IV.

Defenses

a. Complete Defenses

i. Plaintiff’s negligence is the proximate cause of injury

- NCC Article 2179

Cases:

Paulan vs. Sarabia, 104 Phil 1050

The action which appellants(Sarabia) desire to press against appellee (Lim) is really one based on quasi-delict which
prescribes in four years, and this period having already expired when the action was taken, it is obvious that the action
has prescribed. Thus, in the third-party complaint against the appelle it is alleged that the collision “was the exclusive,
direct and immediate result of the felonious, negligent, careless, reckless and imprudent driving of the TPU truck of Mary
Lim Line No. 108 by Juan Cadungon xxx without any regard for traffic laws, and regulations and vehicle laws as to speed,
blowing of horn, right of way and other rules”, which truck is owned and operated by appellee. And Article 1146 of the
New Civil Code provides that an action based “upon a quasi-delict”prescribes in four years.

The law ordinarily provides that the period during which an action may be brought shall be computed from the time the
right of action accrues (Articles 1144 & 1149, New Civil Code), but nothing is provided in this respect with regard to an
action based on a quasi-delict, Article 1146 (New Civil Code) simply provides that the action shall be instituted within four
years. There being no provision as to when shall the period of four years commence to run, the provision of Article 1150
shall apply, which reads: “The time for prescription for all kinds of actions, when there is no special provision which
ordains otherwise, shall be counted from the day they may be brought.” Evidently, the day therein referred to is that of
the collision, for an action based on a quasi-delict can be brought now independently of the criminal action and even
regardless of the outcome of the latter (Article 31, New Civil Code). There can therefore be no dispute that the action of
appellants against the appellee should have been brought within the period of four years counted from July 25, 1951.

In the case of Diocosa Paulan, et al. vs. Zacarias Sarabia, et al., G.R. No. L-10542, promulgated July 31, 1958, this Court
held that an action based on a quasi-delict is governed by Article 1150 of the Civil Code as to the question of when the
prescriptive period of four years shall begin to run, that is, "from the day (the action) may be brought," which means from
the day the quasi-delict occurred or was committed.

As held in Paulan v. Sarabia, supra, "the institution of a criminal action cannot have the effect of interrupting the
institution of a civil action based on a quasi-delict."

American Express vs. Cordero, GR. 138550, Oct. 14, 2005

Civil Law; Obligations; Quasi-Delicts; In order that an obligation based on quasi-delict may arise, there must be no pre-
existing contractual relation between the parties.-

In order that an obligation based on quasi-delict may arise, there must be no pre-existing contractual relation between
the parties. But there are exceptions. There may be an action for quasi-delict notwithstanding that there is a subsisting
contract between the parties. A liability for tort may arise even under a contract, where tort is that which breaches the
contract. Stated differently, when an act which constitutes a breach of contract would have itself constituted the source
of a quasi-delictual liability, the contract can be said to have been breached by tort, thereby allowing the rules on tort to
apply. Furthermore, to constitute quasi-delict, the fault or negligence must be the proximate cause of the damage or

1
injury suffered by the plaintiff. Proximate cause is that cause which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces the injury and without which the result would not have occurred. Proximate cause is
determined by the facts of each case upon mixed considerations of logic, common sense, policy and precedent.

Fernando vs. CA, 208 SCRA 714 (1992)

1. Civil Law; Negligence; Definition of; Under the Law, a person who by his omission causes damage to another, there
being negligence is obliged to pay for the damage done.-

Negligence has been defined as the failure to observe for the protection of the interests of another person that degree of
care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury (Corliss
v. Manila Railroad Company, L-21291, March 28, 1969, 27 SCRA 674, 680). Under the law, a person who by his omission
causes damage to another, there being negligence, is obliged to pay for the damage done (Article 2176, New Civil Code).

2. Civil Law; Negligence; To be entitled to damages for an injury resulting from the negligence of another, a claimant must
establish the relation between the omission and the damage; Definition of Proximate cause.-

To be entitled to damages for an injury resulting from the negligence of another, a claimant must establish the relation
between the omission and the damage. He must prove under Article 2179 of the New Civil Code that the defendant’s
negligence was the immediate and proximate cause of his injury. Proximate cause has been defined as that cause, which,
in natural and continuous sequence unbroken by any efficient intervening cause, produces the injury, and without which
the result would not have occurred (Vda. de Bataclan, et al. v. Medina, 102 Phil. 181, 186). Proof of such relation of cause
and effect is not an arduous one if the claimant did not in any way contribute to the negligence of the defendant.
However, where the resulting injury was the product of the negligence of both parties, there exists a difficulty to discern
which acts shall be considered the proximate cause of the accident.

PLDT vs. CA, GR. 57079, Sept. 12, 1989

Torts and Damages; Negligence; Contributory Negligence; Private respondents’ negligence was not merely contributory
but goes to the very cause of the accident, hence, he has no right to recover damages for the injuries which he and his
wife suffered.—The above findings clearly show that the negligence of respondent Antonio Esteban was not only
contributory to his injuries and those of his wife 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, hence
appreciated and assumed by, private respondents. By exercising reasonable care and prudence, respondent Antonio
Esteban could have avoided the injurious consequences of his act, even assuming arguendo that there was some alleged
negligence on the part of petitioner.

Same; Same; Same; Last Clear Chance; Private respondent cannot recover notwithstanding the negligence he imputes to
PLDT considering that he had the last clear chance to avoid the injury.—The presence of warning signs could not have
completely prevented the accident; the only purpose of said signs was to inform and warn the public of the presence of
excavations on the site. The private respondents already knew of the presence of said excavations. It was not the lack of
knowledge of these excavations which caused the jeep of respondents to fall into the excavation but the unexplained
sudden swerving of the jeep from the inside lane towards the accident mound. As opined in some quarters, 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. It is basic that private respondents cannot
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charge PLDT for their injuries where their own failure to exercise due and reasonable care was the cause thereof. It is
both a societal norm and necessity that one should exercise a reasonable degree of caution for his own protection.
Furthermore, respondent Antonio Esteban had the last clear chance or opportunity to avoid the accident,
notwithstanding the negligence he imputes to petitioner PLDT. As a resident of Lacson Street, he passed on that street
almost everyday and had knowledge of the presence and location of the excavations there. It was his negligence that
exposed him and his wife to danger, hence he is solely responsible for the consequences of his imprudence.

Same; Same; One who claims damages for the negligence of another has the burden of proof to show existence of such
fault or negligence causative thereof.—A person claiming damages for the negligence of another has the burden of
proving the existence of such fault or negligence causative thereof. The facts constitutive of negligence must be
affirmatively established by competent evidence. Whosoever relies on negligence for his cause of action has the burden in
the first instance of proving the existence of the same if contested, otherwise his action must fail.

Pantaleon vs. American Express, GR. 174269, Aug. 25, 2010

1. Credit Cards; Words and Phrases; A credit card is defined as “any card, plate, coupon book, or other credit device
existing for the purpose of obtaining money, goods, property, labor or services or anything of value on credit”; It traces its
roots to the charge card first introduced by the Diners Club in New York City in 1950; In the Philippines, the now defunct
Pacific Bank was responsible for bringing the first credit card into the country in the 1970s.-

—A credit card is defined as “any card, plate, coupon book, or other credit device existing for the purpose of obtaining
money, goods, property, labor or services or anything of value on credit.” It traces its roots to the charge card first
introduced by the Diners Club in New York City in 1950. American Express followed suit by introducing its own charge card
to the American market in 1958. In the Philippines, the now defunct Pacific Bank was responsible for bringing the first
credit card into the country in the 1970s. However, it was only in the early 2000s that credit card use gained wide
acceptance in the country, as evidenced by the surge in the number of credit card holders then.

2. Same; Same; Same; Same; Principle of Damnum Absque Injuria; Words and Phrases; There is a material distinction
between damages and injury-

—injury is the illegal invasion of a legal right while damage is the loss, hurt, or harm which results from the injury; 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.—More importantly, AMEX did not violate any legal duty to Pantaleon under the circumstances under the principle
of damnum absque injuria, or damages without legal wrong, loss without injury. As we held in BPI Express Card v. CA, 296
SCRA 260 (1998): “We do not dispute the findings of the lower court that private respondent suffered damages as a result
of the cancellation of his credit card. However, there is a material distinction between damages and injury. Injury is the
illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and damages are the
recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those
instances in which the loss or harm was not the result of a violation of a legal duty. In such cases, the consequences must
be borne by the injured person alone, the law affords no remedy for damages resulting from an act which does not
amount to a legal injury or wrong. These situations are often called damnum absque injuria.” In other words, in order that
a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted
from a breach of duty which the defendant owed to the plaintiff—a concurrence of injury to the plaintiff and legal
responsibility by the person causing it. The underlying basis for the award of tort damages is the premise that an
individual was injured in contemplation of law. Thus, there must first be a breach of some duty and the imposition of
liability for that breach before damages may be awarded; and the breach of such duty should be the proximate cause of
the injury.

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3. Same; Same; Same; Same; A person who knowingly and voluntarily exposes himself to danger cannot claim damages
for the resulting injury.-

—In Nikko Hotel Manila Garden v. Reyes, 452 SCRA 532 (2005), we ruled that a person who knowingly and voluntarily
exposes himself to danger cannot claim damages for the resulting injury: “The doctrine of volenti non fit injuria (“to which
a person assents is not esteemed in law as injury”) refers to self-inflicted injury or to the consent to injury which precludes
the recovery of damages by one who has knowingly and voluntarily exposed himself to danger, even if he is not negligent
in doing so.” This doctrine, in our view, is wholly applicable to this case. Pantaleon himself testified that the most basic
rule when travelling in a tour group is that you must never be a cause of any delay because the schedule is very strict.
When Pantaleon made up his mind to push through with his purchase, he must have known that the group would become
annoyed and irritated with him. This was the natural, foreseeable consequence of his decision to make them all wait.

4. Same; Same; Same; Same; It is an elementary rule in our jurisdiction that good faith is presumed and that the burden of
proving bad faith rests upon the party alleging it; So long as the credit card company exercises its rights, performs its
obligations, and generally acts with good faith, with no intent to cause harm, even if it mayoccasionally inconvenience
others, it cannot be held liable for damages.-

—It is an elementary rule in our jurisdiction that good faith is presumed and that the burden of proving bad faith rests
upon the party alleging it. Although it took AMEX some time before it approved Pantaleon’s three charge requests, we
find no evidence to suggest that it acted with deliberate intent to cause Pantaleon any loss or injury, or acted in a manner
that was contrary to morals, good customs or public policy. We give credence to AMEX’s claim that its review procedure
was done to ensure Pantaleon’s own protection as a cardholder and to prevent the possibility that the credit card was
being fraudulently used by a third person. Pantaleon countered that this review procedure is primarily intended to
protect AMEX’s interests, to make sure that the cardholder making the purchase has enough means to pay for the credit
extended. Even if this were the case, however, we do not find any taint of bad faith in such motive. It is but natural for
AMEX to want to ensure that it will extend credit only to people who will have sufficient means to pay for their purchases.
AMEX, after all, is running a business, not a charity, and it would simply be ludicrous to suggest that it would not want to
earn profit for its services. Thus, so long as AMEX exercises its rights, performs its obligations, and generally acts with
good faith, with no intent to cause harm, even if it may occasionally inconvenience others, it cannot be held liable for
damages.

5. Same; Human Relations; Abuse of Rights; Damages; In the context of a credit card relationship, although there is
neither a contractual stipulation nor a specific law requiring the credit card issuer to act on the credit card holder’s offer
within a definite period of time, the principles set out in Article 19 of the Civil Code provide the standard by which to
judge the credit card company’s actions.-

—Article 19pervades the entire legal system and ensures that a person suffering damage in the course of another’s
exercise of right or performance of duty, should find himself without relief. It sets the standard for the conduct of all
persons, whether artificial or natural, and requires that everyone, in the exercise of rights and the performance of
obligations, must: (a) act with justice, (b) give everyone his due, and (c) observe honesty and good faith. It is not because
a person invokes his rights that he can do anything, even to the prejudice and disadvantage of another. While Article 19
enumerates the standards of conduct, Article 21 provides the remedy for the person injured by the willful act, an action
for damages. We explained how these two provisions correlate with each other in GF Equity, Inc. v. Valenzona 462 SCRA
466 (2005): “[Article 19], known to contain what is commonly referred to as the principle of abuse of rights, sets certain
standards which must be observed not only in the exercise of one’s rights but also in the performance of one’s duties.
These standards are the following: to act with justice; to give everyone his due; and to observe honesty and good faith.
The law, therefore, recognizes a primordial limitation on all rights; that in their exercise, the norms of human conduct set
forth in Article 19 must be observed. A right, though by itself legal because recognized or granted by law as such, may
nevertheless become the source of some illegality. When a right is exercised in a manner which does not conform with
4
the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which the
wrongdoer must be held responsible. But while Article 19 lays down a rule of conduct for the government of human
relations and for the maintenance of social order, it does not provide a remedy for its violation. Generally, an action for
damages under either Article 20 or Article 21 would be proper.” In the context of a credit card relationship, although
there is neither a contractual stipulation nor a specific law requiring the credit card issuer to act on the credit card
holder’s offer within a definite period of time, these principles provide the standard by which to judge AMEX’s actions.

6. Same; The Court holds that AMEX is neither contractually bound nor legally obligated to act on its cardholders’
purchase requests within any specific period of time, much less a period of a “matter of seconds”-

—the standard therefore is implicit and, as in all contracts, must be based on fairness and reasonableness, read in relation
to the Civil Code provisions on human relations.—In light of the foregoing, we find and so hold that AMEX is neither
contractually bound nor legally obligated to act on its cardholders’ purchase requests within any specific period of time,
much less a period of a “matter of seconds” that Pantaleon uses as his standard. The standard therefore is implicit and, as
in all contracts, must be based on fairness and reasonableness, read in relation to the Civil Code provisions on human
relations, as will be discussed below.

7. Same; A survey of Philippine law on credit card transactions demonstrates that the State does not require credit card
companies to act upon its cardholders’ purchase requests within a specific period of time.-

—Nor can Pantaleon look to the law or government issuances as the source of AMEX’s alleged obligation to act upon his
credit card purchases within a matter of seconds. As the following survey ofPhilippine law on credit card transactions
demonstrates, the State does not require credit card companies to act upon its cardholders’ purchase requests within a
specific period of time. Republic Act No. 8484 (RA 8484), or the Access Devices Regulation Act of 1998, approved on
February 11, 1998, is the controlling legislation that regulates the issuance and use of access devices, including credit
cards. The more salient portions of this law include the imposition of the obligation on a credit card company to disclose
certain important financial information to credit card applicants, as well as a definition of the acts that constitute access
device fraud. As financial institutions engaged in the business of providing credit, credit card companies fall under the
supervisory powers of the Bangko Sentral ng Pilipinas (BSP). BSP Circular No. 398 dated August 21, 2003 embodies the
BSP’s policy when it comes to credit cards—“The Bangko Sentral ng Pilipinas (BSP) shall foster the development of
consumer credit through innovative products such as credit cards under conditions of fair and sound consumer credit
practices. The BSP likewise encourages competition and transparency to ensure more efficient delivery of services and fair
dealings with customers.” (Emphasis supplied)

8. Same; Even if the cardholder did prove that the credit card company, as a matter of practice or custom, acted on its
customers’ purchase requests in a matter of seconds, this would still not be enough to establish a legally demandable
right-

—as a general rule, a practice or custom is not a source of a legally demandable or enforceable right.—As for Pantaleon’s
previous experiences with AMEX (i.e., that in the past 12 years, AMEX has always approved his charge requests in three or
four seconds), this record does not establish that Pantaleon had a legally enforceable obligation to expect AMEX to act on
his charge requests within a matter of seconds. For one, Pantaleon failed to present any evidence to support his assertion
that AMEX acted on purchase requests in a matter of three or four seconds as an established practice. More importantly,
even if Pantaleon did prove that AMEX, as a matter of practice or custom, acted on its customers’ purchase requests in a
matter of seconds, this would still not be enough to establish a legally demandable right; as a general rule, a practice or
custom is not a source of a legally demandable or enforceable right.

9. Same; The right to review a card holder’s credit history, although not specifically set out in the card membership
agreement, is a necessary implication of the credit card company’s right to deny authorization for any requested charge.-

5
—AMEX’s credit authorizer, Edgardo Jaurigue, explained that having no pre-set spending limit in a credit card simply
means that the charges made by the cardholder are approved based on his ability to pay, as demonstrated by his past
spending, payment patterns, and personal resources. Nevertheless, every time Pantaleon charges a purchase on his credit
card, the credit card company still has to determine whether it will allow this charge, based on his past credit history. This
right to review a card holder’s credit history, although not specifically set out in the card membership agreement, is a
necessary implication of AMEX’s right to deny authorization for any requested charge.

10. Same; Same; A demand presupposes the existence of an obligation between the parties.-

—Apart from the lack of any demandable obligation, we also find that Pantaleon failed to make the demand required by
Article 1169 of the Civil Code. As previously established, the use of a credit card to pay for a purchase is only an offer to
the credit card company to enter a loan agreement with the credit card holder. Before the credit card issuer accepts this
offer, no obligation relating to the loan agreement exists between them. On the other hand, a demand is defined as the
“assertion of a legal right; x x x an asking with authority, claiming or challenging as due.” A demand presupposes the
existence of an obligation between the parties.

11. Same; Default; Requisites; Since the credit card company has no obligation to approve the purchase requests of its
credit cardholders, the cardholder cannot claim that the former defaulted in its obligation-

—without a demandable obligation, there can be no finding of default.—Since American Express International, Inc.
(AMEX) has no obligation to approve the purchase requests of its credit cardholders, Pantaleon cannot claim that AMEX
defaulted in its obligation. Article 1169 of the Civil Code, which provides the requisites to hold a debtor guilty of culpable
delay, states: “Article 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially
or extrajudicially demands from them the fulfillment of their obligation.” x x x. The three requisites for a finding of default
are: (a) that the obligation is demandable and liquidated; (b) the debtor delays performance; and (c) the creditor judicially
or extrajudicially requires the debtor’s performance. Based on the above, the first requisite is no longer met because
AMEX, by the express terms of the credit card agreement, is not obligated to approve Pantaleon’s purchase request.
Without a demandable obligation, there can be no finding of default.

12. Same; In more concrete terms, when cardholders use their credit cards to pay for their purchases, they merely offer to
enter into loan agreements with the credit card company-

—only after the latter approves the purchase requests that the parties enter into binding loan contracts.—Although we
recognize the existence of a relationship between the credit card issuer and the credit card holder upon the acceptance
by the cardholder of the terms of the card membership agreement (customarily signified by the act of the cardholder in
signing the back of the credit card), we have to distinguish this contractual relationship from the creditor-debtor relation-
ship which only arises after the credit card issuer has approved the cardholder’s purchase request. The first relates merely
to an agreement providing for credit facility to the cardholder. The latter involves the actual credit on loan agreement
involving three contracts, namely: the sales contract between the credit card holder and the merchant or the business
establishment which accepted the credit card; the loan agreement between the credit card issuer and the credit card
holder; and the promise to pay between the credit card issuer and the merchant or business establishment. From the loan
agreement perspective, the contractual relationship begins to exist only upon the meeting of the offer and acceptance of
the parties involved. In more concrete terms, when cardholders use their credit cards to pay for their purchases,
theymerely offer to enter into loan agreements with the credit card company. Only after the latter approves the purchase
requests that the parties enter into binding loan contracts, in keeping with Article 1319 of the Civil Code.

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 Exc.: Doctrine of Attractive Nuisance

Cases:

Taylor vs. Manila Electric Railroad, 16 Phil 8

LlABILITY FOR DAMAGES; CONTRIBUTORY NEGLIGENCE.- When the immediate cause of an accident resulting in an injury
is the plaintiff's own act, which contributed to the principal occurrence as one of its determining factors, he can not
recover damages for the injury.

Hidalgo Enterprises vs. Balandan, 91 Phil 488

ATTRACTIVE NUISANCE, WHAT CONSTITUTES; MAINTAINER LIABLE FOR INJURIES CAUSED TO CHILD.-

One who maintains on his premises dangerous instrumentalities or appliances of a character likely to attract children in
play, and who fails toexercise ordinary care to prevent children from playing therewith or resorting thereto, is liable to a
child of tender years who is injured thereby, even if the child is technically a trespasser in the premises.

ATTRACTIVE NUISANCE, WHAT CONSTITUTES; DOCTRINE NOT APPLICABLE TO SWIMMING POOL OR WATER TANK.-

The attractive nuisance doctrine generally is not applicable to bodies of water, artificial as well as natural, in the absence
of some unusual condition or artificial feature other than the mere water and its location.

ii. Assumption of Risk

- NCC Article 2179

Cases:

Afiliada vs. Hisole and Hisole, 85 Phil 67

DAMAGES; LIABILITY OF OWNER OF ANIMAL FOR DAMAGE CAUSED TO ITS CARETAKER.- Under article 1905 of the Civil
Code, the owner of an animal is not liable for injury caused by it to its caretaker.

Ilocos Norte vs. CA, GR. 53401, Nov. 6, 1989

Torts and Damages; Negligence; When an act of God combines with defendant’s negligence to produce an injury,
defendant is liable if the injury would not have resulted but for his own negligent conduct.-

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. x x x 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

7
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” (38 Am. Jur., p. 649).

Torts and Damages; Damages; Attorney’s Fees; Award of damages and attorney’s fees is unwarranted if the action was
filed in good faith; there should be no penalty on the right to litigate.-

The exclusion of moral damages and attorney’s fees awarded by the lower court was properly made by the respondent
CA, the charge of malice and bad faith on the part of respondents in instituting this case being a mere product of wishful
thinking and speculation. Award of damages and attorney’s fees is unwarranted where the action was filed in good faith;
there should be no penalty on the right to litigate (Espiritu vs. CA, 137 SCRA 50). If damage results from a person’s
exercising his legal rights, it is damnum absque injuria (Auyong Hian vs. CTA, 59 SCRA 110).

Nikko Hotel Manila Garden vs. Reyes, GR. 154259, Feb. 28, 2005

1. Actions; Human Relations; Torts and Damages; Doctrine of Volenti Non Fit Injuria; The doctrine of volenti non fit injuria
(“to which a person assents is not esteemed in law as injury”) refers to a self-inflicted injury or to the consent to injury
which precludes the recovery of damages by one who has knowingly and voluntarily exposed himself to danger, even if he
is not negligent in doing so.-

Petitioners Lim and Hotel Nikko contend that pursuant to the doctrine of volenti non fit injuria, they cannot be made
liable for damages as respondent Reyes assumed the risk of being asked to leave (and being embarrassed and humiliated
in the process) as he was a “gate-crasher.” The doctrine of volenti non fit injuria (“to which a person assents is not
esteemed in law as injury”) refers to self-inflicted injury or to the consent to injury which precludes the recovery of
damages by one who has knowingly and voluntarily exposed himself to danger, even if he is not negligent in doing so. As
formulated by petitioners, however, this doctrine does not find application to the case at bar because even if respondent
Reyes assumed the risk of being asked to leave the party, petitioners, under Articles 19 and 21 of the New Civil Code,
were still under obligation to treat him fairly in order not to expose him to unnecessary ridicule and shame.

2. Actions; Human Relations; Torts and Damages; Appeals; Where the trial court and the appellate court reached
divergent and irreconcilable conclusions concerning the same facts and evidence of the case, the Supreme Court is left
without choice but to use its latent power to review such findings of facts.-

The general rule is that we are not a trier of facts as our jurisdiction is limited to reviewing and revising errors of law. One
of the exceptions to this general rule, however, obtains herein as the findings of the Court of Appeals are contrary to
those of the trial court. The lower court ruled that Ms. Lim did not abuse her right to ask Mr. Reyes to leave the party as
she talked to him politely and discreetly. The appellate court, on the other hand, held that Ms. Lim is liable for damages as
she needlessly embarrassed Mr. Reyes by telling him not to finish his food and to leave the place within hearing distance
of the other guests. Both courts, however, were in agreement that it was Dr. Filart’s invitation that brought Mr. Reyes to
the party.

3. Actions; Human Relations; Torts and Damages; Evidence; It is a basic rule in civil cases that he who alleges proves.-

Another problem with Mr. Reyes’s version of the story is that it is unsupported. It is a basic rule in civil cases that he who
alleges proves. Mr. Reyes, however, had not presented any witness to back his story up. All his witnesses—Danny
Rodinas, Pepito Guerrero and Alexander Silva—proved only that it was Dr. Filart who invited him to the party.

4. Actions; Human Relations; Torts and Damages; Party Gatecrashers; A person who did not abuse her right in asking a
person to leave a party to which he was not invited cannot be made to pay for damages under Articles 19 and 21 of the
Civil Code.-
8
Ms. Lim, not having abused her right to ask Mr. Reyes to leave the party to which he was not invited, cannot be made
liable to pay for damages under Articles 19 and 21 of the Civil Code. Necessarily, neither can her employer, Hotel Nikko,
be held liable as its liability springs from that of its employee.

5. Actions; Human Relations; Torts and Damages; Principle of Abuse of Rights; Article 19 of the Civil Code, known to
contain what is commonly referred to as the principle of abuse of rights, is not a panacea for all human hurts and social
grievances, the object of the article being to set certain standards which must be observed not only in the exercise of
one’s rights but also in the performance of one’s duties.-

Article 19, known to contain what is commonly referred to as the principle of abuse of rights, is not a panacea for all
human hurts and social grievances. Article 19 states: Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. Elsewhere, we
explained that when “a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and
results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be responsible.” The
object of this article, therefore, is to set certain standards which must be observed not only in the exercise of one’s rights
but also in the performance of one’s duties. These standards are the following: act with justice, give everyone his due and
observe honesty and good faith. Its antithesis, necessarily, is any act evincing bad faith or intent to injure. Its elements are
the following: (1) There is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or
injuring another. When Article 19 is violated, an action for damages is proper under Articles 20 or 21 of the Civil Code.

6. Actions; Human Relations; Torts and Damages; Principle of Abuse of Rights; A common theme runs through Articles 19
and 21, and that is, the act complained of must be intentional.-

Article 20 pertains to damages arising from a violation of law which does not obtain herein as Ms. Lim was perfectly
within her right to ask Mr. Reyes to leave. Article 21, on the other hand, states: Art. 21. Any person who willfully causes
loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter
for the damage. Article 21 refers to acts contra bonus mores and has the following elements: (1) There is an act which is
legal; (2) but which is contrary to morals, good custom, public order, or public policy; and (3) it is done with intent to
injure. A common theme runs through Articles 19 and 21, and that is, the act complained of must be intentional.

7. Actions; Human Relations; Torts and Damages; Principle of Abuse of Rights; A complaint based on Articles 19 and 21 of
the Civil Code must necessarily fail if it has nothing to recommend it but innuendos and conjectures.-

As applied to herein case and as earlier discussed, Mr. Reyes has not shown that Ms. Lim was driven by animosity against
him. These two people did not know each other personally before the evening of 13 October 1994, thus, Mr. Reyes had
nothing to offer for an explanation for Ms. Lim’s alleged abusive conduct except the statement that Ms. Lim, being “single
at 44 years old,” had a “very strong bias and prejudice against (Mr. Reyes) possibly influenced by her associates in her
work at the hotel with foreign businessmen.” The lameness of this argument need not be belabored. Suffice it to say that
a complaint based on Articles 19 and 21 of the Civil Code must necessarily fail if it has nothing to recommend it but
innuendos and conjectures.

8. Actions; Human Relations; Torts and Damages; Principle of Abuse of Rights; Bad judgment which, if done with good
intentions, cannot amount to bad faith.-

The manner by which Ms. Lim asked Mr. Reyes to leave was likewise acceptable and humane under the circumstances. In
this regard, we cannot put our imprimatur on the appellate court’s declaration that Ms. Lim’s act of personally
approaching Mr. Reyes (without first verifying from Mrs. Filart if indeed she invited Mr. Reyes) gave rise to a cause of
action “predicated upon mere rudeness or lack of consideration of one person, which calls not only protection of human
dignity but respect of such dignity.” Without proof of any ill-motive on her part, Ms. Lim’s act of by-passing Mrs. Filart
cannot amount to abusive conduct especially because she did inquire from Mrs. Filart’s companion who told her that Mrs.
9
Filart did not invite Mr. Reyes. If at all, Ms. Lim is guilty only of bad judgment which, if done with good intentions, cannot
amount to bad faith.

iii. Doctrine of Last Clear Chance; Doctrine of Supervening Negligence;

Doctrine of Discovered Peril; or the Humanitarian Doctrine

Cases:

Picart vs. Smith, 37 Phil. 809 (1918)

1. NEGLIGENCE; CRITERION FOR DETERMINING EXISTENCE OF NEGLI-GENCE.-

The test for determining whether a person is negligent in doing an act whereby injury or damage results to the person or
property of another is this: Would a prudent man, in the position of the person to whom negligence is attributed, foresee
harm to the person injured as a reasonable consequence of the course about to be pursued. If so, the law imposes a duty
on the actor to refrain from that course or to take precaution against its mischievous results, and the failure to do so con

2. NEGLIGENCE; CONTRIBUTORY NEGLIGENCE; SUCCESSIVE NEGLIGENT ACTS.-

Where both parties are guilty of negligence, but the negligent act of one succeeds that of the other by an appreciable
interval of time, the one who has the last reasonable opportunity to avoid the impending harm and fails to do so is
chargeable with the consequences, without reference to the prior negligence of the other party.

3. NEGLIGENCE; CONTRIBUTORY NEGLIGENCE; CASE AT BAR.-

The plaintiff was riding a pony on a bridge, Seeing an automobile ahead he improperly pulled his horse over to the railing
on the right. The driver of the automobile, however, guided his car toward the plaintiff without diminution of speed until
he was only a few feet away. He then turned to the right but passed so closely to the horse that the latter being
frightened, jumped around and was killed by the passing car. Held: That although the plaintiff was guilty of negligence in
being on the wrong side of the bridge, the defendant was nevertheless civilly liable for the legal damages resulting from
the collision, as he had a fair opportunity to avoid the accident af ter he realized the situation created by the negligence of
the plaintiff and failed to avail himself of that opportunity; while the plaintiff could by no means then place himself in a
position of greater safety.

Philippine National Railways vs. Vizcara, GR. 190022, Feb. 15, 2012

Civil Law; Quasi-Delicts; Article 2176 of the New Civil Code prescribes a civil liability for damages caused by a person’s act
or omission constituting fault or negligence.-

—Article 2176 of the New Civil Code prescribes a civil liability for damages caused by a person’s act or omission
constituting fault or negligence. It states: Article 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 was no pre-existing
contractual relation between the parties, is called quasi-delict and is governed by the provisions of this chapter.

Same; Same; Doctrine of Last Clear Chance; Words and Phrases; 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

10
the last clear opportunity to avoid the impending harm but failed to do so, is chargeable with the consequences arising
therefrom.-

—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.

Same; Same; Same; At this age of modern transportation, it behooves the Philippine National Railways (PNR) to exert
serious efforts to catch up with the trend, including the contemporary standards in railroad safety.-

—At this age of modern transportation, it behooves the PNR to exert serious efforts to catch up with the trend, including
the contemporary standards in railroad safety. As an institution established to alleviate public transportation, it is the
duty of the PNR to promote the safety and security of the general riding public and provide for their convenience, which
to a considerable degree may be accomplished by the installation of precautionary warning devices. Every railroad
crossing must be installed with barriers on each side of the track to block the full width of the road until after the train
runs past the crossing. To even draw closer attention, the railroad crossing may be equipped with a device which rings a
bell or turns on a signal light to signify the danger or risk of crossing. It is similarly beneficial to mount advance warning
signs at the railroad crossing, such as a reflectorized crossbuck sign to inform motorists of the existence of the track, and a
stop, look and listen signage to prompt the public to take caution. These warning signs must be erected in a place where
they will have ample lighting and unobstructed visibility both day and night.

Same; Same; Same; Contributory Negligence; Words and Phrases; 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.-

—As to whether there was contributory negligence on the part of the respondents, this court rule in the negative.
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. 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. Here, we cannot see how the respondents could have contributed to their injury
when they were not even aware of the forthcoming danger.

Civil Law; Quasi-Delicts; Negligence; 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.-

—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
11
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.

Same; Same; Negligence; Words and Phrases; Negligence is the omission to do something which a reasonable man,
guided by 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.-

—In Layugan v. Intermediate Appellate Court, 167 SCRA 363 (1988), negligence was defined as the omission to do
something which a reasonable man, guided by 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. It is the failure to observe for
the protection of the interests of another person, that degree of care, precaution, and vigilance which the circumstances
justly demand, whereby such other person suffers injury. To determine the existence of negligence, the time-honored test
was: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily
prudent person would have used in the same situation? If not, then he is guilty of negligence. The law here in effect
adopts the standard supposed to be supplied by the imaginary conduct of the discreet pater familias of the Roman law.
The existence of negligence in a given case is not determined by reference to the personal judgment of the actor in the
situation before him. The law considers what would be reckless, blameworthy, or negligent in the man of ordinary
intelligence and prudence and determines liability by that.

Echevara vs. Ramos, GR. 175172, Sept. 29, 2009

Civil Law; Torts and Damages; Quasi-Delicts; Negligence; Foreseeability is the fundamental test of negligence.—
Foresee-ability 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. Seeing that the owner-type jeep was wiggling and running fast in a zigzag
manner as it travelled on the opposite side of the highway, Benigno Valdez was made aware of the danger ahead if he
met the owner-type jeep on the road. Yet he failed to take precaution by immediately veering to the rightmost portion of
the road or by stopping the passenger jeep at the right shoulder of the road and letting the owner-type jeep pass before
proceeding southward; hence, the collision occurred. The Court of Appeals correctly held that Benigno Valdez was guilty
of inexcusable negligence by neglecting to take such precaution, which a reasonable and prudent man would ordinarily
have done under the circumstances and which proximately caused injury to another.

Same; Same; Same; An ordinarily prudent man would know that he would be putting himself and other vehicles he would
encounter on the road at risk for driving a mechanically defective vehicle; Gross negligence is the absence of care or
diligence as to amount to a reckless disregard of the safety of persons or property.—The Court also finds Arnulfo Ramos
guilty of gross negligence for knowingly driving a defective jeep on the highway. An ordinarily prudent man would know
that he would be putting himself and other vehicles he would encounter on the road at risk for driving a mechanically
defective vehicle. Under the circumstances, a prudent man would have had the owner-type jeep repaired or would have
stopped using it until it was repaired. Ramos was, therefore, grossly negligent in continuing to drive on the highway the
mechanically defective jeep, which later encroached on the opposite lane and bumped the passenger jeep driven by
Benigno Valdez. Gross negligence is the absence of care or diligence as to amount to a reckless disregard of the safety of
persons or property. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them.

Same; Same; Same; Doctrine of Last Clear Chance; The doctrine of last clear chance 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 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
12
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.

Same; Same; Same; Same; Where the gross negligence of one driver and the inexcusable negligence of another driver
were the proximate cause of the vehicular accident, the heirs of the latter cannot recover damages pursuant to Article
2179 of the Civil Code.—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. Since the gross negligence of
Arnulfo Ramos and the inexcusable negligence of Benigno Valdez were the proximate cause of the vehicular accident,
respondents cannot recover damages pursuant to Article 2179 of the Civil Code.

Lapanday Agricultural vs. Angala, GR. 153076, June 21, 2007

1. Quasi-Delicts; Torts; Motor Vehicles; Doctrine of Last Clear Chance; Words and Phrases; The doctrine of last clear
chance states that where both parties are negligent but the negligent act of one is appreciably later than that of the
other, or where it is impossible to determine whose fault or negligence caused the loss, the one who had the last clear
opportunity to avoid the loss but failed to do so is chargeable with the loss; A U-turn is done at a much slower speed to
avoid skidding and overturning, compared to running straight ahead.-

Since both parties are at fault in this case, the doctrine of last clear chance applies. The doctrine of last clear chance states
that where both parties are negligent but the negligent act of one is appreciably later than that of the other, or where it is
impossible to determine whose fault or negligence caused the loss, the one who had the last clear opportunity to avoid
the loss but failed to do so is chargeable with the loss. In this case, Deocampo had the last clear chance to avoid the
collision. Since Deocampo was driving the rear vehicle, he had full control of the situation since he was in a position to
observe the vehicle in front of him. Deocampo had the responsibility of avoiding bumping the vehicle in front of him. A U-
turn is done at a much slower speed to avoid skidding and overturning, compared to running straight ahead. Deocampo
could have avoided the vehicle if he was not driving very fast while following the pick-up. Deocampo was not only driving
fast, he also admitted that he did not step on the brakes even upon seeing the pick-up. He only stepped on the brakes
after the collision.

2. Quasi-Delicts; Torts; Motor Vehicles; Labor Law; Where the employer failed to substantiate allegation that it exercised
due diligence in the supervision and selection of its employees.-

LADECO alleges that it should not be held jointly and severally liable with Deocampo because it exercised due diligence in
the supervision and selection of its employees. Aside from this statement, LADECO did not proffer any proof to show how
it exercised due diligence in the supervision and selection of its employees. LADECO did not show its policy in hiring its
drivers, or the manner in which it supervised its drivers. LADECO failed to substantiate its allegation that it exercised due
diligence in the supervision and selection of its employees. Hence, we hold LADECO solidarily liable with Deocampo.

3. Damages; Moral damages are awarded to allow a plaintiff to obtain means, diversion, or amusement that will serve to
alleviate the moral suffering he has undergone due to the defendant’s culpable action.-

We sustain the award of moral damages. Moral damages are awarded to allow a plaintiff to obtain means, diversion, or
amusement that will serve to alleviate the moral suffering he has undergone due to the defendant’s culpable action. The
trial court found that respondent, who was on board the pick-up when the collision took place, suffered shock, serious
anxiety, and fright when the crewcab bumped his pick-up. We sustain the trial court and the Court of Appeals in ruling
that respondent sufficiently showed that he suffered shock, serious anxiety, and fright which entitle him to moral
damages.

13
4. Damages; Attorney’s Fees; Judgments; Awards of attorney’s fees must be based on findings of fact and of law and
stated in the decision of the trial court.-

Both the trial court and the Court of Appeals failed to give any justification for the award of attorney’s fees. Awards of
attorney’s fees must be based on findings of fact and of law and stated in the decision of the trial court. Further, no
premium should be placed on the right to litigate. Hence, we delete the award of attorney’s fees.

Tiu vs. Arriesgado, 437 SCRA 426 (2004)

1. Civil Law; Contracts; Contracts of Carriage; Common Carriers; Extraordinary Diligence; A man must use common sense,
and exercise due reflection in all his acts—it is his duty to be cautious, careful and prudent, if not from instinct, then
through fear of recurring punishment.-

A man must use common sense, and exercise due reflection in all his acts; it is his duty to be cautious, careful and
prudent, if not from instinct, then through fear of recurring punishment. He is responsible for such results as anyone
might foresee and for acts which no one would have performed except through culpable abandon. Otherwise, his own
person, rights and property, and those of his fellow beings, would ever be exposed to all manner of danger and injury.

2. Civil Law; Contracts; Contracts of Carriage; Common Carriers; Extraordinary Diligence;Negligence; Upon the happening
of the accident, the presumption of negligence at once arises, and it becomes the duty of a common carrier to prove that
he observed extraordinary diligence in the care of his pasengers.-

Under the said contract of carriage, the petitioners assumed the express obligation to transport the respondent and his
wife to their destination safely and to observe extraordinary diligence with due regard for all circumstances. Any injury
suffered by the passengers in the course thereof is immediately attributable to the negligence of the carrier. Upon the
happening of the accident, the presumption of negligence at once arises, and it becomes the duty of a common carrier to
prove that he observed extraordinary diligence in the care of his passengers. It must be stressed that in requiring the
highest possible degree of diligence from common carriers and in creating a presumption of negligence against them, the
law compels them to curb the recklessness of their drivers.

3. Civil Law; Contracts; Contracts of Carriage; Common Carriers; Extraordinary Diligence;Negligence; The carrier must
show the utmost diligence of very cautious persons as far as human care and foresight can provide, or that the accident
was caused by fortuitous event.-

While evidence may be submitted to overcome such presumption of negligence, it must be shown that the carrier
observed the required extraordinary diligence, which means that the carrier must show the utmost diligence of very
cautious persons as far as human care and foresight can provide, or that the accident was caused by fortuitous event.

4. Civil Law; Contracts; Contracts of Carriage; Common Carriers; Extraordinary Diligence;Negligence; Principle of Last Clear
Chance; Contrary to the petitioner’s contention, the principle of last clear chance is inapplicable in the instant case, as it
only applies in a suit between the owners and drivers of colliding vehicles.-

Contrary to the petitioner’s contention, the principle of last clear chance is inapplicable in the instant case, as it only
applies in a suit between the owners and drivers of 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 and its owner on the ground that the other driver was likewise guilty of negligence. The common law notion of last
clear chance permitted courts to grant recovery to a plaintiff who has also been negligent provided that the defendant
had the last clear chance to avoid the casualty and failed to do so. Accordingly, it is difficult to see what role, if any, the
common law of last clear chance doctrine has to play in a jurisdiction where the common law concept of contributory
14
negligence as an absolute bar to recovery by the plaintiff, has itself been rejected, as it has been in Article 2179 of the Civil
Code.

5. Civil Law; Contracts; Contracts of Carriage; Common Carriers; Extraordinary Diligence;Negligence; Presumed
Negligence; It is such a firmly established principle, as to have virtually formed part of the law itself, that the negligence of
the employee gives rise to the presumption of negligence on the part of the employer.-

It is such a firmly established principle, as to have virtually formed part of the law itself, that the negli- gence of the
employee gives rise to the presumption of negligence on the part of the employer. This is the presumed negligence in the
selection and supervision of employee. The theory of presumed negligence, in contrast with the American doctrine of
respondeat superior, where the negligence of the employee is conclusively presumed to be the negligence of the
employer, is clearly deducible from the last paragraph of Article 2180 of the Civil Code which provides that the
responsibility therein mentioned shall cease if the employers prove that they observed all the diligence of a good father of
a family to prevent damages. . . .

6. Civil Law; Contracts; Contracts of Carriage; Common Carriers; Extraordinary

Diligence;Negligence; Indemnity; Compulsory Vehicle Liability Insurance; The nature of Compulsory Motor Vehicle Liability
Insurance is such that it is primarily intended to provide compensation for the death or bodily injuries suffered by
innocent third parties or pasengers as a result of the negligent operation and use of motor vehicles.-

The nature of Compulsory Motor Vehicle Liability Insurance is such that it is primarily intended to provide compensation
for the death or bodily injuries suffered by innocent third parties or passengers as a result of the negligent operation and
use of motor vehicles. The victims and/or their dependents are assured of immediate financial assistance, regardless of
the financial capacity of motor vehicle owners.

7. Civil Law; Contracts; Contracts of Carriage; Common Carriers; Extraordinary

Diligence;Negligence; Indemnity; Compulsory Vehicle Liability Insurance; Extent; Although the victim may proceed directly
against the insurer for indemnity, the third party liability is only up to the extent of the insurance policy and those
required by law.-

Although the victim may proceed directly against the insurer for indemnity, the third party liability is only up to the extent
of the insurance policy and those required by law. While it is true that where the insurance contract provides for
indemnity against liability to third persons, and such persons can directly sue the insurer, the direct liability of the insurer
under indemnity contracts against third party liability does not mean that the insurer can be held liable in solidum with
the insured and/or the other parties found at fault. For the liability of the insurer is based on contract; that of the insured
carrier or vehicle owner is based on tort. . . .

8. Civil Law; Contracts; Contracts of Carriage; Common Carriers; Extraordinary Diligence;Negligence; Exemplary
Damages; Article 2231 of the Civil Code explicitly authorizes the imposition of exemplary damages in quasi-delicts “if the
defendant acted with gross negligence.”-

While the immediate beneficiaries of the standard of extraordinary diligence are, of course, the passengers and owners of
cargo carried by a common carrier, they are not the only persons that the law seeks to benefit. For if common carriers
carefully observed the statutory standard of extraordinary diligence in respect of their own passengers, they cannot help
but simultaneously benefit pedestrians and the passengers of other vehicles who are equally entitled to the safe and
convenient use of our roads and highways. The law seeks to stop and prevent the slaughter and maiming of people
(whether passengers or not) on our highways and buses, the very size and power of which seem to inflame the minds of
their drivers. Article 2231 of the Civil Code explicitly authorizes the imposition of exemplary damages in cases of quasi-
delicts “if the defendant acted with gross negligence.” . . .

15
9. Civil Law; Contracts; Contracts of Carriage; Common Carriers; Extraordinary Diligence;Negligence; Solidary Liability; In
case of injury to a passenger due to the negligence of the driver of the bus on which he was riding and of the driver of
another vehicle, the drivers as well as the owners of the two vehicles are jointly and severally liable for damages.-

The same rule of liability was applied in situations where the negligence of the driver of the bus on which plaintiff was
riding concurred with the negligence of a third party who was the driver of another vehicle, thus causing an accident. In
Anuran v. Buño, Batangas Laguna Tayabas Bus Co. v. Intermediate Appellate Court, and Metro Manila Transit Corporation
v. Court of Appeals, the bus company, its driver, the operator of the other vehicle and the driver of the vehicle were
jointly and severally held liable to the injured passenger or the latter’s heirs. The basis of this allocation of liability was
explained in Viluan v. Court of Appeals, thus: “Nor should it make difference that the liability of petitioner [bus owner]
springs from contract while that of respondents [owner and driver of other vehicle] arises from quasi-delict. As early as
1913, we already ruled in Gutierrez vs. Gutierrez, 56 Phil. 177, that in case of injury to a passenger due to the negligence
of the driver of the bus on which he was riding and of the driver of another vehicle, the drivers as well as the owners of
the two vehicles are jointly and severally liable for damages. Some members of the Court, though, are of the view that
under the circumstances they are liable on quasi-delict.”

IV. Fortuitous Event

NCC Article 1174

Gotesco vs. Chatto, 210 SCRA 18

1. Damages; Building-owner must prove its building’s ceiling collapsed due to force majeure.-

Petitioner could have easily discovered the cause of the collapse if indeed it were due to force majeure. To Our mind, the
real reason why Mr. Ong could not explain the cause or reason is that either he did not actually conduct the investigation
or that he is, as the respondent Court impliedly held, incompetent. He is not an engineer, but an architect who had not
even passed the government’s examination. Verily, the post-incident investigation cannot be considered as material to
the present proceedings. What is significant is the finding of the trial court, affirmed by the respondent Court, that the
collapse was due to construction defects. There was no evidence offered to overturn this finding. The building was
constructed barely four (4) years prior to the accident in question. It was not shown that any of the causes denominated
as force majeure obtained immediately before or at the time of the collapse of the ceiling. Such defects could have been
easily discovered if only petitioner exercised due diligence and care in keeping and maintaining the premises. But as
disclosed by the testimony of Mr. Ong, there was no adequate inspection of the premises before the date of the accident.
His answers to the leading questions on inspection disclosed neither the exact dates of said inspection nor the nature and
extent of the same.

2. Damages; Approval by City Engineer of structural plans no proof of no defects in construction.-

That the structural designs and plans of the building were duly approved by the City Engineer and the building permits
and certificate of occupancy were issued do not at all prove that there were no defects in the construction, especially as
regards the ceiling, considering that no testimony was offered to prove that it was ever inspected at all.

3. Damages; Force majeure as cause of accident not necessarily exculpatory where negligence is also proved.-

Besides, even assuming for the sake of argument that, as petitioner vigorously insists, the cause of the collapse was due
to force majeure, petitioner would still be liable because it was guilty of negligence, which the trial court denominated as
gross. As gleaned from Bouvier’s definition of and Cockburn’s elucidation on force majeure, for one to be exempt from
any liability because of it, he must have exercised care, i.e., he should not have been guilty of negligence.
16
Servando vs. Philippine Steam Navigation Co., 117 SCRA 832

Civil Law; Common Carriers; Limitation of carrier's liability for loss or damage to goods, valid: Reason.—It should be
pointed out, however, that in the bills of lading issued for the cargoes in question, the parties agreed to limit the
responsibility of the carrier for the loss or damage that may be caused to the shipment. x x x We sustain the validity of the
above stipulation; there is nothing therein that is contrary to law, morals or public policy.

Same; Same; Same; Agreement on limitation of liability of carrier, binding upon the parties; Reason; Contracts of adhesion
not entirely prohibited.—Appellees would contend that the above stipulation does not bind them because it was printed
in fine letters on the back of the bills of lading; and that they did not sign the same. This argument overlooks the
pronouncement of this Court in Ong Yiu vs. Court of Appeals, promulgated June 29, 1979, where the same issue was
resolved in this wise: "While it may be true that petitioner had not signed the plane ticket (Exh. '12'), he is nevertheless
bound by the provisions thereof. 'Such provisions have been held to be a part of the contract of carriage, and valid and
binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation.' It is what is known as
a contract of 'adhesion', in regards which it has been said that contracts of adhesion wherein one party imposes a ready
made form of contract on the other, as the plane ticket in the case at bar, are contracts not entirely prohibited. The one
who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent." (Tolentino, Civil
Code, Vol. IV, 1962 Ed., p. 462, citing Mr. Justice J.B.L. Reyes, Lawyer's Journal, Jan. 31, 1951, p. 49).

Same; Same; Exemption from liability; Fortuitous event or force majeure, concept and nature of; Obligor exempt from
liability for non-performance of obligation due to a fortuitous event; Burning of customs warehouse, a fortuitous event;
Case at bar.—Thus, where fortuitous event or force majeure is the immediate and proximate cause of the loss, the obligor
is exempt from liability for non-performance. The Partidas, the antecedent of Article 1174 of the Civil Code, defines 'caso
fortuito' as 'an event that takes place by accident and could not have been foreseen. Examples of this are destruction of
houses, unexpected fire, shipwreck, violence of robbers.' In its dissertation of the phrase 'caso fortuito' the Enciclopedia
Juridicada Española says: "In a legal sense and, consequently, also in relation to contracts, a 'caso fortuito' presents the
following essential characteristics: (1) the cause of the unforeseen and unexpected occurrence, or of the failure of the
debtor to comply with his obligation, must be independent of the human will; (2) it may be impossible to foresee the
event which constitutes the 'caso fortuito', or if it can be foreseen, it must be impossible to avoid; (3) the occurrence must
be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (4) the obligor must be
free from any participation in the aggravation of the injury resulting to the creditor." In the case at bar, the burning of the
customs warehouse was an extraordinary event which happened independently of the will of the appellant. The latter
could not have foreseen the event.

Same; Same; Same; Absence of delay of carrier in the performance of its obligation and negligence of its employees
exempt carrier from liability for loss of goods due to fire.—There is nothing in the record to show that appellant carrier
incurred in delay in the performance of its obligation. It appears that appellant had not only notified appellees of the
arrival of their shipment, but had demanded that the same be withdrawn. In fact, pursuant to such demand, appellee Uy
Bico had taken delivery of 907 cavans of rice before the burning of the warehouse. Nor can the appellant or its employees
be charged with negligence. The storage of the goods in the Customs warehouse pending withdrawal thereof by the
appellees was undoubtedly made with their knowledge and consent. Since the warehouse belonged to and was
maintained by the government, it would be unfair to impute negligence to the appellant, the latter having no control
whatsoever over the same.

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Edgar Cokaliong vs. UCPB General Insurance Company, GR. 146018

1. Civil Law; Damages; Force Majeure; Broadly speaking, force majeure generally applies to a natural accident, such as
that caused by a lightning, an earthquake, a tempest or a public enemy.-

Having originated from an unchecked crack in the fuel oil service tank, the fire could not have been caused by force
majeure. Broadly speaking, force majeure generally applies to a natural accident, such as that caused by a lightning, an
earthquake, a tempest or a public enemy. Hence, fire is not considered a natural disaster or calamity.

2. Civil Law; Damages; Negligence; Common Carriers; A common carrier is presumed to have been negligent if it fails to
prove that it exercised extraordinary vigilance over the goods if transported.-

The law provides that a common carrier is presumed to have been negligent if it fails to prove that it exercised
extraordinary vigilance over the goods it transported. Ensuring the seaworthiness of the vessel is the first step in
exercising the required vigilance. Petitioner did not present sufficient evidence showing what measures or acts it had
undertaken to ensure the seaworthiness of the vessel.

3. Civil Law; Damages; Negligence; Common Carriers; A stipulation that limits liability is valid as long as it is not against
public policy.-

A stipulation that limits liability is valid as long as it is not against public policy. In Everett Steamship Corporation v. Court
of Appeals the Court stated: “A stipulation in the bill of lading limiting the common carrier’s liability for loss or destruction
of a cargo to a certain sum, unless the shipper or owner declares a greater value, is sanctioned by law, particularly Articles
1749 and 1750 of the Civil Code.

4. Civil Law; Damages; Negligence; Common Carriers; Petitioner should not be held liable for more than what was
declared by the shippers/consignees as the value of the goods in the bills of lading.-

In Aboitiz Shipping Corporation v. Court of Appeals, the description of the nature and the value of the goods shipped were
declared and reflected in the bill of lading, like in the present case. The Court therein considered this declaration as the
basis of the carrier’s liability and ordered payment based on such amount. Following this ruling, petitioner should not be
held liable for more than what was declared by the shippers/consignees as the value of the goods in the bills of lading.

V. Emergency Rule

Gan vs. CA, GR. L-44264

1. Criminal Law; Homicide Through Reckless Imprudence; Civil Law; Torts and Damages; Test for Determining Negligence
Resulting in Injury or Damages; Failure to take precautions to avoid the mischievous results of a person’s course of action
constitutes negligence.-

The test for determining whether or not a person is negligent in doing an act whereby injury or damage results to the
person or property of another is this: Would a prudent man in the position of the person to whom negligence is attributed
foresee harm to the person injured as a reasonable consequence of the course about to be pursued? If so, the law
imposes the duty on the doer to take precaution against its mischievous results and the failure to do so constitutes
negligence.

2. Criminal Law; Homicide Through Reckless Imprudence; Civil Law; Torts and Damages; Test for Determining Negligence
Resulting in Injury or Damages; Emergency Rule, Defined.-

18
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.

3. Criminal Law; Homicide Through Reckless Imprudence; Civil Law; Torts and Damages; Test for Determining Negligence
Resulting in Injury or Damages; Appellant is not guilty of Homicide Thru Simple Imprudence, as there was no showing that
she had sufficient time to analyze the situation and ponder on which course of action would result in the least possible
harm.-

Applying the above tests to the case at bar, we find the petitioner not guilty of the crime of Simple Imprudence resulting
in Homicide. The appellate court in finding the petitioner guilty said: “The accused should have stepped on the brakes
when she saw the car going in the opposite direction followed by another which overtook the first by passing towards its
left. She should not only have swerved the car she was driving to the right but should have also tried to stop or lessen her
speed so that she would not bump into the pedestrian who was crossing at the time but also the jeepney which was then
parked along the street.” The course of action suggested by the appellate court 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 analyze
the situation confronting her and to ponder on which of the different courses of action would result in the least possible
harm to herself and to others. Due to the lack of eyewitnesses, no evidence was presented by the prosecution with
respect to the relative distances of petitioner to the parked jeepney and the oncoming overtaking vehicle that would tend
to prove that petitioner did have sufficient time to reflect on the consequences of her instant decision to swerve her car
to the right without stepping on her brakes.

Valenzuela vs. CA, GR. 115024 & 117944

2. Torts; Motor Vehicles; Driving exacts a more than usual toll on the senses—physiological “fight or flight” mechanisms
are at work, provided such mechanisms were not dulled by drugs, alcohol, exhaustion, drowsiness, etc.-

One will have to suspend disbelief in order to give credence to Li’s disingenuous and patently self-serving asseverations.
The average motorist alert to road conditions will have no difficulty applying the brakes to a car traveling at the speed
claimed by Li. Given a light rainfall, the visibility of the street, and the road conditions on a principal metropolitan
throroughfare like Aurora Boulevard, Li would have had ample time to react to the changing conditions of the road if he
were alert—as every driver should be—to those conditions. Driving exacts a more than usual toll on the senses.
Physiological “fight or flight” mechanisms are at work, provided such mechanisms were not dulled by drugs, alcohol,
exhaustion, drowsiness, etc. Li’s failure to react in a manner which would have avoided the accident could therefore have
been only due to either or both of the two factors: 1) that he was driving at a “very fast” speed as testified by Rodriguez;
and 2) that he was under the influence of alcohol. Either factor working independently would have diminished his
responsiveness to road conditions, since normally he would have slowed down prior to reaching Valenzuela’s car, rather
than be in a situation forcing him to suddenly apply his brakes.

3. Torts; Motor Vehicles; Words and Phrases; Contributory Negligence, Defined.-

Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has
suffered, which falls below the standard to which he is required to conform for his own protection. Based on the
foregoing definition, the standard or act to which, according to petitioner Li, Valenzuela ought to have conformed for her
own protection was not to park at all at any point of Aurora Boulevard, a no parking zone. We cannot agree.

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4. Torts; Motor Vehicles; Words and Phrases; “Emergency Rule,” Explained; 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.-

Courts have traditionally been compelled to recognize that an actor who is confronted with an emergency is not to be
held up to the standard of conduct normally applied to an individual who is in no such situation. The law takes stock of
impulses of humanity when placed in threatening or dangerous situations and does not require the same standard of
thoughtful and reflective care from persons confronted by unusual and oftentimes threatening conditions. Under the
“emergency rule” adopted by this Court in Gan vs. Court of Appeals, 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.

5. Torts; Motor Vehicles; Words and Phrases; “Emergency Rule,” Explained; A woman driving a vehicle suddenly crippled
by a flat tire on a rainy night will not be faulted for stopping at a point which is both convenient for her to do so and which
is not a hazard to other motorists.-

A woman driving a vehicle suddenly crippled by a flat tire on a rainy night will not be faulted for stopping at a point which
is both convenient for her to do so and which is not a hazard to other motorists. She is not expected to run the entire
boulevard in search for a parking zone or turn on a dark street or alley where she would likely find no one to help her. It
would be hazardous for her not to stop and assess the emergency (simply because the entire length of Aurora Boulevard
is a no-parking zone) because the hobbling vehicle would be both a threat to her safety and to other motorists.

6. Torts; Motor Vehicles; Words and Phrases; “Negligence,” Explained; Negligence, as it is commonly understood, is
conduct which creates an undue risk of harm to others—it is the failure to observe that degree of care, precaution, and
vigilance which the circumstances justly demand, whereby such other person suffers injury.-

Obviously in the case at bench, the only negligence ascribable was the negligence of Li on the night of the accident.
“Negligence, as it is commonly understood, is conduct which creates an undue risk of harm to others.” It is the failure to
observe that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other
person suffers injury. We stressed, in Corliss vs. Manila Railroad Company, that negligence is the want of care required by
the circumstances.

7. Torts; Employer-Employee Relationships; The liability of an employer for the negligence of his employee is not based
on the principle of respondeat superior but that of pater familias.-

We agree with the respondent court that the relationship in question is not based on the principle of respondeat
superior, which holds the master liable for acts of the servant, but that of pater familias, in which 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.

Orix Metro Leasing vs. Mangalinao, GR. 174089 & 174266

8. Civil Law; Quasi-Delicts; Torts; Emergency Rule; One who suddenly finds himself in a place of danger, and is required to
act without time to consider the best means that may be adopted to avoid the impending danger, is not guilty of
negligence, if he fails to adopt what subsequently and upon reflection may appear to have been a better method, unless
the emergency in which he finds himself is brought about by his own negligence.-

20
—The ‘Emergency Rule’ invoked by petitioners will not apply. Such principle states: [O]ne who suddenly finds himself in a
place of danger, and is required to act without time to consider the best means that may be adopted to avoid the
impending danger, is not guilty of negligence, if he fails to adopt what subsequently and upon reflection may appear to
have been a better method, unless the emergency in which he finds himself is brought about by his own negligence.
Considering the wet and slippery condition of the road that night, Antonio should have been prudent to reduce his speed
and increase his distance from the Pathfinder. Had he done so, it would be improbable for him to have hit the vehicle in
front of him or if he really could not avoid hitting it, prevent such extensive wreck to the vehicle in front. With the glaring
evidence, he obviously failed to exercise proper care in his driving.

VI. Prescription

NCC, Article 1150

Capuno vs. Pepsi, GR. L-19331

1. Damages; Prescription; Civil action based on quasi-delict; Prescribes in four years.-

An action for recovery of damages based on a quasi-delict must be instituted within four years.

2. Damages; Prescription; Prescriptive period starts from day quasidelict occurred.-

AN action based on a quasi-delict is governed by Article 1150 of the Civil Code as to the question of when the prescriptive
period of four years shall begin to run, that is, “from the day (the action) may be brought,” which means from the day the
quasi-delict occurred or was committed

3. Damages; Prescription; Prescriptive period not interrupted by institution of criminal action.-

The institution of a criminal action cannot have the effect of interrupting the institution of a civil action based on a quasi-
delict.

De Guzman vs. Toyota Cubao, GR. 141480

Appeals; Pleadings and Practice; Hierarchy of Courts; Questions of Law; Where the Regional Trial Court’s order and its
subsequent order partake of the nature of a final disposition of the case, the appropriate remedy for the aggrieved party
to take is to file a notice of appeal from the RTC to the Court of Appeals, not a petition for review on certiorari directly
with the Supreme Court.—On procedural grounds, the petition should forthwith be denied for violation of the hierarchy
of courts. Petitioner states that the present petition is an “appeal by certiorari on pure questions of law, from the final
Order of Branch 105 of the Regional Trial Court of Quezon City in Civil Case No. Q-99–37381 . . . under Rule 45 of the Rules
of Court.” Upon receipt of the Order of the RTC, dated September 9, 1999, on September 21, 1999, petitioner filed a
motion for reconsideration on September 28, 1999. On December 21, 1999, the RTC denied petitioner’s motion. When
petitioner received a copy of the said order on January 18, 2000, he had fifteen (15) days from receipt within which to
appeal to the Court of Appeals by filing a notice of appeal under Section 2(a) of Rule 41, from an order of the RTC issued
in the exercise of its original jurisdiction. The RTC’s order dated September 9, 1999 and its subsequent order dated
December 21, 1999 partake of the nature of a final disposition of the case. Hence, the appropriate remedy petitioner
should have taken was to file a notice of appeal from the RTC to the Court of Appeals, not a petition for review on
certiorari directly with this Court.

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Same; Same; Same; Same; Even if the sole matter assailed is the RTC’s order of dismissal of a complaint for damages on
the ground of prescription which is tantamount to an adjudication on the merits, the plaintiff should resort to the remedy
of appealing the case to the Court of Appeals by filing notice of appeal with the RTC.—Although petitioner intended his
petition, filed on February 2, 2000, to be one filed under Rule 45 and he filed it well within the 15-day reglementary
period counted from January 18, 2000, the same was in effect a petition for certiorari under Rule 65, and is therefore
dismissible for violation of the hierarchy of courts under Section 4 thereof. Petitioner failed to show that special and
important reasons or exceptional and compelling circumstances exist to justify a direct filing of the petition with this
Court instead of first taking an appeal to the Court of Appeals. Likewise, petitioner cannot find refuge in the argument
that he was raising pure questions of law. The sole matter petitioner assails in this action is the RTC’s order of dismissal of
his complaint for damages on the ground of prescription which was tantamount to an adjudication on the merits. Again,
petitioner should have resorted to the remedy of appealing the case to the Court of Appeals by filing a notice of appeal
with the RTC.

Actions; Sales; Warranties; Prescription; Where the cause of action is to hold the seller of a vehicle for breach of implied
warranty for having sold a vehicle with defective engine, the action should be filed within six months from the delivery of
the thing sold.—Under Article 1599 of the Civil Code, once an express warranty is breached, the buyer can accept or keep
the goods and maintain an action against the seller for damages. In the absence of an existing express warranty on the
part of the respondent, as in this case, the allegations in petitioner’s complaint for damages were clearly anchored on the
enforcement of an implied warranty against hidden defects, i.e., that the engine of the vehicle which respondent had sold
to him was not defective. By filing this case, petitioner wants to hold respondent responsible for breach of implied
warranty for having sold a vehicle with defective engine. Such being the case, petitioner should have exercised this right
within six months from the delivery of the thing sold. Since petitioner filed the complaint on April 20, 1999, or more than
nineteen months counted from November 29, 1997 (the date of the delivery of the motor vehicle), his cause of action had
become time-barred.

Incomplete/Partial Defense

Doctrine of Contributory Negligence

NCC Article 2179

Rakes vs. The Atlantic, Gulf and Pacific Company, 7 Phil 359

1.CIVIL LIABILITY FOR DAMAGES.—In order to enforce the liability of an employer for injuries to his employee, it is not
necessary that a criminal action be first prosecuted against the employer or his representative primarily chargeable with
the accident. No criminal proceeding having been taken, the civil action may proceed to judgment.

2.LIABILITY OF EMPLOYER TO WORKMEN.—The responsibility of an employer to his employee arises out of the
contractual relations between them and is regulated by article 1101 and the following articles of the Civil Code.

3.FELLOW-SERVANT RULE.—The doctrine known as the "Fellow-servant rule," exonerating the employer where the injury
was incurred through the negligence of a fellow-servant of the employee injured, is not adopted in Philippine
jurisprudence.

4.CONTRIBUTORY NEGLIGENCE.—The negligence of the injured person contributing to his injury but not being one of the
determining causes of the principal accident, does not operate as a bar to recovery, but only in reduction of his damages.
Each party is chargeable with damages in proportion to his fault. Rakes vs. Atlantic, Gulf and Pacific Co., 7 Phil., 359, No.
1719 January 23, 1907

22
NPC vs. Casionan, GR. 165969

Civil Law; Negligence; Petitioner cannot excuse itself from its failure to properly maintain the wires by attributing
negligence to the victim.—Petitioner cannot excuse itself from its failure to properly maintain the wires by attributing
negligence to the victim. In Ma-ao Sugar Central Co., Inc. v. Court of Appeals, 189 SCRA 88 (1990), this Court held that the
responsibility of maintaining the rails for the purpose of preventing derailment accidents belonged to the company. The
company should not have been negligent in ascertaining that the rails were fully connected than to wait until a life was
lost due to an accident.

Same; Same; Words and Phrases; Negligence is the failure to observe, for the protection of the interest of another person,
that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers
injury.—Negligence is the failure to observe, for the protection of the interest of another person, that degree of care,
precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury. On the other
hand, contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has
suffered, which falls below the standard which he is required to conform for his own protection. There is contributory
negligence when the party’s act showed lack of ordinary care and foresight that such act could cause him harm or put his
life in danger. It is an act or omission amounting to want of ordinary care on the part of the person injured which,
concurring with the defendant’s negligence, is the proximate cause of the injury. The underlying precept on contributory
negligence is that a plaintiff who is partly responsible for his own injury should not be entitled to recover damages in full
but must bear the consequences of his own negligence. If indeed there was contributory negligence on the part of the
victim, then it is proper to reduce the award for damages. This is in consonance with the Civil Code provision that liability
will be mitigated in consideration of the contributory negligence of the injured party. Article 2179 of the Civil Code is
explicit on this score: When the plaintiff’s own negligence was the immediate and proximate cause of his injury, he cannot
recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the
defendant’s lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.

Same; Same; It was held that to hold a person as having contributed to his injuries, it must be shown that he performed
an act that brought about his injuries in disregard of warnings or signs of an impending danger to health and body.—In
Ma-ao Sugar Central, 189 SCRA 88 (1990), it was held that to hold a person as having contributed to his injuries, it must be
shown that he performed an act that brought about his injuries in disregard of warnings or signs on an impending danger
to health and body. This Court held then that the victim was not guilty of contributory negligence as there was no
showing that the caboose where he was riding was a dangerous place and that he recklessly dared to stay there despite
warnings or signs of impending danger. In this case, the trail where Noble was electrocuted was regularly used by
members of the community. There were no warning signs to inform passersby of the impending danger to their lives
should they accidentally touch the high tension wires. Also, the trail was the only viable way from Dalicon to Itogon.
Hence, Noble should not be faulted for simply doing what was ordinary routine to other workers in the area.

Same; Same; This Court ruled that the violation of a statute is not sufficient to hold that the violation was the proximate
cause of the injury, unless the very injury that happened was precisely what was intended to be prevented by the
statute.—In Añonuevo v. Court of Appeals, 441 SCRA 24 (2004), this Court ruled that the violation of a statute is not
sufficient to hold that the violation was the proximate cause of the injury, unless the very injury that happened was
precisely what was intended to be prevented by the statute. In said case, the allegation of contributory negligence on the
part of the injured party who violated traffic regulations when he failed to register his bicycle or install safety gadgets
thereon was struck down.

Quasi-Delicts; Damages; In quasi delicts, exemplary damages are awarded where the offender was guilty of gross
negligence.—In quasi delicts, exemplary damages are awarded where the offender was guilty of gross negligence. Gross

23
negligence has been defined to be the want or absence of even slight care or diligence as to amount to a reckless
disregard of the safety of person or property. It evinces a thoughtless disregard of consequences without exerting any
effort to avoid them.

Same; Same; Moral Damages; Moral damages are designed to compensate the claimant for actual injury suffered and not
to impose a penalty on the wrongdoer.—As to the award of moral damages, We sustain the CA reduction of the award.
Moral damages are designed to compensate the claimant for actual injury suffered and not to impose a penalty on the
wrongdoer. It is not meant to enrich the complainant but to enable the injured party to obtain means to obviate the
moral suffering experience. Trial courts should guard against the award of exorbitant damages lest they be accused of
prejudice or corruption in their decision making. We find that the CA correctly reduced the award from P100,000.00 to
P50,000.00.

Lambert vs. Heirs of Rey Castillon, 452 SCRA 285

2. Civil Law; Negligence; Proximate Cause; Proximate cause is defined as that which, in the natural and continuous
sequence, unbroken by any efficient, intervening cause, produces the injury, and without which the result would not have
occurred.-

Clearly, the abrupt and sudden left turn by Reynaldo, without first establishing his right of way, was the proximate cause
of the mishap which claimed the life of Ray and injured Sergio. Proximate cause is defined as that which, in the natural
and continuous sequence, unbroken by any efficient, intervening cause, produces the injury, and without which the result
would not have occurred. The cause of the collision is traceable to the negligent act of Reynaldo for, as the trial court
correctly held, without that left turn executed with no precaution, the mishap in all probability would not have happened.

3. Civil Law; Negligence; Contributory Negligence; The underlying precept on contributory negligence is that a plaintiff
who is partly responsible for his own injury should not be entitled to recover damages in full but must bear the
consequences of his own negligence.-

The underlying precept on contributory negligence is that a plaintiff who is partly responsible for his own injury should
not be entitled to recover damages in full but must bear the consequences of his own negligence. The defendant must
thus be held liable only for the damages actually caused by his negligence. The determination of the mitigation of the
defendant’s liability varies depending on the circumstances of each case. The Court had sustained a mitigation of 50% in
Rakes v. AG P; 20% in Phoenix Construction, Inc. v. Intermediate Appellate Court and LBC Air Cargo, Inc. v. Court of
Appeals; and 40% in Bank of the Philippine Islands v. Court of Appeals and Philippine Bank of Commerce v. Court of
Appeals.

4. Civil Law; Negligence; Damages; Loss of Earning Capacity; Factors to be Considered in Determining the Compensable
Amount of Lost Earnings.-

In considering the earning capacity of the victim as an element of damages, the following factors are considered in
determining the compensable amount of lost earnings: (1) the number of years for which the victim would otherwise
have lived; and (2) the rate of loss sustained by the heirs of the deceased. Jurisprudence provides that the first factor, i.e.,
life expectancy, is computed by applying the formula (2/3 x [80 - age at death]) adopted in the American Expectancy Table
of Mortality or the Actuarial Combined Experience Table of Mortality. As to the second factor, it is computed by multi-
plying the life expectancy by the net earnings of the deceased, i.e., the total earnings less expenses necessary in the
creation of such earnings or income and less living and other incidental expenses. The net earning is ordinarily computed
at fifty percent (50%) of the gross earnings. Thus, the formula used by this Court in computing loss of earning capacity is:

24
Net Earning Capacity = [2/3 x (80 – age at time of death) x (gross annual income – reasonable and necessary living
expenses)].

5. Civil Law; Negligence; Damages; Reason for the Grant of Moral Damages.-

Paragraph 3 of the same provision also serves as the basis for the award of moral damages in quasi-delict. The reason for
the grant of moral damages has been explained, thus: . . . the award of moral damages is aimed at a restoration, within
the limits possible, of the spiritual status quo ante; and therefore, it must be proportionate to the suffering inflicted. The
intensity of the pain experienced by the relatives of the victim is proportionate to the intensity of affection for him and
bears no relation whatsoever with the wealth or means of the offender.

VICARIOUS LIABILITY

By Parents

Art. 221, Family Code of the Philippines

Libi v. IAC, G.R. No. 70890

1. Civil Law; Damages; Liability of parents for damages caused by their minor children under Article 2180 of the Civil
Code.-

In imposing sanctions for the so-called vicarious liability of petitioners, respondent court cites Fuellas vs. Cadano, et al.
which supposedly holds that “(t)he subsidiary liability of parents for damages caused by their minor children imposed by
Article 2180 of the New Civil Code covers obligations arising from both quasi-delicts and criminal offenses,” followed by
an extended quotation ostensibly from the same case explaining why under Article 2180 of the Civil Code and Article 101
of the Revised Penal Code parents should assume subsidiary liability for damages caused by their minor children. The
quoted passages are set out two paragraphs back, with pertinent underscoring for purposes of the discussion hereunder.
Now, we do not have any objection to the doctrinal rule holding the parents liable, but the categorization of their liability
as being subsidiary, and not primary, in nature requires a hard second look considering previous decisions of this court on
the matter which warrant comparative analyses. Our concern stems from our readings that if the liability of the parents
for crimes or quasidelicts of their minor children is subsidiary, then the parents can neither invoke nor be absolved of civil
liability on the defense that they acted with the diligence of a good father of a family to prevent damages. On the other
hand, if such liability imputed to the parents is considered direct and primary, that diligence would constitute a valid and
substantial defense. We believe that the civil liability of parents for quasi-delicts of their minor children, as contemplated
in Article 2180 of the Civil Code, is primary and not subsidiary. In fact, if we apply Article 2194 of said code which provides
for solidary liability of joint tortfeasors, the persons responsible for the act or omission, in this case the minor and the
father and, in case of his death or incapacity, the mother, are solidarily liable. Accordingly, such parental liability is
primary and not subsidiary, hence the last paragraph of Article 2180 provides that “(t)he responsibility treated of in this
article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a
family to prevent damage.”

2. Criminal Law; Civil liability of parents for crimes committed by their minor children.-

Accordingly, just like the rule in Article 2180 of the Civil Code, xxx the civil liability of the parents for crimes committed by
their minor children is likewise direct and primary, and also subject to the defense of lack of fault or negligence on their
part, that is, the exercise of the diligence of a good father of a family. That in both quasi-delicts and crimes the parents
primarily respond for such damages is buttressed by the corresponding provisions in both codes that the minor
transgressor shall be answerable or shall respond with his own property only in the absence or in case of insolvency of the
25
former. Thus, for civil liability ex quasi delicto of minors, Article 2182 of the Civil Code states that “(i)f the minor causing
damage has no parents or guardian, the minor x x x shall be answerable with his own property in an action against him
where a guardian ad litem shall be appointed.” For civil liability ex delicto of minors, an equivalent provision is found in
the third paragraph of Article 101 of the Revised Penal Code, to wit: “Should there be no person having such x x x minor
under his authority, legal guardianship or control, or if such person be insolvent, said x x x minor shall respond with (his)
own property, excepting property exempt from execution, in accordance with civil law.”

Tamargo v. CA, 209 Scra 518

1. Supreme Court; Motions; While notice of time and place of hear-ing is mandatory in motion, Supreme Court may
suspend its rules thereon to prevent manifest injustice to appellant-

As in fact repeatedly held by this Court, what is mandatory is the service of the motion on the opposing counsel indicating
the time.and place of hearing. In view, however, of the nature of the issue raised in the instant Petition, and in order that
substantial justice may be served, the Court, invoking its right to suspend the application of technical rules to prevent
manifest injustice, elects to treat the notice of appeal as having been seasonably filed before the trial court, and the
motion (and supplemental motion) for reconsideration filed by petitioner in the trial court as having interrupted the
reglementary period for appeal.

2. Actions; Quasi-delicts; Parents and Child; Adoption; The natural parents of a minor still living with the former when the
latter accidentally shot a girl with an air rifle are liable for damages thus caused rather than the adopter even if petition
for adoption filed before the accident and granted thereafter.-

We do not believe that parental authority is properly regarded as having been retroactively transferred to and vested in
the adopting parents, the Rapisura spouses, at the time the air rifle shooting happened. We do 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 the 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.

3. Actions; Same.-

Under the above Article 35, parental authority is provisionally vested in the adopting parents during the period of trial
custody, i.e., before the issuance of a decree of adoption, precisely because the adopting parents are given actual custody
of the child during such trial period. In the instant case, the trial custody period either had not yet begun or had already
been completed at the time of the air rifle shooting; in any case, actual custody of Adelberto was then with his natural
parents, not the adopting parents.

By guardians

Art. 217, Family Code of the Philippines

26
By owners and managers of establishment

Castilex Industries vs Varquez, 321 SCRA 401

2. Torts; Quasi-Delicts; Employer-Employee Relationships; Words and Phrases; The phrase “even though the former are
not engaged in any business or industry” found in the fifth paragraph of Article 2180 of the Civil Code should be
interpreted to mean that it is not necessary for the employer to be engaged in any business or industry to be liable for the
negligence of his employee who is acting within the scope of his assigned task.-

Petitioner contends that the fifth paragraph of Article 2180 of the Civil Code should only apply to instances where the
employer is not engaged in business or industry. Since it is engaged in the business of manufacturing and selling furniture
it is therefore not covered by said provision. Instead, the fourth paragraph should apply. Petitioner’s interpretation of the
fifth paragraph is not accurate. The phrase “even though the former are not engaged in any business or industry” found in
the fifth paragraph should be interpreted to mean that it is not necessary for the employer to be engaged in any business
or industry to be liable for the negligence of his employee who is acting within the scope of his assigned task.

3. Torts; Quasi-Delicts; Employer-Employee Relationships; Fourth and Fifth Paragraphs of Article 2180 of the Civil Code,
Distinguished; Admittedly, employees oftentimes wear different hats—they perform functions which are beyond their
office, title or designation but which, nevertheless, are still within the call of duty.-

A distinction must be made between the two provisions to determine what is applicable. Both provisions apply to
employers: the fourth paragraph, to owners and managers of an establishment or enterprise; and the fifth paragraph, to
employers in general, whether or not engaged in any business or industry. The fourth paragraph covers negligent acts of
employees committed either in the service of the branches or on the occasion of their functions, while the fifth paragraph
encompasses negligent acts of employees acting within the scope of their assigned task. The latter is an expansion of the
former in both employer coverage and acts included. Negligent acts of employees, whether or not the employer is
engaged in a business or industry, are covered so long as they were acting within the scope of their assigned task, even
though committed neither in the service of the branches nor on the occasion of their functions. For, admittedly,
employees oftentimes wear different hats. They perform functions which are beyond their office, title or designation but
which, nevertheless, are still within the call of duty.

4. Torts; Quasi-Delicts; Employer-Employee Relationships; Under the fifth paragraph of Article 2180, whether or not
engaged in any business or industry, an employer is liable for the torts committed by employees within the scope of their
assigned tasks.-

Under the fifth paragraph of Article 2180, whether or not engaged in any business or industry, an employer is liable for
the torts committed by employees within the scope of his assigned tasks. But it is necessary to establish the employer-
employee relationship; once this is done, the plaintiff must show, to hold the employer liable, that the employee was
acting within the scope of his assigned task when the tort complained of was committed. It is only then that the employer
may find it necessary to interpose the defense of due diligence in the selection and supervision of the employee.

5. Torts; Quasi-Delicts; Employer-Employee Relationships; Appeals; Evidence; The rule that the factual findings of the
Court of Appeals are entitled to great respect, and even finality at times, is subject to exceptions, such as when the con-
clusion is grounded on speculations, surmises, or conjectures.-

Well-entrenched in our jurisprudence is the rule that the factual findings of the Court of Appeals are entitled to great
respect, and even finality at times. This rule is, however, subject to exceptions such as when the conclusion is grounded
on speculations, surmises, or conjectures. Such exception obtain in the present case to warrant review by this Court of
the finding of the Court of Appeals that since ABAD was driving petitioner’s vehicle he was acting within the scope of his
duties as a manager.

27
6. Torts; Quasi-Delicts; Employer-Employee Relationships; Evidence; It is not incumbent upon an employer to present
evidence that its employee was not acting within the scope of his assigned tasks at the time of the motor vehicle
mishap—it is not under obligation to prove such negative averment.-

Before we pass upon the issue of whether ABAD was performing acts within the range of his employment, we shall first
take up the other reason invoked by the Court of Appeals in holding petitioner CASTILEX vicariously liable for ABAD’s
negligence, i.e., that the petitioner did not present evidence that ABAD was not acting within the scope of his assigned
tasks at the time of the motor vehicle mishap. Contrary to the ruling of the Court of Appeals, it was not incumbent upon
the petitioner to prove the same. It was enough for petitioner CASTILEX to deny that ABAD was acting within the scope of
his duties; petitioner was not under obligation to prove this negative averment. Ei incumbit probatio qui dicit, non qui
negat (He who asserts, not he who denies, must prove). The Court has consistently applied the ancient rule that if the
plaintiff, upon whom rests the burden of proving his cause of action, fails to show in a satisfactory manner facts which he
bases his claim, the defendant is under no obligation to prove his exception or defense.

7. Torts; Quasi-Delicts; Employer-Employee Relationships; The mere fact that an employee was using a service vehicle at
the time of the injurious incident is not of itself sufficient to charge his employer with liability for the negligent operation
of said vehicle unless it appears that he was operating the vehicle within the course or scope of his employment.-

The court a quo and the Court of Appeals were one in holding that the driving by a manager of a company-issued vehicle
is within the scope of his assigned tasks regardless of the time and circumstances. We do not agree. 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.

8. Torts; Quasi-Delicts; Employer-Employee Relationships; Whether the fault or negligence of an employee is conclusive
on his employer as in American law or jurisprudence, or merely gives rise to the presumption juris tantum of negligence
on the part of the employer as in ours, it is indispensable that the employee was acting in his employer’s business or
within the scope of his assigned task.-

The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based on the doctrine of respondeat
superior, not on the principle of bonus pater familias as in ours. Whether the fault or negligence of the employee is
conclusive on his employer as in American law or jurisprudence, or merely gives rise to the presumption juris tantum of
negligence on the part of the employer as in ours, it is indispensable that the employee was acting in his employer’s
business or within the scope of his assigned task.

9. Torts; Quasi-Delicts; Employer-Employee Relationships; Where there is paucity of evidence that an employee was
acting within the scope of the functions entrusted to him when a tortious act occurred, the employer has no duty to show
that it exercised the diligence of a good father of a family in providing the employee with a service vehicle, and the
employer is thus relieved of vicarious liability for the consequences of the negligence of the employee.-

To the mind of this 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 then about 2:00 a.m. of 28 August 1988, way beyond the
normal working hours. ABAD’s working day had ended; his overtime work had already been completed. His being at a
place which, as petitioner put it, was known as a “haven for prostitutes, pimps, and drug pushers and addicts,” had no
connection to petitioner’s business; neither had it any relation to his duties as a manager. Rather, using his service vehicle
even for personal purposes was a form of a fringe benefit or one of the perks attached to his position. Since there is
paucity of evidence that ABAD was acting within the scope of the functions entrusted to him, petitioner CASTILEX had no
duty to show that it exercised the diligence of a good father of a family in providing ABAD with a service vehicle. Thus,
justice and equity require that petitioner be relieved of vicarious liability for the consequences of the negligence of ABAD
in driving its vehicle.
28
By employers

St. Francis High School v. CA, G.R. No. 82465, Feb. 25, 1991

1. Civil Law; Negligence; 4th paragraph Article 2180 of the Civil Code; When employer held liable for the negligence of its
employees; Rule.-

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.

2. Civil Law; Negligence; Employees were not in the actual performance of their assigned tasks;Case at bar.-

The teachers/peti-tioners were not in the actual performance of their assigned tasks. The incident happened not within
the school premises, not on a school day and most importantly while the teachers and students were holding a purely
private affair, a picnic. It is clear from the beginning that the incident happened while some members of the I-C class of St.
Francis High School were having a picnic at Talaan Beach. This picnic had no permit from the school head or its principal,
Benjamin Illumin because this picnic is not a school sanctioned activity neither is it considered as an extra-curricular
activity.

3. Civil Law; Negligence; Negligence attributed to the employees not proven; Case at bar.-

Petitioners Connie Arquio, the class adviser of I-C, the section where Ferdinand belonged, did her best and exercised
diligence of a good father of a family to prevent any untoward incident or damages to all the students who joined the
picnic. In fact, Connie invited co-petitioners Tirso de Chavez and Luisito Vinas who are both P.E. instructors and scout
masters who have knowledge in First Aid application and swimming. Moreover, even respondents’ witness, Segundo
Vinas, testified that “the defendants (petitioners herein) had life savers especially brought by the defendants in case of
emergency.” (p. 85, Rollo) The records also show that both petitioners Chavez and Vinas did all what is humanly possible
to save the child.

4. Civil Law; Negligence; Liability; Moral Damages; Where no negligence was established no moral damages can be
recovered.-

Moral damages may be recovered if they are the proximate result of the defendant’s wrongful act or omission.

5. Civil Law; Negligence; Test.-

Would a prudent man in the position of the person to whom negligence is attributed foresee harm to the person injured
as a reasonable consequence of the course about to be pursued? If so, the law imposes the duty on the doer TO TAKE
PRECAUTION against its mischivous results and the failure to do so constitutes negligence.

6. Civil Law; Negligence; Under this test petitioners’ negligence established; Case at bar.-

Despite awareness that the waters in the area were deep, petitioners-teachers did not take concrete steps to make sure
their wards did not stray too far and too deeply. Even if they were not actually informed of the possible dangers which the
area posed, petitioners-teachers should have first “tested the waters”, so to speak, to ensure which parts thereof were
safe for swimming purposes. However, this was not the case for as testified to by petitioner de Chavez, “they admitted
that they did not even go to the water to check its depth although they were aware that some parts of it were deep.” At
best, it appears that only oral safety instructions were imparted to the young excursionists. But, what I find most
disturbing is the fact that at the time the trouble arose, Vinas and de Chavez, the male teachers who were supposed to
ensure the children’s safety, being physical education instructors, were nowhere within the immediate vicinity but were,
29
in fact, as admitted by the latter, “at his house getting some foods (sic) and drinks.” The Court a quo even went as far as
to say that “they were somewhere and as testified to by plaintiffs’ witness they were having a drinking spree!”

7. Civil Law; Negligence; Article 2176 of the Civil Code in relation to paragraphs (1) and (5) of Article 2180 of the Civil
Code; Construed.-

The negligence of the employee in causing injury or damage gives rise to a presumption of negligence on the part of the
owner and/or manager of the establishment. While this presumption is not conclusive, it may be overcome only by clear
and convincing evidence that the owner and/or manager exercised the care and diligence of a good father of a family in
the selection and/or supervision of the employees causing the injury or damage.

8. Civil Law; Negligence; Case at bar.-

The record indicates that petitioner Benjamin Illumin, school principal, knew of the excursion and had, in fact, been
invited to attend. As the majority see it, such knowledge does not in any manner show acquiescence or consent to the
holding of the excursion, a view which I do not accept. It seems to me that having known of the forthcoming activity,
petitioner Illumin, as school principal, should have taken appropriate measures to ensure the safety of his students.
Having preferred to remain silent, and even indifferent, he now seeks excuse from such omission by invoking his alleged
lack of consent to the excursion. But it is precisely his silence and negligence in performing his role as principal head of
the school that must be construed as an implied consent to such activity xxxIagree with the respondent court that no
proof was presented to absolve the owner and/or manager.

9. Civil Law; Negligence; Liability; Moral Damages; Where negligence results to the death of the victim moral damages
recoverable; Basis—2nd paragraph Article 2219 Civil Code.-

Moral damages may be recovered in quasi-delicts causing physical injuries.

Filipinas Synthetic Fiber Corporation vs. Wilfredo De Los Santos, et al., G.R. No. 152033

1. Appeals; Petition for Review on Certiorari; Whether a person is negligent or not is a question of fact which cannot be
passed upon in a petition for review on certiorari.-

—Whether a person is negligent or not is a question of fact which this Court cannot pass upon in a petition for review on
certiorari, as its jurisdiction is limited to reviewing errors of law. As a rule, factual findings of the trial court, affirmed by
the CA, are final and conclusive and may not be reviewed on appeal.

2. Same; Vicarious Liability; Under Article 2180 of the New Civil Code, when an injury is caused by the negligence of the
employee, there instantly arises a presumption of law that there was negligence on the part of the master or employer
either in the selection of the servant or employee, or in supervision over him after selection or both.-

—Under Article 2180 of the New Civil Code, when an injury is caused by the negligence of the employee, there instantly
arises a presumption of law that there was negligence on the part of the master or employer either in the selection of the
servant or employee, or in supervision over him after selection or both. The liability of the employer under Article 2180 is
direct and immediate; it is not conditioned upon prior recourse against the negligent employee and a prior showing of the
insolvency of such employee.

3. Negligence; Traffic Violation; It is presumed that a person driving a motor vehicle has been negligent if at the time of
the mishap, he was violating any traffic regulation.-

30
—Under the New 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 any traffic regulation. Apparently, in the present case, Mejia’s
violation of the traffic rules does not erase the presumption that he was the one negligent at the time of the collision.

Filamer Christian Institute vs. Intermediate Appellate Court, 212 SCRA 637

1. Labor Law; Employer-Employee relationship; In relation to the school, Funtecha was an employee even if he was
assigned to clean the school premises for only two (2) hours in the morning of each school day.-

It is undisputed that Funtecha was a working student, being a part-time janitor and a scholar of petitioner Filamer. He
was, in relation to the school, an employee even if he was assigned to clean the school premises for only two (2) hours in
the morning of each school day.

2. Labor Law; Employer-Employee relationship; Driving the vehicle to and from the house of the school president where
both Allan and Funtecha reside is an act in furtherance of the interest of the petitioner-school.-

Driving the vehicle to and from the house of the school president where both Allan and Funtecha reside is an act in
furtherance of the interest of the petitioner-school. Allan’s job demands that he drive home the school jeep so he can use
it to fetch students in the morning of the next school day.

3. Labor Law; Employer-Employee relationship; Court is constrained to conclude that the act of Funtecha in taking over
the steering wheel was done for and in behalf of his employer for which act the petitioner school cannot deny any
responsibility by arguing that it was done beyond the scope of his janitorial duties.-

In learning how to drive while taking the vehicle home in the direction of Allan’s house, Funtecha definitely was not
having a joy ride. Funtecha was not driving for the purpose of his enjoyment or for a “frolic of his own” but ultimately, for
the service for which the jeep was intended by the petitioner school. (See L. Battistoni v. Thomas, Can SC 144, 1 D.L.R..
577, 80 ALR 722 [1932]; See also Association of Baptists for World Evangelism, Inc. v. Fieldmen’s Insurance Co., Inc. 124
SCRA 618 [1983]). Therefore, the Court is constrained to conclude that the act of Funtecha in taking over the steering
wheel was one done for and in behalf of his employer for which act the petitioner-school cannot deny any responsibility
by arguing that it was done beyond the scope of his janitorial duties. The clause “within the scope of their assigned tasks”
for purposes of raising the presumption of liability of an employer, includes any act done by an employee, in furtherance
of the interests of the employer or for the account of the employer at the time of the infliction of the injury or damage.

4. Labor Law; Employer-Employee relationship; Section 14, Rule X, Book III of the Rules implementing the Labor Code
promulgated only for the purpose of administering and enforcing the provisions of the Labor Code on conditions of
employment.-

Section 14, Rule X, Book III of the Rules implementing the Labor Code, on which the petitioner anchors its defense, was
promulgated by the Secretary of Labor and Employment only for the purpose of administering and enforcing the
provisions of the Labor Code on conditions of employment. Particularly, Rule X of Book III provides guidelines on the
manner by which the powers of the Labor Secretary shall be exercised; on what records should be kept; maintained and
preserved; on payroll; and on the exclusion of working scholars from, and inclusion of resident physicians in the
employment coverage as far as compliance with the substantive labor provisions on working conditions, rest periods, and
wages, is concerned.

5. Labor Law; Employer-Employee relationship; Section 14, Rule X, Book III of the Rules not the decisive law in a civil suit
for damages instituted by an injured person during a vehicular accident against a working student of a school and against
the school itself.-
31
In other words, Rule X is merely a guide to the enforcement of the substantive law on labor. The Court, thus, makes the
distinction and so holds that Section 14, Rule X, Book III of the Rules is not the decisive law in a civil suit for damages
instituted by an injured person during a vehicular accident against a working student of a school and against the school
itself.

6. Labor Law; Employer-Employee relationship; 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.-

The present case does not deal with a labor dispute on conditions of employment between an alleged employee and an
alleged employer. It invokes a claim brought by one for damages for injury caused by the patently negligent acts of a
person, against both doer-employee and his employer. Hence, the reliance on the implementing rule on labor to
disregard the primary liability of an employer under Article 2180 of the Civil Code is misplaced. 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.

7. Labor Law; Civil Law; Negligence; There is evidence to show that there exists in the present case an extra-contractual
obligation arising from the negligence or reckless imprudence of a person whose acts or omission are imputable by a legal
fiction to others who are in a position to exercise an absolute or limited control over him.-

There is evidence to show that there exists in the present case an extra-contractual obligation arising from the negligence
or reckless imprudence of a person “whose acts or omissions are imputable, by a legal fiction, to other(s) who are in a
position to exercise an absolute or limited control over (him).”

8. Labor Law; Civil Law; Negligence; Fact that Funtecha was not the school driver or was not acting within the scope of his
janitorial duties does not relieve the petitioner of the burden of rebutting the presumption juris tantum that there was
negligence on its part either in the selection of a servant or employee or in the supervision over him.-

Funtecha is an employee of petitioner Filamer. He need not have an official appointment for a driver’s position in order
that the petitioner may be held responsible for his grossly negligent act, it being sufficient that the act of driving at the
time of the incident was for the benefit of the petitioner. Hence, the fact that Funtecha was not the school driver or was
not acting within the scope of his janitorial duties does not relieve the petitioner of the burden of rebutting the
presumption juris tantum that there was negligence on its part either in the selection of a servant or employee, or in the
supervision over him. The petitioner has failed to show proof of its having exercised the required diligence of a good
father of a family over its employees Funtecha and Allan.

9. Labor Law; Civil Law; Negligence; Supervision includes the formulation of suitable rules and regulation for the guidance
of its employees and the issuance of proper instructions intended for the protection of the public and persons with whom
the employer has relations through his employees.-

The Court reiterates that supervision includes the formulation of suitable rules and regulation for the guidance of its
employees and the issuance of proper instructions intended for the protection of the public and persons with whom the
employer has relations through his employees.

10. Labor Law; Civil Law; Negligence; Employer is expected to impose upon its employees the necessary discipline called
for in the performance of any act indispensable to the business and beneficial to their employer.-

An employer is expected to impose upon its employees the necessary discipline called for in the performance of any act
indispensable to the business and beneficial to their employer.

11. Labor Law; Civil Law; Negligence; In the absence of evidence that the petitioner had exercised the diligence of a good
father of a family in the supervision of its employees, the law imposes upon it the vicarious liability for acts or omissions
of its employees.-
32
The petitioner, thus, has an obligation to pay damages for injury arising from the unskilled manner by which Funtecha
drove the vehicle. (Cangco v. Manila Railroad Co., 38 Phil. 768, 772 [1918]). In the absence of evidence that the petitioner
had exercised the diligence of a good father of a family in the supervision of its employees, the law imposes upon it the
vicarious liability for acts or omissions of its employees.

12. Labor Law; Civil Law; Negligence; Liability of the employer under Article 2180 is primary and solidary.-

The liability of the employer is, under Article 2180, primary and solidary. However, the employer shall have recourse
against the negligent employee for whatever damages are paid to the heirs of the plaintiff.

Baliwag Transit vs CA, G.R. No. 116624, September 20, 1996

(Principle of Respondeat superior)

1. Civil Law; Negligence; Damages; When an injury is caused by the negligence of an employee there instantly arises a
presumption of the law that there was negligence on the part of the employer either in the selection of his employee or in
the supervision over him after such selection.-

Article 2180, in relation to Art. 2176, of the Civil Code provides that the employer of a negligent employee is liable for the
damages caused by the latter. When an injury is caused by the negligence of an employee there instantly arises a
presumption of the law that there was negligence on the part of the employer either in the selection of his employee or in
the supervision over him after such selection. The presumption however may be rebutted by a clear showing on the part
of the employer that it had exercised the care and diligence of a good father of a family in the selection and supervision of
his employee. Hence, to escape solidary liability for quasi-delict committed by an employee, the employer must adduce
sufficient proof that it exercised such degree of care.

2. Civil Law; Negligence; Damages; Factors to be considered in determining the reasonableness of the damages awarded
under Article 1764 in conjunction with Article 2206 of the Civil Code.-

As regards the reasonableness of the damages awarded, under Art. 1764, in conjunction with Art. 2206, of the Civil Code,
as well as established jurisprudence, several factors are considered, namely: (a) life expectancy (considering the health of
the deceased and the mortality table being deemed conclusive) and loss of earning capacity; (b) pecuniary loss, loss of
support and service; and, (c) moral and mental sufferings. The loss of earning capacity is based mainly on two factors,
namely, the number of years on the basis of which the damages shall be computed, and the rate at which the loss
sustained by the heirs should be fixed.

3. Civil Law; Negligence; Damages; Article 2206 grants the spouse, legitimate, and illegitimate descendants and
ascendants of the deceased moral damages for mental anguish by reason of death.-

Article 2206 grants the spouse, legitimate and illegitimate descendants and ascendants of the deceased moral damages
for mental anguish by reason of death. Indisputably, the heirs of Mario suffered no small amount of mental anguish
brought about by the manner he died and bearing in mind that he was the sole breadwinner of the family.

4. Civil Law; Negligence; Damages; Exemplary damages also awarded if defendant acted with gross negligence.-

Article 2231 also awards exemplary damages if the defendant acted with gross negligence, as Juanito did, when he moved
Bus No. 117 without first ascertaining if the repair of its break system was already undertaken. Exemplary damages having
been awarded, recovery of attorney’s fees follows under Art. 2208, par. (1), of the Civil Code.

33
L.G. Foods Corporation and Victor Gabor, Vice-President and General Manager vs Hon. Agraviador, et al., G.R. No.
158995

Actions; Damages; An act or omission causing damage to another may give rise to two separate civil liabilities on the part
of the offender, i.e., 1) civil liability ex delicto; and, 2) independent civil liabilities.—Section 2, Rule 2, of the 1997 Rules of
Civil Procedure defines cause of action as the “act or omission by which a party violates the right of another.” Such act or
omission gives rise to an obligation which may come from law, contracts, quasi contracts, delicts or quasi-delicts.
Corollarily, an act or omission causing damage to another may give rise to two separate civil liabilities on the part of the
offender, i.e., 1) civil liability ex delicto; and 2) independent civil liabilities, such as those (a) not arising from an act or
omission complained of as felony (e.g., culpa contractual or obligations arising from law; the intentional torts; and culpa
aquiliana); or (b) where the injured party is granted a right to file an action independent and distinct from the criminal
action. Either of these two possible liabilities may be enforced against the offender.

Same; Same; Torts; Quasi-Delicts; Negligence; Victims of negligence or their heirs have a choice between an action to
enforce the civil liability arising from culpa criminal under Article 100 of the Revised Penal Code, and an action for quasi-
delict (culpa aquiliana) under Articles 2176 to 2194 of the Civil Code.—Victims of negligence or their heirs have a choice
between an action to enforce the civil liability arising from culpa criminal under Article 100 of the Revised Penal Code, and
an action for quasi-delict (culpa aquiliana) under Articles 2176 to 2194 of the Civil Code. If, as here, the action chosen is
for quasi-delict, the plaintiff may hold the employer liable for the negligent act of its employee, subject to the employer’s
defense of exercise of the diligence of a good father of the family. On the other hand, if the action chosen is for culpa
criminal, the plaintiff can hold the employer subsidiarily liable only upon proof of prior conviction of its employee. Article
1161 of the Civil Code provides that civil obligation arising from criminal offenses shall be governed by penal laws subject
to the provision of Article 2177 and of the pertinent provision of Chapter 2, Preliminary Title on Human Relation, and of
Title XVIII of this Book, regulating damages. Plainly, Article 2177 provides for the alternative remedies the plaintiff may
choose from in case the obligation has the possibility of arising indirectly from the delict/crime or directly from quasi-
delict/tort. The choice is with the plaintiff who makes known his cause of action in his initiatory pleading or complaint,
and not with the defendant who can not ask for the dismissal of the plaintiff’s cause of action or lack of it based on the
defendant’s perception that the plaintiff should have opted to file a claim under Article 103 of the Revised Penal Code.

Same; Same; Same; Same; Same; Under Article 2180 of the Civil Code, 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.—Under Article 2180 of the Civil Code, 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.
Here, the complaint sufficiently alleged that the death of the couple’s minor son was caused by the negligent act of the
petitioners’ driver; and that the petitioners themselves were civilly liable for the negligence of their driver for failing “to
exercise the necessary diligence required of a good father of the family in the selection and supervision of [their]
employee, the driver, which diligence, if exercised, would have prevented said accident.”

Same; Same; Same; Same; Same; The circumstance that no reservation to institute a separate civil action for damages was
made when the criminal case was filed is of no moment where the criminal case was dismissed without any
pronouncement having been made therein—in reality, it is as if there was no criminal case to speak of in the first place.—
Citing Maniago v. CA, 253 SCRA 674 (1996), petitioner would argue that Civil Case No. 99-10845 should have been
dismissed for failure of the respondent spouses to make a reservation to institute a separate civil action for damages
when the criminal case against the driver was filed. The argument is specious. To start with, the petitioners’ reliance on
Maniago is obviously misplaced. There, the civil case was filed while the criminal case against the employee was still
pending. Here, the criminal case against the employee driver was prematurely terminated due to his death. Precisely, Civil
Case No. 99-10845 was filed by the respondent spouses because no remedy can be obtained by them against the
petitioners with the dismissal of the criminal case against their driver during the pendency thereof. The circumstance that
no reservation to institute a separate civil action for damages was made when the criminal case was filed is of no moment
34
for the simple reason that the criminal case was dismissed without any pronouncement having been made therein. In
reality, therefor, it is as if there was no criminal case to speak of in the first place. And for the petitioners to insist for the
conviction of their driver as a condition sine qua non to hold them liable for damages is to ask for the impossible.

Owner of Vehicle

In the vehicle, Not in the vehicle

Duavit vs. CA, G.R. No. 82318, May 18 1989

1. Motor Vehicle Law; Damages; An owner of a vehicle cannot be held liable for an accident involving the said vehicle if
the same was driven without his consent or knowledge and by a person not employed by him.-

As early as in 1939, we have ruled that an owner of a vehicle cannot be held liable for an accident involving the said
vehicle if the same was driven without his consent or knowledge and by a person not employed by him.

2. Motor Vehicle Law; Damages; Reliance on the cases of Erezo v. Jepte and Vargas v. Langcay cannot be sustained.-

The respondent court’s misplaced reliance on the cases of Erezo v. Jepte (102 Phil. 103 [1957]) and Vargas v. Langcay (6
SCRA 174 [1962]) cannot be sustained. In the Erezo case, Jepte, the registered owner of the truck which collided with a
taxicab, and which resulted in the killing of Erezo, claimed that at the time of the accident, the truck belonged to the Port
Brokerage in an arrangement with the corporation but the same was not known to the Motor Vehicles Office. This court
sustained the trial court’s ruling that since Jepte represented himself to be the owner of the truck and the Motor Vehicles
Office, relying on his representation, registered the vehicle in his name, the Government and all persons affected by the
representation had the right to rely on his declaration of ownership and registration. Thus, even if Jepte were not the
owner of the truck at the time of the accident, he was still held liable for the death of Erezo. Significantly, the driver of the
truck was fully authorized to drive it.

3. Motor Vehicle Law; Damages; Same.-

Likewise, in the Vargas case, just before the accident occurred, Vargas had sold her jeepney to a third person, so that at
the time of the accident she was no longer the owner of the jeepney. This court, nevertheless, affirmed Vargas’ liability
since she failed to surrender to the Motor Vehicles Office the corresponding AC plates in violation of the Revised Motor
Vehicle Law and Commonwealth Act No. 146. We further ruled that the operator of record continues to be the operator
of the vehicle in contemplation of law, as regards the public and third persons, and as such is responsible for the
consequences incident to its operator. The vehicle involved was a public utility jeepney for hire. In such cases, the law
does not require the surrender of the AC plates but orders the vendor operator to stop the operation of the jeepney as a
form of public transportation until the matter is reported to the authorities.

4. Motor Vehicle Law; Damages; Circumstances of the above cases are entirely different from those in the present case.-

As can be seen, the circumstances of the above cases are entirely different from those in the present case. Herein
petitioner does not deny ownership of the vehicle involved in the mishap but completely denies having employed the
driver Sabiniano or even having authorized the latter to drive his jeep. The jeep was virtually stolen from the petitioner’s
garage. To hold, therefore, the petitioner liable for the accident caused by the negligence of Sabiniano who was neither
his driver nor employee would be absurd as it would be like holding liable the owner of a stolen vehicle for an accident
caused by the person who stole such vehicle.

35
5. Motor Vehicle Law; Damages; Court cannot apply absolute rules based on precedents whose facts do not jibe four
square with pending cases.-

We cannot blindly apply absolute rules based on precedents whose facts do not jibe four square with pending cases.
Every case must be determined on its own peculiar factual circumstances. Where, as in this case, the records of the
petition fail to indicate the slightest indicia of an employer-employee relationship between the owner and the erring
driver or any consent given by the owner for the vehicle’s use, we cannot hold the owner liable.

Cadiente vs Macas, G.R. No. 161946, November 14, 2008

Civil Law; Negligence; Damages; Contributory Negligence; The underlying precept on contributory negligence is that a
plaintiff who is partly responsible for his own injury should not be entitled to recover damages in full, but must
proportionately bear the conse-quences of his own negligence.—The underlying precept on contributory negligence is
that a plaintiff who is partly responsible for his own injury should not be entitled to recover damages in full, but must
proportionately bear the consequences of his own negligence. The defendant is thus held liable only for the damages
actually caused by his negligence.

Same; Same; Same; The registered owner of any vehicle, even if he had already sold it to someone else is primarily
responsible to the public for whatever damage or injury the vehicle may cause.—This Court has recently reiterated in PCI
Leasing and Finance, Inc. v. UCPB General Insurance Co., Inc., 557 SCRA 141 (2008), that the registered owner of any
vehicle, even if he had already sold it to someone else, is primarily responsible to the public for whatever damage or
injury the vehicle may cause.

Same; Same; Same; The policy behind vehicle registration is the easy identification of the owner who can be held
responsible in case of accident, damage or injury caused by the vehicle.—In the case of Villanueva v. Domingo, 438 SCRA
485 (2004), we said that the policy behind vehicle registration is the easy identification of the owner who can be held
responsible in case of accident, damage or injury caused by the vehicle. This is so as not to inconvenience or prejudice a
third party injured by one whose identity cannot be secured. Therefore, since the Ford Fiera was still registered in the
petitioner’s name at the time when the misfortune took place, the petitioner cannot escape liability for the permanent
injury it caused the respondent, who had since stopped schooling and is now forced to face life with nary but two
remaining limbs. Cadiente vs. Macas, 571 SCRA 105, G.R. No. 161946 November 14, 2008

By state, provinces, cities, municipalities

Meritt vs. GPI, 34 Phil 311

1. DAMAGES; MEASURE OF.-

Where the evidence shows that the plaintiff was wholly incapacitated for six months it is an error to restrict the damages
to a shorter period during which he was confined in the hospital.

2. SPECIAL STATUTES; CONSENT OF THE STATE TO BE SUED; CONSTRUCTION.-

The Government of the Philippine Islands having been "modeled after the federal and state governments of the United
States" the decisions of the high courts of that country may be used in determining the scope and purpose of a special
statute.

3. SPECIAL STATUTES; CONSENT OF THE STATE TO BE SUED; ID.-

36
The state not being liable to suit except by its expressconsent, an Act abrogating that immunity will be strictly construed.

4. SPECIAL STATUTES; CONSENT OF THE STATE TO BE SUED; ID.-

An act permitting a suit against the state gives rise to no liability not previously existing unless it is clearly expressed in the
act.

5. GOVERNMENT OF THE PHILIPPINE ISLANDS; LlABILITY FOR THE NEGLIGENT ACTS OF ITS OFFICERS, AGENTS, AND
EMPLOYEES.-

The Government of the Philippine Islands its only liable for the negligent acts of its officers, agents, and employees when
they are acting as special agents within. the meaning of paragraph 5 of article 1903 of the Civil Code, and a chauffeur of
the General Hospital is not such a special agent.

San Fernando, La Union vs. Firme, G.R. No. 52179, April 8, 1991

1. Constitutional Law; Doctrine of State Immunity; The general rule is that the State may not be sued except when it gives
consent to be sued.-

The doctrine of non-suability of the State is expressly provided for in Article XVI, Section 3 of the Constitution, to wit: “the
State may not be sued without its consent.” Stated in simple parlance, the general rule is that the State may not be sued
except when it gives consent to be sued. Consent takes the form of express or implied consent.

2. Constitutional Law; Doctrine of State Immunity; Express and Implied Consent, defined.-

Express consent may be embodied in a general law or a special law. The standing consent of the State to be sued in case
of money claims involving liability arising from contracts is found in Act No. 3083. A special law may be passed to enable a
person to sue the government for an alleged quasi-delict, as in Merritt v. Government of the Philippine Islands (34 Phil
311). (see United States of America v. Guinto, G.R. No. 76607, February 26, 1990, 182 SCRA 644, 654.) Consent is implied
when the government enters into business contracts, therey descending to the level of the other contracting party, and
also when the State files a complaint, thus opening itself to a counterclaim.

3. Constitutional Law; Doctrine of State Immunity; Rule that the Municipality cannot be held liable for the torts
committed by its regular employee, who was then engaged in the discharge of governmental functions; Case at bar.-

After a careful examination of existing laws and jurisprudence, We arrive at the conclusion that the municipality cannot
be held liable for the torts committed by its regular employee, who was then engaged in the discharge of governmental
functions. Hence, the death of the passenger—tragic and deplorable though it may be—imposed on the municipality no
duty to pay monetary compensation.

By teachers

Palisoc, et al. vs. Brillantes, G.R. No. L-29025, October 4, 1971

1. Civil law; Damages; Student need not live with schoolteacher for latter to be liable for former’s tort.-

Under the provisions of Art. 2180 of the New Civil Code, the president of a vocational school and the instructor of the
student of the school who caused the death of his classmate are jointly and severally liable for damages to the parents of
the deceased who was fatally injured at the school’s laboratory room. No liability attaches, however, to a defendant who
37
was sued as a mere member of the school’s board of directors nor to the school itself which was not impleaded as a
party-defendant.

2. Civil law; Damages; Same.-

The phrase used in Art. 2180 of the New Civil Code “so long as they (the students) remain in their custody” means the
protective and supervisory custody that the school and its heads and teachers exercise over the pupils and students for as
long as they are at attendance in the school and includes recess time. There is nothing in the law that requires that for
such liability to attach, the pupil or student who commits the tortious act must live and board in the school, as
erroneously held by the lower court, and in the dicta in Mercado (as well as in Exconde) on which it relied, must now be
deemed to have been set aside by the present decision.

3. Civil law; Damages; School officials must prove due diligence in supervision of students.-

The law holds school officials liable unless they relieve themselves of such liability, in compliance with the last paragraph
of Art. 2180 of the New Civil Code by “(proving) that they observed all the diligence of a good father of a family to prevent
damage.”

4. Civil law; Damages; Amount of compensatory damages in death cases arising from tort.-

In view of the decline in the purchasing power of the peso, the minimum amount of compensatory damages for death
caused by a crime or quasi-delict under Art. 2206 of the New Civil Code is P12,000.00, which amount is to be awarded
even though there may have been mitigating circumstances pursuant to the express provisions of said codal article.

5. Civil law; Damages; Discretion of trial court in award of exemplary damages and attorney’s fees.-

The matter of awarding damages, imposing legal interest on the total damage award and increasing the attorney’s fees
rests upon the sound discretion of the trial court. Under Art. 2231 of the New Civil Code, gross negligence on the part of
the defendant must be shown to entitle the plaintiff to an award of exemplary damages.

6. Civil law; Damages; Vicarious liability of school officials not limited to minor student-offenders.-

The responsibility of teachers and school officers under Art. 2180 of the New Civil Code is not limited to pupils who are
minors. An examination of this article shows that where the responsibility prescribed therein is limited to illegal acts
during minority, the article expressly so provides, as in the case of the parents and of the guardians. It is natural to expect
that if the law intended to similarly restrict the civil responsibility of the other categories of persons enumerated in the
article, it would have expressly so stated. Further, it is not without significance that the teachers and heads of scholarly
establishments are not grouped with parents and guardians but ranged with owners and managers of enterprises,
employers and the state, as to whom no reason is discernible to imply that they should answer only for minors.

7. Civil law; Damages; Vocational school officials not liable for tort of student not living with them.-

The pupil should live and board with the teacher for the latter to be liable for the former’s tortious act. There is no reason
to depart from the doctrine laid down in Mercado vs. CA (108 Phil. 414) where the clause “so long as they remain in their
custody” used in Article 2180 of the Civil Code was construed as referring to a “situation where the pupil lives and boards
with the teacher, such that the (latter’s) control, direction and influence on the pupil supersedes those of the parents.”

8. Civil law; Damages; Vicarious liability of schoolteacher for tort applies only where student-offender a minor.-

If, as stated in the majority opinion, “the rationale of (the) liability of school heads and teachers for the tortious acts of
their pupils and students, so long as they remain in their custody, is that they stand, to a certain extent, as to their pupils
and students, in loco parentis and are called upon to exercise reasonable supervision over the conduct of the child,” then
38
it stands to reason that (1) the clause “so long as they remain in their custody” as used in reference to teachers and
school heads should be equated with the phrase “who live in their company” as used in reference to parents; and (2) that
just as parents are not responsible for damages caused by their children who are no longer minors, so should teachers
and school heads be exempt from liability for the tortious acts of their students in the same age category.

St. Mary’s Academy vs. Carpitanos, G.R. No. 143363, Feb. 6, 2002

1. Schools and Universities; Persons and Institutions With Special Parental Authority Over Minor Children; The special
parental authority and responsibility applies to all authorized activities, whether inside or outside the premises of the
school, entity or institution.-

Under Article 218 of the Family Code, the following shall have special parental authority over a minor child while under
their supervision, instruction or custody: (1) the school, its administrators and teachers; or (2) the individual, entity or
institution engaged in child care. This special parental authority and responsibility applies to all authorized activities,
whether inside or outside the premises of the school, entity or institution. Thus, such authority and responsibility applies
to field trips, excursions and other affairs of the pupils and students outside the school premises whenever authorized by
the school or its teachers. Under Article 219 of the Family Code, if the person under custody is a minor, those exercising
special parental authority are principally and solidarily liable for damages caused by the acts or omissions of the
unemancipated minor under their supervision, instruction, or custody.

2. Schools and Universities; For a school to be liable, there must be a finding that the act or omission considered as
negligent was the proximate cause of the injury caused because the negligence must have a causal connection to the
accident.-

For petitioner to be liable, there must be a finding that the act or omission considered as negligent was the proximate
cause of the injury caused because the negligence must have a causal connection to the accident. “In order that there
may be a recovery for an injury, however, it must be shown that the ‘injury for which recovery is sought must be the
legitimate consequence of the wrong done; the connection between the negligence and the injury must be a direct and
natural sequence of events, unbroken by intervening efficient causes.’ In other words, the negligence must be the
proximate cause of the injury. For, ‘negligence, no matter in what it consists, cannot create a right of action unless it is the
proximate cause of the injury complained of.’ And ‘the proximate cause of an injury is that cause, which, in natural and
continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result
would not have occurred.’ ”

3. Schools and Universities; Words and Phrases; The proximate cause of an injury is that cause, which, in natural and
continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result
would not have occurred.-

Liability for the accident, whether caused by the negligence of the minor driver or mechanical detachment of the steering
wheel guide of the jeep, must be pinned on the minor’s parents primarily. The negligence of petitioner St. Mary’s
Academy was only a remote cause of the accident. Between the remote cause and the injury, there intervened the
negligence of the minor’s parents or the detachment of the steering wheel guide of the jeep. “The proximate cause of an
injury is that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the
injury, and without which the result would not have occurred.”

4. Quasi-Delicts; Torts; Motor Vehicles; The registered owner of any vehicle, even if not used for public service, would
primarily be responsible to the public or to third persons for injuries caused the latter while the vehicle was being driven
on the highways or streets.-

39
Incidentally, there was no question that the registered owner of the vehicle was respondent Villanueva. He never denied
and in fact admitted this fact. We have held that the registered owner of any vehicle, even if not used for public service,
would primarily be responsible to the public or to third persons for injuries caused the latter while the vehicle was being
driven on the highways or streets.” Hence, with the overwhelming evidence presented by petitioner and the respondent
Daniel spouses that the accident occurred because of the detachment of the steering wheel guide of the jeep, it is not the
school, but the registered owner of the vehicle who shall be held responsible for damages for the death of Sherwin
Carpitanos.

Proprietors of building, engineer, architect, contractor

De Roy vs CA, et. Al., G.R. No. L-80718, January 29, 1988

1. Remedial Law; Civil Procedure; Appeals; Habaluyas and Lacsamana cases, reiterated; Motion for extension of time to
file motion for reconsideration of the decision of the Court of Appeals, not allowed; Under the Habaluyas and Lacsamana
cases, the 15-day period for appealing or for filing a motion for reconsideration cannot be ex-tended.-

This Court finds that the Court of Appeals did not commit a grave abuse of discretion when it denied petitioners’ motion
for extension of time to file a motion for reconsideration, directed entry of judgment and denied their motion for
reconsideration. It correctly applied the rule laid down in Habaluyas Enterprises, Inc. v. Japzon, [G.R. No. 70895, August 5,
1985, 138 SCRA 46], that the fifteen-day period for appealing or for filing a motion for reconsideration cannot be
extended. In its Resolution denying the motion for reconsideration, promulgated on May 30, 1986 (142 SCRA 208), this
Court en banc restated and clarified the rule. x x x Lacsamana v. Second Special Cases Division of the Intermediate
Appellate Court, [G.R. Nos. 73146-53, August 26, 1986, 143 SCRA 643], reiterated the rule and went further to restate and
clarify the modes and periods of appeal.

2. Remedial Law; Civil Procedure; Appeals; Prospective application of the Habaluyas rule.-

Bacaya v. Intermediate Appellate Court, [G.R. No. 74824, Sept. 15, 1986, 144 SCRA 161], stressed the prospective
application of said rule, and explained the operation of the grace period.

3. Remedial Law; Civil Procedure; Appeals; Non-publication of the Habaluyas decision in the Official Gazette; There is no
law requiring the publication of Supreme Court decisions in the Official Gazette before they can be binding; Duty of
lawyer in active law practice to keep abreast of Supreme Court decisions.+

4. Civil Law; Damages; Petitioner is liable under Article 2190 of the Civil Code for damages resulting from the total or
partial collapse of a building if it should be due to the lack of necessary repairs.-

This Court likewise finds that the Court of Appeals committed no grave abuse of discretion in affirming the trial court’s
decision holding petitioner liable under Article 2190 of the Civil Code, which provides that “the proprietor of a building or
structure is responsible for the damage resulting from its total or partial collapse, if it should be due to the lack of
necessary repairs.”

STRICT LIABILITY TORTS

1. Possessor of Animals

40
Art. 2183

Vestil vs. CA, 179 SCRA 47

1. Damages; Possession; The possessor of an animal or whoever may make use of the same shall be responsible for the
damage it may cause; Case at bar.-

In the proceedings now before us, Purita Vestil insists that she is not the owner of the house or of the dog left by her
father as his estate has not yet been partitioned and there are other heirs to the property. Pursuing the logic of the Uys,
she claims, even her sister living in Canada would be held responsible for the acts of the dog simply because she is one of
Miranda’s heirs. However, that is hardly the point. What must be determined is the possession of the dog that admittedly
was staying in the house in question, regardless of the ownership of the dog or of the house. Article 2183 reads as
follows: The possessor of an animal or whoever may make use of the same is responsible for the damage which it may
cause, although it may escape or be lost. This responsibility shall cease only in case the damage should come from force
majeure or from the fault of the person who has suffered damage. Thus, in Afialda v. Hisole, a person hired as caretaker
of a carabao gored him to death and his heirs thereupon sued the owner of the animal for damages. The complaint was
dismissed on the ground that it was the caretaker’s duty to prevent the carabao from causing injury to any one, including
himself.

2. Damages; Possession; Art. 2183 of the Civil Code holds that the possessor liable even if the animal should “escape or be
lost”; Even removed from his control, possessor still liable.-

The petitioner’s contention that they could not be expected to exercise remote control of the dog is not acceptable. In
fact, Article 2183 of the Civil Code holds the possessor liable even if the animal should “escape or be lost” and so be
removed from his control. And it does not matter either that, as the petitioners also contend, the dog was tame and was
merely provoked by the child into biting her. The law does not speak only of vicious animals but covers even tame ones as
long as they cause injury. As for the alleged provocation, the petitioners forget that Theness was only three years old at
the time she was attacked and can hardly be faulted for whatever she might have done to the animal.

3. Damages; Possession; Equity; Obligation imposed by Art. 2183 of the Civil Code is based on natural equity and principle
of social interest.-

According to Manresa, the obligation imposed by Article 2183 of the Civil Code is not based on the negligence or on the
presumed lack of vigilance of the possessor or user of the animal causing the damage. It is based on natural equity and on
the principle of social interest that he who possesses animals for his utility, pleasure or service must answer for the
damage which such animal may cause.

2. Manufacturers and processors of foodstuffs

Art. 2187

See also Secs 97-102 , Consumer Act and Sec. 31, Corporation Code

3. Head of family

SPECIAL TORTS
41
DBP vs. CA, et al., G.R. No. 137916, December 8, 2004

Civil Law; Damages; Abuse of Rights; Elements of Abuse of Rights; Good faith is presumed and he who alleges bad faith
has the duty to prove the same.-

The elements of abuse of rights are the following: (a) the existence of a legal right or duty; (b) which is exercised in bad
faith; and (c) for the sole intent of prejudicing or injuring another. Malice or bad faith is at the core of said provision. Good
faith is presumed and he who alleges bad faith has the duty to prove the same. Good faith refers to the state of the mind
which is manifested by the acts of the individual concerned. It consists of the intention to abstain from taking an
unconscionable and unscrupulous advantage of another. Bad faith does not simply connote bad judgment or simple
negligence, dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of known duty due to
some motives or interest or ill-will that partakes of the nature of fraud. Malice connotes ill-will or spite and speaks not in
response to duty. It implies an intention to do ulterior and unjustifiable harm. Malice is bad faith or bad motive.

Lagon vs. CA, et al., G.R. No. 119107, March 18, 2005

1. Actions; Contracts; Torts; Tortuous Interference with Contractual Relations; The tort recognized in Article 1314 of the
Civil Code is known as interference with contractual relations.-

Article 1314 of the Civil Code provides that any third person who induces another to violate his contract shall be liable for
damages to the other contracting party. The tort recognized in that provision is known as interference with contractual
relations. The interference is penalized because it violates the property rights of a party in a contract to reap the benefits
that should result therefrom.

2. Actions; Contracts; Torts; Tortuous Interference with Contractual Relations; Elements.-

The Court, in the case of So Ping Bun v. 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. In that case, petitioner So Ping
Bun occupied the premises which the corporation of his grandfather was leasing from private respondent, without the
knowledge and permission of the corporation. The corporation, prevented from using the premises for its business, sued
So Ping Bun for tortuous interference.

3. Actions; Contracts; Torts; Tortuous Interference with Contractual Relations; Notarial Law;Evidence; 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.-

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, after undergoing the rigid scrutiny of petitioner’s counsel and after the trial court declared it to be valid and
subsisting, the nota- rized 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.

4. Actions; Contracts; Torts; Tortuous Interference with Contractual Relations; Knowledge on the part of the interferer of
the subsistence of the contract is an essential element to state a cause of action for tortuous interference.-

42
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.

5. Actions; Contracts; Torts; Tortuous Interference with Contractual Relations; To sustain a case for tortuous interference,
the defendant must have acted with malice or must have been driven by purely impious reasons to injure the plaintiff—in
other words, his act of interference cannot be justified.-

Assuming ex gratia argumenti that petitioner knew of the contract, such knowledge alone was not sufficient to make him
liable for tortuous interference. Which brings us to the third element. According to our ruling in So Ping Bun, petitioner
may be held liable only when there was no legal justification or excuse for his action or when his conduct was stirred by a
wrongful motive. To sustain a case for tortuous interference, the defendant must have acted with malice or must have
been driven by purely impious reasons to injure the plaintiff. In other words, his act of interference cannot be justified.

6. Actions; Contracts; Torts; Tortuous Interference with Contractual Relations; Words and Phrases;The word “induce”
refers to situations where a person causes another to choose one course of conduct by persuasion or intimidation.-

The records do not support the allegation of private respondent that petitioner induced the heirs of Bai Tonina Sepi to sell
the property to him. The word “induce” refers to situations where a person causes another to choose one course of
conduct by persuasion or intimidation. The records show that the decision of the heirs of the late Bai Tonina Sepi to sell
the property was completely of their own volition and that petitioner did absolutely nothing to influence their judgment.
Private respondent himself did not proffer any evidence to support his claim. In short, even assuming that private
respondent was able to prove the renewal of his lease contract with Bai Tonina Sepi, the fact was that he was unable to
prove malice or bad faith on the part of petitioner in purchasing the property. Therefore, the claim of tortuous
interference was never established.

7. Actions; Contracts; Torts; Tortuous Interference with Contractual Relations; A financial or profit motivation will not
necessarily make a person an officious interferer liable for damages as long as there is no malice or bad faith involved.-

In our view, petitioner’s purchase of the subject property was merely an advancement of his financial or economic
interests, absent any proof that he was enthused by improper motives. In the very early case of Gilchrist v. Cuddy, the
Court declared that a person is not a malicious interferer if his conduct is impelled by a proper business interest. In other
words, a financial or profit motivation will not necessarily make a person an officious interferer liable for damages as long
as there is no malice or bad faith involved.

8. Actions; Contracts; Torts; Words and Phrases; The law affords no remedy for damages resulting from an act which does
not amount to legal injury or wrong—damnum absque injuria; “Injury” is the legal invasion of a legal right while “damage”
is the hurt, loss or harm which results from the injury.-

This case is one of damnum 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. In BPI Express Card Corporation v. Court of Appeals, the
Court turned down the claim for damages of a cardholder whose credit card had been cancelled by petitioner corporation
after several defaults in payment. We held there that there can be damage without injury where the loss or harm is not
the result of a violation of a legal duty. In that instance, the consequences must be borne by the injured person alone
since the law affords no remedy for damages resulting from an act which does not amount to legal injury or wrong.
Indeed, lack of malice in the conduct complained of precludes recovery of damages.

43
 KINDERED TORTS

Medical Malpractice

Reyes, et. al vs. Sisters of Mercy Hospital, et al., G.R. No. 130547, October 3, 200

1. Medical Malpractice; Elements; Words and Phrases; Medical malpractice is a particular form of negligence which
consists in the failure of a physician or surgeon to apply to his practice of medicine that degree of care and skill which is
ordinarily employed by the profession generally, under similar conditions, and in like surrounding circumstances; There
are four elements involved in medical negligence cases, namely: duty, breach, injury and proximate causation.-

Petitioner’s action is for medical malpractice. This is a particular form of negligence which consists in the failure of a
physician or surgeon to apply to his practice of medicine that degree of care and skill which is ordinarily employed by the
profession generally, under similar conditions, and in like surrounding circumstances. In order to successfully pursue such
a claim, a patient must prove that the physician or surgeon either failed to do something which a reasonably prudent
physician or surgeon would 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. There are thus four elements involved in
medical negligence cases, namely: duty, breach, injury, and proximate causation.

2. Medical Malpractice; Evidence; Expert Witnesses; Inasmuch as the causes of the injuries involved in malpractice actions
are determinable only in the light of scientific knowledge, it has been recognized that expert testimony is usually
necessary to support the conclusion as to causation.-

In the present case, there is no doubt that a physician-patient relationship existed between respondent doctors and Jorge
Reyes. Respondents were thus duty-bound to use at least the same level of care that any reasonably competent doctor
would use to treat a condition under the same circumstances. It is breach of this duty which constitutes actionable
malpractice. As to this aspect of medical malpractice, the determination of the reasonable level of care and the breach
thereof, expert testimony is essential. Inasmuch as the causes of the injuries involved in malpractice actions are
determinable only in the light of scientific knowledge, it has been recognized that expert testimony is usually necessary to
support the conclusion as to causation.

3. Medical Malpractice; Evidence; Expert Witnesses; Res Ipsa Loquitur; There is a case when expert testimony may be
dispensed with, and that is under the doctrine of res ipsa loquitur; Where res ipsa loquitur is applicable, the court is
permitted to find a physician negligent upon proper proof of injury to the patient, without the aid of expert testimony,
where the court from its fund of common knowledge can determine the proper standard of care.-

There is a case when expert testimony may be dispensed with, and that is under the doctrine of res ipsa loquitur. As held
in Ramos v. Court of Appeals : Although generally, expert medical testimony is relied upon in malpractice suits to prove
that a physician has done a negligent act or that he has deviated from the standard medical procedure, when the doctrine
of res ipsa loquitur is availed by the plaintiff, the need for expert medical testimony is dispensed with because the injury
itself provides the proof of negligence. The reason is that the general rule on the necessity of expert testimony applies
only to such matters clearly within the domain of medical science, and not to matters that are within the common
knowledge of mankind which may be testified to by anyone familiar with the facts. Ordinarily, only physicians and
surgeons of skill and experience are competent to testify as to whether a patient has been treated or operated upon with
a reasonable degree of skill and care. However, testimony as to the statements and acts of physicians and surgeons,
external appearances, and manifest conditions which are observable by any one may be given by non-expert witnesses.
Hence, in cases where the res ipsa loquitur is applicable, the court is permitted to find a physician negligent upon proper
proof of injury to the patient, without the aid of expert testimony, where the court from its fund of common knowledge

44
can determine the proper standard of care. Where common knowledge and experience teach that a resulting injury
would not have occurred to the patient if due care had been exercised, an inference of negligence may be drawn giving
rise to an application of the doctrine of res ipsa loquitur without medical evidence, which is ordinarily required to show
not only what occurred but how and why it occurred. When the doctrine is appropriate, all that the patient must do is
prove a nexus between the particular act or omission complained of and the injury sustained while under the custody and
management of the defendant without need to produce expert medical testimony to establish the standard of care.
Resort to res ipsa loquitur is allowed because there is no other way, under usual and ordinary conditions, by which the
patient can obtain redress for injury suffered by him.

4. Medical Malpractice; Evidence; Expert Witnesses; Res Ipsa Loquitur; Requisites for Application of Res Ipsa Loquitur.-

Petitioners now contend that all requisites for the application of res ipsa loquitur were present, namely: (1) the accident
was of a kind which does not ordinarily occur unless someone is negligent; (2) the instrumentality or agency which caused
the injury was under the exclusive control of the person in charge; and (3) the injury suffered must not have been due to
any voluntary action or contribution of the person injured.

5. Medical Malpractice; Evidence; Expert Witnesses; Res Ipsa Loquitur; Res ipsa loquitur is not a rigid or ordinary doctrine
to be perfunctorily used but a rule to be cautiously applied, depending upon the circumstances of each case—the
doctrine of res ipsa loquitur can have no application in a suit against a physician or a surgeon which involves the merits of
a diagnosis or of a scientific treatment; The physician or surgeon is not required at his peril to explain why any particular
diagnosis was not correct, or why any particular scientific treatment did not produce the desired result.-

Respondents alleged failure to observe due care was not immediately apparent to a layman so as to justify application of
res ipsa loquitur. The question required expert opinion on the alleged breach by respondents of the standard of care
required by the circumstances. Furthermore, on the issue of the correctness of her diagnosis, no presumption of
negligence can be applied to Dr. Marlyn Rico. As held in Ramos:. . . . Res ipsa loquitur is not a rigid or ordinary doctrine to
be perfunctorily used but a rule to be cautiously applied, depending upon the circumstances of each case. It is generally
restricted to situations in malpractice cases where a layman is able to say, as a matter of common knowledge and
observation, that the consequences of professional care were not as such as would ordinarily have followed if due care
had been exercised. A distinction must be made between the failure to secure results, and the occurrence of something
more unusual and not ordinarily found if the service or treatment rendered followed the usual procedure of those skilled
in that particular practice. It must be conceded that the doctrine of res ipsa loquitur can have no application in a. suit
against a physician or a surgeon which involves the merits of a diagnosis or of a scientific treatment. The physician or
surgeon is not required at his peril to explain why any particular diagnosis was not correct, or why any particular scientific
treatment did not produce the desired result .

Professional Services, Inc. vs. Agana, G.R. No. 126297, January 31, 2007 (Captain of the Ship Rule)

Civil Law; Damages; Negligence; The leaving of sponges or other foreign substances in the wound after the incision has
been closed is at least prima facie negligence by the operating surgeon.— 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 after 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.

Same; Same; Same; To the mind of the Court, what was initially an act of negligence by Dr. Ampil has ripened into a
deliberate wrongful act of deceiving his patient.—Here, 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.
45
Had he been more candid, Natividad could have taken the immediate and appropriate medical remedy to remove the
gauzes from her body. To our mind, what was initially an act of negligence by Dr. Ampil has ripened into a deliberate
wrongful act of deceiving his patient.

Same; Same; Same; Doctrine of Res Ipsa Loquitur; Requisites for the Applicability of the Doctrine.—Literally, res ipsa
loquitur means “the thing speaks for itself.” It is the rule that the fact of the occurrence of an injury, taken with the
surrounding circumstances, may permit an inference or raise a presumption of negligence, or make out a plaintiff’s prima
facie case, and present a question of fact for defendant to meet with an explanation. Stated differently, where the thing
which caused the injury, without the fault of the injured, is under the exclusive control of the defendant and the injury is
such that it should not have occurred if he, having such control used proper care, it affords reasonable evidence, in the
absence of explanation that the injury arose from the defendant’s want of care, and the burden of proof is shifted to him
to establish that he has observed due care and diligence. From the foregoing statements of the rule, the requisites for the
applicability of the doctrine of res ipsa loquitur are: (1) the occurrence of an injury; (2) the thing which caused the injury
was under the control and management of the defendant; (3) the occurrence was such that in the ordinary course of
things, would not have happened if those who had control or management used proper care; and (4) the absence of
explanation by the defendant. Of the foregoing requisites, the most instrumental is the “control and management of the
thing which caused the injury.”

Same; Same; Same; Same; 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.—In this jurisdiction, 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. 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.

Same; Same; Same; Professionals are considered personally liable for the fault or negligence they commit in the discharge
of their duties and their employer cannot be held liable for such fault or negligence.—A prominent civilist commented
that professionals engaged by an employer, such as physicians, dentists, and pharmacists, are not “employees” under this
article because the manner in which they perform their work is not within the control of the latter (employer). In other
words, professionals are considered personally liable for the fault or negligence they commit in the discharge of their
duties, and their employer cannot be held liable for such fault or negligence. In the context of the present case, “a
hospital cannot be held liable for the fault or negligence of a physician or surgeon in the treatment or operation of
patients.”

Same; Same; Same; In this jurisdiction, the nature of the relationship between the hospital and the physicians is rendered
inconsequential in view of the pronouncement in Ramos vs. Court of Appeals, 321 SCRA 584 (1999), that for purposes of
apportioning responsibility in medical negligence cases, an employer-employee relationship in effect exists between
hospitals and their attending and visiting physicians.—In our shores, the nature of the relationship between the hospital
and the physicians is rendered inconsequential in view of our categorical pronouncement in Ramos v. Court of Appeals,
321 SCRA 584 (1999), that for purposes of apportioning responsibility in medical negligence cases, an employer-employee
relationship in effect exists between hospitals and their attending and visiting physicians.

Same;Same; Same; PSI’s liability is also anchored upon the agency principle of apparent authority or agency by estoppel
and the doctrine of corporate negligence.—But the Ramos pronouncement is not our only basis in sustaining PSI’s liability.
Its liability is also anchored upon the agency principle of apparent authority or agency by estoppel and the doctrine of
corporate negligence which have gained acceptance in the determination of a hospital’s liability for negligent acts of
health professionals. The present case serves as a perfect platform to test the applicability of these doctrines, thus,
enriching our jurisprudence. Apparent authority, or what is sometimes referred to as the “holding out” theory, or doctrine
of ostensible agency or agency by estoppel, has its origin from the law of agency. It imposes liability, not as the result of
46
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 estoppel
and has been explained in this manner: “The principal is bound by the acts of his agent with the apparent authority which
he knowingly permits the agent to assume, or which he holds the agent out to the public as possessing. The question in
every case is whether the principal has by his voluntary act placed the agent in such a situation that a person of ordinary
prudence, conversant with business usages and the nature of the particular business, is justified in presuming that such
agent has authority to perform the particular act in question.

Same; Same; Same; In cases where it can be shown that a hospital, by its actions, has held out a particular physician as its
agent and/or employee and that a patient has accepted treatment from that physician in the reasonable belief that it is
being rendered in behalf of the hospital, then the hospital will be liable for the physician’s negligence.—The applicability
of apparent authority in the field of hospital liability was upheld long time ago in Irving v. Doctor Hospital of Lake Worth,
Inc., 415 So. 2d 55 (1982). There, it was explicitly stated that “there does not appear to be any rational basis for excluding
the concept of apparent authority from the field of hospital liability.” Thus, in cases where it can be shown that a hospital,
by its actions, has held out a particular physician as its agent and/or employee and that a patient has accepted treatment
from that physician in the reasonable belief that it is being rendered in behalf of the hospital, then the hospital will be
liable for the physician’s negligence.

Same; Same; Same; By accrediting Dr. Ampil and Dr. Fuentes and publicly advertising their qualifications, the hospital
created the impression that they were its agents, authorized to perform medical or surgical services for its patients.—In
this case, PSI publicly displays in the lobby of the Medical City Hospital the names and specializations of the physicians
associated or accredited by it, including those of Dr. Ampil and Dr. Fuentes. We concur with the Court of Appeals’
conclusion that it “is now estopped from passing all the blame to the physicians whose names it proudly paraded in the
public directory leading the public to believe that it vouched for their skill and competence.” Indeed, PSI’s act is
tantamount to holding out to the public that Medical City Hospital, through its accredited physicians, offers quality health
care services. By accrediting Dr. Ampil and Dr. Fuentes and publicly advertising their qualifications, 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. Professional Services, Inc. vs. Agana, 513 SCRA 478, G.R.
No. 126297, G.R. No. 126467, G.R. No. 127590 January 31, 2007

Garcia-Rueda vs. Pascaio, et al., G.R. No. 118141, September 5, 1997

Same; Same; Evidence; Physicians; Medical Malpractice or Negligence; The fact of want of competence or diligence is
evidentiary in nature, the veracity of which can best be passed upon after a full-blown trial for it is virtually impossible to
ascertain the merits of a medical negligence case without extensive investigation, research, evaluation and consultations
with medical experts—clearly, the City Prosecutors are not in a competent position to pass judgment on such a technical
matter, especially when there are conflicting evidence and findings.—In the instant case, no less than the NBI pronounced
after conducting an autopsy that there was indeed negligence on the part of the attending physicians in administering the
anaesthesia. The fact of want of competence or diligence is evidentiary in nature, the veracity of which can best be passed
upon after a full-blown trial for it is virtually impossible to ascertain the merits of a medical negligence case without
extensive investigation, research, evaluation and consultations with medical experts. Clearly, the City Prosecutors are not
in a competent position to pass judgment on such a technical matter, especially when there are conflicting evidence and
findings. The bases of a party’s accusation and defenses are better ventilated at the trial proper than at the preliminary
investigation.

47
Same; Same; Same; Same; Words and Phrases; “Medical Malpractice or Negligence,” Explained.—A word on medical
malpractice or negligence cases. “In its simplest terms, the type of lawsuit which has been called medical malpractice or,
more appropriately, medical negligence, is that type of claim which a victim has available to him or her to redress a wrong
committed by a medical professional which has caused bodily harm. In order to successfully pursue such a claim, a patient
must prove that a health care provider, in most cases a physician, either failed to do something which a reasonably
prudent health care provider would have done, or that he or she did something that a reasonably prudent provider would
not have done; and that that failure or action caused injury to the patient.” Hence, there are four elements involved in
medical negligence cases: duty, breach, injury and proximate causation.

Same; Same; Same; Same; In malpractice or negligence cases involving the administration of anaesthesia, the necessity of
expert testimony and the availability of the charge of res ipsa loquitur to the plaintiff, have been applied in actions against
anaesthesiologists to hold the defendant liable for the death or injury of a patient under excessive or improper
anaesthesia.—Moreover, in malpractice or negligence cases involving the administration of anaesthesia, the necessity of
expert testimony and the availability of the charge of res ipsa loquitur to the plaintiff, have been applied in actions against
anaesthesiologists to hold the defendant liable for the death or injury of a patient under excessive or improper
anaesthesia. Essentially, it requires two-pronged evidence: evidence as to the recognized standards of the medical
community in the particular kind of case, and a showing that the physician in question negligently departed from this
standard in his treatment.

Same; Same; The better and more logical remedy from a dismissal of a criminal complaint by a City Prosecutor would be
an appeal to the Secretary of Justice.—While a party who feels himself aggrieved is at liberty to choose the appropriate
“weapon from the armory,” it is with no little surprise that this Court views the choice made by the complainant widow.
To our mind, the better and more logical remedy under the circumstances would have been to appeal the resolution of
the City Prosecutors dismissing the criminal complaint to the Secretary of Justice under the Department of Justice’s Order
No. 223, otherwise known as the “1993 Revised Rules on Appeals From Resolutions In Preliminary
Investigations/Reinvestigations,” as amended by Department Order No. 359, Section 1.

Ramos vs CA, et al., G.R. No. 124354, December 29, 1999

6. Remedial Law; Evidence; Res Ipsa Loquitur; Res ipsa loquitur is not a rigid or ordinary doctrine to be perfunctorily used
but a rule to be cautiously applied depending upon the circumstances of each case.-

Despite the fact that the scope of res ipsa loquitur has been measurably enlarged, it does not automatically apply to all
cases of medical negligence as to mechanically shift the burden of proof to the defendant to show that he is not guilty of
the ascribed negligence. Res ipsa loquitur is not a rigid or ordinary doctrine to be perfunctorily used but a rule to be
cautiously applied, depending upon the circumstances of each case. It is generally restricted to situations in malpractice
cases where a layman is able to say, as a matter of common knowledge and observation, that the consequences of
professional care were not as such as would ordinarily have followed if due care had been exercised.

7. Remedial Law; Evidence; Res Ipsa Loquitur; Res ipsa loquitur is not available in a malpractice suit if the only showing is
that the desired result of an operation or treatment was not accomplished.-

It must be conceded that the doctrine of res ipsa loquitur can have no application in a suit against a physician or surgeon
which involves the merits of a diagnosis or of a scientific treatment. The physician or surgeon is not required at his peril to
explain why any particular diagnosis was not correct, or why any particular scientific treatment did not produce the
desired result. Thus, res ipsa loquitur is not available in a malpractice suit if the only showing is that the desired result of
an operation or treatment was not accomplished.

48
8. Hospitals; Damages; Proximate Cause Defined.-

Proximate cause has been defined as that which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces injury, and without which the result would not have occurred. An injury or damage is
proximately caused by an act or a failure to act, whenever it appears from the evidence in the case, that the act or
omission played a substantial part in bringing about or actually causing the injury or damage; and that the injury or
damage was either a direct result or a reasonably probable consequence of the act or omission. It is the dominant,
moving or producing cause.

9. Hospitals; Damages; For the purpose of allocating responsibility in medical negligence cases, an employer-employee
relationship in effect exists between hospitals and their attending and visiting physicians.-

Private hospitals, hire, fire and exercise real control over their attending and visiting “consultant” staff. While
“consultants” are not, technically employees, a point which respondent hospital asserts in denying all responsibility for
the patient’s condition, the control exercised, the hiring, and the right to terminate consultants all fulfill the important
hallmarks of an employer-employee relationship, with the exception of the payment of wages. In assessing whether such
a relationship in fact exists, the control test is determining. Accordingly, on the basis of the foregoing, we rule that for the
purpose of allocating responsibility in medical negligence cases, an employer-employee relationship in effect exists
between hospitals and their attending and visiting physicians. This being the case, the question now arises as to whether
or not respondent hospital is solidarily liable with respondent doctors for petitioner’s condition.

10. Hospitals; Damages; The basis for holding an employer solidarily responsible for the negligence of its employee is
found in Article 2180 of the Civil Code.-

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. Such responsibility ceases when the persons or entity
concerned prove that they have observed the diligence of a good father of the family to prevent damage. In other words,
while the burden of proving negligence rests on the plaintiffs, once negligence is shown, the burden shifts to the
respondents (parent, guardian, teacher or employer) who should prove that they observed the diligence of a good father
of a family to prevent damage.

11. Hospitals; Damages; Amount of damages awarded may be a continuing one where the injury is chronic and
continuing, as when the patient is comatose.-

In these cases, the amount of damages which should be awarded, if they are to adequately and correctly respond to the
injury caused, should be one which compensates for pecuniary loss incurred and proved, up to the time of trial; and one
which would meet pecuniary loss certain to be suffered but which could not, from the nature of the case, be made with
certainty. In other words, temperate damages can and should be awarded on top of actual or compensatory damages in
instances where the injury is chronic and continuing. And because of the unique nature of such cases, no incompatibility
arises when both actual and temperate damages are provided for. The reason is that these damages cover two distinct
phases.

Ramos et al., vs CA, G.R. No. 124354, April 11, 2002

1. Physicians; Anesthesiologists; Medical Malpractice; Negligence; The conduct of a preanesthetic/preoperative

evaluation prior to an operation, whether elective or emergency, cannot be dispensed with—such evaluation is necessary
for the formulation of a plan of anesthesia care suited to the needs of the patient concerned.-

49
The conduct of a preanesthetic/preoperative evaluation prior to an operation, whether elective or emergency, cannot be
dispensed with. Such evaluation is necessary for the formulation of a plan of anesthesia care suited to the needs of the
patient concerned. Pre-evaluation for anesthesia involves taking the patient’s medical history, reviewing his current drug
therapy, conducting physical examination, interpreting laboratory data, and determining the appropriate prescription of
preoperative medications as necessary to the conduct of anes- thesia. Physical examination of the patient entails not only
evaluating the patient’s central nervous system, cardiovascular system and lungs but also the upper airway. Examination
of the upper airway would in turn include an analysis of the patient’s cervical spine mobility, temporomandibular
mobility, prominent central incisors, deceased or artificial teeth, ability to visualize uvula and the thyromental distance.

2. Physicians; Anesthesiologists; Medical Malpractice; Negligence; Words and Phrases.-

To “auscultate” means to listen to the sounds arising within organs as an aid to diagnosis and treatment, the examination
being made either by use of the stethoscope or by direct application of the ear to the body. (WEBSTER’S THIRD NEW
INTERNATIONAL DICTIONARY, p. 145 [1976]).

3. Physicians; Anesthesiologists; Medical Malpractice; Negligence; Witnesses; Expert Testimony; A pulmonologist could
not be considered an authority on anesthesia practice and procedure and their complications.-

What is left to be determined therefore is whether Erlinda’s hapless condition was due to any fault or negligence on the
part of Dr. Gutierrez while she (Erlinda) was under the latter’s care. Dr. Gutierrez maintains that the bronchospasm and
cardiac arrest resulting in the patient’s comatose condition was brought about by the anaphylactic reaction of the patient
to Thiopental Sodium (pentothal). In the Decision, we explained why we found Dr. Gutierrez’ theory unacceptable. In the
first place, Dr. Eduardo Jamora, the witness who was presented to support her (Dr. Gutierrez) theory, was a
pulmonologist. Thus, he could not be considered an authority on anesthesia practice and procedure and their
complications.

4. Physicians; Anesthesiologists; Medical Malpractice; Negligence; The standard practice in anesthesia is that every single
act that the anesthesiologist performs must be recorded.-

The Court has reservations on giving evidentiary weight to the entries purportedly contained in Dr. Gutierrez’ synopsis. It
is significant to note that the said record prepared by Dr. Gutierrez was made only after Erlinda was taken out of the
operating room. The standard practice in anesthesia is that every single act that the anesthesiologist performs must be
recorded. In Dr. Gutierrez’ case, she could not account for at least ten (10) minutes of what happened during the
administration of anesthesia on Erlinda.

5. Physicians; Anesthesiologists; Medical Malpractice; Negligence; “Captain of the Ship” Doctrine;Words and
Phrases; Under the Captain-of-the-Ship Doctrine, a surgeon is likened to a captain of the ship, in that it is his duty to
control everything going on in the operating room.-

The Captain-of-the-Ship Doctrine was discussed in McConnell v. Williams (65 A 2d 243 [1949]), where the Supreme Court
of Pennsylvania stated that under this doctrine, a surgeon is likened to a captain of the ship, in that it is his duty to control
everything going on in the operating room.

6. Physicians; Anesthesiologists; Medical Malpractice; Negligence; “Captain of the Ship” Doctrine;Judgments; That there is
a trend in American jurisprudence to do away with the Captain-of-the-Ship doctrine does not mean that the Supreme
Court will ipso facto follow said trend. Due regard for the peculiar factual circumstances obtaining in the instant case
justify the application of the Captain-of-the-Ship doctrine.-

That there is a trend in American jurisprudence to do away with the Captain-of-the-Ship doctrine does not mean that this
Court will ipso facto follow said trend. Due regard for the peculiar factual circumstances obtaining in this case justify the
application of the Captain-of-the-Ship doctrine. From the facts on record it can be logically inferred that Dr. Hosaka
50
exercised a certain degree of, at the very least, supervision over the procedure then being performed on Erlinda. x x x
While the professional services of Dr. Hosaka and Dr. Gutierrez were secured primarily for their performance of acts
within their respective fields of expertise for the treatment of petitioner Erlinda, and that one does not exercise control
over the other, they were certainly not completely independent of each other so as to absolve one from the negligent
acts of the other physician. x x x That they were working as a medical team is evident from the fact that Dr. Hosaka was
keeping an eye on the intubation of the patient by Dr. Gutierrez, and while doing so, he observed that the patient’s nails
had become dusky and had to call Dr. Gutierrez’s attention thereto. The Court also notes that the counsel for Dr. Hosaka
admitted that in practice, the anesthesiologist would also have to observe the surgeon’s acts during the surgical process
and calls the attention of the surgeon whenever necessary in the course of the treatment. The duties of Dr. Hosaka and
those of Dr. Gutierrez in the treatment of petitioner Erlinda are therefore not as clear-cut as respondents claim them to
be. On the contrary, it is quite apparent that they have a common responsibility to treat the patient, which responsibility
necessitates that they call each other’s attention to the condition of the patient while the other physician is performing
the necessary medical procedures.

7. Physicians; Anesthesiologists; Medical Malpractice; Negligence; The long period—three hours—that the surgeon made
the patient wait for him certainly aggravated the anxiety that the latter must have been feeling at the time, such that it
could be safely said that her anxiety adversely affected the administration of anesthesia on her.-

It is equally important to point out that Dr. Hosaka was remiss in his duty of attending to petitioner Erlinda promptly, for
he arrived more than three (3) hours late for the scheduled operation. The cholecystectomy was set for June 17, 1985 at
9:00 a.m., but he arrived at DLSMC only at around 12:10 p.m. In reckless disregard for his patient’s well being, Dr. Hosaka
scheduled two procedures on the same day, just thirty minutes apart from each other, at different hospitals. Thus, when
the first procedure (protoscopy) at the Sta. Teresita Hospital did not proceed on time, Erlinda was kept in a state of
uncertainty at the DLSMC. The unreasonable delay in petitioner Erlinda’s scheduled operation subjected her to continued
starvation and consequently, to the risk of acidosis, or the condition of decreased alkalinity of the blood and tissues,
marked by sickly sweet breath, headache, nausea and vomiting, and visual disturbances. The long period that Dr. Hosaka
made Erlinda wait for him certainly aggravated the anxiety that she must have been feeling at the time. It could be safely
said that her anxiety adversely affected the administration of anesthesia on her. As explained by Dr. Camagay, the
patient’s anxiety usually causes the outpouring of adrenaline which in turn results in high blood pressure or disturbances
in the heart rhythm.

8. Physicians; Anesthesiologists; Medical Malpractice; Negligence; Human Relations; A surgeon’s irresponsible conduct of
arriving very late for a scheduled operation is violative, not only of his duty as a physician but also of Article 19 of the Civil
Code.-

Dr. Hosaka’s irresponsible conduct of arriving very late for the scheduled operation of petitioner Erlinda is violative, not
only of his duty as a physician “to serve the interest of his patients with the greatest solicitude, giving them always his
best talent and skill,” but also of Article 19 of the Civil Code which requires a person, in the performance of his duties, to
act with justice and give everyone his due.

Dr. Li vs. Sps. Soliman, G.R. No. 165279, June 7, 2011

1. Medical Malpractice; Medical malpractice, or more appropriately, medical negligence, is that type of claim which a
victim has available to him or her to redress a wrong committed by a medical professional which has caused bodily harm.-

—The type of lawsuit which has been called medical malpractice or, more appropriately, medical negligence, is that type
of claim which a victim has available to him or her to redress a wrong committed by a medical professional which has
caused bodily harm. In order to successfully pursue such a claim, a patient must prove that a health care provider, in most
51
cases a physician, either failed to do something which a reasonably prudent health care provider would have done, or
that he or she did something that a reasonably prudent provider would not have done; and that that failure or action
caused injury to the patient.

2. Same; Same; Respondents accepted the risks that chemotherapy offered with full knowledge of its effects on their
daughter.-

—The Solimans accepted the risks that chemotherapy offered with full knowledge of its effects on their daughter. It is not
fair that they should blame Dr. Li for Angelica’s suffering and death brought about by a decease that she did not wish
upon her. Indeed, it was not Dr. Li, according to Reynaldo, who convinced him to agree to submit his daughter to
chemotherapy but Dr. Tamayo. The latter explained to him the need for her daughter to undergo chemotherapy to
increase the chance of containing her cancer. This consultation took place even before the Solimans met Dr. Li.

3. Same; Same; Respondents are arguing from hindsight. The fact is that they were willing to assume huge risks on the
chance that their daughter could cheat death.-

—The Solimans are arguing from hindsight. The fact is that they were willing to assume huge risks on the chance that
their daughter could cheat death. They did not mind that their young daughter’s left leg would be amputated from above
the knee for a 50% chance of preventing the spread of the cancer. There is probably no person on this planet whose
family members, relatives, or close friends have not been touched by cancer. Every one knows of the travails and agonies
of chemotherapy, yet it is rare indeed for a cancer patient or his relatives not to take a chance with this treatment, which
had proved successful in extending the lives of some. Unfortunately for the Solimans, their daughter did not number
among the successful cases.

4. Medical Malpractice; Doctrine of Informed Consent; The claim that Dr. Li gave assurance that Angelica had 95% chance
of recovery after chemotherapy cannot be believed-

—it would be most unlikely for someone of Dr. Li’s expertise to make such a grossly reckless claim to a patient who
actually had only a 20% chance of surviving the first year. She would literally be inviting a malpractice suit.—The claim
that Dr. Li gave assurance that Angelica had a 95% chance of recovery after chemotherapy cannot be believed. The
Solimans knew that their daughter had bone cancer. Having consulted with other doctors from four medical institutions,
the Ago Medical and Educational Center in Bicol, the UERM Medical Center in Manila, the National Children’s Hospital in
Quezon City, and finally the St. Luke’s hospital, all of whom gave the same dire opinion, it would be quite unlikely for the
Solimans to accept Dr. Li’s supposed assurance that their daughter had 95% chance of returning to normal health after
chemotherapy. In fact, it would be most unlikely for someone of Dr. Li’s expertise to make such a grossly reckless claim to
a patient who actually had only a 20% chance of surviving the first year. She would literary be inviting a malpractice suit.

5. Same; Specific disclosures such as life expectancy probabilities are not legally necessary or required to be disclosed in
informed consent situations.+

6. Same; Sufficiency of disclosure can be made only after determination and assessment of risks have been made.+

7. Same; Dr. Balmaceda’s testimony failed to establish the existence of the risks or side-effects the petitioner should have
disclosed to them in the use of chemotherapy in the treatment of osteosarcoma.+

8. Same; In the present case, expert testimony is required in determining the risks and or side effects of chemotherapy
that the attending physician should have considered and disclosed as these are clearly beyond the knowledge of a
layperson to testify on.+

9. Medical Malpractice; Philippine jurisprudence tells us that expert testimony is crucial, if not determinative of a
physician’s liability in a medical negligence case; Expert testimony is, therefore, essential since the factual issue of
52
whether a physician or surgeon exercised the requisite degree of skill and care in the treatment of his patient is generally
a matter of expert opinion.-

—Philippine jurisprudence tells us that expert testimony is crucial, if not determinative of a physician’s liability in a
medical negligence case. In litigations involving medical negligence as in any civil action, we have consistently ruled that
the burden to prove by preponderance of evidence the essential elements—i.e., duty, breach, injury and proximate
causation—rests with the plaintiff. Expert testimony is, therefore, essential since the factual issue of whether a physician
or surgeon exercised the requisite degree of skill and care in the treatment of his patient is generally a matter of expert
opinion.

10. Same; Same; Infection, sepsis and death are material risks and side effects of chemotherapy.+

11. Same; Same; Dr. Li impliedly admits that she failed to disclose to Reynaldo and Lina many of the other associated risks
and side effects of chemotherapy, including the most material+

12. Same; Same; Under the patient standard of materiality, a doctor obligated to disclose that information which a
reasonable patient would deem material in deciding whether to proceed with a proposed treatment.+

13. Same; Same; In order to determine what the associated risks and side effects of proposed treatment are, testimony by
an expert witness is necessary because these are beyond the common knowledge of ordinary people.+

14. Same; Same; Two standards by which courts determine what constitutes adequate disclosure of associated risks and
side effects of a proposed treatment: the physician standard, and the patient standard of materiality.+

15. Medical Malpractice; Doctrine of Informed Consent; The doctrine of informed consent requires doctors, before
administering treatment to their patients, to disclose adequately the material risks and side effects of the proposed
treatment; it is distinct from the doctor’s duty to skillfully diagnose and treat the patient.-

—The doctrine of informed consent requires doctors, before administering treatment to their patients, to disclose
adequately the material risks and side effects of the proposed treatment. The duty to obtain the patient’s informed
consent is distinct from the doctor’s duty to skillfully diagnose and treat the patient.

16. Same; Same; Four essential elements a plaintiff must prove in a malpractice action based upon the doctrine of
informed consent.-

—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.

17. Same; Same; Proficiency in diagnosis and therapy is not the full measure of a physician’s responsibility; The physician
is not expected to give the patient a short medical education, the disclosure rule only requires of him a reasonable
explanation, which means generally informing the patient in nontechnical terms as to what is at stake, the therapy
alternatives open to him, the goals expectably to be achieved, and the risks that may ensure from particular treatment or
no treatment.+

18. Same; Doctrine of Informed Consent; Informed consent evolved into a general principle of law that a physician has a
duty to disclose what a reasonably prudent physician in the medical community in the exercise of reasonable care would
disclose to his patient as to whatever grave risks of injury might be incurred from a proposed course of treatment, so that
53
a patient, exercising ordinary care for his own welfare, and faced with a choice of undergoing the proposed treatment, or
alternative treatment, or none at all, may intelligently exercise his judgment by reasonably balancing the probable risks
against the probable benefits.-

—The doctrine of informed consent within the context of physician-patient relationships goes far back into English
common law. As early as 1767, doctors were charged with the tort of “battery” (i.e., an unauthorized physical contact
with a patient) if they had not gained the consent of their patients prior to performing a surgery or procedure. In the
United States, the seminal case was Schoendorff v. Society of New York Hospital which involved unwanted treatment
performed by a doctor. Justice Benjamin Cardozo’s oft-quoted opinion upheld the basic right of a patient to give consent
to any medical procedure or treatment: “Every human being of adult years and sound mind has a right to determine what
shall be done with his own body; and a surgeon who performs an operation without his patient’s consent, commits an
assault, for which he is liable in damages.” From a purely ethical norm, informed consent evolved into a general principle
of law that a physician has a duty to disclose what a reasonably prudent physician in the medical community in the
exercise of reasonable care would disclose to his patient as to whatever grave risks of injury might be incurred from a
proposed course of treatment, so that a patient, exercising ordinary care for his own welfare, and faced with a choice of
undergoing the proposed treatment, or alternative treatment, or none at all, may intelligently exercise his judgment by
reasonably balancing the probable risks against the probable benefits.

19. Same; Court has recognized that medical negligence cases are best proved by opinions of expert witnesses belonging
in the same general neighborhood and in the same general line of practice as defendant physician or surgeon.-

—This Court has recognized that medical negligence cases are best proved by opinions of expert witnesses belonging in
the same general neighborhood and in the same general line of practice as defendant physician or 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.

Legal Malpractice

STI Drivers Association, et al. vs CA, G.R. No. 143196, November 26, 2002

1. Remedial Law; Actions; Attorneys; Petitioners were duly represented by a bona fide lawyer and the latter’s failure to
file the required position papers before the Labor Arbiter or to appeal on time to the NLRC is not a ground to declare the
proceedings a quo null and void; Any act performed by a lawyer within the scope of his general or implied authority is
regarded as an act of his client except in cases where reckless or gross negligence of counsel deprives the client of due
process of law or when its application “results in the outright deprivation of one’s property through a technicality.”-

Based on the foregoing, we find that the petitioners were duly represented by a bona fide lawyer and the latter’s failure
to file the required position papers before the Labor Arbiter or to appeal on time to the NLRC is not a ground to declare
the proceedings a quo null and void. We have ruled time and again that any act performed by a lawyer within the scope of
his general or implied authority is regarded as an act of his client. Consequently, the mistake or negligence of petitioners’
counsel may result in the rendition of an unfavorable judgment against them. Exceptions to the foregoing have been
recognized by this court in cases where reckless or gross negligence of counsel deprives the client of due process of law,
or when its application “results in the outright deprivation of one’s property through a technicality.” None of these
exceptions has been sufficiently shown in the instant case.

2. Remedial Law; Constitutional Law; Due Process; In the application of the principle of due process, what is sought to be
safeguarded against is not the lack of previous notice but the denial of the opportunity to be heard.-

54
The petitioners failed to show any evidence that the services of Atty. Arellano violated their right to due process or
deprived them of their property through a technicality. No gross negligence can be attributed to Atty. Arellano inasmuch
as he did not totally abandon or disregard his clients’ cases. He filed pleadings for and in their behalf. The petitioners
should therefore, as far as this suit is concerned, bear the consequences of their faulty option. After all, in the application
of the principle of due process, what is sought to be safeguarded against is not the lack of previous notice but the denial
of the opportunity to be heard. The question is not whether the petitioners succeeded in defending their interest but
whether the petitioners had the opportunity to present their side.

DAMAGES
ACTUAL OR COMPENSATORY DAMAGES

Mendoza &Lim vs. Sps. Gomez, G.R. No. 160110, June 18, 2014

1. Same; Same; Same; Interest Rates; Moratory Interests; Interest by way of damages has been defined as interest
allowed in actions for breach of contract or tort for the unlawful detention of money already due. This type of interest is
frequently called “moratory interest.”-

—Interest by way of damages has been defined as interest allowed in actions for breach of contract or tort for the
unlawful detention of money already due. This type of interest is frequently called “moratory interest.” Interest as a part
of damage, is allowed, not by application of arbitrary rules, but as a result of the justice of the individual case and as
compensation to the injured party. The legal provision on interests in quasi-delicts is Article 2211 of the Civil Code which
provides that in crimes and quasi-delicts, interest as part of the damage, may, in a proper case, be adjudicated in the
discretion of the court. Generally, interest is allowed as a matter of right for failure to pay liquidated claims when due. For
unliquidated claims, however, Article 2213 of the Civil Code provides that interest cannot be recovered upon unliquidated
claims or damages, except when the demand can be established with reasonable certainty. In the case at bar, although
the award of exemplary damages is unliquidated in the sense that petitioners cannot know for sure, before judgment, the
exact amount that they are required to pay to respondents, the award of actual or compensatory damages, however,
such as the truck repairs and medical expenses, is arguably liquidated in that they can be measured against a reasonably
certain standard. Moreover, justice would seem to require that the delay in paying for past losses which can be made
reasonably certain should be compensated through an award of interest.

2. Civil Law; Quasi-Delicts; Proximate Cause; Words and Phrases; 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.-

—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. And more
comprehensively, the proximate legal cause is that acting first and producing the injury, either immediately or by setting
other events in motion, all constituting a natural and continuous chain of events, each having a close causal connection
with its immediate predecessor, the final event in the chain immediately effecting the injury as a natural and probable
result of the cause which first acted, under such circumstances that the person responsible for the first event should, as
an ordinary prudent and intelligent person, have reasonable ground to expect at the moment of his act or default that an
injury to some person might probably result therefrom.

3. Same; Same; According to Manresa, liability for personal acts and omissions is founded on that indisputable principle of
justice recognized by all legislations that when a person by his act or omission causes damage or prejudice to another, a

55
juridical relation is created by virtue of which the injured person acquires a right to be indemnified and the person causing
the damage is charged with the corresponding duty of repairing the damage.-

—Having settled the fact of Mendoza’s negligence, then, the next question that confronts us is who may be held liable.
According to Manresa, liability for personal acts and omissions is founded on that indisputable principle of justice
recognized by all legislations that when a person by his act or omission causes damage or prejudice to another, a juridical
relation is created by virtue of which the injured person acquires a right to be indemnified and the person causing the
damage is charged with the corresponding duty of repairing the damage. The reason for this is found in the obvious truth
that man should subordinate his acts to the precepts of prudence and if he fails to observe them and causes damage to
another, he must repair the damage. His negligence having caused the damage, Mendoza is certainly liable to repair said
damage.

4. Same; Same; Vicarious Liability; In our jurisdiction, vicarious liability or imputed negligence is embodied in Article 2180
of the Civil Code and the basis for damages in the action under said article is the direct and primary negligence of the
employer in the selection or supervision, or both, of his employee.-

—Mendoza’s employer may also be held liable under the doctrine of vicarious liability or imputed negligence. Under such
doctrine, a person who has not committed the act or omission which caused damage or injury to another may
nevertheless be held civilly liable to the latter either directly or subsidiarily under certain circumstances. In our
jurisdiction, vicarious liability or imputed negligence is embodied in Article 2180 of the Civil Code and the basis for
damages in the action under said article is the direct and primary negligence of the employer in the selection or
supervision, or both, of his employee.

5. Same; Same; Same; In Filcar Transport Services v. Espinas, 674 SCRA 117 (2012), the Supreme Court (SC) held that the
registered owner is deemed the employer of the negligent driver, and is thus vicariously liable under Article 2176, in
relation to Article 2180, of the Civil Code.-

—In Filcar Transport Services v. Espinas, 674 SCRA 117 (2012), we held that the registered owner is deemed the employer
of the negligent driver, and is thus vicariously liable under Article 2176, in relation to Article 2180, of the Civil Code. Citing
Equitable Leasing Corporation v. Suyom, 388 SCRA 445 (2002), the Court ruled that insofar as third persons are
concerned, 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, whether there is an employer-employee relationship between the
registered owner and the driver is irrelevant in determining the liability of the registered owner who the law holds
primarily and directly responsible for any accident, injury or death caused by the operation of the vehicle in the streets
and highways.

6. Same; Same; Same; With the enactment of the motor vehicle registration law, the defenses available under Article
2180 of the Civil Code-

— that the employee acts beyond the scope of his assigned task or that it exercised the due diligence of a good father of a
family to prevent damage — are no longer available to the registered owner of the motor vehicle, because the motor
vehicle registration law, to a certain extent, modified Article 2180.—Generally, when an injury is caused by the negligence
of a servant or employee, there instantly arises a presumption of law that there was negligence on the part of the master
or employer either in the selection of the servant or employee (culpa in eligiendo) or in the supervision over him after the
selection (culpa vigilando), or both. The presumption is juris tantum and not juris et de jure; consequently, it may be
rebutted. Accordingly, the general rule is that if the employer shows to the satisfaction of the court that in the selection
and supervision of his employee he has exercised the care and diligence of a good father of a family, the presumption is
overcome and he is relieved of liability. However, with the enactment of the motor vehicle registration law, the defenses
available under Article 2180 of the Civil Code — that the employee acts beyond the scope of his assigned task or that it

56
exercised the due diligence of a good father of a family to prevent damage — are no longer available to the registered
owner of the motor vehicle, because the motor vehicle registration law, to a certain extent, modified Article 2180.

7. Same; Same; Unjust Enrichment; Under the civil law principle of unjust enrichment, the registered owner of the motor
vehicle has a right to be indemnified by the actual employer of the driver; and under Article 2181 of the Civil Code,
whoever pays for the damage caused by his dependents or employees may recover from the latter what he has paid or
delivered in satisfaction of the claim.-

—As such, there can be no other conclusion but to hold Lim vicariously liable with Mendoza. This does not mean,
however, that Lim is left without any recourse against Enriquez and Mendoza. Under the civil law principle of unjust
enrichment, the registered owner of the motor vehicle has a right to be indemnified by the actual employer of the driver;
and under Article 2181 of the Civil Code, whoever pays for the damage caused by his dependents or employees may
recover from the latter what he has paid or delivered in satisfaction of the claim.

8. Same; Same; Damages; Article 2202 of the Civil Code provides that in crimes and quasi-delicts, the defendant shall be
liable for all damages which are the natural and probable consequences of the act or omission complained of.-

—Article 2202 of the Civil Code provides that in crimes and quasi-delicts, the defendant shall be liable for all damages
which are the natural and probable consequences of the act or omission complained of. It is not necessary that such
damages have been foreseen or could have reasonably been foreseen by the defendant. Article 2199 of the same Code,
however, sets the limitation that, except as provided by law or by stipulation, one is entitled to an adequate
compensation only for such pecuniary loss suffered by him as he has duly proved. As such, to warrant an award of actual
or compensatory damages, the claimant must prove that the damage sustained is the natural and probable consequences
of the negligent act and, moreover, the claimant must adequately prove the amount of such damage.

9. Same; Same; Same; Moral Damages; Moral damages are not meant to be punitive but are designed to compensate and
alleviate the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral
shock, social humiliation, and similar harm unjustly caused to a person.-

—Moral damages are awarded to enable the injured party to obtain means, diversions or amusements that will serve to
alleviate the moral suffering he has undergone, by reason of the defendant’s culpable action. In prayers for moral
damages, however, recovery is more an exception rather than the rule. Moral damages are not meant to be punitive but
are designed to compensate and alleviate the physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar harm unjustly caused to a person. To be
entitled to such an award, the claimant must satisfactorily prove that he has suffered damages and that the injury causing
it has sprung from any of the cases listed in Articles 2219 and 2220 of the Civil Code. Moreover, the damages must be
shown to be the proximate result of a wrongful act or omission. The claimant must thus establish the factual basis of the
damages and its causal tie with the acts of the defendant.

10. Same; Same; Same; Exemplary Damages; In motor vehicle accident cases, exemplary damages may be awarded where
the defendant’s misconduct is so flagrant as to transcend simple negligence and be tantamount to positive or affirmative
misconduct rather than passive or negative misconduct.-

—In motor vehicle accident cases, exemplary damages may be awarded where the defendant’s misconduct is so flagrant
as to transcend simple negligence and be tantamount to positive or affirmative misconduct rather than passive or
negative misconduct. In characterizing the requisite positive misconduct which will support a claim for punitive damages,
the courts have used such descriptive terms as willful, wanton, grossly negligent, reckless, or malicious, either alone or in
combination. Gross negligence is the absence of care or diligence as to amount to a reckless disregard of the safety of
persons or property. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them.

57
11. Same; Same; Same; Attorney’s Fees; The general rule remains that attorney’s fees are not recoverable in the absence
of a stipulation thereto, the reason being that it is not sound policy to set a premium on the right to litigate.-

—From the very opening sentence of Article 2208 of the Civil Code, it is clearly intended to retain the award of attorney’s
fees as the exception in our law, as the general rule remains that attorney’s fees are not recoverable in the absence of a
stipulation thereto, the reason being that it is not sound policy to set a premium on the right to litigate. As such, in
Spouses Agustin v. Court of Appeals, 186 SCRA 375 (1990), we held that, the award of attorney’s fees being an exception
rather than the general rule, it is necessary for the court to make findings of facts and law that would bring the case
within the exception and justify the grant of such award. Thus, the reason for the award of attorney’s fees must be stated
in the text of the court’s decision; otherwise, if it is stated only in the dispositive portion of the decision, the same must
be disallowed on appeal.

12. Same; Same; Same; Cost of Suit; The Rules of Court provide that, generally, costs shall be allowed to the prevailing
party as a matter of course.-

—The Rules of Court provide that, generally, costs shall be allowed to the prevailing party as a matter of course, thus:
Section 1. Costs ordinarily follow results of suit.—Unless otherwise provided in these rules, costs shall be allowed to the
prevailing party as a matter of course, but the court shall have power, for special reasons, to adjudge that either party
shall pay the costs of an action, or that the same be divided, as may be equitable. No costs shall be allowed against the
Republic of the Philippines, unless otherwise provided by law

Philippine Hawk Corp vs Vivian Tan Lee, G.R. No. 166869, February 16, 2010

- Formula in determining loss of earning capacity

2. Appeals; The appellate court is clothed with ample authority to review matters, even if they are not assigned as errors
in the appeal, if it finds that their consideration is necessary in arriving at a just decision of the case.-

—The Court of Appeals correctly awarded civil indemnity for the death of respondent’s husband, temperate damages,
and moral damages for the physical injuries sustained by respondent in addition to the damages granted by the trial court
to respondent. The trial court overlooked awarding the additional damages, which were prayed for by respondent in her
Amended Complaint. The appellate court is clothed with ample authority to review matters, even if they are not assigned
as errors in the appeal, if it finds that their consideration is necessary in arriving at a just decision of the case.

3. Same; Same; In the computation of loss of earning capacity, only net earnings, not gross earnings, are to be
considered; that is, the total of the earnings less expenses necessary for the creation of such earnings or income, less
living and other incidental expenses.-

—In the computation of loss of earning capacity, only net earnings, not gross earnings, are to be considered; that is, the
total of the earnings less expenses necessary for the creation of such earnings or income, less living and other incidental
expenses. In the absence of documentary evidence, it is reasonable to peg necessary expenses for the lease and
operation of the gasoline station at 80 percent of the gross income, and peg living expenses at 50 percent of the net
income (gross income less necessary expenses).

4. Damages; Loss of Earning Capacity; The indemnity for loss of earning capacity of the deceased is awarded not for loss of
earnings, but for loss of capacity to earn money; As a rule, documentary evidence should be presented to substantiate the
claim for damages for loss of earning capacity;Exceptions.-

58
—The indemnity for loss of earning capacity of the deceased is provided for by Article 2206 of the Civil Code.
Compensation of this nature is awarded not for loss of earnings, but for loss of capacity to earn money. As a rule,
documentary evidence should be presented to substantiate the claim for damages for loss of earning capacity. By way of
exception, damages for loss of earning capacity may be awarded despite the absence of documentary evidence when: (1)
the deceased is self-employed and earning less than the minimum wage under current labor laws, in which case, judicial
notice may be taken of the fact that in the deceased’s line of work no documentary evidence is available; or (2) the
deceased is employed as a daily wage worker earning less than the minimum wage under current labor laws.

5. Same; The Court of Appeals is clothed with ample authority to review matters, even if they are not assigned as errors
on appeal, if it finds that their consideration is necessary in arriving at a just decision of the case.-

—Section 8, Rule 51 of the 1997 Rules of Civil Procedure provides: SEC. 8. Questions that may be decided.—No error
which does not affect the jurisdiction over the subject matter or the validity of the judgment appealed from or the
proceedings therein will be considered unless stated in the assignment of errors, or closely related to or dependent on an
assigned error and properly argued in the brief, save as the court pass upon plain errors and clerical errors. Philippine
National Bank v. Rabat, 344 SCRA 706 (2000) cited the book of Justice Florenz D. Regalado to explain the section above,
thus: In his book, Mr. Justice Florenz D. Regalado commented on this section, thus: 1. Sec. 8, which is an amendment of
the former Sec. 7 of this Rule, now includes some substantial changes in the rules on assignment of errors. The basic
procedural rule is that only errors claimed and assigned by a party will be considered by the court, except errors affecting
its jurisdiction over the subject matter. To this exception has now been added errors affecting the validity of the judgment
appealed from or the proceedings therein. Also, even if the error complained of by a party is not expressly stated in his
assignment of errors but the same is closely related to or dependent on an assigned error and properly argued in his brief,
such error may now be considered by the court. These changes are of jurisprudential origin. 2. The procedure in the
Supreme Court being generally the same as that in the Court of Appeals, unless otherwise indicated (see Secs. 2 and 4,
Rule 56), it has been held that the latter is clothed with ample authority to review matters, even if they are not assigned
as errors on appeal, if it finds that their consideration is necessary in arriving at a just decision of the case. Also, an
unassigned error closely related to an error properly assigned (PCIB vs. CA, et al., L-34931, Mar. 18, 1988), or upon which
the determination of the question raised by error properly assigned is dependent, will be considered by the appellate
court notwithstanding the failure to assign it as error (Ortigas, Jr. vs. Lufthansa German Airlines, L-28773, June 30, 1975;
Soco vs. Militante, et al., G.R. No. 58961, June 28, 1983). It may also be observed that under Sec. 8 of this Rule, the
appellate court is authorized to consider a plain error, although it was not specifically assigned by the appellant (Dilag vs.
Heirs of Resurreccion, 76 Phil. 649), otherwise it would be sacrificing substance for technicalities.

6. Same; Same; Same; Whenever an employee’s negligence 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 a family in the selection or
supervision of its employees.-

—Whenever an employee’s negligence 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. To avoid liability for a quasi-delict committed by his employee, an employer must overcome the presumption
by presenting convincing proof that he exercised the care and diligence of a good father of a family in the selection and
supervision of his employee. The Court upholds the finding of the trial court and the Court of Appeals that petitioner is
liable to respondent, since it failed to exercise the diligence of a good father of the family in the selection and supervision
of its bus driver, Margarito Avila, for having failed to sufficiently inculcate in him discipline and correct behavior on the
road. Indeed, petitioner’s tests were concentrated on the ability to drive and physical fitness to do so. It also did not know
that Avila had been previously involved in sideswiping incidents.

7. Torts; Damages; Quasi-Delicts; Negligence; Foreseeability is the fundamental test of negligence-

59
—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.—A
review of the records showed that it was petitioner’s witness, Efren Delantar Ong, who was about 15 meters away from
the bus when he saw the vehicular accident. Nevertheless, this fact does not affect the finding of the trial court that
petitioner’s bus driver, Margarito Avila, was guilty of simple negligence as affirmed by the appellate court. 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. In this case, the bus driver, who was driving on the right side of the road, already saw
the motorcycle on the left side of the road before the collision. However, he did not take the necessary precaution to slow
down, but drove on and bumped the motorcycle, and also the passenger jeep parked on the left side of the road, showing
that the bus was negligent in veering to the left lane, causing it to hit the motorcycle and the passenger jeep.

Eastern Shipping Lines, Inc. vs CA, G.R. No.97412 July 12, 1994

- Interest

Damages; Interest Rates; Rules of thumb for future guidance in the award of damages and interest rates.—The ostensible
discord is not difficult to explain. The factual circumstances may have called for different applications, guided by the rule
that the courts are vested with discretion, depending on the equities of each case, on the award of interest. Nonetheless,
it may not be unwise, by way of clarification and reconciliation, to suggest the following rules of thumb for future
guidance.

Same; Same; Same; When an obligation is breached, the contravenor can be held liable for damages.—When an
obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the
contravenor can be held liable for damages. The provisions under Title XVIII on “Damages” of the Civil Code govern in
determining the measure of recoverable damages.

Same; Same; Same; Interests in the Concept of Actual and Compensatory Damages; In a loan or forbearance of money,
the interest due should be that stipulated in writing, and in the absence thereof, the rate shall be 12% per annum.—With
regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as
well as the accrual thereof, is imposed, as follows: 1. When the obligation is breached, and it consists in the payment of a
sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in
writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the
absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or
extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.

Same; Same; Same; Same; In case of other obligations, the interest on the amount of damages may be imposed at the
discretion of the court at the rate of 6% per annum.—When an obligation, not constituting a loan or forbearance of
money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the
rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until
the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable
certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code)
but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to
run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed
to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the
amount finally adjudged.
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Same; Same; Same; Same; When the judgment of the court awarding a sum of money becomes final and executory, the
rate of legal interest shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to
be by then an equivalent to a forbearance of credit.—When the judgment of the court awarding a sum of money becomes
final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be
12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a
forbearance of credit.

Attorney’s fees:

Philippine National Construction Corporation vs. APAC Marketing Corporation, G.R. No. 190957, June 5, 2013

1. Civil Law; Damages; Attorney’s Fees; Article 2208 of the New Civil Code of the Philippines states the policy that should
guide the courts when awarding attorney’s fees to a litigant.-

—Article 2208 of the New Civil Code of the Philippines states the policy that should guide the courts when awarding
attorney’s fees to a litigant. As a general rule, the parties may stipulate the recovery of attorney’s fees. In the absence on
such stipulation, this article restrictively enumerates the instances when these fees may be recovered, to wit: Art. 2208. In
the absence of stipulation, attorney’s fees and expenses of litigation, other than judicial costs, cannot be recovered,
except: (1) When exemplary damages are awarded; (2) When the defendant’s act or omission has compelled the plaintiff
to litigate with third persons or to incur expenses to protect his interest; (3) In criminal cases of malicious prosecution
against the plaintiff; (4) In case of a clearly unfounded civil action or proceeding against the plaintiff; (5) Where the
defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly valid, just and demandable claim;
(6) In actions for legal support; (7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen’s compensation and employer’s liability laws; (9) In a separate civil action to
recover civil liability arising from a crime; (10) When at least double judicial costs are awarded; (11) In any other case
where the court deems it just and equitable that attorney’s fees and expenses of litigation should be recovered. In all
cases, the attorney’s fees and expenses of litigation must be reasonable.

2. Same; Same; Same; The award of attorney’s fees is an exception rather than the general rule;thus, there must be
compelling legal reason to bring the case within the exceptions provided under Article 2208 of the Civil Code to justify the
award.-

—We have consistently held that an award of attorney’s fees under Article 2208 demands factual, legal, and equitable
justification to avoid speculation and conjecture surrounding the grant thereof. Due to the special nature of the award of
attorney’s fees, a rigid standard is imposed on the courts before these fees could be granted. Hence, it is imperative that
they clearly and distinctly set forth in their decisions the basis for the award thereof. It is not enough that they merely
state the amount of the grant in the dispositive portion of their decisions. It bears reiteration that the award of attorney’s
fees is an exception rather than the general rule; thus, there must be compelling legal reason to bring the case within the
exceptions provided under Article 2208 of the Civil Code to justify the award.

3. Same; Same; Same; Attorney’s fees are not awarded as a matter of course every time a party wins.-

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—In Benedicto v. Villaflores, 632 SCRA 446 (2010), we explained the reason behind the need for the courts to arrive upon
an actual finding to serve as basis for a grant of attorney’s fees, considering the dual concept of these fees as ordinary and
extraordinary: It is settled that the award of attorney’s fees is the exception rather than the general rule; counsel’s fees
are not awarded every time a party prevails in a suit because of the policy that no premium should be placed on the right
to litigate. Attorney’s fees, as part of damages, are not necessarily equated to the amount paid by a litigant to a lawyer. In
the ordinary sense, attorney’s fees represent the reasonable compensation paid to a lawyer by his client for the legal
services he has rendered to the latter; while in its extraordinary concept, they may be awarded by the court as indemnity
for damages to be paid by the losing party to the prevailing party. Attorney’s fees as part of damages are awarded only in
the instances specified in Article 2208 of the Civil Code. As such, it is necessary for the court to make findings of fact and
law that would bring the case within the ambit of these enumerated instances to justify the grant of such award, and in all
cases it must be reasonable. We can glean from the above ruling that attorney’s fees are not awarded as a matter of
course every time a party wins. We do not put a premium on the right to litigate. On occasions that those fees are
awarded, the basis for the grant must be clearly expressed in the decision of the court.

Citibank N.A. vs Sps. Cabamongan, et al., G.R. No. 146918, May 2, 2006

4. Banks and Banking; Time Deposits; Interests; In a loan or forbearance of money, the interest due should be that
stipulated in writing, and in the absence thereof, the rate shall be 12% per annum counted from the time of demand—in
the case of the subject time deposit, the stipulated interest rate of 2.562% per annum shall apply for the 182-day contract
period, and for the period from the date of extrajudicial demand, until full payment, the rate of 12% shall apply.-

The time deposit subject matter of herein petition is a simple loan. The provisions of the New Civil Code on simple loan
govern the contract between a bank and its depositor. Specifically, Article 1980 thereof categorically provides that “. . .
savings . . . deposits of money in banks and similar institutions shall be governed by the provisions concerning simple
loan.” Thus, the relationship between a bank and its depositor is that of a debtor-creditor, the depositor being the
creditor as it lends the bank money, and the bank is the debtor which agrees to pay the depositor on demand. The
applicable interest rate on the actual damages of $55,216.69, should be in accordance with the guidelines set forth in
Eastern Shipping Lines, Inc. v. Court of Appeals, 234 SCRA 78 (1994), to wit: * * * Thus, in a loan or forbearance of money,
the interest due should be that stipulated in writing, and in the absence thereof, the rate shall be 12% per annum counted
from the time of demand. Accordingly, the stipulated interest rate of 2.562% per annum shall apply for the 182-day
contract period from August 16, 1993 to February 14, 1994. For the period from the date of extrajudicial demand,
September 16, 1994, until full payment, the rate of 12% shall apply. As for the intervening period between February 15,
1994 to September 15, 1994, the rate of interest then prevailing granted by Citibank shall apply since the time deposit
provided for roll over upon maturity of the principal and interest.

5. Banks and Banking; Time Deposits; Gross Negligence; The act of the bank’s employees in allowing the pretermination of
a depositor’s account despite the noted discrepancies in the depositor’s signature and photograph, the absence of the
original certificate of time deposit and the lack of notarized waiver dormant, constitutes gross negligence amounting to
bad faith under Article 2220 of the Civil Code.-

As to moral damages, in culpa contractual or breach of contract, as in the case before the Court, moral damages are
recoverable only if the defendant has acted fraudulently or in bad faith, or is found guilty of gross negligence amounting
to bad faith, or in wanton disregard of his contractual obligations. The act of Citibank’s employee in allowing the
pretermination of Cabamongan spouses’ account despite the noted discrepancies in Carmelita’s signature and
photograph, the absence of the original certificate of time deposit and the lack of notarized waiver dormant, constitutes
gross negligence amounting to bad faith under Article 2220 of the Civil Code.

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6. Attorney’s Fees; Since the award of attorney’s fees is the exception rather than the rule, it is necessary for the court to
make findings of facts and law that would bring the case within the exception and justify the grant of such award.-

Citibank contends that the award of attorney’s fees should be deleted since such award appears only in the dispositive
portion of the decision of the RTC and the latter failed to elaborate, explain and justify the same. Article 2208 of the New
Civil Code enumerates the instances where such may be awarded and, in all cases, it must be reasonable, just and
equitable if the same were to be granted. Attorney’s fees as part of damages are not meant to enrich the winning party at
the expense of the losing litigant. They are not awarded every time a party prevails in a suit because of the policy that no
premium should be placed on the right to litigate. The award of attorney’s fees is the exception rather than the general
rule. As such, it is necessary for the court to make findings of facts and law that would bring the case within the exception
and justify the grant of such award. The matter of attorney’s fees cannot be mentioned only in the dispositive portion of
the decision. They must be clearly explained and justified by the trial court in the body of its decision. Consequently, the
award of attorney’s fees should be deleted.

Sps. Pudadera vs. Magallanes, G.R. No. 170073, October 18, 2010.

1. Property; Sales; Buyer in Good Faith; The buyers cannot be considered in bad faith because the alleged flaw, the notice
of lis pendens, was already being ordered cancelled at the time of the sale and the cancellation of the notice terminated
the effects of such notice.-

—Based on these established facts, petitioners correctly argue that the said notice of lis pendens cannot be made the
basis for holding that they are buyers in bad faith. Indeed, at the time of the sale of the subject lot by Spouses Natividad
to petitioners on July 7, 1986, the civil case filed by Magallanes against Spouses Natividad had long been dismissed for
lack of jurisdiction and the said order of dismissal had become final and executory. In Spouses Po Lam v. Court of Appeals,
347 SCRA 86 (2000), the buyers similarly bought a property while a notice of lis pendens was subsisting on its title.
Nonetheless, we ruled that the buyers cannot be considered in bad faith because the alleged flaw, the notice of lis
pendens, was already being ordered cancelled at the time of the sale and the cancellation of the notice terminated the
effects of such notice.

2. Same; Same; The burden of proof to establish the status of a purchaser and registrant in good faith lies upon the one
who asserts it; The onus probandi cannot be discharged by mere invocation of the legal presumption of good faith.-

—Petitioners miscomprehend the right to due process. The records indicate that at no instance during the trial of this
case were they prevented from presenting evidence, including the testimonies of Spouses Natividad, to support their
claims. Thus, they were not denied their day in court. Petitioners seem to forget that they were the ones who filed this
action to recover ownership and quiet title against Magallanes. If petitioners intended to bolster their claim of good faith
by impleading the Spouses Natividad in this case, there was nothing to prevent them from doing so. Time and again, we
have ruled that the burden of proof to establish the status of a purchaser and registrant in good faith lies upon the one
who asserts it. This onus probandi cannot be discharged by mere invocation of the legal presumption of good faith.

3. Same; Same; Torrens Title; Well-settled is the rule that every person dealing with registered land may safely rely on the
correctness of the certificate of title issued therefor and the law will in no way oblige him to go beyond the certificate to
determine the condition of the property;Exception.-

—One is considered a purchaser in good faith if he buys the property without notice that some other person has a right to
or interest in such property and pays its fair price before he has notice of the adverse claims and interest of another
person in the same property. Well-settled is the rule that every person dealing with registered land may safely rely on the
correctness of the certificate of title issued therefor and the law will in no way oblige him to go beyond the certificate to

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determine the condition of the property. “However, this rule shall not apply when the party has actual knowledge of facts
and circumstances that would impel a reasonably cautious man to make such inquiry or when the purchaser has
knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to inquire
into the status of the title of the property in litigation.” “His mere refusal to believe that such defect exists, or his willful
closing of his eyes to the possibility of the existence of a defect in his vendor’s title will not make him an innocent
purchaser for value if it later develops that the title was in fact defective, and it appears that he had such notice of the
defect had he acted with that measure of precaution which may reasonably be required of a prudent man in a like
situation.”

4. Same; Same; Rules in Case of a Double Sale of Immovables.-

—Thus, in case of a double sale of immovables, ownership shall belong to “(1) the first registrant in good faith; (2) then,
the first possessor in good faith; and (3) finally, the buyer who in good faith presents the oldest title.” However, mere
registration is not enough to confer ownership. The law requires that the second buyer must have acquired and
registered the immovable property in good faith. In order for the second buyer to displace the first buyer, the following
must be shown: “(1) the second buyer must show that he acted in good faith (i.e., in ignorance of the first sale and of the
first buyer’s rights) from the time of acquisition until title is transferred to him by registration or failing registration, by
delivery of possession; and (2) the second buyer must show continuing good faith and innocence or lack of knowledge of
the first sale until his contract ripens into full ownership through prior registration as provided by law.”

MORAL DAMAGES

Montinola vs PAL, G.R. No. 198656, September 8, 2014

6. Civil Law; Damages; Moral Damages; Article 2220 states that “[w]illful injury to property may be a legal ground for
awarding moral damages if the court should find that, under the circumstances, such damages are justly due.-

—The nature of moral damages is defined under our Civil Code. Article 2220 states that “[w]illful injury to property may
be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are
justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.” In
Primero v. Intermediate Appellate Court, 156 SCRA 435 (1987), this court stated that damages, as defined in the Civil
Code, is recoverable in labor cases. Thus, moral damages: . . . cannot be justified solely upon the premise (otherwise
sufficient for redress under the Labor Code) that the employer fired his employee without just cause or due process.
Additional facts must be pleaded and proven to warrant the grant of moral damages under the Civil Code, these being, to
repeat, that the act of dismissal was attended by bad faith or fraud, or was oppressive to labor, or done in a manner
contrary to morals, good customs, or public policy; and, of course, that social humiliation, wounded feelings, grave
anxiety, etc., resulted therefrom.

7. Same; Same; Same; Labor Law; The employee is entitled to moral damages when the employer acted a) in bad faith or
fraud; b) in a manner oppressive to labor; or c) in a manner contrary to morals, good customs, or public policy.-

—The employee is entitled to moral damages when the employer acted a) in bad faith or fraud; b) in a manner oppressive
to labor; or c) in a manner contrary to morals, good customs, or public policy. Bad faith “implies a conscious and
intentional design to do a wrongful act for a dishonest purpose or moral obliquity.” Cathay Pacific Airways v. Spouses
Vazquez, 399 SCRA 207 (2003), established that bad faith must be proven through clear and convincing evidence. This is
because “[b]ad faith and fraud . . . are serious accusations that can be so conveniently and casually invoked, and that is
why they are never presumed. They amount to mere slogans or mudslinging unless convincingly substantiated by
whoever is alleging them.” Here, there was clear and convincing evidence of bad faith adduced in the lower tribunals.

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8. Labor Law; Due Process; There is denial of an opportunity to be heard if the employee is not clearly apprised of the acts
she committed that constituted the cause for disciplinary action.-

—There is denial of an opportunity to be heard if the employee is not clearly apprised of the acts she committed that
constituted the cause for disciplinary action. The Omnibus Rules Implementing the Labor Code requires that “a written
notice [be] served on the employee specifying the ground or grounds for termination, and giving said employee
reasonable opportunity within which to explain his side.” Reasonable opportunity has been described as “every kind of
assistance that management must accord to the employees to enable them to prepare adequately for their defense.”

9. Same; Civil Law; Damages; Moral Damages; The deprivation of economic compensation caused mental anguish, fright,
serious anxiety, besmirched reputation, and wounded feelings. All these are grounds for an award of moral damages
under the Civil Code.-

—This act of PAL is contrary to morals, good customs, and public policy. PAL was willing to deprive Montinola of the
wages she would have earned during her year of suspension even if there was no substantial evidence that she was
involved in the pilferage. Moral damages are, thus, appropriate. In Almira v. B.F. Goodrich Philippines, 58 SCRA 120
(1974), this court noted that unemployment “brings untold hardships and sorrows on those dependent on the wage-
earner.” This is also true for the case of suspension. Suspension is temporary unemployment. During the year of her
suspension, Montinola and her family had to survive without her usual salary. The deprivation of economic compensation
caused mental anguish, fright, serious anxiety, besmirched reputation, and wounded feelings. All these are grounds for an
award of moral damages under the Civil Code.

del Mundo vs. CA, G.R. No. 104576, January 20, 1995

2. Damages; Actual Damages; Moral Damages; Awards for actual and moral damages must each be separately identified
and independently justified and cannot be dealt with in the aggregate as they are not kindred terms and are not governed
by a coincident set of rules.-

The two awards—one for actual damages and the other for moral damages—cannot be dealt with in the aggregate;
neither being kindred terms nor governed by a coincident set of rules, each must be separately identified and
independently justified. A requirement common to both, of course, is that an injury must have been sustained by the
claimant. The nature of that injury, nonetheless, differs for while it is pecuniary in actual or compensatory damages, it is,
upon the other hand, nonpecuniary in the case of moral damages.

3. Damages; Actual Damages; Moral Damages; Actual damages, to be recoverable, must not only be capable of proof but
must actually be proved with reasonable degree of certainty, and courts, in making an award, must point out specific facts
which could afford a basis for measuring whatever compensatory or actual damages are borne.-

A party is entitled to an adequate compensation for such pecuniary loss actually suffered by him as he has duly proved.
Such damages, to be recoverable, must not only be capable of proof, but must actually be proved with a reasonable
degree of certainty. We have emphasized that these damages cannot be presumed, and courts, in making an award must
point out specific facts which could afford a basis for measuring whatever compensatory or actual damages are borne.

4. Damages; Actual Damages; Moral Damages; Moral damages must be understood to be in the concept of grants, not
punitive or corrective in nature, calculated to compensate the claimant for the injury suffered.-
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Moral damages, upon the other hand, may be awarded to compensate one for manifold injuries such as physical
suffering, mental anguish, serious anxiety, besmirched reputation, wounded feelings and social humiliation. These
damages must be understood to be in the concept of grants, not punitive or corrective in nature, calculated to
compensate the claimant for the injury suffered,

5. Damages; Actual Damages; Moral Damages; Requisites for the award of moral damages.-

Although incapable of exactness and no proof of pecuniary loss is necessary in order that moral damages may be
awarded, the amount of indemnity being left to the discretion of the court, it is imperative, nevertheless, that (1) injury
must have been suffered by the claimant, and (2) such injury must have sprung from any of the cases expressed in Article
2219 and Article 2220 of the Civil Code. A causal relation, in fine, must exist between the act or omission referred to in the
Code which underlies, or gives rise to, the case or proceeding, on the one hand, and the resulting injury, on the other
hand; i.e., the first must be the proximate cause and the latter the direct consequence thereof.

Congregation of the Religious of the Virgin Mary vs. CA, G.R. No. 126363, June 26, 1998

Damages; Pleadings and Practice; A party is entitled to an adequate compensation for such pecuniary loss actually
suffered by him as he has duly proved—such damages, to be recoverable, must not only be capable of proof, but must
actually be proved with a reasonable degree of certainty.—Petitioner claims that the respondent court committed grave
abuse of discretion when it awarded respondents-spouses actual damages in the form of back rentals of P15,000.00 a
month, plus the legal rate of interest, to be reckoned from January, 1991, without proof to support the same. We have
examined the respondents-spouses’ complaint and the testimony of respondent Jerome Protasio on the matter of back
rentals prayed for in the complaint, and we find no factual basis how such award was arrived at. Thus, we have to discard
such award of damages. A party is entitled to an adequate compensation for such pecuniary loss actually suffered by him
as he has duly proved. Such damages, to be recoverable, must not only be capable of proof, but must actually be proved
with a reasonable degree of certainty. These damages cannot be presumed, and the courts in making such award of
damages must point out specific facts which could afford a basis for measuring whatever compensatory or actual
damages are borne.

Same; Same; Moral damages must be disallowed when it is not specifically prayed for in the complaint—there must be
pleading and proof of moral suffering, mental anguish, fright and the like.—We also agree with the petitioner that the
respondent court should not have awarded respondents-spouses moral damages of P100,000.00 simply because their
complaint did not specifically ask for such relief. Moral damages must be disallowed when it is not specifically prayed for
in the complaint. It is elementary that in order that moral damages may be awarded, there must be pleading and proof of
moral suffering, mental anguish, fright and the like, both of which are absent in this case.

Attorney’s Fees; The award of attorney’s fees should be eliminated where there is lack of factual basis and legal
justification.—We further agree with the petitioner that the award of attorney’s fees of P100,000.00 should be eliminated
for lack of factual basis and legal justification. The only evidence to support respondents-spouses’ claim for attorney’s
fees is the testimony of Jerome Protasio to the effect that his agreement with the law firm handling his case is that he is
obligated to pay “25% of the obligation receivable x x x.” That is all. Both the trial court and respondent Court of Appeals
likewise did not cite specific factual basis to justify the award of attorney’s fees, which is in violation of the proscription
against the imposition of a penalty on the right to litigate.

People vs. Degala, G.R. No. 129292-93, June 20, 2001

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5. Criminal Law; Rape; Damages; Civil indemnity is distinct from moral damages and the two are awarded separately from
each other.-

As regards the damages, the trial court awarded in favor of the complainant the amount of P50,000.00 in each case “as
civil indemnity by way of moral damages.” We reiterate that civil indemnity is distinct from moral damages and the two
are awarded separately from each other. Civil indemnity, is mandatory upon the finding of the fact of rape.

People vs. Lascano, et al., G.R. No. 192180, March 21, 2012

Civil Indemnities; The award of civil indemnity to the rape victim is mandatory upon the finding that rape took place.-

—The award of civil indemnity to the rape victim is mandatory upon the finding that rape took place. Moral damages, on
the other hand, are awarded to rape victims without need of proof other than the fact of rape, under the assumption that
the victim suffered moral injuries from the experience she underwent. Therefore, this Court affirms the award of
P50,000.00 as civil indemnity and P50,000.00 as moral damages, based on prevailing jurisprudence. In addition, we
likewise award exemplary damages in the amount of P30,000.00 for each count of rape. The award of exemplary damages
is justified under Article 2229 of the Civil Code to set a public example or correction for the public good.

Gregorio et al. vs Angeles et al., G.R. No. 85847, December 21, 1989

1. Damages; Docket Fees; Amount payable by way of exemplary damages may be determined in the course of trial.-

The amount payable by way of exemplary damages may be determined in the course of the trial. The plaintiff (the
petitioners in this case) could not have therefore predicted how much exemplary losses they had incurred. We are not
saying—so let us make one thing clear—that the amount of exemplary damages need not be alleged in all cases.
Certainly, it would have been different had the case been one purely for moral, nominal, temperate, or exemplary,
damages, (as in libel) other than actual. Though these damages are, under the Civil Code, damages that can not be shown
with certainty, unlike actual damages, the plaintiff must ascertain, in his estimation, the sums he wants, and the sums
required to determine the amount of docket and other fees.

2. Damages; Docket Fees; Case at bar; The Court can assess docketing fees on the basis of actual damages sought.-

The case at bar is different. It is, in essence, a demand for specific performance, as a consequence of a contract of loan
between the parties in the sum of: “a. The principal of P100,000.00, less whatever was paid per evidence to be presented,
if any; b. Attorney’s fees of 25% of principal, plus interest or P52,000.00; c. Interests of 12% per annum = P108,000.00 for
nine (9) years which is provided in annex “B” and is part of the principal = P100,000.00 + P108,000.00; d. Exemplary
damages subject to the discretion of the Honorable Court; e. Expenses of litigation of P10,000.00; f. For other relief which
the Honorable Court may deem just to impose under the circumstances, such as issuance of the order/writ of attachment
due to conversion as stated in the herein affidavit.” The demand for exemplary damages was obviously meant to magnify
the total claims, as is the usual practice, but the failure to specify it is not lethal. The court can assess the docketing fees
on the basis of the actual damages sought.

3. Damages; Docket Fees; It is fatal if the complaint left to the judge mere “guesswork” as to the amounts payable as and
by way of docket fees.-

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So it has been held that where the complaint states enough facts and sums to “enable . . . the Clerk of Court of the lower
Court to compute the docket fees payable,” the trial court would be in error to expunge the pleading. What is fatal, so we
are told, is if the complaint left to the judge mere “guesswork” as to the amounts payable as and by way of docket fees.

Republic vs. Tuvera, G.R. No. 148246, February 16, 2007

9. Civil Law; Damages; An action for recovery of sum of money must prove the amount sought to be recovered; The
Republic failed to prove damages.-

It bears to the most primitive of reasons that an action for recovery of sum of money must prove the amount sought to be
recovered. In the case at bar, the Republic rested its case without presenting any evidence, documentary or testimonial,
to establish the amount that should be restituted to the State by reason of the illegal acts committed by the respondents.
There is the bare allegation in the complaint that the State is entitled to P48 million by way of actual damages, but no
single proof presented as to why the State is entitled to such amount. Actual damages must be proven, not presumed.
The Republic failed to prove damages. It is not enough for the Republic to have established, as it did, the legal travesty
that led to the wrongful obtention by Twin Peaks of the TLA. It should have established the degree of injury sustained by
the State by reason of such wrongful act.

10. Civil Law; Damages; A juridical person is not entitled to moral damages under Article 2217 of the Civil Code; It may
avail of moral damages under the analogous cases listed in Article 2219, such as for libel, slander or any other form of
defamation.-

As explained, a juridical person is not entitled to moral damages under Article 2217 of the Civil Code. It may avail of moral
damages under the analogous cases listed in Article 2219, such as for libel, slander or any other form of defamation.
Suffice it to say that the action at bar does not involve any of the analogous cases under Article 2219, and indeed upon an
intelligent reading of Article 2219, it is difficult to see how the Republic could sustain any of the injuries contemplated
therein. Any lawyer for the Republic who poses a claim for moral damages in behalf of the State stands in risk of serious
ridicule. Temperate Damages; Jurisprudence applying Article 2224 is clear that temperate damages may be awarded even
in instances where pecuniary loss could theoretically have been proved with certainty.—There is sufficient basis for an
award of temperate damages, also sought by the Republic notwithstanding the fact that a claim for both actual and
temperate damages is internally inconsistent. Tem- perate or moderate damages avail when “the court finds that some
pecuniary loss has been suffered but its amount can not from the nature of the case, be proved with certainty.” The
textual language might betray an intent that temperate damages do not avail when the case, by its nature, is susceptible
to proof of pecuniary loss; and certainly the Republic could have proved pecuniary loss herein. Still, jurisprudence
applying Article 2224 is clear that temperate damages may be awarded even in instances where pecuniary loss could
theoretically have been proved with certainty.

11. Civil Law; Exemplary Damages; The allowance of temperate damages also paves the way for the award of exemplary
damages.-

The allowance of temperate damages also paves the way for the award of exemplary damages. Under Article 2234 of the
Civil Code, a showing that the plaintiff is entitled to temperate damages allows for the award of exemplary damages. Even
as exemplary damages cannot be recovered as a matter of right, the courts are empowered to decide whether or not they
should be adjudicated. Ill-gotten wealth cases are hornbook demonstrations where damages by way of example or
correction for the public good should be awarded. Fewer causes of action deserve the stigma left by exemplary damages,
which “serve as a deterrent against or as a negative incentive to curb socially deleterious actions.”

NOMINAL DAMAGES

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PNOC Shipping and Transport Corp. vs. CA, et al., G. R. No. 107518, October 8, 1998

Damages; There are two kinds of actual or compensatory damages: One is the loss of what a person already possesses
(daño emergente), and the other is the failure to receive as a benefit that which would have pertained to him (lucro
cesante).—Under Article 2199 of the Civil Code, actual or compensatory damages are those awarded in satisfaction of, or
in recompense for, loss or injury sustained. They proceed from a sense of natural justice and are designed to repair the
wrong that has been done, to compensate for the injury inflicted and not to impose a penalty. In actions based on torts or
quasi-delicts, actual damages include all the natural and probable consequences of the act or omission complained of.
There are two kinds of actual or compensatory damages: one is the loss of what a person already possesses (daño
emergente), and the other is the failure to receive as a benefit that which would have pertained to him (lucro cesante).

Same; Evidence; To enable an injured party to recover actual or compensatory damages, he is required to prove the
actual amount of loss with reasonable degree of certainty premised upon competent proof and on the best evidence
available—damages cannot be presumed and courts, in making an award must point out specific facts that could afford a
basis for measuring whatever compensatory or actual damages are borne.—As stated at the outset, to enable an injured
party to recover actual or compensatory damages, he is required to prove the actual amount of loss with reasonable
degree of certainty premised upon competent proof and on the best evidence available. The burden of proof is on the
party who would be defeated if no evidence would be presented on either side. He must establish his case by a
preponderance of evidence which means that the evidence, as a whole, adduced by one side is superior to that of the
other. In other words, damages cannot be presumed and courts, in making an award must point out specific facts that
could afford a basis for measuring whatever compensatory or actual damages are borne.

Same; Nominal damages are damages in name only and not in fact.—Actually, nominal damages are damages in name
only and not in fact. Where these are allowed, they are not treated as an equivalent of a wrong inflicted but simply in
recognition of the existence of a technical injury. However, the amount to be awarded as nominal damages shall be equal
or at least commensurate to the injury sustained by private respondent considering the concept and purpose of such
damages. The amount of nominal damages to be awarded may also depend on certain special reasons extant in the case.

Go vs. IAC, G.R. No. 68138, May 13, 1991

1. Torts; Quasi-Delicts; Damages; Although as a rule, there should be no penalty on the right to litigate, but under the
peculiar circumstances of this case showing that it was the bank officers’ gross negligence which caused inconvenience,
humiliation and embarrasment to private respondent, the latter is entitled to an award of damages.-

Although this Court has consistently held that there should be no penalty on the right to litigate and that error alone in
the filing of a case be it before the courts or the proper police authorities, is not a ground for moral damages, we hold
that under the peculiar circumstances of this case, private respondent is entitled to an award of damages. Indeed, it
would be unjust to overlook the fact that petitioners’ negligence was the root of all the inconvenience and
embarrassment experienced by the private respondent albeit they happened after the filing of the complaint with the
constabulary authorities. Petitioner Go’s negligence in fact led to the swindling of his employer. Had Go exercised the
diligence expected of him as a bank officer and employee, he would have noticed the glaring disparity between the
payee’s name and address on the treasury checks involved and the name and address of the depositor appearing in the
bank’s records. The situation would have been different if the treasury checks were tampered with only as to their
amounts because the alteration would have been unnoticeable and hard to detect as the herein altered check bearing the
amount of $913.40 shows. But the error in the name and address of the payee was very patent and could not have
escaped the trained eyes of bank officers and employees. There is therefore, no other conclusion than that the bank
through its employees (including the tellers who allegedly conducted an identification check on the depositor) was grossly
negligent in handling the business transaction herein involved. While at that stage of events private respondent was still
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out of the picture, it definitely was the start of his consequent involvement as his name was illegally used in the illicit
transaction. Again, knowing that its viability depended on the confidence reposed upon it by the public, the bank through
its employees should have exercised the caution expected of it. In crimes and quasi-delicts, the defendant shall be liable
for all damages which are the natural and probable consequences of the act or omission complained of. It is not necessary
that such damages have been foreseen or could have reasonably been foreseen by the defendant. As Go’s negligence was
the root cause of the complained inconvenience, humiliation and embarrassment, Go is liable to private respondents for
damages.

2. Torts; Quasi-Delicts; Damages; Petitioner-bank cannot disclaim liability for the negligence of its employees, because it
failed to prove not only that it exercised due diligence to prevent damage but that it was not negligent in the selection
and supervision of its employees.-

Anent petitioner bank’s claim that it is not “co-equally liable” with Go for damages, under the fifth paragraph of Article
2180 of the Civil Code, “(E)mployers shall be liable for the damages caused by their employees x x x acting within the
scope of their assigned tasks.” Pursuant to this provision, the bank is responsible for the acts of its employee unless there
is proof that it exercised the diligence of a good father of a family to prevent the damage. Hence, the burden of proof lies
upon the bank and it cannot now disclaim liability in view of its own failure to prove not only that it exercised due
diligence to prevent damage but that it was not negligent in the selection and supervision of its employees.

TEMPERATE OR MODERATE DAMAGES

Premiere Development Bank Development Bank vs. CA, G.R. No. 159352, April 14, 2004

Actions; Banks and Banking; Contracts; Damages; Corporation Law; Where the not-so-forthright conduct of a bank in its
dealings with two corporations caused damaged to the latter, it should be held liable to each of the two corporations
which are two separate and distinct juridical entities.-

Undeniably, the not-so-forthright conduct of Premiere Bank in its dealings with respondent corporations caused damage
to Panacor and Iba-Finance. It is error for Premiere Bank to assume that the compromise agreement it entered with Iba-
Finance extinguished all direct and collateral incidents to the aborted take-out such that it also cancelled its obligations to
Panacor. The unjustified refusal by Premiere Bank to release the mortgage document prompted Iba-Finance to withhold
the release of the P2.5 million earmarked for Panacor which eventually terminated the distributorship agreement. Both
Iba-Finance and Panacor, which are two separate and distinct juridical entities, suffered damages due to the fault of
Premiere Bank. Hence, it should be held liable to each of them.

Damages; Words and Phrases; To justify an award for 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; Actual or compensatory
damages are those awarded in satisfaction of, or in recompense for, loss or injury sustained—they proceed from a sense
of natural justice and are designed to repair the wrong that has been done, to compensate for the injury inflicted and not
to impose a penalty.-

To justify an award for 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. The burden of proof is on the party who will be defeated if no
evidence is presented on either side. He must establish his case by a preponderance of evidence which means that the
evidence, as a whole, adduced by one side is superior to that of the other. In other words, damages cannot be presumed
and courts, in making an award, must point out specific facts that can afford a basis for measuring whatever
compensatory or actual damages are borne. Under Article 2199 of the Civil Code, actual or compensatory damages are
those awarded in satisfaction of, or in recompense for, loss or injury sustained. They proceed from a sense of natural

70
justice and are designed to repair the wrong that has been done, to compensate for the injury inflicted and not to impose
a penalty.

Damages; Words and Phrases; “Temperate Damages,” Explained; When the court finds that some pecuniary loss has been
suffered but the amount cannot, from the nature of the case, be proved with certainty, temperate damages may be
recovered.-

Even if not recoverable as compensatory damages, Panacor may still be awarded damages in the concept of temperate or
moderate damages. When the court finds that some pecuniary loss has been suffered but the amount cannot, from the
nature of the case, be proved with certainty, temperate damages may be recovered. Temperate damages may be allowed
in cases where from the nature of the case, definite proof of pecuniary loss cannot be adduced, although the court is
convinced that the aggrieved party suffered some pecuniary loss. The Code Commission, in explaining the concept of
temperate damages under Article 2224, makes the following comment: In some States of the American Union, temperate
damages are allowed. There are cases where from the nature of the case, definite proof of pecuniary loss cannot be
offered, although the court is convinced that there has been such loss. For instance, injury to ones commercial credit or to
the goodwill of a business firm is often hard to show with certainty in terms of money. Should damages be denied for that
reason? The judge should be empowered to calculate moderate damages in such cases, rather than that the plaintiff
should suffer, without redress from the defendant’s wrongful act.

MBTC vs CA, G.R. No. 112576, October 26, 1994

1. Civil Law; Negligence; Damages; Responsibility arising from negligence in the performance of every kind of obligation is
demandable.-

Clearly, petitioner bank was remiss in its duty and obligation to treat private respondents’ account with the highest
degree of care, considering the fiduciary nature of their relationship. The bank is under obligation to treat the accounts of
its depositors with meticulous care, whether such account consists only of a few hundred pesos or of millions. It must
bear the blame for failing to discover the mistake of its employee despite the established procedure requiring bank
papers to pass through bank personnel whose duty it is to check and countercheck them for possible errors.
Responsibility arising from negligence in the performance of every kind of obligation is demandable.

2. Civil Law; Negligence; Damages; The bank’s negligence although not have been attended with malice and bad faith,
nevertheless, it caused serious anxiety, embarassment and humiliation to private respondents.-

While the bank’s negligence may not have been attended with malice and bad faith, nevertheless, it caused serious
anxiety, embarrassment and humiliation to private respondents for which they are entitled to recover reasonable moral
damages.

3. Civil Law; Negligence; Damages; Damage to private respondents’ reputation and social standing entitles them to moral
damages.-

The damage to private respondents’ reputation and social standing entitles them to moral damages. Moral damages
include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock,
social humiliation and similar injury. 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. Temperate damages may be allowed in cases
where from the nature of the case, definite proof of pecuniary loss cannot be adduced, although the court is convinced
that there has been such loss.

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4. Civil Law; Negligence; Damages; Moral and temperate damages are not awarded to penalize the petitioner but to
compensate the respondents for injuries suffered as a result of the former’s fault and negligence.-

Moral and temperate damages which are not susceptible of pecuniary estimation are not awarded to penalize the
petitioner but to compensate the respondents for injuries suffered as a result of the former’s fault and negligence, taking
into account the latter’s credit and social standing in the banking community, particularly since this is the very first time
such humiliation has befallen private respondents. The amount of such losses need not be established with exactitude,
precisely due to their nature.

Leticia Tan vs OMC carriers, Inc. and Bonifacio Arambala, G.R. No. 190521, January 12, 2011

2. Interest Rates; Legal interest at the rate of 6% per annum on the amounts awarded starts to run from the time when
the trial court rendered judgment, and from the time this judgment becomes final and executory, the interest rate shall
be 12% per annum on the judgment amount and the interest earned up to that date.-

—Accordingly, legal interest at the rate of 6% per annum on the amounts awarded starts to run from May 14, 2003, when
the trial court rendered judgment. From the time this judgment becomes final and executory, the interest rate shall be
12% per annum on the judgment amount and the interest earned up to that date, until the judgment is wholly satisfied.

3. Same; Temperate Damages; Temperate damages in lieu of actual damages for loss of earning capacity may be awarded
where earning capacity is plainly established but no evidence was presented to support the allegation of the injured
party’s actual income.-

—According to the petitioners, prior to his death, Celedonio was a self-employed tailor who earned approximately
P156,000.00 a year, or P13,000.00 a month. At the time of his death in 1995, the prevailing daily minimum wage was
P145.00, or P3,770.00 per month, provided the wage earner had only one rest day per week. Even if we take judicial
notice of the fact that a small tailoring shop normally does not issue receipts to its customers, and would probably not
have any documentary evidence of the income it earns, Celedonio’s alleged monthly income of P13,000.00 greatly
exceeded the prevailing monthly minimum wage; thus, the exception set forth above does not apply. In the past, we
awarded temperate damages in lieu of actual damages for loss of earning capacity where earning capacity is plainly
established but no evidence was presented to support the allegation of the injured party’s actual income.

4. Same; Same; As a rule, documentary evidence should be presented to substantiate the claim for loss of earning
capacity; Exceptions.-

—As a rule, documentary evidence should be presented to substantiate the claim for loss of earning capacity. By way of
exception, damages for loss of earning capacity may be awarded despite the absence of documentary evidence when: (1)
the deceased is self-employed and earning less than the minimum wage under current labor laws, in which case, judicial
notice may be taken of the fact that in the deceased’s line of work, no documentary evidence is available; or (2) the
deceased is employed as a daily wage worker earning less than the minimum wage under current labor laws.

5. Same; Evidence; Absent competent proof on the actual damages suffered, a party still has the option of claiming
temperate damages, which may be allowed in cases where, from the nature of the case, definite proof of pecuniary loss
cannot be adduced although the court is convinced that the aggrieved party suffered some pecuniary loss.+

6. Damages; Actual Damages; Evidence; Actual damages, to be recoverable, must not only be capable of proof, but must
actually be proved with a reasonable degree of certainty-
72
—courts cannot simply rely on speculation, conjecture or guesswork in determining the fact and amount of damages.—
We begin by discussing the petitioners’ claim for actual damages arising from the damage inflicted on petitioner Leticia
Tan’s house and tailoring shop, taking into account the sewing machines and various household appliances affected. Our
basic law tells us that to recover damages there must be pleading and proof of actual damages suffered. As we explained
in Viron Transportation Co., Inc. v. Delos Santos, 345 SCRA 509 (2000): Actual damages, to be recoverable, must not only
be capable of proof, but must actually be proved with a reasonable degree of certainty. Courts cannot simply rely on
speculation, conjecture or guesswork in determining the fact and amount of damages. 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.

GSIS vs. Deang, 365 SCRA 341

2. Obligations and Contracts; Damages; An obligor in good faith is liable for all the natural and probable consequences of
the breach of the obligation.-

Since good faith is presumed and bad faith is a matter of fact which should be proved, we shall treat GSIS as a party who
defaulted in its obligation to return the owners’ duplicate copy of the title. As an obligor in good faith, GSIS is liable for all
the “natural and probable consequences of the breach of the obligation.” The inability of the spouses Deang to secure
another loan and the damages they suffered thereby has its roots in the failure of the GSIS to return the owners’
duplicate copy of the title.

3. Obligations and Contracts; Damages; In a breach of contract, moral damages are not awarded if the defendant is not
shown to have acted fraudulently or with malice or bad faith.-

We come now to the amount of damages. In a breach of contract, moral damages are not awarded if the defendant is not
shown to have acted fraudulently or with malice or bad faith. The fact that the complainant suffered economic hardship
or worries and mental anxiety is not enough.

4. Damages; Actual damages to be compensable must be proven by clear evidence.-

There is likewise no factual basis for an award of actual damages. Actual damages to be compensable must be proven by
clear evidence. A court cannot rely on “speculation, conjecture or guess work” as to the fact and amount of damages, but
must depend on actual proof.

5. Damages; The rationale behind temperate damages is precisely that from the nature of the case, definite proof of
pecuniary loss cannot be offered; When the court is convinced that there has been such loss, the judge is empowered to
calculate moderate damages, rather than let the complainant suffer without redress from the defendant’s wrongful act.-

However, it is also apparent that the spouses Deang suffered financial damage because of the loss of the owners’
duplicate copy of the title. Temperate damages may be granted, x x x GSIS submits that there must be proof of pecuniary
loss. This is untenable. The rationale behind temperate damages is precisely that from the nature of the case, definite
proof of pecuniary loss cannot be offered. When the court is convinced that there has been such loss, the judge is
empowered to calculate moderate damages, rather than let the complainant suffer without redress from the defendant’s
wrongful act.

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LIQUIDATED DAMAGES

Filinvest Land, Inc, vs. CA, G.R. No. 138980, September 20, 2005

1. Appeals; Pleadings and Practice; By assigning only one legal issue before the Supreme Court, a party has effectively
cordoned off any discussion into the factual issue raised before the Court of Appeals.-

It should be stressed that as only the issue of liquidated damages has been elevated to this Court, petitioner Filinvest is
deemed to have acquiesced to the other matters taken up by the courts below. Section 1, Rule 45 of the 1997 Rules of
Court states in no uncertain terms that this Court’s jurisdiction in petitions for review on certiorari is limited to “questions
of law which must be distinctly set forth.” By assigning only one legal issue, Filinvest has effectively cordoned off any
discussion into the factual issue raised before the Court of Appeals. In effect, Filinvest has yielded to the decision of the
Court of Appeals, affirming that of the trial court, in deferring to the factual findings of the commissioner assigned to the
parties’ case. Besides, as a general rule, factual matters cannot be raised in a petition for review on certiorari. This Court
at this stage is limited to reviewing errors of law that may have been committed by the lower courts. We do not perceive
here any of the exceptions to this rule; hence, we are restrained from conducting further scrutiny of the findings of fact
made by the trial court which have been affirmed by the Court of Appeals. Verily, factual findings of the trial court,
especially when affirmed by the Court of Appeals, are binding and conclusive on the Supreme Court.

2. Obligations and Contracts; Penal Clause; Functions; Words and Phrases; A penal clause is an accessory undertaking to
assume greater liability in case of breach.-

There is no question that the penalty of P15,000.00 per day of delay was mutually agreed upon by the parties and that the
same is sanctioned by law. A penal clause is an accessory undertaking to assume greater liability in case of breach. It is
attached to an obligation in order to insure performance and has a double function: (1) to provide for liquidated damages,
and (2) to strengthen the coercive force of the obligation by the threat of greater responsibility in the event of breach.

4. Obligations and Contracts; Penal Clause; Words and Phrases; A distinction between a penalty clause imposed
essentially as penalty in case of breach and a penalty clause imposed as indemnity for damages should be made in cases
where there has been neither partial nor irregular compliance with the terms of contract, but where there has been
partial or irregular compliance, there will be no substantial difference between a penalty and liquidated damages insofar
as legal results are concerned.-

Unfortunately for Filinvest, the above-quoted doctrine is inapplicable to herein case. The Supreme Court in Laureano
instructed that a distinction between a penalty clause imposed essentially as penalty in case of breach and a penalty
clause imposed as indemnity for damages should be made in cases where there has been neither partial nor irregular
compliance with the terms of the contract. In cases where there has been partial or irregular compliance, as in this case,
there will be no substantial difference between a penalty and liquidated damages insofar as legal results are concerned.
The distinction is thus more apparent than real especially in the light of certain provisions of the Civil Code of the
Philippines which provides in Articles 2226 and Article 2227 thereof: Art. 2226. Liquidated damages are those agreed
upon by the parties to a contract to be paid in case of breach thereof. Art. 2227. Liquidated damages, whether intended
as an indemnity or a penalty, shall be equitably reduced if they are iniquitous or unconscionable. Thus, we lamented in
one case that “(t)here is no justification for the Civil Code to make an apparent distinction between a penalty and
liquidated damages because the settled rule is that there is no difference between penalty and liquidated damages
insofar as legal results are concerned and that either may be recovered without the necessity of proving actual damages
and both may be reduced when proper.”

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HL Carlos Construction VS Marina Properties Corp., G.R. No. 147614, January 29, 2004

Civil Law; Human Relations; Unjust Enrichment; Requisites; There is unjust enrichment under Article 22 of the Civil Code
when the following are met.—There is unjust enrichment under Article 22 of the Civil Code when (1) a person is unjustly
benefited, and (2) such benefit is derived at the expense of or with damages to another.

Same; Same; Same; Quantum Meruit Principle; Quantum meruit means that in an action for work and labor, payment
shall be made in such amount as the plaintiff reasonably deserves.—Under the principle of quantum meruit, a contractor
is allowed to recover the reasonable value of the thing or services rendered despite the lack of a written contract, in order
to avoid unjust enrichment. Quantum meruit means that in an action for work and labor, payment shall be made in such
amount as the plaintiff reasonably deserves.To deny payment for a building almost completed and already occupied
would be to permit unjust enrichment at the expense of the contractor. H.L. Carlos Construction, Inc. vs. Marina
Properties Corporation, 421 SCRA 428, G.R. No. 147614 January 29, 2004

Damages; Liquidated Damages; Penal Clause; Under Philippine laws, liquidated damages take the nature of penalties.—
Liquidated damages are those that the parties agree to be paid in case of a breach. As worded, the amount agreed upon
answers for damages suffered by the owner due to delays in the completion of the project. Under Philippine laws, these
damages take the nature of penalties. A penal clause is an accessory undertaking to assume greater liability in case of a
breach. It is attached to an obligation in order to ensure performance.

EXEMPLARY OR CORRECTIVE DAMAGES

People vs. Catubig, G.R. No. 137842, August 23, 2001

Damages; Words and Phrases; Also known as “punitive” or “vindictive” damages, exemplary or corrective damages are
intended to serve as a deterrent to serious wrongdoings and as a vindication of undue sufferings and wanton invasion of
the rights of an injured or a punishment for those guilty of outrageous conduct; In common law, there is preference in the
use of exemplary damages when the award is to account for injury to feelings and for the sense of indignity and
humiliation suffered by a person as a result of an injury that has been maliciously and wantonly inflicted, while the terms
punitive or vindictive damages are often used to refer to those species of damages that may be awarded against a person
to punish him for his outrageous conduct.—Also known as “punitive” or “vindictive” damages, exemplary or corrective
damages are intended to serve as a deterrent to serious wrongdoings and as a vindication of undue sufferings and wanton
invasion of the rights of an injured or a punishment for those guilty of outrageous conduct. These terms are generally, but
not always, used interchangeably. In common law, there is preference in the use of exemplary damages when the award
is to account for injury to feelings and for the sense of indignity and humiliation suffered by a person as a result of an
injury that has been maliciously and wantonly inflicted, the theory being that there should be compensation for the hurt
caused by the highly reprehensible conduct of the defendant—associated with such circumstances as willfulness,
wantonness, malice, gross negligence or recklessness, oppression, insult or fraud or gross fraud—that intensifies the
injury. The terms punitive or vindictive damages are often used to refer to those species of damages that may be awarded
against a person to punish him for his outrageous conduct. In either case, these damages are intended in good measure
to deter the wrongdoer and others like him from similar conduct in the future.

Same; Same; The term “aggravating circumstances” used by the Civil Code, the law not having specified otherwise, is to
be understood in its broad or generic sense; The ordinary or qualifying nature of an aggravating circumstance is a
distinction that should only be of consequence to the criminal, rather than to the civil, liability of the offender—relative to
the civil aspect of the case, an aggravating circumstance, whether ordinary or qualifying, should entitle the offended party

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to an award of exemplary damages within the unbridled meaning of Article 2230 of the Civil Code.—The term
“aggravating circumstances” used by the Civil Code, the law not having specified otherwise, is to be understood in its
broad or generic sense. The commission of an offense has a two-pronged effect, one on the public as it breaches the
social order and the other upon the private victim as it causes personal sufferings, each of which is addressed by,
respectively, the prescription of heavier punishment for the accused and by an award of additional damages to the victim.
The increase of the penalty or a shift to a graver felony underscores the exacerbation of the offense by the attendance of
aggravating circumstances, whether ordinary or qualifying, in its commission. Unlike the criminal liability which is basically
a State concern, the award of damages, however, is likewise, if not primarily, intended for the offended party who suffers
thereby. It would make little sense for an award of exemplary damages to be due the private offended party when the
aggravating circumstance is ordinary but to be withheld when it is qualifying. Withal, the ordinary or qualifying nature of
an aggravating circumstance is a distinction that should only be of consequence to the criminal, rather than to the civil,
liability of the offender. In fine, relative to the civil aspect of the case, an aggravating circumstance, whether ordinary or
qualifying, should entitle the offended party to an award of exemplary damages within the unbridled meaning of Article
2230 of the Civil Code.

ARCO Pulp and Paper Co., Inc. vs Lim, G.R. No. 206806, June 25, 2014

Same; Damages; Moral Damages; Moral damages are not awarded as a matter of right but only after the party claiming it
proved that the breach was due to fraud or bad faith.—Under Article 2220 of the Civil Code, moral damages may be
awarded in case of breach of contract where the breach is due to fraud or bad faith: Art. 2220. Willfull injury to property
may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages
are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.
(Emphasis supplied) Moral damages are not awarded as a matter of right but only after the party claiming it proved that
the breach was due to fraud or bad faith. As this court stated: Moral damages are not recoverable simply because a
contract has been breached. They are recoverable only if the party from whom it is claimed acted fraudulently or in bad
faith or in wanton disregard of his contractual obligations. The breach must be wanton, reckless, malicious or in bad faith,
and oppressive or abusive.

Same; Same; Abuse of Rights; Persons who have the right to enter into contractual relations must exercise that right with
honesty and good faith. Failure to do so results in an abuse of that right, which may become the basis of an action for
damages.—Breaches of contract done in bad faith, however, are not specified within this enumeration. When a party
breaches a contract, he or she goes against Article 19 of the Civil Code, which states: Article 19. Every person must, in the
exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty
and good faith. Persons who have the right to enter into contractual relations must exercise that right with honesty and
good faith. Failure to do so results in an abuse of that right, which may become the basis of an action for damages. Article
19, however, cannot be its sole basis: Article 19 is the general rule which governs the conduct of human relations. By
itself, it is not the basis of an actionable tort. Article 19 describes the degree of care required so that an actionable tort
may arise when it is alleged together with Article 20 or Article 21.

Same; Same; Exemplary Damages; Exemplary damages may also be awarded in this case to serve as a deterrent to those
who use fraudulent means to evade their liabilities.—Business owners must always be forthright in their dealings. They
cannot be allowed to renege on their obligations, considering that these obligations were freely entered into by them.
Exemplary damages may also be awarded in this case to serve as a deterrent to those who use fraudulent means to evade
their liabilities. Since the award of exemplary damages is proper, attorney’s fees and cost of the suit may also be
recovered. Article 2208 of the Civil Code states: Article 2208. In the absence of stipulation, attorney’s fees and expenses
of litigation, other than judicial costs, cannot be recovered, except: (1) When exemplary damages are awarded[.]

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Same; Same; Rates of Interest; In view of the promulgation by the Supreme Court of the decision dated August 13, 2013
in Nacar v. Gallery Frames, 703 SCRA 439, the rate of interest due on the obligation must be modified from 12% per
annum to 6% per annum from the time of demand.—In view, however, of the promulgation by this court of the decision
dated August 13, 2013 in Nacar v. Gallery Frames, 703 SCRA 439, the rate of interest due on the obligation must be
modified from 12% per annum to 6% per annum from the time of demand. Nacar effectively amended the guidelines
stated in Eastern Shipping v. Court of Appeals, 234 SCRA 78 (1994), and we have laid down the following guidelines with
regard to the rate of legal interest: To recapitulate and for future guidance, the guidelines laid down in the case of Eastern
Shipping Lines are accordingly modified to embody BSP-MB Circular No. 799, as follows: I. When an obligation, regardless
of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable
for damages. The provisions under Title XVIII on “Damages” of the Civil Code govern in determining the measure of
recoverable damages. II. With regard particularly to an award of interest in the concept of actual and compensatory
damages, the rate of interest, as well as the accrual thereof, is imposed, as follows: 1. When the obligation is breached,
and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that
which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is
judicially demanded. In the absence of stipulation, the rate of interest shall be 6% per annum to be computed from
default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. 2.
When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages
awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be
adjudged on unliquidated claims or damages, except when or until the demand can be established with reasonable
certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the
time the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be so reasonably
established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court
is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual
base for the computation of legal interest shall, in any case, be on the amount finally adjudged. 3. When the judgment of
the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under
paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality until its satisfaction, this interim period
being deemed to be by then an equivalent to a forbearance of credit. And, in addition to the above, judgments that have
become final and executory prior to July 1, 2013, shall not be disturbed and shall continue to be implemented applying
the rate of interest fixed therein.

ASSESSMENT OF DAMAGES

Inhelder Corporation vs CA, G.R. No. L-52358, May 30, 1983

Damages; Checks; Action; There being no showing when the check given in payment by the Panganibans to Inhelder
Corp. was encashed, it cannot be said that latter’s filing of a collection suit against the former was clearly unfounded as to
justify award of damages in the case at bar.—On the above facts and circumstances, it should be difficult to conclude that
the COLLECTION CASE was a clearly unfounded civil action. It is not clear that the account of the PANGANIBANS had
already been paid as of February 12, 1975. Under Article 1249 of the Civil Code, payment should be held effective only
when PNB Check No. 32058 was actually cashed by, or credited to the account of, INHELDER. If that did not eventuate on
or before February 12, 1975, and there is no proof that it did, the account would still be unpaid, and the complaint in the
COLLECTION CASE, technically, could not be considered as substantially unfounded.

Same; Same; Same; Attorneys; Failure of Inhelder Corporation’s collection manager to advice its attorney that account
was already paid by means of a check would not justify inference that collection case filed by said attorney was clearly
unfounded.—It is true that when the check of the PANGANIBANS was received on February 5, 1975, the better procedure
would have been to withhold a complaint pending determination of whether or not the check was good. If dishonored,
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that would be the time to file the complaint. That procedure was not followed because of the failure of the corresponding
advice which could have been given to Atty. Fajardo by the INHELDER Credit and Collection Manager. But the lack of that
advice should not justify qualifying the COLLECTION CASE as clearly unfounded. If the check had bounced, the
COLLECTION CASE would have been tried and acted upon by the MANDALUYONG COURT on the merits.

Same; To justify award of damages for malicious prosecution, elements of malice or sinister design to vex or humiliate a
person, and want of probable cause must be proved.—Neither may it be said that the COLLECTION CASE was malicious.
Malicious prosecution, to be the basis of a suit, requires the elements of malice and want of probable cause. There must
be proof that the prosecution was prompted by a sinister design to vex and humiliate a person, and that it was initiated
deliberately knowing that the charge was false and groundless.

Same; Same.—In the present case, there is no evidence on record, clearly establishing these two elements. Although
there may be want of probable cause, there is no proof that petitioner deliberately initiated the COLLECTION CASE
knowing that the same was false and groundless.

Same; Same.—Nor can malice be inferred from want of probable cause. “It would be a harsh rule to hold that, where the
evidence was merely sufficient to make a prima facie showing of want of probable cause, malice must necessarily be
inferred therefrom.”

Same; Mere filing of suit even if unsuccessful does not justify award of damages against the filer.—It should also be
stressed that the mere filing of a suit does not render a person liable for malicious prosecution should he be unsuccessful.
The law could not have meant to impose a penalty on the right to litigate. Sound principles of justice and public policy
demand that persons shall have free resort to Courts of law for redress of wrongs and vindication of their rights without
fear of later on standing trial for damages should their actions lose ground.

Same; Trial courts should not award exhorbitant damages.—At this juncture, it may not be amiss to remind Trial Courts to
guard against the award of exhorbitant damages that are way out of proportion to the environmental circumstances of a
case and which, time and again, this Court has reduced or eliminated. Judicial discretion granted to the Courts in the
assessment of damages must always be exercised with balanced restraint and measured objectivity.

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