) of Republic Act No. 6395, or, alternatively, under Article 620 and Article 646 of
the Civil Code.

Ruling:

No. Five-year prescriptive period under Section 3(i) of Republic Act No. 6395 does not apply
to claims for just compensation.

The court ruled that the prescriptive period provided under Section 3(i) of Republic Act
No. 6395 is applicable only to an action for damages, and does not extend to an action to
recover just compensation like this case. Consequently, NPC cannot thereby bar the right of the
Heirs of Macabangkit to recover just compensation for their land.

The action to recover just compensation from the State or its expropriating agency
differs from the action for damages. The former, also known as inverse condemnation, has the
objective to recover the value of property taken in fact by the governmental defendant, even
though no formal exercise of the power of eminent domain has been attempted by the taking
agency. Just compensation is the full and fair equivalent of the property taken from its owner by
the expropriator. The measure is not the takers gain, but the owners loss. The word just is used
to intensify the meaning of the word compensation in order to convey the idea that the
equivalent to be rendered for the property to be taken shall be real, substantial, full, and
ample. On the other hand, the latter action seeks to vindicate a legal wrong through damages,
which may be actual, moral, nominal, temperate, liquidated, or exemplary. When a right is
exercised in a manner not conformable with the norms enshrined in Article 19 and like
provisions on human relations in the Civil Code, and the exercise results to the damage of
another, a legal wrong is committed and the wrongdoer is held responsible.

SOLID HOMES, INC., petitioner, vs. SPOUSES ANCHETA K. TAN and CORAZON DE JESUS
TAN, respondents.
G.R. Nos. 145156-57 July 29, 2005

Facts:
Petitioner Solid Homes, Inc., sold to the spouses Joe Uy and Myrna Uy a
subdivision lot which thereafter was registered in the name of the Uys. The spouses Uy
sold the same lot to herein respondents. From then on, respondents visited their property
 95

a number of times, only to find out the sad state of development thereat. In short, there
has been no development at all.
The respondents, in a letter dated December 18, 1995, demanded petitioner to
provide the needed utility systems and clear the area of squatters and other obstructions
and to enable them to start the construction of their house thereon and to allow other lot
owners in the area a full access to and peaceful possession of their respective lots.
Having received no reply from petitioner, respondents filed with the Field Office
of the Housing and Land Use Regulatory Board (HLURB), NCR a complaint for specific
performance and damages which the Housing and Land Use Arbiter, in a decision
rendered judgment in favor of the respondents by directing petitioner to perform its
obligation to provide subdivision facilities in the subject premises and to rid the premises
of squatters and to pay complainants.
Dissatisfied, petitioner went on appeal to the HLURB Board of Commissioners,
which, in a decision affirmed that of the Arbiter. The petitioner then elevated the case to
the Office of the President (O.P.), which also affirmed with modification the appealed
decision of the HLURB Board of Commissioners.
Respondents filed a motion for partial reconsideration of the aforementioned
decision, praying for the deletion of that portion thereof giving petitioner the option of
merely paying them the purchase price with interest. Respondents argued that it would
be more in accord with equity and fair play if they will be paid the fair market value of
the lot in question and not merely its purchase price.
Issue:
Whether or not in the event respondents opt to rescind the contract, should
petitioner pay them merely the price they paid for the lot plus interest or the current
market value thereof.
Ruling:
No. The court held that “a literal application of any part of a statute is to be
rejected if it will operate unjustly, lead to absurd results, or contradict the evident
meaning of the statute taken as a whole. Statutes should receive a sensible
construction, such as will give effect to the legislative intention and so as to avoid an
unjust or an absurd conclusion.”
Indeed, there would be unjust enrichment if respondents Solid Homes, Inc. &
Purita Soliven are made to pay only the purchase price plus interest. It is definite that the
value of the subject property already escalated after almost two decades from the time the
petitioner paid for it. Equity and justice dictate that the injured party should be paid the
market value of the lot, otherwise, respondents Solid Homes, Inc. & Purita Soliven would
enrich themselves at the expense of herein lot owners when they sell the same lot at the
present market value. Surely, such a situation should not be countenanced for to do so
would be contrary to reason and therefore, unconscionable. Over time, courts have
recognized with almost pedantic adherence that what is inconvenient or contrary to
reason is not allowed in law.

BANCO FILIPINO SAVINGS AND MORTGAGE BANK, vs. THE HON. COURT OF APPEALS, and
CALVIN & ELSA ARCILLA,
G.R. No. 129227. May 30, 2000

Facts:

Elsa Arcilla and her husband, Calvin Arcilla secured on three occasions, loans from the
Banco Filipino Savings and Mortgage bank in the amount of Php.107,946.00 as evidenced by the
 96

“Promissory Note” executed by the spouses in favor of the said bank. To secure payment of said
loans, the spouses executed “Real Estate Mortgages” in favor of the appellants (Banco Filipino)
over their parcels of land. The appellee spouses failed to pay their monthly amortization to
appellant. On September 2, 1985 the appellee’s filed a complaint for “Annulment of the Loan
Contracts, Foreclosure Sale with Prohibitory and Injunction” which was granted by the RTC.
Petitioners appealed to the Court of Appeals, but the CA affirmed the decision of the RTC.

Issue:

Whether or not the CA erred when it held that the cause of action of the private
respondents accrued on October 30, 1978 and the filing of their complaint for annulment of
their contracts in 1085 was not yet barred by the prescription

Ruling:

The court held that the petition is unmeritorious. Petitioner’s claim that the action of the
private respondents have prescribed is beref of merit. Under Article 1150 of the Civil Code, the
time for prescription of all kinds of action where there is no special provision which ordains
otherwise shall be counted from the day they may be brought. Thus the period of prescription of
any cause of action is reckoned only from the date of the cause of action accrued. The period
should not be made to retroact to the date of the execution of the contract, but from the date
they received the statement of account showing the increased rate of interest, for it was only
from the moment that they discovered the petitioner’s unilateral increase thereof.

LAFARGE CEMENT PHILIPPINES, INC vs CONTINENTAL CEMENT CORPORATION (CCC)

G.R. No. 155173, November 23, 2004

Facts:

On August 11, 1998, a letter of intent was executed by both parties, Lafarge and CCC.
Lafarge agreed to purchase the cement business of CCC. On October 21, 1998, they entered into
a Sale and Purchase Agreement (SPA). The petitioners, at the time of such transactions were
aware of the pending case of CCC with the Supreme Court entitled Asset Privatization Trust (APT)
v. Court of Appeals and Continental Cement Corporation. In anticipation of the liability that the
 97

High Tribunal might adjudge against CCC, the parties, under Clause 2 (c) of the SPA, allegedly
agreed to retain from the purchase price a portion of the contract price in the amount of
P117,020,846.84 -- the equivalent of US$2,799,140. This amount was to be deposited in an
interest-bearing account in the First National City Bank of New York (Citibank) for payment to
APT. However, petitioners allegedly refused to apply the sum to the payment to APT, afer the
finality of the judgment in the case of CCC. Fearful that nonpayment to APT would result in the
foreclosure, of several properties, CCC filed before the RTC a “Complaint with Application for
Preliminary Attachment" against petitioners. The Complaint prayed, that petitioners be directed
to pay the "APT Retained Amount" referred to in Clause 2 (c) of the SPA. Petitioners moved to
dismiss the Complaint on the ground that it violated the prohibition on forum-shopping.
Respondent CCC had allegedly made the same claim it was raising in another action, which
involved the same parties and which was filed earlier before the International Chamber of
Commerce. Afer the trial court denied the Motion to Dismiss in its November 14, 2000 Order,
petitioners elevated the matter before the Court of Appeals.

In the meantime, to avoid being in default and without prejudice to the outcome of their
appeal, petitioners filed their Answer and Compulsory Counterclaims ad Cautelam before the
trial court. In their Answer, they denied the allegations in the Complaint. They prayed -- by way
of compulsory counterclaims against Respondent CCC, its majority stockholder and president
Gregory T. Lim, and its corporate secretary Anthony A. Mariano -- for the sums of (a) P2,700,000
each as actual damages, (b) P100,000,000 each as exemplary damages, (c) P100,000,000 each as
moral damages, and (d) P5,000,000 each as attorney's fees plus costs of suit.

Petitioners alleged that CCC, through Lim and Mariano, had filed the "baseless"
Complaint and procured the Writ of Attachment in bad faith. Relying on this Court's
pronouncement in Sapugayv. CA, petitioners prayed that both Lim and Mariano be held "jointly
and solidarily" liable with Respondent CCC. On behalf of Lim and Mariano who had yet to file any
responsive pleading, CCC moved to dismiss petitioners' compulsory counterclaims on grounds
that essentially constituted the very issues for resolution in the instant Petition.

RTC ruled that the counterclaims of the petitioners against Lim and Mariano were not
compulsory, that the ruling in Sapugay was not applicable and that the petitioner’s answer with
counterclaims violated the procedural rules on joinder of actions.

Issue:

Whether or not the petitioner’s answer with counterclaims violated the procedural rules
on joinder of actions.

Ruling:

The procedural rules on joinder of actions were not violated. In joining Lim and Mariano
in the compulsory counterclaim, petitioners are being consistent with the solidary nature of the
liability alleged therein. The procedural rules are founded on practicality and convenience.They
are meant to discourage duplicity and multiplicity of suits.
JOSEPH SALUDAGA vs. FEU and EDILBERTO C. DE JESUS (President of FEU)
G.R. No. 179337, April 30, 2008

Facts:

Joseph Saludaga was a sophomore law student of (FEU) when he was shot by Alejandro
Rosete, one of the security guards on duty at the school premises on August 18, 1996. Saludaga
was rushed to FEU Hospital due to the wound he sustained. Meanwhile, Rosete was brought to
the police station where he explained that the shooting was accidental and eventually released
for no formal complaint was filed against him.
 98

Saludaga thereafer filed with RTC Manila a complaint for damages against respondents on
the ground that they breached their obligation to provide students with a safe and secure
environment and an atmosphere conducive to learning.

Respondents, in turn, filed a Third-Party Complaint against Galaxy Development and

Management Corp. (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, if any; and to pay attorney's fees and cost of the suit

Issue:

Whether Respondents can be vicariously liable under Article 2180 of the Civil Code.

Ruling:

The Court agree with the findings of the Court of Appeals that respondents cannot be held
liable for damages under Art. 2180 of the Civil Code because respondents are not the employers
of Rosete. The latter 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. 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.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.

KHRISTINE REGINO, petitioner, vs. Pangasinan College of Science and Technology, Respondent
G.R. No. 156109
November 18, 2004

Facts:

Petitioner Khristine Regino, an enrolled student at respondent PCST, was disallowed to take from
taking tests or examinations by her teachers Rachelle A. Gamut and Elissa Baladlad, because the former did
not pay for two tickets at the price of P100 each as required by PCST. The payment was for fund raising
campaign dubbed as the Rave Party and Dance Revolution. Petitioner did not pay because of financial
difficulties and prohibited by her religion from attending dance parties and celebrations. Petitioner then
filed a complaint for damages against PCST, Gamurot, and Baladlad.
Respondents filed a motion to dismiss on the ground of failure to exhaust administrative remedies which
the RTC upheld and resulted to the dismissal of the case on the ground of lack of cause of action.

Issues:
 99

Whether or not the principle of exhaustion of administrative remedies applies in a civil action
exclusively for damages based on violation of human relations provisions of the Civil Code, filed by a
student against here former school, thus concluding that CHED has exclusive original jurisdiction over
actions for damages based upon violation of the Civilc Code provisions and that a prior declaration of
invalidity of a certain school administrative policy is need for the action to prosper.

Ruling:

No. First, the doctrine of exhaustion of administrative remedies has no bearing on the present case.
Petitioner is not asking for the reversal of the policies of PCST. Neither is she demanding it to allow her to
take her final examinations; she was already enrolled in another educational institution. A reversal of the
acts complained of would not adequately redress her grievances; under the circumstances, the
consequences of respondents acts could no longer be undone or rectified.

Second, exhaustion of administrative remedies is applicable when there is competence on the part of
the administrative body to act upon the matter complained of. Administrative agencies are not courts; they
are neither part of the judicial system, nor are they deemed judicial tribunals. Specifically, the CHED does
not have the power to award damages. Hence, petitioner could not have commenced her case before the
Commission.

Third, the exhaustion doctrine admits of exceptions, one of which arises when the issue is purely legal
and well within the jurisdiction of the trial court. Petitioners action for damages inevitably calls for the
application and the interpretation of the Civil Code, a function that falls within the jurisdiction of the
courts.

St. Mary’s Academy vs. Carpetanos

GR No. 143363
February 6, 2002

Facts:

Herein petitioner, conducted an enrollment drive for the school year 1995-1996 They visited schools
from where prospective enrollees were studying. Sherwin Carpitanos joined the campaign. Along with the
other high school students, they rode a Mitsubishi jeep owned by Vivencio Villanueva on their way to
Larayan Elementary School. Such jeep was driven by James Daniel II, a 15 year old student of the same
school. It was alleged that he drove the jeep in a reckless manner which resulted for it to turned turtle.
Sherwin died due to this accident.

Issue:

WON petitioner should be held liable for the damages.

Ruling:

CA held petitioner liable for the death of Sherwin under Article 218 and 219 of the Family Code
where it was pointed that they were negligent in allowing a minor to drive and not having a teacher
accompany the minor students in the jeep. However, for them to be held liable, the act or omission to be
considered negligent must be the proximate cause of the injury caused thus, negligence needs to have a
causal connection to the accident. It must be direct and natural sequence of events, unbroken by any
efficient intervening causes. The parents of the victim failed to show such negligence on the part of the
petitioner. The spouses Villanueva admitted that the immediate cause of the accident was not the reckless
driving of James but the detachment of the steering wheel guide of the jeep. Futhermore, there was no
evidence that petitioner allowed the minor to drive the jeep of Villanueva. The mechanical defect was an
event over which the school has no control hence they may not be held liable for the death resulting from
such accident.

The registered owner of any vehicle, even if not used for public service, would primarily be
responsible to the public or to 3rd persons for injuries caused while it is being driven on the road. It is not
the school, but the registered owner of the vehicle who shall be held responsible for damages for the death
of Sherwin. Case was remanded to the trial court for determination of the liability of the defendants
excluding herein petitioner.
 100

CHILD LEARNING CENTER VS. TAGORIO

G.R. NO. 150920 NOVEMBER 25, 2005

Facts:

The complaint alleged that during the school year 1990-1991, Timothy was a Grade IV
student at Marymount School, an academic institution operated and maintained by Child
Learning Center, Inc. (CLC). In the afernoon of March 5, 1991, between 1 and 2 p.m., Timothy
entered the boys comfort room at the third floor 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 three stories. Timothy was hospitalized and given
medical treatment for serious multiple physical injuries.

An action under Article 2176 of the Civil Code was filed by respondents against the CLC, the
members of its Board of Directors, namely Spouses Edgardo and Sylvia Limon, Alfonso Cruz,
Carmelo Narciso and Luningning Salvador, and the Administrative Officer of Marymount School,
Ricardo Pilao. In its defense, CLC maintained that there was nothing defective about the locking
mechanism of the door and that the fall of Timothy was not due to its fault or negligence. CLC
further maintained that it had exercised the due care and diligence of a good father of a family
to ensure the safety, well-being and convenience of its students.

Issue:

Whether or not Child Learning Center is liable for torts and consequently, of damages?

Ruling:

Yes. In this tort case, respondents contend 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. The trial court found that the lock was defective on March
5, 1991. The door knob was defective. Afer the incident of March 5, 1991, said door knob was
taken off the door of the toilet where Timothy was in. The architect who testified during the trial
declared that although there were standard specifications for door knobs for comfort room[s],
 101

and he designed them according to that requirement, he did not investigate whether the door
knob specified in his plans during the construction [was] actually put in place. This is so because
he did not verify whether the door knob he specified w[as] actually put in place at the particular
comfort room where Timothy was barred from getting outside.

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 of res
ipsa loquitor 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. Petitioners
are 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.

Petitioners argument that CLC 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 of the Civil Code. In this case, CLCs liability is under
Article 2176 of the Civil Code, premised on the fact of its own negligence in not ensuring that all
its doors are properly maintained.
 102

HEIRS OF REDENTOR COMPLETO VS. ALBAYDA JR. 6

24 SCRA 97

Facts:

Albayda is a Master Sergeant of the PH Air Force, and Completo was the taxi driver of a
Toyota Corolla which was owned by Abiad. Albayda was riding a bike on his way to the office,
when Completo’s taxi bumped and sideswept him, causing serious physical injuries. He [Albayda]
was brought to the PH Air Force General Hospital, but he was transferred to the AFP Medical
Center because he sustained a fracture and there was no orthopedic doctor available in the first
hospital. He was confined from 27 Aug 1997 to 11 Feb 1998, and again in 23 Feb to 22 Mar 1998
[approx. 7 months].

Conciliation before the barangay failed, so Albayda filed a complaint for physical injuries
through reckless imprudence against Completo before the Office of the City Prosecutor of Pasay.
Completo filed a counter-charge of damage to property through reckless imprudence against
Albayda. The Office of the City Prosecutor recommended the filing of an information for
Albayda’s complaint, and Completo’s complaint [against Albayda] was dismissed. Albayda
manifested his reservation to file a separate civil action for damages against Completo and
Abiad. Albayda alleged that Completo’s negligence is the proximate cause of the incident. He
demanded the following damages and their respective amounts: Actual damages – 276,550;
Moral damages – 600,000; Exemplary damages – 200,000; Attorney’s fees – 25,000 + 1,000 per
court appearance.

On the other hand, Completo alleged that he was carefully driving the taxicab when he
heard a strange sound from the taxicab’s rear right side. He found Albayda lying on the road,
holding his lef leg, so he brought Albayda to PH Air Force General Hospital. Completo asserted
that he was an experienced driver, and that he already reduced his speed to 20km even before
reaching the intersection. In contrast, Albayda rode his bicycle at high speed, causing him to lose
control of the bicycle. Completo said that Albayda had no cause of action.

Several people testified for each side, but here are some notes on the testimony of the
owner of the taxi driver, Abiad. Abiad said that aside from being a soldier, he also held franchises
of taxicabs and passenger jeepneys, and being a taxicab operator, he would wake up early to
personally check the taxicabs. When Completo applied as a taxicab driver, Abiad required him to
show his bio-data, NBI clearance, and driver’s license. Completo never figured in a vehicular
 103

accident since he was employed and according to Abiad, he [Completo] was a good driver and
good man.

RTC rendered judgment in favor of Albayda, and the defendants are ordered to pay actual
[46k] and moral [400k] damages, and attorney’s fees [25k]. Upon appeal at the CA, the court
affirmed RTC’s decision with modifications [no more actual damages; awarded temperate
damages [40k]; moral damages only 200k; Completo and Abiad are solidarily liable to pay
Albayda; added legal interest].

Issues:

1. Whether the CA erred in finding that Completo was the one who caused the
collision.
2. Whether Abiad failed to prove that he observed the diligence of a good father of
the family; and
Ruling:

1. No. It is a rule in negligence suits that the plaintiff has the burden of proving by a
preponderance of evidence the motorists breach in his duty of care owed to the
plaintiff, that the motorist was negligent in failing to exercise the diligence
required to avoid injury to the plaintiff, and that such negligence was the
proximate cause of the injury suffered. Article 2176 of the Civil Code provides
that whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if
there is no preexisting contractual relation between the parties, is called a quasi-
delict. In this regard, the question of the motorist's negligence is a question of
fact.It was proven by a preponderance of evidence that Completo failed to
exercise reasonable diligence in driving the taxicab because he was over-speeding
at the time he hit the bicycle ridden by Albayda. Such negligence was the sole and
proximate cause of the serious physical injuries sustained by Albayda. Completo
did not slow down even when he approached the intersection of 8 th and 11th
Streets of VAB. It was also proven that Albayda had the right of way, considering
that he reached the intersection ahead of Completo.

2. Yes. In the selection of prospective employees, employers are required to examine

them as to their qualifications, experience, and service records. On the other hand,
with respect to the supervision of employees, employers should formulate
standard operating procedures, monitor their implementation, and impose
disciplinary measures for breaches thereof. To establish these factors in a trial
involving the issue of vicarious liability, employers must submit concrete proof,
including documentary evidence. Abiad testified that before he hired Completo,
he required the latter to show his bio-data, NBI clearance, and drivers license.
Abiad likewise stressed that Completo was never involved in a vehicular accident
prior to the instant case, and that, as operator of the taxicab, he would wake up
early to personally check the condition of the vehicle before it is used. The
protestation of Abiad to escape liability is short of the diligence required under the
law. Abiads evidence consisted entirely of testimonial evidence, and the
unsubstantiated and self-serving testimony of Abiad was insufficient to overcome
the legal presumption that he was negligent in the selection and supervision of his
drive.
 104

ALLIED BANKING CORP. VS. LIM SIO WAN

G.R. No. 133179 MARCH 27, 2008

Facts:

On November 14, 1983, respondent Lim Sio Wan deposited with petitioner Allied Banking
Corporation (Allied) at its Quintin Paredes Branch in Manila a money market placement of PhP
1,152,597.35 for a term of 31 days to mature on December 15, 1983.

On December 5, 1983, a person claiming to be Lim Sio Wan called up Cristina So, an officer
of Allied, and instructed the latter to pre-terminate Lim Sio Wan’s money market placement, to
issue a manager’s check representing the proceeds of the placement, and to give the check to
one Deborah Dee Santos who would pick up the check. Later, Santos arrived at the bank and
signed the application form for a manager’s check to be issued.

The bank issued Manager’s Check No. 035669 for PhP 1,158,648.49, representing the
proceeds of Lim Sio Wan’s money market placement in the name of Lim Sio Wan, as payee. The
manager’s check was deposited in the account of Filipinas Cement Corporation (FCC) at
respondent Metropolitan Bank and Trust Co. (Metrobank), with the forged signature of Lim Sio
Wan as indorser. To clear the check and in compliance with the requirements of the Philippine
Clearing House Corporation (PCHC) Rules and Regulations, Metrobank stamped a guaranty on
the check.

The check was sent to Allied through the PCHC. Upon the presentment of the check, Allied
funded the check even without checking the authenticity of Lim Sio Wan’s purported
indorsement. Thus, the amount on the face of the check was credited to the account of FCC.

Lim Sio Wan deposited with Allied a second money market placement, upon the maturity
date of the first money market placement, Lim Sio Wan went to Allied to withdraw it. She was
then informed that the placement had been pre-terminated upon her instructions. Allied
refused to pay Lim Sio Wan, claiming that the latter had authorized the pre-termination of the
placement and its subsequent release to Santos.

Issue:
 105

Whether or not Allied negligence was the proximate cause of the loss of Lim Sio Wan’s
money market placement.

Ruling:

The court ruled that Allied is liable to Lim Sio Wan. Fundamental and familiar is the doctrine
that the relationship between a bank and a client is one of debtor-creditor. Since there was no
effective payment of Lim Sio Wan’s money market placement, the bank still has an obligation to
pay her at six percent (6%) interest from March 16, 1984 until the payment thereof.

We cannot, however, say outright that Allied is solely liable to Lim Sio Wan. Allied avers that
even if it had not issued the check payment, the money represented by the check would still be
lost because of Metrobank’s negligence in indorsing the check without verifying the genuineness
of the indorsement thereon. The trial court correctly found Allied negligent in issuing the
manager’s check and in transmitting it to Santos without even a written authorization. In fact,
Allied did not even ask for the certificate evidencing the money market placement or call up Lim
Sio Wan at her residence or office to confirm her instructions. Both actions could have prevented
the whole fraudulent transaction from unfolding. Allied’s negligence must be considered as the
proximate cause of the resulting loss.

Santos could be the architect of the entire controversy. Unfortunately, since summons had
not been served on Santos, the courts have not acquired jurisdiction over her.

SPS. BUENAVENTURA VS. APOSTOL

G.R. No. 163609 NOVEMBER 27, 2008

Facts:

On February 5, 1989, 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 in South Cotabato. The intensity of 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. Marvin sustained severe head
injuries. Despite medical attention, Marvin expired six (6) days after the accident.

Issues:

1. May a municipal mayor be held solidarily liable for the negligent acts of the driver
assigned to him

2. May an LGU be held liable for the tortuous act of a government employee.

Ruling:

1. 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. The Municipality of Koronadal remains to be Lozano’s employer
notwithstanding Lozano’s assignment to Mayor Miguel. Even assuming arguendo that
Mayor Miguel had authority to give instructions or directions to Lozano, he still cannot
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. Mayor Miguel was neither
Lozano’s employer nor the vehicle’s registered owner. There existed no causal
 106

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.

2. The municipality may not be sued because it is an agency of the State engaged in
governmental functions and, hence, immune from suit. This immunity is illustrated in
Municipality of San Fernando, La Union v. Firme, where the Court held 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.
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 to its operation.

ALMIREZ VS. INFINITE LOOP TECHNOLOGY CORPORATION

G.R. No. 162401 JANUARY 31, 2006

Facts:

Petitioner Corazon Almirez was hired by respondent Infinite Loop Technology Corporation
(Infinite Loop) to be a Refinery Senior Process Design Engineer for a specific project starting
October 18, 1999 with a guaranty of 12 continuous months of service or until a mutually agreed
date. However, Almirez was later on suspended. Hence, she filed an action before the National
Labor Relations Commission (NLRC) against Infinite Loop and its General Manager/President/co-
petitioner Edwin R. Rabino on the ground of breach of contract of employment.

Both the Labor Arbiter and the NLRC ruled that there is an existing employer-employee
relationship between Almirez and Infinite Loop since the latter exercises control over the means
and methods used by Almirez in the performance of her duties.

The Court of Appeals ruled that there was no existing employer-employee relationship
between the parties since Almirez was hired to render her professional service only for a specific
project.

Issue:

Whether or not there is employee-employer relationship between Almirez and Infinite

Loop.

Ruling:

To ascertain the existence of an employer-employee relationship, jurisprudence has

invariably applied the four-fold test, to wit: (1) the manner of selection and engagement; (2) the
payment of wages; (3) the presence or absence of the power of dismissal; and (4) the presence
or absence of the power of control. Of these four, the last one, the so called "control test" is
commonly regarded as the most crucial and determinative indicator of the presence or absence
of an employer-employee relationship.
 107

Under the control test, an employer-employee relationship exists where the person for
whom the services are performed reserves the right to control not only the end achieved, but
also the manner and means to be used in reaching that end.

From the earlier-quoted scope of Almirez’ professional services, there is no showing of a

power of control over petitioner. The services to be performed by her specified what she needed
to achieve but not on how she was to go about it.

Contrary to the finding of the Labor Arbiter, as affirmed by the NLRC, the "Scope of
[Almirez’] Professional Services" does not "show that the company’s management team
exercises control over the means and methods in the performance of her duties as Refinery
Process Design Engineer." Having hired Almirez’ professional services on account of her
"expertise and qualifications" as Almirez herself proffers in her Position Paper, the company
naturally expected to be updated regularly of her "work progress," if any, on the project for
which she was specifically hired.

As for the designation of the payments to Almirez as "salaries," it is not determinative of the
existence of an employer-employee relationship. "Salary" is a general term defined as "a
remuneration for services given." It is the above-quoted contract of engagement of services-
letter dated September 30, 1999, together with its attachments, which is the law between the
parties. Even Almirez concedes rendering service "based on the contract," which, as reflected
earlier, is beref of a showing of power of control, the most crucial and determinative indicator
of the presence of an employer-employee relationship.

ARNULFO C. ACEVEDO, Petitioner, vs. ADVANSTAR COMPANY INC. (ACI)

and/or FELIPE LOI, TONY JALAPADAN, Respondents
November 11, 2005 G.R. No. 157656

Facts:

ACI was engaged in the distribution and sale of various brands of liquor and alcoholic spirits.
Felipe Loi was employed as its manager and Jalapadan was one of the ACI’s hired salesmen.
Under the Agreement for the Sale of Merchandise between Jalapadan and ACI, among others,
the former shall be provided with a 6-wheeler truck to facilitate the sale and delivery of products
to customers and outlets and was authorized to employ and discharge a driver and other
assistants as he deemed necessary, who would be considered his employees, and that he alone
would be liable for their compensation and actual expenses, including meals while on duty. On
August 5, 1997, Jalapadan hired Arnulfo Acebedo as driver.

In the course of business, Jalapadan and Acebedo had several misunderstandings until in
October 10, 1998 Acebedo signed a letter, using his thumb mark, informing Jalapadan that he is
resigning effective that date. On October 26, 1998, Acevedo filed a complaint against Jalapadan,
ACI and its general manager, Felipe Loi, for illegal dismissal and for the recovery of back wages
and other monetary benefits.

Issue:

Whether or not Jalapadan, and not ACI and Loi, was the employer of Acebedo.

Ruling:

No, because there has been an employer-employee relationship between respondent ACI
and complainant Arnulfo Acevedo, with respondent Tony Jalapadan as agent of the respondent
corporation arising from their relationship of labor-only contracting. The agreement between
the respondents cannot prevail over Articles 106 and 107 of the Labor Code of the Philippines.
 108

The principal employer becomes solidarily liable with the labor-only contractor for all the
rightful claims of the employees. The labor-only contractor is considered merely as an agent of
the employer, the employer having been made, by law, responsible to the employees of the
labor-only contractor as if such employees had been directly employed by it.

CAYAO-LASAM, petitioners vs SPOUSES RAMOLETE, respondents

GR No. 159132 December 18, 2002

Facts:

On July 28, 1994, respondent Editha Ramolete, who was 3 months pregnant, was brought to
Lorma Medical Center (LMC) in San Fernando, La Union due to vaginal bleeding. Upon advise of
petitioner related via telephone, Editha was admitted to the LMC on the same day.

A pelvic sonogram was then conducted on Editha revealing the fetus’ weak cardiac
pulsation. The following day, the pelvic sonogram showed that aside from the fetus’ weak
cardiac pulsation, no fetal movement was also appreciated. Due to persistent and profuse
vaginal bleeding, petitioner advised her to undergo a D&C procedure. She was discharged the
following day.

On September 16, 1994, Editha was once gain brought at the LMC, as she was suffering
from vomiting and severe abdominal pains. Editha was attended by Drs. Dela Cruz, Mayo and
Komiya. Dr. Mayo allegedly informed Editha that there was a dead fetus in the latter’s womb,
afer Editha went laparectomy, she was found to have massive intra abdominal hemorrhage and
ruptured uterus. Thus, she had to go hysterectomy and as a result no more chance to bear a
child.

Issue:

Whether or not petitioner is liable for medical malpractice.

Ruling:

No. Medical malpractice is a particular form of negligence which consists in the failure of a
physician or a surgeon to apply in 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
 109

circumstances. In order to successfully pursue such a claim, a patient must either prove that the
physician or surgeon failed to do something which a reasonably prudent physician or surgeon
would have done, or that the physician or surgeon performed something which a reasonably
prudent physician or surgeon would not have done, and that such failure or action caused injury
to the patient.

There are four elements involved in medical negligence cases: duty, breach, injury, and
proximate cause.

The breach of the 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
malpractice. Further, in as much 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 suspect the conclusion as to causation.

However, in this case, it was undisputedly established that Editha did not return for follow-
up evaluation, in defiance of the petitioner’s advice. This is, as found out, is the proximate cause
of the injury she sustained.

DR. PEDRO DENNIS CERENO, and DR. SANTOS ZAFE, Petitioners,

vs. COURT OF APPEALS, SPOUSES DIOGENES S. OLAVERE and FE R.
SERRANO, Respondents
G.R. No. 167366, September 26, 2012

Facts:

At 9:15 in the evening, Raymond S. Olavere, a victim of a stabbing incident was

rushed to the Bicol Regional Medical Center. The emergency room resident physician,
recommended that the patient undergo "emergency exploratory laparotomy." During that
time, the hospital surgeons, were busy operating on gunshot victim Maluly-on with the
only anaesthesiologist Dr. Tatad on duty assisting them. Just before the operation on
Maluluy-on was finished, another emergency case involving Lilia Aguila, a woman who
was giving birth to triplets, was brought to the operating room. Because they were
heavily occupied, the doctors decided to defer the operation on Raymond. They however
examined Raymond and they found that the latter’s blood pressure was normal and
"nothing in him was significant."

At 12:15 am, the operation on Raymong started. But while the operation was on-
going, Raymond suffered a cardiac arrest and he was pronounced dead at 2:30 A.M with
his death certificate indicating "hypovolemic shock" as the immediate cause of death.

Issue:

Whether Dr. Cereno and Dr. Zafe are guilty of gross negligence in the performance
of their duties.

Ruling:

No, the petitioners are not guilty of gross negligence.The type of lawsuit which has
been called medical malpractice or medical negligence, is that type of claim which the
complainant must prove: (1) that the health care provider, either by his act or omission,
had been negligent, and (2) that such act or omission proximately caused the injury
complained of. The best approach to prove these is through the opinions of expert
 110

witnesses belonging in the same general line of practice as defendant surgeon. The
deference of courts to the expert opinion of qualified physicians 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.

In the case at bar, there were no expert witnesses presented to testify norwas there
any testimony offered, except that of Dr. Tatad’s, on which it may be inferred that
petitioners failed to exercise the standard of care, diligence, learning and skill expected
from practitioners of their profession. Dr. Tatad is not an expert witness in this case as her
expertise is in the administration of anesthesia and not in the determination of whether
surgery ought or not ought to be performed.

In medical negligence cases, it is established that the complainant has the burden of
establishing breach of duty on the part of the doctors or surgeons. It must be proven that
such breach of duty has a causal connection to the death of the patient.Aside from their
failure to prove negligence on the part of the petitioners, they also failed to prove that it
was petitioners’ fault that caused the injury.

NOGALES vs. CAPITOL MEDICAL CENTER

G.R. No. 142625/December 19, 2006
511 SCRA 204

Facts:

Corazon Nogales (“Corazon”) was pregnant with her fourth child. She was under the
exclusive prenatal care of Dr. Oscar Estrada. On her last trimester of pregnancy, she had leg
edema and an increase in blood pressure. Her condition was a dangerous complication of
pregnancy. When she experienced mild labor pains, Dr. Estrada advised her immediate
admission to Capitol Medical Center (CMC). Upon Corazon's admission at the CMC, Rogelio
Nogales ("Rogelio") executed and signed the "Consent on Admission and Agreement" and
"Admission Agreement." Corazon was then brought to the labor room of the CMC. She had
incidents of medical complication and was given treatment by the doctors in CMC. Despite
several measures administered, Corazon died. The cause of death was hemorrhage, post partum.

Petitioners filed a complaint for damages against CMC, Dr. Estrada, and the rest of CMC
medical staff for the death of Corazon. In their defense, CMC pointed out that Dr. Estrada was a
consultant to be considered as an independent-contractor, and that no employer-employee
relationship existed between the former and the latter.

Afer more than 11 years of trial, the court rendered judgment finding Dr. Estrada solely
liable for damages. Petitioners appealed the trial court’s decision. Petitioners claimed that aside
from Dr. Estrada, the remaining respondents should be held equally liable for negligence.
Petitioners stressed that the subject matter of the petition was the liability of CMC for the
negligence of Dr. Estrada.

Issue:

Whether CMC is vicariously liable for the negligence of Dr. Estrada.

 111

Ruling:

Yes. 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. 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 acquired in them;
and 3.) the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent
with ordinary care and prudence. In the instant case, CMC impliedly held out Dr. Estrada as a
member of its medical staff. Through CMC's acts, CMC clothed Dr. Estrada with apparent
authority thereby leading the Spouses Nogales to believe that Dr. Estrada was an employee or
agent of CMC.

PROFESSIONAL SERVICES INC. v. AGANA

G.R. No. 126297, 31 January 2007

Facts:

On April 1984, Natividad Agana was rushed to the Medical City General Hospital (Medical
City Hospital) because of difficulty of bowel movement and bloody anal discharge. Dr. Miguel
Ampil diagnosed her to be suffering from "cancer of the sigmoid". The doctor performed an
anterior resection surgery on Natividad and found that the malignancy in her sigmoid area had
spread on her lef ovary, necessitating the removal of certain portions of it. Dr. Ampil obtained
the consent of Natividad’s husband, Enrique Agana, to permit Dr. Juan Fuentes, to perform
hysterectomy on her. Dr. Fuentes had completed the hysterectomy and thenafer lef afer he
presented to Dr. Ampil his work being done. Dr. Ampil took over and completed the operation
and closed the incision. The attending nurses had "announced to Dr. Ampil that two (2) "sponge
count lacking” but he continued the closure. The attending nurses entered the incident in the
Record of Operations.

Natividad was released with a hospital bill amounted to P60,000.00 inclusive of the doctor’s
fee. A few days late, Natividad complained of excruciating pain in her anal region and consulted
both Dr. Ampil and Dr. Fuentes. Both doctors told her that the pain was the natural consequence
of the surgery. Dr. Ampil then recommended that she consult an oncologist to examine the
cancerous nodes which were not removed during the operation.

Natividad and her husband, went to the United States to seek further treatment and was
told she was free of cancer afer four (4) months. She was advised to return to the Philippines.

In August 31, 1984, Natividad flew back to the Philippines, still suffering from pains. Two
weeks thereafer, her daughter found a piece of gauze protruding from her vagina. Dr. Ampil
was informed about it and he preceded 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. She suffered intense pains hence prompted her admission to the Polymedic General
Hospital.
 112

Dr. Ramon 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 and
forced the stool to excrete through the vagina. In October 1984, Natividad underwent another
surgery to remedy the damage.

On Nov. 12, 1984, Natividad and her husband filed with the RTC, Branch 96, Quezon City a
complaint for damages against the Professional Services, Inc. (PSI), owner of the Medical City
Hospital, Dr. Ampil, and Dr. Fuentes, docketed as Civil Case No. Q-43322. They alleged that the
latter are liable for negligence for leaving two pieces of gauze inside Natividad’s body and
malpractice for concealing their acts of negligence.

On February 16, 1986 Natividad died.

On March 1993, the RTC rendered its Decision in favor of the Aganas, finding PSI, Dr. Ampil
and Dr. Fuentes liable for negligence and malpractice. The defendants PSI, Dr. Miguel Ampil and
Dr. Juan Fuentes to pay to the plaintiffs, jointly and severally for actual damages (US $ 19,900 at
the rate of P21.60-US$1.00, as reimbursement of actual expenses incurred in the United States
of America); travel taxes; cost of hospitalization at Polymedic Hospital (P45,802.50); ) moral
damages (P2,000,000.00); attorney’s fees (P250,000.00); legal interest and the cost of suits. Dr.
Ampil and Dr. Fuentes are liable for exemplary damages and the interest thereon (P300,000.00).

Aggrieved, PSI, Dr. Fuentes and Dr. Ampil interposed an appeal to the Court of Appeals.

Issue:

Whether the CA erred in holding Dr. Ampil liable for negligence and malpractice.

Ruling:

YES.The glaring truth is that all the major circumstances, taken together, directly point to Dr.
Ampil as the negligent party: (1) it is not disputed that the surgeons used gauzes as sponges to
control the bleeding of the patient during the surgical operation. (2) immediately afer the
operation, the nurses who assisted in the surgery noted in their report that two ‘sponge count
was lacking’; that such anomaly was ‘announced to surgeon’ and that a ‘search was done but to
no avail’ prompting Dr. Ampil to ‘continue for closure’. (3) afer the operation, two gauzes were
extracted from the same spot of the body of Mrs. Agana where the surgery was performed.

Dr. Ampil did not inform Natividad about the missing two pieces of gauze. Worse, he even
misled her that the pain she was experiencing was the ordinary consequence of her operation.
Had he been more candid, Natividad could have taken the immediate and appropriate medical
remedy to remove the gauzes from her body. What was initially an act of negligence by Dr. Ampil
has ripened into a deliberate wrongful act of deceiving his patient.

This is a clear case of medical malpractice or more appropriately, medical negligence. The
elements are duty, breach, injury and proximate causation. Dr, 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. Dr. Ampil
breached both duties. Such breach caused injury to Natividad, necessitating her further
examination by American doctors and another surgery. That Dr. 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 Dr.
Ampil’s negligence and the injury. And what further aggravated such injury was his deliberate
concealment of the missing gauzes from the knowledge of Natividad and her family.
 113

PROFESSIONAL SERVICES INC. v. AGANA

G.R. No. 126467, 11 February 2008

Facts:

The case emanated on April 1984, when Natividad Agana was hospitalized and operated by
Dr. Ampil and Dr. Fuentes at the Medical City General Hospital for her "cancer of the sigmoid".
Afer the operations, circumstances pointed out two (2) “sponge count lacking”. Insurmountable
cost of hospital bills were incurred and intense pains still felt even when the two “sponges”
were later removed from the vagina of Natividad.

The Agana’s filed a complaint for damages against PSI, Dr. Migule Ampil and Dr. Fuentes at
the RTC, Branch 96, Quezon City. The RTC ruled in favor of the Aganas and ordered the
defendants to pay jointly and severally the plaintiff. The defendants interposed an appeal to the
Court of Appeal (CA). On April 1993, the Aganas filed with the RTC a motion for a Partial
Execution of its Decision. The Court granted the motion. The sheriff levied upon certain
properties of Dr. Ampil and sold them for P451,275.00 and delivered the amount to the Aganas.

Following their receipt of the money, the Aganas entered into an agreement with PSI and
Dr. Fuentes to indefinitely suspend any further execution of the RTC Decision. However, not long
thereafer, the Aganas again filed a motion for an alias writ of execution against the properties of
PSI and Dr. Fuentes.

On September 21, 1993, the RTC granted the motion and issued the corresponding writ. Dr.
Fuentes filed with the Court of Appeals a petition for certiorari and prohibition, with prayer for
preliminary injunction, docketed as CA-G.R. SP No. 32198. On Oct. 29, 1993, the CA issued a
Resolution granting Dr. Fuentes’ prayer for injunctive relief.

On September 6, 1996, the Court of Appeals rendered its Decision jointly disposing of CA-
G.R. CV No. 42062 and CA-G.R. SP No. 32198. The case against defendant-appellant Dr. Juan
Fuentes was DISMISSED.

The Aganas maintained that the Court of Appeals erred in finding that Dr. Fuentes is not
guilty of negligence or medical malpractice, invoking the doctrine of res ipsa loquitur. They
contend that the pieces of gauze are prima facie proofs that the operating surgeons have been
negligent.

Issue:
 114

Whether the CA erred in absolving Dr. Fuentes of any liability.

Ruling:

NO. Literally, res ipsa loquitur means "the thing speaks for itself." 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.

The element of "control and management of the thing which caused the injury" to be
wanting. It was duly established that Dr. Ampil was the lead surgeon during the operation of
Natividad. He requested the assistance of Dr. Fuentes only to perform hysterectomy when he (Dr.
Ampil) found that the malignancy in her sigmoid area had spread to her lef ovary. Dr. Fuentes
performed the surgery and thereafer reported and showed his work to Dr. Ampil. The latter
examined it and finding everything to be in order, allowed Dr. Fuentes to leave the operating
room. Dr. Ampil then resumed operating on Natividad. He was about to finish the procedure
when the attending nurses informed him that two pieces of gauze were missing. A "diligent
search" was conducted, but the misplaced gauzes were not found. Dr. Ampil then directed that
the incision be closed. During this entire period, Dr. Fuentes was no longer in the operating room
and had, in fact, lef the hospital.

Under the "Captain of the Ship" rule, 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. Dr. Ampil was the lead surgeon thus he was the "Captain of the Ship." It was
this act of ordering the closure of the incision notwithstanding that two pieces of gauze
remained unaccounted for, that caused injury to Natividad’s body. Clearly, the control and
management of the thing which caused the injury was in the hands of Dr. Ampil, not Dr. Fuentes.

Res ipsa loquitur is not a rule of substantive law, hence, does not per se create or constitute
an independent or separate ground of liability, being a mere evidentiary rule.c In other words,
mere invocation and application of the doctrine does not dispense with the requirement of
proof of negligence. Here, the negligence was proven to have been committed by Dr. Ampil and
not by Dr. Fuentes.
 115

DR. RUBU LI vs. SPS. SOLIMAN

G.R. No. 165279/ June 7, 2011
651 SCRA 32

Facts:

Angelica Soliman, the daughter of Sps. Soliman underwent a biopsy of the mass located in
her lower extremity at the St. Lukes Medical Center (SLMC).Results showed that Angelica was
suffering from a highly malignant cancer of the bone. Angelica’s right leg was amputated in order
to remove the tumor. To eliminate any remaining cancer cells, chemotherapy was administered
by herein petitioner Dr. Rubi Li, a medical oncologist.

Angelica was admitted to SLMC. However, she died 11 days afer the administration of the
first cycle of the chemotherapy regimen. Respondents filed a damage suit against Dr. Li and
other doctors and against SLMC, charging them with negligence and disregard of Angelica’s
safety, health and welfare by their careless administration of the chemotherapy drugs, their
failure to observe the essential precautions in detecting early the symptoms of fatal blood
platelet decrease and stopping early on the chemotherapy, which bleeding led to hypovolemic
shock that caused Angelicas untimely demise.

Petitioner denied having been negligent in administering the chemotherapy drugs to

Angelica and asserted that she had fully explained to respondents the effects of chemotherapy.
On her supposed non-disclosure of all possible side effects of chemotherapy, including death,
petitioner argues that it was foolhardy to imagine her to be all-knowing. While the theoretical
side effects of chemotherapy were explained by her to the respondents, as these should be
known to a competent doctor, petitioner cannot possibly predict how a particular patient’s body
constitution would respond to the treatment. These are obviously dependent on too many
known, unknown and immeasurable variables, thus requiring that Angelica be closely monitored
during the treatment. Petitioner asserts that she did everything within her professional
competence to attend to the medical needs of Angelica.

Issue:

Whether the petitioner 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.

Ruling:
 116

No. There are four essential elements a plaintiff must prove in a malpractice action based
upon the doctrine of informed consent: "(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." The gravamen in an
informed consent case requires the plaintiff to "point to significant undisclosed information
relating to the treatment which would have altered her decision to undergo it.

In this case, there was adequate disclosure of material risks inherent in the chemotherapy
procedure performed with the consent of Angelica’s parents. On the other hand, the suing
parents failed to establish the existence of the risks or side-effects Dr. Li should have disclosed to
them in the use of chemotherapy in the treatment of osteosarcoma. The doctor presented as
witness does not qualify as expert testimony to establish the standard of care in obtaining
consent for chemotherapy treatment. In the absence of expert testimony in this regard, the
Court felt hesitant in defining the scope of mandatory disclosure in cases of malpractice based
on lack of informed consent. Thus, the Court has no factual basis to declare that the
chemotherapy administered by the petitioner proximately caused Angelica’s death.

DR. EDUARDO AQUINO VS HEIRS OF RAYMUNDA CALAYAG

G.R. No. 158461

Facts:

When his wife Raymunda wento into labor pains and began bleeding, respondent Rodrigo
Calayag brought her to St. Michaels’s Clinic. Afer initial examination, the doctor told Rodrigo
that Raymunda had to have caesarean section for her baby but this had to be done at the
beteer-equipped Sacred Heart Hospital (SHH), owned and operated by petitioner Dr. Alberto
Reyes (Dr. Reyes). SHH admitted on the same day. To prepare her, the attending anesthesiologist,
petitioner Dr. Eduardo Aquino injected with a preliminary “Hipnotic” and he administered an
anesthesia on her spine. A few minutes later, Dr. Unite delivered a stillborn eight-month-old
baby. A few minutes later the operating team noticed that Raymunda had become cyanotic and
her blood darkened for lack of oxygen and suddenly her vital signs gone. Fortunately, she was
restored. It was found out that suffered a cardiac arrest during the operation which explained
her comatose states and was advised to move her to a better-equipped hospital. Raymunda was
moved to Medical Center Manila where Dr. Libarnes, a neurologist, found her in a “vegetative
state” having suffered from an anoxic injury due to cardio-respiratory arrest. Her condition
worsen and she never regained consciousness, prompting her MCM doctors to advise Rodrigo to
take her home since they could do no more to improve her condition. MCM discharged her and
she died 15 days later. Rodrigo filed, together with his seven children, a complaint damages for
Dr. Unite, Dr. Aquino and Dr. Reyes claiming that Dr. Unite and Dr. Aquino failed to exercise the
diligence required for operating Raymunda while Dr. Reyes, as Rodrigo averred, was negligent in
supervising the work of the two doctors.

Issues:
 Whether or not Dr. Unite (the surgeon) and Dr. Aquino (the anesthesiologist) acted
negligently in handling Raymunda’s operation, resulting in her death; and
 Whether or not Dr. Reyes is liable, as hospital owner, for the negligence of Dr. Unite and
Dr. Aquino.

Rulings:

Yes, Dr. Unite and Dr. Aquino are liable. The cause of action against the doctors in these
cases is commonly known as medical malpractice and to successfully mount a medical
malpractice action, the plaintiff should establish four basic things: (1) duty; (2) breach; (3) injury;
and (4) proximate causation. The evidence should show that the physician or surgeon, either
failed to do something which a reasonably prudent physician or surgeon would have done, or
that he or she did something that a reasonably prudent physician or surgeon would not have
done; and that the failure or action caused injury to the patient. To prove the doctors negligence,
 117

Rodrigo presented Dr. Libarnes who explained that it was the lack of oxygen in the brain that
caused Raymunda’s vegetative state and it could be traced to the anesthetic accident that
resulted when Dr. Aquino placed her under anesthesia. Furthermore, Dr. Libarnes blamed the
doctors who operated on Raymunda for not properly keeping track of her vital sign during the
caesarean procedure resulting in their failure to promptly address the cyanosis when it set in.
The damage coud have been averted had the attending doctors promptly detected the situation
and resuscitated her on time.

No, Dr. Reyes is not liable as a hospital owner. The doctrine of apparent authority would
not apply to make Dr. Reyes liable. Two factors must be present under this doctrine: 1) the
hospital acted in a manner which would lead a reasonable person to believe that the person
claimed to be negligent was its agent or employee; and 2) the patient relied on such belief. In
this case, there is no evidence that the hospital acted in a way that made Raymunda and her
husband believe that the two doctors were in the hospital’s employ. There appears no concrete
proof to show that Dr. Unite and Dr. Aquino were under the hospital’s payroll. Indeed, Dr. Aquino
appeared to be a government physician connected with the Integrated Provincial Health Office
of Bulacan while Dr. Unite appeared to be a self-employed doctor. No evidence has been
presented that Raymunda suffered her fate because of defective hospital facilities or poor staff
support to the surgeons.
 118

PETER PAUL PATRICK LUCAS VS DR. PROSPERO MA. C . TUANO

G.R. NO. 178763

Facts:

Herein petitioner, Peter Lucas, first consulted respondent, Dr. Tuaño, on a complaint of
soreness and redness on his right eye. The respondent, afer a series of examinations, found that
the former was suffering from conjunctivitis or “sore eyes” and prescribed the use of the
Spersacet-C. However, afer the petitioner’s condition seemed to have worsened, he sought for
the respondent’s second finding wherein the latter said that his condition had progressed to
Epidemic Kerato Conjunctivitis (EKC), a viral infection. The respondent then prescribed the use
of Maxitrol, a steroid-based eye drop. The petitioner’s condition worsened overtime, yet he
obediently complied with all the prescriptions and orders of the respondent.

Four months later and afer the petitioner suffered from significant swelling of his right
eyeball, headaches, nausea and blindness on this right eye, he sought for the opinion of another
doctor, Dr. Aquino. Dr. Aquino found that the petitioner had been suffering from glaucoma and
needed to undergo laser surgery, lest he might suffer from total blindness. Afer reading the
literature on the use of the medicine Maxitrol, Fatima, one of the petitioners herein and Peter
Lucas’ wife, read that one of the adverse effects of prolonged use of steroid-based eye drops
could possibly be glaucoma. Claiming to have steroid-induced glaucoma and blaming Dr. Tuano
for the same, Peter, Fatima, and their two children instituted a civil case for damages against
herein respondent for medical malpractice.

Issue:

Whether or not Dr. Tuano failed to exercise due diligence in the performance of his duty and
may be held liable.

Ruling:

No, petitioers failed to prove by preponderance of evidence that Dr. Tuano was negligent in
his treatment of Peter’s condition. In medical negligence cases, also called medical malpractice
suits, there exist a physician-patient relationship between the doctor and the victim. But just
like any other proceeding for damages, four essential (4) elements i.e., (1) duty; (2) breach; (3)
injury; and (4) proximate causation, must be established by the plaintiff/s. All the four (4)
elements must co-exist in order to find the physician negligent and, thus, liable for damages.

As the physician has the duty to use at least the same level of care as that of any other
reasonably competent physician would use in the treatment of his patient, said standard level of
 119

care, skill and diligence must likewise be proven by expert medical testimony, because the
standard of care in a medical malpractice case is a matter peculiarly within the knowledge of
experts in the field. The same is outside the ken of the average layperson. There is breach of
duty of care, skill and diligence, or the improper performance of such duty, by the attending
physician when the patient is injured in body or in health [and this] constitutes the actionable
malpractice. Hence, proof of breach of duty on the part of the attending physician is insufficient.
Rather, the negligence of the physician must be the proximate cause of the injury.

FILCAR TRANSPORT SERVICES VS JOSE A. ESPINAS

G.R. NO. 174156

Facts:

On November 22, 1998, respondent Espinas was driving his car in Manila when another car
suddnenly and bumped his car. The other car escaped from the scene of the incident, but
Espinas was able to get its plate number. Afer verifying with the LTO, Espinas learned that the
owner of the other car is Filcar. Espenias sent several letters to Filcar and to its President and
General Manager. On May 31, 2001, Espinas filed a complaint for damages against Filcar and
Carmen Flor before the Metropolitan Trial Court of Manila and demand that they pay actual
damages sustained by his car.

Filcar argued that while it is the registered owner of the car that hit and bumped Espinas
car, the car was assigned to its Corporate Secretary and further stated that when the incident
happened, the car was being driven by Atty. Flor’s personal driver, Timoteo Floresca. Filcar
denied any liability to Espinas and claimed that the incident was not due to its fault or
negligence since Floresca was not its employee but that of Atty. Flor. Filcar and Flor both said
that they always exercised the due diligence required of a good father of a family in leasing and
assigning their vehicles to third parties.

Issue:

Whether or not Filcar, a registered owner of the motor vehicle, may be held liable for the
damages caused to Espinas.

Ruling:

Yes. Filcar, as registered owner, is deemed the employer of the driver Floresca, and is thus
vicariously liable under Article 2176 in relation with Article 2180 of the Civil Code which provides
that an action predicated on an employee’s act or omission may be instituted against the
employer who is held liable for the negligent act or omission committed by his employee. It is
well settled that in case of motor vehicle mishaps, the registered owner of the motor vehicle is
considered as the employer of the tortfeasor-driver, and is made primarily liable for the tort
committed by the latter. In Equitable Leasing Corp vs Suyom the registered owner of the motor
vehicle is the employer of the negligent driver and the actual employer is considered merely as
an agent of such owner.

Thus, it is clear that for the purpose of holding the registered owner of the motor vehicle
primarily and directly liable for damages under Article 2176, in relation with Article 2180 of the
Civil Code, the existence of an employer- employee relationship is not required. It is sufficient to
establish that Filcar is the registered owner of the motor vehicle causing damage in order that it
 120

may be held vicariously liable under Article 2180 of the Civil Code. 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.

PCIB v CA PHILIPPINE COMMERCIAL INTERNATIONAL BANK (formerly INSULAR BANK OF ASIA

AND AMERICA), petitioner, vs. COURT OF APPEALS and FORD PHILIPPINES, INC. and CITIBANK,
N.A., respondents.
G.R. No. 121413. January 29, 2001

Facts:
Ford Philippines drew and issued Citibank Check. No. SN 04867 on October 19, 1977,
Citibank Check No. SN 10597 on July 19, 1978 and Citibank Check No. SN-16508 on April 20,
1979, all in favor of the Commissioner of Internal Revenue (CIR) for payment of its percentage
taxes. The checks were crossed and deposited with the IBAA, now PCIB, BIR's authorized
collecting bank. The first check was cleared containing an indorsement that "all prior
indorsements and/or lack of indorsements guaranteed." The same, however, was replaced with
two (2) IBAA's managers' checks based on a call and letter request made by Godofredo Rivera,
Ford's General Ledger Accountant, on an alleged error in the computation of the tax due without
IBAA verifying the authority of Rivera. These manager's checks were later deposited in another
bank and misappropriated by the syndicate. The last two checks were cleared by the Citibank
but failed to discover that the clearing stamps do not bear any initials. The proceeds of the
checks were also illegally diverted or switched by officers of PCIB — members of the syndicate,
who eventually encashed them. Ford, which was compelled to pay anew the percentage taxes,
sued in two actions for collection against the two banks on January 20, 1983, barely six years
from the date the first check was returned to the drawer. The direct perpetrators of the crime
are now fugitives from justice. The decision of the lower courts are the following:

1st case:
(1) Trial Court: Citibank and IBAA were jointly and severally liable for the checks (2) CA: only IBAA
(PCIB) solely liable for the amount of the first check
2nd case:
(1) Trial Court: absolved PCIB from liability and held that only the Citibank is liable for the checks
issued by Ford
(2) Court of Appeals: held both banks liable for negligence in the selection and supervision of
their employees resulting in the erroneous encashment of the checks.

Issue:
1. Whether the petitioner Ford had the right to recover from the collecting bank (PCIBank)
and the drawee bank (Citibank) the value of the checks intended as payment to the
Commissioner of Internal Revenue?

2. Whether Ford has cause of action already prescribed?

 121

Ruling:
A. Citibank Check No. SN-04867
FORD
Ford, is guilty of the "imputed contributory negligence" that would defeat its claim for
reimbursement, bearing in mind that its employees, Godofredo Rivera and Alexis Marindo, were
among the members of the syndicate.
although the employees of Ford initiated the transactions attributable to an organized syndicate,
in our view, their actions were not the proximate cause of encashing the checks payable to the
CIR. The degree of Ford's negligence, if any, could not be characterized as the proximate cause of
the injury to the parties.

IBAA/PCIB
As agent of the BIR (the payee of the check), defendant IBAA should receive instructions
only from its principal BIR and not from any other person especially so when that person is not
known to the defendant. It is very imprudent on the part of the defendant IBAA to just rely on
the alleged telephone call of one (Godofredo Rivera and in his signature to the authenticity of
such signature considering that the plaintiff is not a client of the defendant IBAA." The crossing
of the check with the phrase "Payee's Account Only," is a warning that the check should be
deposited only in the account of the CIR. Thus, it is the duty of the collecting bank PCIBank to
ascertain that the check be deposited in payee's account only. Therefore, it is the collecting bank
(PCIBank) which is bound to scrutinize the check and to know its depositors before it could make
the clearing indorsement "all prior indorsements and/or lack of indorsement guaranteed".
PCIBank is liable in the amount corresponding to the proceeds of Citibank Check No. SN-04867.

Citibank
None
B. Citibank Check Numbers SN-10597 and 16508

PCIBank
Section 5 31 of Central Bank Circular No. 580, Series of 1977 provides that any thef
affecting items in transit for clearing, shall be for the account of sending bank, which in this case
is PCIBank.

Citibank
Citibank is negligent in the performance of its duties. Citibank failed to establish that its
payment of Ford's checks were made in due course and legally in order. In its defense, Citibank
claims the genuineness and due execution of said checks, considering that Citibank (1) has no
knowledge of any infirmity in the issuance of the checks in question (2) coupled by the fact that
said checks were sufficiently funded and (3) the endorsement of the Payee or lack thereof was
guaranteed by PCIBank (formerly IBAA), thus, it has the obligation to honor and pay the same. As
the drawee bank breached its contractual obligation with Ford and such degree of culpability
contributed to the damage caused to the latter. It failed to perform what was incumbent upon it,
which is to ensure that the amount of the checks should be paid only to its designated payee.
Invoking the doctrine of comparative negligence, we are of the view that both PCIBank and
Citibank failed in their respective obligations and both were negligent in the selection and
supervision of their employees resulting in the encashment of Citibank Check Nos. SN 10597 and
16508. Thus, we are constrained to hold them equally liable for the loss of the proceeds of said
checks issued by Ford in favor of the CIR. Time and again, we have stressed that banking
business is so impressed with public interest where the trust and confidence of the public in
 122

general is of paramount importance such that the appropriate standard of diligence must be
very high, if not the highest, degree of diligence. A bank's liability as obligor is not merely
vicarious but primary, wherein the defense of exercise of due diligence in the selection and
supervision of its employees is of no moment. Banks handle daily transactions involving millions
of pesos. By the very nature of their work the degree of responsibility, care and trustworthiness
expected of their employees and officials is far greater than those of ordinary clerks and
employees. Banks are expected to exercise the highest degree of diligence in the selection and
supervision of their employees.
The relationship between a holder of a commercial paper and the bank to which it is sent
for collection is that of a principal and an agent and the diversion of the amount of the check is
justified only by proof of authority from the drawer; that in crossed checks, the collecting bank is
bound to scrutinize the check and know its depositors before clearing indorsement; that as a
general rule, banks are liable for wrongful or tortuous acts of its agents within the scope and in
the course of their employment; that failure of the drawee bank to seasonably discover
irregularity in the checks constitutes negligence and renders the bank liable for loss of proceeds
of the checks; that an action upon a check prescribes in ten (10) years; and that the contributory
negligence of the drawer shall reduce the damages he may recover against the collecting bank.
Since a master may be held for his servant's wrongful act, the law imputes to the master the
act of the servant, and if that act is negligent or wrongful and proximately results in injury to a
third person, the negligence or wrongful conduct is the negligence or wrongful conduct of the
master, for which he is liable. The general rule is that if the master is injured by the negligence of
a third person and by the concurring contributory negligence of his own servant or agent, the
latter's negligence is imputed to his superior and will defeat the superior's action against the
third person, assuming, of course that the contributory negligence was the proximate cause of
the injury of which complaint is made.
As a general rule, however, a banking corporation is liable for the wrongful or tortuous acts
and declarations of its officers or agents within the course and scope of their employment. A
bank will be held liable for the negligence of its officers or agents when acting within the course
and scope of their employment. It may be liable for the tortuous acts of its officers even as
regards that species of tort of which malice is an essential element. A bank holding out its
officers and agents as worthy of confidence will not be permitted to profit by the frauds these
officers or agents were enabled to perpetrate in the apparent course of their employment; nor
will it be permitted to shirk its responsibility for such frauds, even though no benefit may accrue
to the bank therefrom. For the general rule is that a bank is liable for the fraudulent acts or
representations of an officer or agent acting within the course and apparent scope of his
employment or authority. And if an officer or employee of a bank, in his official capacity, receives
money to satisfy an evidence of indebtedness lodged with his bank for collection, the bank is
liable for his misappropriation of such sum.

CONTRIBUTORY NEGLIGENCE OF PLAINTIFF SHALL REDUCE DAMAGES HE MAY RECOVER.

The court also find that Ford is not completely blameless in its failure to detect the
fraud. Failure on the part of the depositor to examine its passbook, statements of account, and
cancelled checks and to give notice within a reasonable time (or as required by statute) of any
discrepancy which it may in the exercise of due care and diligence find therein, serves to
mitigate the banks' liability by reducing the award of interest from twelve percent (12%) to six
percent (6%) per annum. As provided in Article 1172 of the Civil Code of the Philippines,
responsibility arising from negligence in the performance of every kind of obligation is also
demandable, but such liability may be regulated by the courts, according to the circumstances.
In quasi-delicts, the contributory negligence of the plaintiff shall reduce the damages that he
may recover.
 123

MANILA ELECTRIC COMPANY (MERALCO) vs.

ATTY. PABLITO M. CASTILLO, doing business under the trade name and style of
PERMANENT LIGHT MANUFACTURING ENTERPRISES and GUIA S.
CASTILLO,
G.R. No. 182976 January 14, 2013

Facts:
Respondents Pablito M. Castillo and Guia S. Castillo are spouses engaged a business
under the name and style of Permanent Light Manufacturing Enterprises (Permanent
Light).
After conducting an inspection of Permanent Lights electric meter, the petitioner
Manila Electric Company (Meralco) concluded that the meter was tampered with and
electric supply to Permanent Light was immediately disconnected, without notice to
respondents, for one day. However, respondents used generators soon after the power
went out to keep the operations of Permanent Light on track. Subsequently, Meralco
assured respondents in a letter that Permanent Lights meter has been tested and was
found to be in order. In the same letter, petitioner informed respondents that said meter
was replaced anew after it sustained a crack during testing. However, respondents
requested for a replacement meter. According to them, the meters installed by Meralco
ran faster than the one it confiscated following the disconnection. Subsequently, Meralco
installed a new electric meter at the premises of Permanent Light.

Issues:
1. Whether or not the respondents are entitled to claim damages for petitioners act of
disconnecting electricity to Permanent Light.

2. Whether or not the respondents are entitled to actual damages for the supposed
overbilling by petitioner Meralco of their electric consumption from the time the new
electric meter was installed.

Ruling:
First Issue:
In Quisumbing v. Manila Electric Company, the Court treated the immediate
disconnection of electricity without notice as a form of deprivation of property without
due process of law, which entitles the subscriber aggrieved to moral damages. In addition
to moral damages, exemplary damages are imposed by way of example or correction for
the public good. In this case, to serve as an example - that before disconnection of electric
supply can be effected by a public utility, the requisites of law must be complied with the
Court sustained the award of exemplary damages to respondents.

Second Issue:
Actual or compensatory damages cannot be presumed, but must be duly proved with
a reasonable degree of certainty. The award is dependent upon competent proof of the
damage suffered and the actual amount thereof. The award must be based on the evidence
presented, not on the personal knowledge of the court; and certainly not on flimsy,
remote, speculative and unsubstantial proof. Nonetheless, in the absence of competent
 124

proof on the amount of actual damages suffered, a party is entitled to temperate damages.
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 amount thereof is usually left to the discretion of the courts but the same
should be reasonable.

In this case, the Court is convinced that respondents sustained damages from the
abnormal increase in Permanent Lights electric bills after petitioner replaced the latters
meter. However, respondents failed to establish the exact amount thereof by competent
evidence. Thus, temperate damages is awarded.
Petition is DENIED. The decision of CA is affirmed

UNIVERSAL AQUARIUS, INC. and CONCHITA TAN versus Q.C. HUMAN RESOURCES
MANAGEMENT CORPORATION
G.R. NO. 155990, September 12, 2007

Facts:

Universal Aquarius, Inc. (Universal) is engaged in the manufacture and distribution of

chemical products in Metro Manila.While Q.C. Human Resources Management Corporation
(Resources) is engaged in supplying manpower to various establishments. It supplied Universal
with about seventy-four (74) temporary workers to assist Universal in the operation of its
chemical plant in Antipolo City. The national president of the labor organization called Obrero
Pilipino (Universal Aquarius Chapter) sent a Notice of Strike to Universal. Resources informed the
Regional Office of the Department of Labor and Employment that the officers and members of
Obrero Pilipino are its employees and not employees of Universal. Capocyon and 36 other union
officers and members of Obrero Pilipino, 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.Universal then filed a Complaint against the strikers and
Resources for breach of contract and damages suffered due to the disruption of their respective
business operations. Universal forged an Agreement 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 Resources filed a Motion to Dismiss. But the RTC
denied the Motion to Dismiss. Latter then filed a Motion for Reconsideration but it was still
denied by the RTC.And later filed a petition for certiorari and prohibition with the CA. The CA
rendered a Decision which set aside the Orders of the RTC and dismissed the complaint for lack
of cause of action.The petitioner filed a Motion for Reconsideration but it was denied by the CA
in its Resolution.

Issue:

Whether the Universal can claimed damages for breach of contract?

Ruling:

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. Given these hypothetically
admitted facts, the RTC, in the exercise of its original and exclusive jurisdiction, could have
rendered judgment over the dispute.
 125

Keppel Cebu Shipyard vs. Pioneer Insurance

601 SCRA 96; 681 SCRA 44

Facts:

WG & A JEBSENS SHIPMANAGEMENT, Owner/Operator of M/V "SUPERFERRY 3" and KEPPEL

CEBUSHIPYARD, INC. (KCSI) entered into an agreement that the Dry docking and Repair of the
above-named vessel ordered by the Owners Authorized Representative shall be carried out under the Keppel
Cebu Shipyard Standard. Conditions of Contract for Ship repair, guidelines and regulations on
safety and security issued by Keppel Cebu Shipyard. In the course of its repair, M/V " Superferry 3"was
gutted by fire claiming that the extent of the damage was pervasive, WG&A declared the vessel damage
as a "total constructive loss" and, hence, filed an insurance claim with Pioneer. Pioneer paid the
insurance claim of WG&A, which in turn, executed a Loss and Subrogation Receipt in favor of
Pioneer. Pioneer tried to collect from KCSI, but the latter denied any responsibility for the loss of
the subject vessel. As KCSI continuously refused to pay despite repeated demands, Pioneer, filed
a Request for Arbitration before the Construction Industry Arbitration Commission CIAC
seeking for payment of U.S.$ 8,472,581.78 plus interest, among others. The CIAC rendered its decision
declaring both WG&A and KCSI guilty of negligence, the CIAC ordered KCSI to pay Pioneer
the amount of P25,000,000.00, with interest at 6% per annum. Both Keppel and Pioneer appealed to the CA.
The cases were consolidated in the CA. the CA rendered a decision dismissing petitioners claims
in its entirety. Keppel was declared as equally negligent.

Issue:

To whom may negligence over the fire that broke out on board M/V "Superferry 3" be
imputed?

Ruling:

As to the issue of negligence, undeniably, the immediate cause of the fire was the hot
work done by Angelino Sevillejo on the accommodation area of the vessel, specifically on Deck
A. As established before the CIAC. Pioneer contends that KCSI should be held liable because
Sevillejo was its employee who, at the time the fire broke out, was doing his assigned task, and
that KCSI was solely responsible for all the hot works done on board the vessel. Court ruled in
favor of Pioneer. At the time of the fire, Sevillejo was an employee of KCSI and was subject to the latter‘s direct
control and supervision. There was a lapse in KCSI’s supervision of Sevillejo’s work at the time the
fire broke out. KCSI failed to exercise the necessary degree of caution and foresight called for by
the circumstances.
 126

SERRA VS MUMAR 668 SCRA 335

Facts:

At around 6:30 in the evening of 3 April 2000, there was a vehicular accident along the
National Highway in Barangay Apopong, General Santos City, which resulted in the death of
Armando Mumar (Mumar), husband of respondent Nelfa T. Mumar (respondent).

Based on the evidence presented before the Regional Trial Court (RTC) of
General Santos City, one Armando Tenerife (Tenerife) was driving his Toyota Corolla
sedan on the National Highway heading in the direction of Polomolok, South Cotabato.
Tenerife noticed the van owned by petitioner Paulita Edith Serra (petitioner) coming from
the opposite direction, which was trying to overtake a passenger jeep, and in the process
encroached on his lane. The left side of the sedan was hit by the van, causing the sedan to
swerve to the left and end up on the other side of the road. The van collided head on with
the motorcycle, which was about 12 meters behind the sedan on the outer lane, causing
injuries to Mumar, which eventually led to his death.

On the other hand, petitioner denied that her van was overtaking the jeepney at
the time of the incident. She claimed that the left tire of Tenerifes sedan burst, causing it
to sideswipe her van. Consequently, the left front tire of the van also burst and the van’s
driver, Marciano de Castro (de Castro), lost control of the vehicle. The van swerved to the
left towards Mumars motorcycle. The impact resulted in the death of Mumar.

Subsequently, respondent filed a complaint against petitioner for Damages by

Reason of Reckless Imprudence resulting to Homicide and Attachment before the
General Santos City RTC. RTC ruled against Serra finding her liable for damages by
reason of reckless imprudence, and she is hereby ordered to pay for damages. CA denied
the appeal and affirmed with modification the RTCs ruling.

Issue:

Whether or not both the lower court and the Court of Appeals committed reversible
error in holding Editha Serra as liable for damages and in not appreciating that she was not
negligent in the selection and supervision of the driver of the van, Marciano de Castro

Ruling:

Under Article 2180 of the Civil Code, employers are liable for the damages caused by their
employees acting within the scope of their assigned tasks. Whenever an employees negligence
 127

causes damage or injury to another, there instantly arises a presumption that the employer
failed to exercise the due diligence of a good father of the family in the selection or supervision
of its employees. The liability of the employer is direct or immediate. It is not conditioned upon
prior recourse against the negligent employee and a prior showing of insolvency of such
employee. Moreover, under Article 2184 of the Civil Code, if the causative factor was the drivers
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.Petitioner failed to show that she
exercised the level of diligence required in supervising her driver in order to prevent the
accident. She admitted that de Castro had only been her driver for one year and she had no
knowledge of his driving experience or record of previous accidents. She also admitted that it
was de Castro who maintained the vehicle and would even remind her to pay the installment of
the car. Petitioner also admitted that, at the time of the accident, she did not know what was
happening and only knew they bumped into another vehicle when the driver shouted. She then
closed her eyes and a moment later felt something heavy fall on the roof of the car. When the
vehicle stopped, petitioner lef the scene purportedly to ask help from her brother, leaving the
other passengers to come to the aid of her injured driver.
 128

PLEYTO VS LUMBOY 432 SCRA 329

Facts:

On May 16, 1995, Pleyto tried to overtake Esguerra’s tricycle but hit it instead.
Pleyto then swerved into the left opposite lane. Coming down the lane, a car driven by
Arnulfo Asuncion with his passengers, Rhino, Ricardo Lomboy and her
daughter Carmela Lomboy. The bus driven by Pleyto smashed head-on the car driven by
Asuncion, killing Arnulfo and Ricardo instantly. Carmela and Rhino suffered injuries, but
only Carmela required hospitalization. On November 29, 1995, Maria and Carmela
Lomboy filed an action for damages against PRBL and its driver, Pleyto, with the RTC of
Dagupan City. The Lomboys prayed that they be indemnified for the untimely death of
Ricardo Lomboy, his lost earnings, the medical and hospitalization expenses of Carmela,
and moral damages. RTC rendered in favor of the plaintiffs and against the defendants
ordering the defendants to pay solidarily Maria and Carmela. The RTC also found Pleyto
negligent and lacking in precaution. The CA affirmed the decision of the trial court, with
modification in award for actual damages from P59,000.00 to P39,550.00 for funeral and
religious services and for medical expenses of Carmela Lomboy from P52,000.00 to
P27,000.00; and the award for loss of earning capacity is accordingly corrected from
P1,642,521.00 to P1,152,000.00
Issue:

Whether or not the CA erred in pegging the monthly living expenses at 50% of gross
earnings; and Whether or not documentary evidence is indispensable to a claim for loss of
earning capacity

Ruling:

In considering the earning capacity of the victim as an element of damages, the net
earnings, which is computed by deducting necessary expenses from the gross earnings, and not
the gross earnings, is to be utilized in the computation. Note that in the present case, both the
Court of Appeals and the trial court used net earnings, not gross earnings in computing loss of
earning capacity. The amount of net earnings was arrived at afer deducting the necessary
expenses (pegged at 50% of gross income) from the gross annual income. This computation is in
accord with settled jurisprudence, including the Villa Rey case. Petitioners’ claim that no
substantial proof was presented to prove Ricardo Lomboy’s gross income lacks merit. Failure to
present documentary evidence to support a claim for loss of earning capacity of the deceased
need not be fatal to its cause. Testimonial evidence suffices to establish a basis for which the
court can make a fair and reasonable estimate of the loss of earning capacity. Hence, the
 129

testimony of respondent Maria Lomboy, Ricardo’s widow, that her husband was earning a
monthly income of P8,000 is sufficient to establish a basis for an estimate of damages for loss of
earning capacity .It is well-settled in jurisprudence that the factors that should be taken into
account in determining the compensable amount of lost earnings are: (1) the number of years
for which the victim would otherwise have lived; and (2) the rate of loss sustained by the heirs of
the deceased. No reversible error may be attributed to the court a quo in fixing the loss
of earning capacity at said amount .Court likewise sustain the reduction of the award of actual
damages from P59,550 for funeral and burial expenses of Ricardo and P52,000 for medical
expenses of Carmela Lomboy to P39,550 and P27,000, respectively, as only these latter amounts
were duly supported by receipts. 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.

However, while the award of P50,000 as moral damages to Carmela Lomboy is

sustained, the award for moral damages of P500,000 to the heirs of Ricardo Lomboy should be
reduced for being excessive. Under Article 2206 of the Civil Code, the spouse, legitimate children
and illegitimate descendants and ascendants of the deceased may demand moral damages for
mental anguish by reason of the death of the deceased. However, we must stress that moral
damages, though incapable of pecuniary estimation, are in the category of an award designed to
compensate the claimant for actual injury and are not meant to enrich complainant at the
expense of defendant. 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.
Under the circumstances of this case, an award of P100,000 to the heirs of Ricardo Lomboy
would be justified and in keeping with the purpose of the law and jurisprudence in allowing
moral damages. The indemnification award of P50,000 is also sustained.
 130

FLORDELIZA MENDOZA, Petitioner, vs. MUTYA SORIANO et. al., Respondents.

G.R. No. 164012, June 8, 2007

Facts:
Sonny Soriano, while crossing Commonwealth Avenue near Luzon Avenue in Quezon City, was hit by
a speeding Tamaraw FX driven by Lomer Macasasa. Soriano was thrown five meters away, while the
vehicle only stopped some 25 meters from the point of impact. Gerard Villaspin, one of Sorianos
companions, asked Macasasa to bring Soriano to the hospital, but after checking out the scene of the
incident, Macasasa returned to the FX, only to flee. A school bus brought Soriano to East Avenue Medical
Center where he later died. Subsequently, the Quezon City Prosecutor recommended the filing of a criminal
case for reckless imprudence resulting to homicide against Macasasa. RTC ruled in favour of the petitioner,
while CA reversed the findings of the RTC.

Issues:

Whether or not RTC has jurisdiction over the case, if so, was there sufficient legal basis to award
damages?

Ruling:

Yes, the Supreme Court held that the Regional Trial Court of Caloocan City possessed and properly
exercised jurisdiction over the case. Section 19(8) of Batas Pambansa Blg. 129,as amended by Republic Act
No. 7691, read together with Administrative Circular No. 09-94 is the authority for this ruling. Applicable
provision is read as follows: “The exclusion of the term damages of whatever kind in determining the
jurisdictional amount under Section 19(8) and Section 33(1) of BP Blg. 129, as amended by RA No. 7691,
applies to cases where the damages are merely incidental to or a consequence of the main cause of action.
However, in cases where the claim for damages is the main cause of action, or one of the causes of action,
the amount of such claim shall be considered in determining the jurisdiction of the court.

Petitioner was presumed negligent in selecting and supervising the driver. The records show that
Macasasa violated two traffic rules under the Land Transportation and Traffic Code. First, he failed to
maintain a safe speed to avoid endangering lives. Both the trial and the appellate courts found Macasasa
overspeeding. The records show also that Soriano was thrown five meters away after he was hit. Moreover,
the vehicle stopped only some 25 meters from the point of impact. Second, Macasasa, the vehicle driver,
did not aid Soriano, the accident victim, in violation of Section 55, Article V of the Land Transportation and
Traffic Code. While Macasasa at first agreed to bring Soriano to the hospital, he fled the scene in a hurry.
Contrary to petitioners claim, there is no showing of any factual basis that Macasasa fled for fear of the
peoples wrath. What remains undisputed is that he did not report the accident to a police officer, nor did he
summon a doctor. Under Article 2185 of the Civil Code, a person driving a motor vehicle is presumed
 131

negligent if at the time of the mishap, he was violating traffic regulations. However, respondent is also
guilty of contributory negligence.

Simon Q. Añonuevo, Jr. and Vicente N. Estrella, petitioners, vs. The Honorable Court Of
Appeals, Rodrigo B. Almazan, Giovanni G. Gumalo, Office Of The Ombudsman & Custom’s
Commissioner Titus Villanueva, respondents
[G.R. No. 152998. September 23, 2003]

Facts:

Sgt. Rodrigo Almazan and Giovanni Gumalo, both of the Office of the Resident Ombudsman
for Manila International Airport Authority-Ninoy Aquino International Airport/Duty Free Phils.,
Inc. filed a complaint against Simon Añonuevo, Jr., Acting Examiner, Vicente Estrella, Customs
Operations Officer I, Nora Linda Cosme, Customs Operations Officer V, and Ricardo Concha,
Acting Principal Customs Appraiser, all of the Bureau of Customs, NAIA, Pasay City for violation of
Section 7(d) of Republic Act No. 6713.

The respondents alleged that the petitioners while assigned at the NAIA customs lanes
numbers 9 and 10, received money handed directly or inserted in the passport of arriving
passengers of the Northwest Airlines flight from Detroit, USA, and the Canadian Airlines flight.
They further alleged that Cosme and Concha received their share of the money collected by the
petitioners. The Resident Ombudsman Team was able to record on video a segment of the
incident using the surveillance camera of the Emergency Operations Center of the NAIA.

The Ombudsman placed the four officials under preventive suspension for six (6) months
without pay, [2] considering that the evidence against them was strong.

Cosme pointed out that there was nothing in the video footage which would implicate her
for any act of solicitation or acceptance of any money, whether directly or indirectly, while in the
course of the performance of her duties. In the same way, Concha asserted that it was grossly
malicious for the complainants to infer that, just because he was caught by the camera passing
by the place where petitioners were standing, he received money from them.

The Ombudsman held that respondents Añonuevo, Jr. and Estrella were guilty as charged
and Cosme as not guilty.

Petitioners then filed a special civil action for certiorari before the Court of Appeals
ascribing grave abuse of discretion to the Ombudsman in rendering the assailed Decision.
However, the Court of Appeals dismissed the case for failure to comply with the requirements of
the Rules of Civil Procedure.

Issues:

WON the CA correctly dismissed the petition on mere technical grounds.

Ruling:

When technicality deserts its function of being an aid to justice, the courts are justified in
exempting from its operations a particular case. Procedural rules are intended to insure the
orderly conduct of litigation, because of the higher objective they seek, which is to protect the
parties’ substantive rights.
 132

In the case at bar, although the petition filed before the Court of Appeals was not
accompanied by an affidavit of service, petitioners were able to confirm that indeed copies of
the petition were served on the respondents as shown in the registry receipts attached opposite
their names. They attached the certified true copies of the Decision and Order of the
Ombudsman when they filed their Motion for Reconsideration of the Resolution dismissing their
petition.

However, petitioners availed of a wrong mode of appeal when they filed a special civil
action for certiorari under Rule 65 of the Rules on Civil Procedure. Appeals from decisions of the
Office of the Ombudsman in administrative disciplinary cases should be taken to the Court of
Appeals under Rule 43 of the 1997 Rules of Civil Procedure. Neither did the petitioners
sufficiently establish the existence of any fact or reason to justify its resort to the extraordinary
remedy of certiorari.

This notwithstanding, we now resolve the substantive issue.

This Court is not a trier of facts. Findings of fact by the Office of the Ombudsman when
supported by substantial evidence are conclusive, as in the case at bar. Substantial evidence,
which is more than a mere scintilla but is such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion, suffices to hold one administratively liable. The
“substantial evidence” rule in administrative proceedings merely requires such relevant evidence
as a reasonable mind might accept as adequate to support a conclusion.

Clearly, therefore, petitioners are guilty of violation of Section 7(d) of Republic Act No. 6713,
otherwise known as the Code of Conduct and Ethical Standards for Public officials and
Employees.
 133

Alfredo Mallari, Sr. and Alfredo Mallari, Jr., petitioners vs. Court of Appeals and Bulletin
Publishing Corporation, respondents
[G.R. No. 128607. January 31, 2000]

Facts:

At about 5:00 o'clock in the morning, the passenger jeepney driven by petitioner Alfredo
Mallari Jr. and owned by his co-petitioner Alfredo Mallari Sr. collided with the delivery van of
respondent Bulletin Publishing Corp. (BULLETIN, for brevity) along the National Highway in
Barangay San Pablo, Dinalupihan, Bataan. Petitioner Mallari Jr. testified that he went to the lef
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 respondent BULLETIN coming from the opposite direction. It was
driven by one Felix Angeles. The sketch of the accident showed that the collision occurred afer
Mallari Jr. overtook the Fiera while negotiating a curve in the highway. The points of collision
were the lef rear portion of the passenger jeepney and the lef front side of the delivery van of
BULLETIN. The two (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 lef 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 of Israel M. Reyes, filed a complaint for damages with the
Regional Trial Court of Olongapo City against Alfredo Mallari Sr. and Alfredo 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 of the passenger jeepney and the Bulletin Isuzu delivery van.
The complaint also prayed that the defendants be ordered jointly and severally to pay the
plaintiff.

The trial court found that the proximate cause of the collision was the negligence of Felix
Angeles, driver of the Bulletin delivery van, considering the fact that the lef front portion of the
delivery truck driven by Felix Angeles hit and bumped the lef 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 Claudia G. Reyes, widow of the deceased victim.

On appeal the Court of Appeals modified the decision of the trial court and found no
negligence on the part of Angeles and consequently of his employer, respondent BULLETIN.
Instead, the appellate court ruled that the collision was caused by the sole negligence of
petitioner Alfredo Mallari Jr. who admitted that immediately before the collision and afer he
rounded a curve on the highway, he overtook a Fiera which had stopped on his lane and that he
had seen the van driven by Angeles before overtaking the Fiera. The Court of Appeals ordered
petitioners Mallari Jr. and Mallari Sr. to compensate Claudia G. Reyes.

Issue:

WON petitioners are correctly held jointly and severally liable to Claudia G. Reyes.

Ruling:

The Court of Appeals correctly found, based on the sketch and spots report of the police
authorities which were not disputed by petitioners, that the collision occurred immediately afer
 134

petitioner 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.

The rule is settled that 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 lef hand side relying upon having time to turn to the right if a car
approaching from the opposite direction comes into view.

In the instant case, by his own admission, petitioner 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 5:00 o'clock in the morning mindlessly occupied the lef lane and
overtook two (2) vehicles in front of it at a curve in the highway. Clearly, 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, petitioner Alfredo Mallari Jr., who recklessly
operated and drove his jeepney in a lane where overtaking was not allowed by traffic rules.
Under Art. 2185 of the Civil Code, 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 the appellate court, petitioners failed to present satisfactory
evidence to overcome this legal presumption.

The negligence and recklessness of the driver of the passenger jeepney is binding against
petitioner 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 of the
Civil Code, 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.

ALFREDO P. PACIS and CLEOPATRA D. PACIS vs. JEROME JOVANNE MORALES,

 135

[G.R. No. 169467. February 25, 2010]

Facts:

Petitioners filed with the trial court a civil case for damages against respondent Morales.
Petitioners are the parents of Alfred Pacis, a 17-year old student who died in a shooting incident
inside the Top Gun Firearms and Ammunitions Store in Baguio City. Morales is the owner of the
gun store.

On the fateful day, Alfred was in the gun store, with Matibag and Herbolario as
sales agents and caretakers of the store while owner Morales was in Manila. The
gun which killed Alfred is a gun owned by a store customer which was left with
Morales for repairs, which he placed inside a drawer. Since Morales would be
going to Manila, he left the keys to the store with the caretakers. It appears that the
caretakers took the gun from the drawer and placed it on top of a table. Attracted by
the sight of the gun, the young Alfred got hold of the same. Matibag asked Alfred to
return the gun. The latter followed and handed the gun to Matibag. It went off, the
bullet hitting the young Alfred in the head.

A criminal case for homicide was filed against Matibag. Matibag, however,
was acquitted of the charge against him because of the exempting circumstance of
“accident” under Art. 12, par. 4 of the RPC.

By agreement of the parties, the evidence adduced in the criminal case for
homicide against Matibag was reproduced and adopted by them as part of their
evidence in the instant case.

he trial court rendered its decision in favor of petitioners, ordering the

defendant to pay plaintiffs indemnity for the death of Alfred, actual damages for the
hospitalization and burial, expenses incurred by the plaintiffs, compensatory
damages, and moral damages. Respondent appealed to the CA, which reversed the
trial court’s Decision and absolved respondent from civil liability under Article
2180 of the Civil Code. Motion of reconsideration is denied, hence this petition.

Issue:

Whether or not Morales is civilly liable?

Ruling:

Yes. Morales is civilly liable. Clearly, Morales did not exercise the degree of care and
diligence required of a good father of a family, much less the bullet which killed Alfred was
fired from a gun brought in by a customer of the gun store for repair.

This case for damages arouse out of the accidental shooting of Alfred. Under Article
1161 of the Civil Code petitioners may enforce their claim for damages based on the civil
liability arising from the crime under Article 100 of the RPC or they may opt to file an
independent civil action for damages under the Civil Code.

In this case, instead of enforcing their claim for damages in the homicide case filed
against Matibag, petitioners opted to file an independent civil action for damages against
respondent whom they alleged was Matibag’s employer. Petitioners based their claim for
damages under Articles 2176 and 2180 of the Civil Code.

He was clearly negligent when he accepted the gun for repair and placed it inside the
drawer without ensuring first that it was not loaded. For failing to insure that the gun was
not loaded, Morales himself was negligent.
 136

Under PNP Circular No. 9, entitled the “Policy on Firearms and Ammunition
Dealership/Repair,” a person who is in the business of purchasing and selling of firearms
and ammunition must maintain basic security and safety requirements of a gun dealer,
otherwise his License to Operate Dealership will be suspended or cancelled.

As a gun store owner, Morales is presumed to be knowledgeable about firearms

safety and should have known never to keep a loaded weapon in his store to avoid
unreasonable risk of harm or injury to others. Morales has the duty to ensure that all the
guns in his store are not loaded. Firearms should be stored unloaded and separate from
ammunition when the firearms are not needed for ready access defensive use.

In the first place, the defective gun should have been stored in a vault. Before
accepting the defective gun for repair, Morales should have made sure that it was not
loaded to prevent any untoward accident. Indeed, Morales should never accept a firearm
from another person, until the cylinder or action is open and he has personally checked
that the weapon is completely unloaded.
 137

Jose V. Lagon, petitioner vs. Honorable Court of Appeals and Menandro V. Lapuz,
respondents
[G.R. No. 119107. March 18, 2005]

Facts:

Petitioner Jose Lagon purchased from the estate of Bai Tonina Sepi, through an intestate
court, two parcels of land located at Tacurong, Sultan Kudarat. A few months afer the sale,
private respondent Menandro Lapuz filed a complaint for torts and damages against petitioner
before the Regional Trial Court (RTC) of Sultan Kudarat.

In the complaint, private respondent, as then plaintiff, claimed that he entered into a
contract of lease with the late Bai Tonina Sepi Mengelen Guiabar over three parcels of land in
Sultan Kudarat, Maguindanao beginning 1964. One of the provisions agreed upon was for private
respondent to put up commercial buildings which would, in turn, be leased to new tenants. The
rentals to be paid by those tenants would answer for the rent private respondent was obligated
to pay Bai Tonina Sepi for the lease of the land. In 1974, the lease contract ended but since the
construction of the commercial buildings had yet to be completed, the lease contract was
allegedly renewed.

When Bai Tonina Sepi died, private respondent started remitting his rent to the court-
appointed administrator of her estate. But when the administrator advised him to stop collecting
rentals from the tenants of the buildings he constructed, he discovered that petitioner,
representing himself as the new owner of the property, had been collecting rentals from the
tenants. He thus filed a complaint against the latter, accusing petitioner of inducing the heirs of
Bai Tonina Sepi to sell the property to him, thereby violating his leasehold rights over it.

In his answer to the complaint, petitioner denied that he induced the heirs of Bai Tonina to
sell the property to him, contending that the heirs were in dire need of money to pay off the
obligations of the deceased. He also denied interfering with private respondents leasehold rights
as there was no lease contract covering the property when he purchased it; that his personal
investigation and inquiry revealed no claims or encumbrances on the subject lots.

Petitioner claimed that before he bought the property, he went to Atty. Benjamin Fajardo,
the lawyer who allegedly notarized the lease contract between private respondent and Bai
Tonina Sepi, to verify if the parties indeed renewed the lease contract afer it expired in 1974.
Petitioner averred that Atty. Fajardo showed him four copies of the lease renewal but these were
all unsigned. To refute the existence of a lease contract, petitioner presented in court a
certification from the Office of the Clerk of Court confirming that no record of any lease contract
notarized by Atty. Fajardo had been entered into their files. Petitioner added that he only
learned of the alleged lease contract when he was informed that private respondent was
collecting rent from the tenants of the building.

Finding the complaint for tortuous interference to be unwarranted, petitioner filed his
counterclaim and prayed for the payment of actual and moral damages.

Accordingly, judgment is hereby rendered in favor of the plaintiff.

The petitioner then filed a petition for review before the Supreme Court.

Issue:
 138

WON the purchase by petitioner of the subject property, during the supposed existence of
private respondents lease contract with the late Bai Tonina Sepi, constituted tortuous
interference for which petitioner should be held liable for damages.

Ruling:

The Court, in the case of So Ping Bun vs. Court of Appeals , laid down the elements of
tortuous interference with contractual relations: (a) existence of a valid contract; (b) knowledge
on the part of the third person of the existence of the contract and (c) interference of the third
person without legal justification or excuse.

As regards the first element, the existence of a valid contract must be duly established. To
prove this, private respondent presented in court a notarized copy of the purported lease
renewal.While the contract appeared as duly notarized, the notarization thereof, however, only
proved its due execution and delivery but not the veracity of its contents. Nonetheless, afer
undergoing the rigid scrutiny of petitioners counsel and afer 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 private respondent 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.

The second element, on the other hand, requires that there be knowledge on the part of
the interferer that the contract exists. 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, petitioner 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.

Afer a careful perusal of the records, we find the contention of petitioner 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 propertys title bore no indication of the leasehold
interest of private respondent. Even the registry of property had no record of the same.

In sum, we rule that, inasmuch as not all three elements to hold petitioner liable for
tortuous interference are present, petitioner cannot be made to answer for private respondents
losses. This case is one of damnun absque injuria or damage without injury. Injury is the legal
invasion of a legal right while damage is the hurt, loss or harm which results from the injury.

PROFESSIONAL SERVICES INC. V. AGANA

G.R. No. 126297, 31 January 2007
 139

Facts:

As presented previously.

Issue:

Whether or not PSI is liable for the negligence of Dr. Ampil.

Ruling:

YES.The hospital vicarious liability is anchored upon the theories of respondeat superior,
apparent authority, ostensible authority, or agency by estoppel. The statute governing liability
for negligent acts is Article 2176 of the Civil Code, which reads: Art. 2176. Whoever by act or
omission causes damage to another, there being fault or negligence, is obliged to pay for the
damage done. Such fault or negligence, if there is no pre-existing contractual relation between
the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

A derivative of this provision is Article 2180, the rule governing vicarious liability under the
doctrine of respondeat superior, thus: ART. 2180. The obligation imposed by Article 2176 is
demandable not only for one’s own acts or omissions, but also for those of persons for whom
one is responsible.

Apparent authority, or what is sometimes referred to as the "holding out" theory, or

doctrine of ostensible agency or agency by estoppel, imposes liability, not as the result of the
reality of a contractual relationship, but rather because of the actions of a principal or an
employer in somehow misleading the public into believing that the relationship or the authority
exists. The concept is essentially one of an agency by implication or estoppel of Article 1869 of
the Civil Code which reads: ART. 1869. Agency may be express, or implied from the acts of the
principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that
another person is acting on his behalf without authority.

By accrediting Dr. Ampil and Dr. Fuentes and publicly advertising their qualifications in the
hospital directory, the hospital created the impression that they were its agents, authorized to
perform medical or surgical services for its patients. As expected, these patients, Natividad being
one of them, accepted the services on the reasonable belief that such were being rendered by
the hospital or its employees, agents, or servants.

PSI has the duty to exercise reasonable care to protect from harm all patients admitted into
its facility for medical treatment. It is liable for the negligent acts of health practitioners, absent
facts to support tfyhe application of respondeat superior or apparent authority

PSI is directly liable for such breach of duty doctrine of corporate negligence or corporate
responsibility. Not only did PSI breach its duties to oversee or supervise all persons who
practice medicine within its walls, it also failed to take an active step in fixing the negligence
committed. This renders PSI, not only vicariously liable for the negligence of Dr. Ampil under
Article 2180 of the Civil Code, but also directly liable for its own negligence under Article 2176.

The Court CONFIRMED the rulings of the Court of Appeals that a hospital has the duty of
supervising the competence of the doctors on its staff. No reason to exempt hospitals from the
universal rule of respondeat superior.

PROFESSIONAL SERVICES INC. v. AGANA

G.R. No. 127590, February 2, 2010
 140

Facts:

Previous facts presented.

PSI was impleaded by Enrique Agana and Natividad Agana (later substituted by her heirs), in
a complaint for damages as owner, operator and manager of the hospital. On petition for review,
this Court, in its January 31, 2007 decision, affirmed the CA decision. PSI filed a motion for
reconsideration but the Court denied it in a resolution dated February 11, 2008.

The PSI filed a second motion for reconsideration urging referral thereof to the Court en
banc and seeking modification of the decision dated January 31, 2007 and resolution dated
February 11, 2008 which affirmed its vicarious and direct liability for damages to respondents
Enrique Agana and the heirs of Natividad Agana (Aganas).

Issue:

Whether or not PSI may be held liable for the negligence of physicians-consultants allowed
to practice in its premises.

Ruling:

YES. The Court holds that 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.

To determine the existence of an employer-employee relationship between hospital and

doctor, the Court employs the "control test". PSI exercised control over respondents based on
the undisputed fact that in the emergency room, the operating room, or any department or
ward for that matter, respondents' work is monitored through its nursing supervisors, charge
nurses and orderlies. Without the approval or consent of PSI or its medical director, no
operations can be undertaken in those areas. For “control test” to apply, it is not essential for the
employer to actually supervise the performance of duties of the employee, it being enough that
it has the right to wield the power. Thus PSI is vicariously liable under Article 2176 in relation to
Article 1431 and Article 1869 of the Civil Code or the principle of apparent authority.

PSI is vicariously liable for the negligence of Dr. Ampil as its ostensible agent. It assumed a
duty to "tread on" the "captain of the ship" role of any doctor rendering services within its
premises for purpose of ensuring the safety of the patients availing themselves of its services
and facilities. Thus, PSI could not simply wave off the problem and nonchalantly delegate to Dr.
Ampil the duty to review what transpired during the operation.

The wretchedness in this case could have been avoided had PSI simply done what was
logical: heed the report of a guaze count discrepancy, initiate a review of what went wrong and
take corrective measures to ensure the safety of Nativad. PSI committed corporate negligence by
its inaction. As hospital corporation, it 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 (for or on this occasion only) liable for every form of negligence of their
doctors-consultants under any and all circumstances.

The Court DENIED the motion of reconsideration. It ORDERED pro hac vice to pay Natividad
‘s heirs the total amount of P15 million, subject to 12% p.a. interest from the finality of this
resolution to full satisfaction. No further pleadings by any party shall be entertained in this case.
 141

MAMARIL VS. BOYS SCOUTS OF THE PHILIPPINES (BSP), et. Al.

688 SCRA 437

Facts:
 142

PUJ operators Sps. Mamaril would park their 6 passenger jeepneys every night at BSP’s
compound in Malate, Manila for a fee of P300.00 per month for each unit. One day, one of the
vehicles was missing and was never recovered. According to the security guards Peña and Gaddi
of AIB Security Agency with whom BSP had contracted for its security and protection, a male
person who looked familiar to them took the subject vehicle out of the compound. Sps. Mamaril
prayed that Peña and Gaddi, together with AIB and BSP, be held liable for: (a) the value of the
subject vehicle; (b) amount representing daily loss of income/boundary reckoned from the day
the vehicle was lost; (c) exemplary damages; (d) moral damages; (e) attorney's fees; and (f) cost
of suit.

BSP denied any liability contending that not only did Sps. Mamaril directly deal with AIB
with respect to the manner by which the parked vehicles would be handled, but the parking
ticket itself expressly stated that the "Management shall not be responsible for loss of vehicle or
any of its accessories or article lef therein." It also claimed that Sps. Mamaril erroneously relied
on the Guard Service Contract. Apart from not being parties thereto, its provisions cover only the
protection of BSP's properties, its officers, and employees.

Issue:

Whether BSP should be held liable for the loss of their vehicle based on the Guard
Service Contract and the parking ticket it issued.

Ruling:

No. The petition is without merit. In this case, it is undisputed that the proximate cause of
the loss of Sps. Mamaril’s vehicle was the negligent act of security guards Peña and Gaddi in
allowing an unidentified person to drive out the subject vehicle. Proximate cause has been
defined as that cause, which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury or loss, and without which the result would not have
occurred. Moreover, Peña and Gaddi failed to refute Sps. Mamaril’s contention that they readily
admitted being at fault during the investigation that ensued. On the other hand, the records are
beref of any finding of negligence on the part of BSP. Hence, no reversible error was committed
by the CA in absolving it from any liability for the loss of the subject vehicle based on fault or
negligence.

Neither will the vicarious liability of an employer under Article 2180 of the Civil Code
apply in this case. It is uncontested that Peña and Gaddi were assigned as security guards by AIB
to BSP pursuant to the Guard Service Contract. Clearly, therefore, no employer-employee
relationship existed between BSP and the security guards assigned in its premises. Consequently,
the latter’s negligence cannot be imputed against BSP but should be attributed to AIB, the true
employer of Peña and Gaddi.

In the case of Soliman, Jr. v. Tuazon, the Court enunciated thus:

It is settled 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 and 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. The fact that a client company
 143

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. Those instructions or
directions are ordinarily no more than requests commonly envisaged in the
contract for services entered into with the security agency.