G.R. No.

82248 January 30, 1992 Whether or not engaged in any business or industry, the employer under Article 2180 is
ERNESTO MARTIN, petitioner, vs. HON. COURT OF APPEALS and MANILA liable for the torts committed by his employees within the scope of their assigned task.
ELECTRIC COMPANY, respondents. But it is necessary first to establish the employment relationship. Once this is done, the
CRUZ, J.: 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
This case turns on the proper application of the familiar rule that he who alleges must the defendant, as employer, may find it necessary to interpose the defense of due
prove his allegation. diligence in the selection and supervision of the employee as allowed in that article. 3

Ernesto Martin was the owner of a private car bearing license plate No. NPA-930. At In the case at bar, no evidence whatsoever was adduced by the plaintiff to show that the
around 2 o'clock in the morning of May 11, 1982, while being driven by Nestor Martin, it defendant was the employer of Nestor Martin at the time of the accident. The trial court
crashed into a Meralco electric post on Valley Golf Road, in Antipolo, Rizal. The car was merely presumed the existence of the employer-employee relationship and held that the
wrecked and the pole severely damaged. Meralco subsequently demanded reparation petitioner had not refuted that presumption. It noted that although the defendant alleged
from Ernesto Martin, but the demand was rejected. It thereupon sued him for damages that he was not Nestor Martin's employer, "he did not present any proof to substantiate
in the Regional Trial Court of Pasig, alleging inter alia that he was liable to it in the sum his allegation."
of P17,352.00 plus attorney's fees and litigation costs as the employer of Nestor Martin.
The petitioner's main defense was that Nestor Martin was not his employee. As the trial court put it:

After the plaintiff had rested, the defendant moved to dismiss the complaint on the There is no need to stretch one's imagination to realize that a car owner entrusts his
ground that no evidence had been adduced to show that Nestor Martin was his employee. vehicle only to his driver or to anyone whom he allows to drive it. Since neither
The motion was denied. The case was considered submitted for decision with the express plaintiff nor defendant has presented any evidence on the status of Nestor Martin, the
waiver by the defendant of his right to present his own evidence. The defendant thus did Court presumes that he was at the time of the incident, an employee of the defendant.
not rebut the plaintiff's allegation that he was Nestor Martin's employer. It is elementary that he who makes an allegation is required to prove the same.
Defendant alleges that Nestor Martin was not his employee but he did not present
In the decision dated August 27, 1985, Judge Eutropio Migriño held in favor of the any proof to substantiate his allegation. While it is true plaintiff did not present
plaintiff, awarding him the amount claimed, with 12% interest, and P4,000.00 attorney's evidence on its allegation that Nestor Martin was defendant's employee, the Court
fees, plus costs.1 The decision was seasonably elevated to the Court of Appeals, which believes and so holds, that there was no need for such evidence. As above adverted
affirmed it in toto on February 22, 1988, 2 prompting this petition for review. to, the Court can proceed on the presumption that one who drives the motor vehicle
is an employee of the owner thereof.
The petition has merit.
A presumption is defined as an inference as to the existence of a fact not actually known,
arising from its usual connection with another which is known, 4 or a conjecture based on
It is important to stress that the complaint for damages was filed by the private
past experience as to what course human affairs ordinarily take. 5 It is either a
respondent against only Ernesto Martin as alleged employer of Nestor Martin, the driver
presumption juris, or of law, or a presumption hominis, or of fact. 6
of the car at the time of the accident. Nestor Martin was not impleaded. The action was
based on tort under Article 2180 of the Civil Code, providing in part that:
There is no law directing the deduction made by the courts below from the particular
facts presented to them by the parties. Such deduction is not among the conclusive
Employers shall be liable for the damages caused by their employees
presumptions under Section 2 or the disputable presumptions under Section 3 of Rule 131
and household helpers acting within the scope of their assigned tasks,
of the Rules of Court. In other words, it is not a presumption juris.
even though the former are not engaged in any business or industry.

Neither is it a presumption hominis, which is a reasonable deduction from the facts proved
The above rule is applicable only if there is an employer-employee relationship although
without an express direction of law to that effect. 7 The facts proved, or not denied, viz.,
it is not necessary that the employer be engaged in any business or industry. It differs in
the ownership of the car and the circumstances of the accident, are not enough bases for
this sense from Article 103 of the Revised Penal Code, which requires that the employer
the inference that the petitioner is the employer of Nestor Martin.
be engaged in an industry to be subsidiarily liable for the felony committed by his
employee in the course of his employment.
In the modern urban society, most male persons know how to drive and do not have to
employ others to drive for them unless this is needed for business reasons. Many cannot
1
afford this luxury, and even if they could, may consider it an unnecessary expense and WHEREFORE, the petition is GRANTED. The decision of the respondent court is
inconvenience. In the present case, the more plausible assumption is that Nestor Martin REVERSED, and Civil Case No. 48045 in the Regional Trial Court of Pasig, Branch 151, is
is a close relative of Ernesto Martin and on the date in question borrowed the car for some DISMISSED, with costs against the respondent. It is so ordered.
private purpose. Nestor would probably not have been accommodated if he were a mere
employee for employees do not usually enjoy the use of their employer's car at two o'clock G.R. No. 66207 May 18, 1992
in the morning. MAXIMINO SOLIMAN, JR., represented by his judicial guardian VIRGINIA C.
SOLIMAN, petitioner, vs. HON. JUDGE RAMON TUAZON, Presiding Judge of
As the employment relationship between Ernesto Martin and Nestor Martin could not be Branch LXI, Regional Trial Court of Region III, Angeles City, and the REPUBLIC
presumed, it was necessary for the plaintiff to establish it by evidence. Meralco had the CENTRAL COLLEGES, represented by its President, respondents.
burden of proof, or the duty "to present evidence on the fact in issue necessary to establish
his claim" as required by Rule 131, Section 1 of the Revised Rules of Court. Failure to do RESOLUTION
this was fatal to its action.
FELICIANO, J.:
It was enough for the defendant to deny the alleged employment relationship, without
more, for he was not under obligation to prove this negative On 22 March 1983, petitioner Soliman, Jr. filed a civil complaint for damages against
averment. Ei incumbit probatio qui dicit, non qui negat. 8 This Court has consistently private respondent Republic Central Colleges ("Colleges"), the R.L. Security Agency Inc.
applied the ancient rule that "if the plaintiff, upon whom rests the burden of proving his and one Jimmy B. Solomon, a security guard, as defendants. The complaint alleged that:
cause of action, fails to show in a satisfactory manner the facts upon which he bases his
claim, the defendant is under no obligation to prove his exception or defense." 9 . . . on 13 August 1982, in the morning thereof, while the plaintiff was in the campus
ground and premises of the defendant, REPUBLIC CENTRAL COLLEGES, as he was
The case of Amor v. Soberano, 10 a Court of Appeals decision not elevated to this Court, and is still a regular enrolled student of said school taking his morning classes, the
was misapplied by the respondent court in support of the petitioner's position. The defendant, JIMMY B. SOLOMON, who was on said date and hour in the premises of
vehicle involved in that case was a six-by-six truck, which reasonably raised the factual said school performing his duties and obligations as a duly appointed security guard
presumption that it was engaged in business and that its driver was employed by the under the employment, supervision and control of his employer-defendant R.L.
owner of the vehicle. The case at bar involves a private vehicle as its license plate SECURITY AGENCY, INC., headed by Mr. Benjamin Serrano, without any
indicates. No evidence was ever offered that it was being used for business purposes or provocation, in a wanton, fraudulent, reckless, oppressive or malevolent manner,
that, in any case, its driver at the time of the accident was an employee of the petitioner. with intent to kill, attack, assault, strike and shoot the plaintiff on the abdomen with
a .38 Caliber Revolver, a deadly weapon, which ordinarily such wound sustained
It is worth mentioning in this connection that would have caused plaintiff's death were it not for the timely medical assistance given
in Filamer Christian Institute v. Court of Appeals, 11 the owner of the jeep involved in the to him. The plaintiff was treated and confined at Angeles Medical Center, Angeles
accident was absolved from liability when it was shown that the driver of the vehicle was City, and, as per doctor's opinion, the plaintiff may not be able to attend to his regular
not employed as such by the latter but was a "working scholar" as that term is defined by classes and will be incapacitated in the performance of his usual work for a duration
the Omnibus Rules Implementing the Labor Code. 12 He was assigned to janitorial duties. of from three to four months before his wounds would be completely healed. 1
Evidence was introduced to establish the employment relationship but it failed
nonetheless to hold the owner responsible. Significantly, no similar evidence was even Private respondent Colleges filed a motion to dismiss, contending that the complaint
presented in the case at bar, the private respondent merely relying on its mere allegation stated no cause of action against it. Private respondent argued that it is free from any
that Nestor Martin was the petitioner's employee. Allegation is not synonymous with liability for the injuries sustained by petitioner student for the reason that private
proof. respondent school was not the employer of the security guard charged, Jimmy Solomon,
and hence was not responsible for any wrongful act of Solomon. Private respondent
The above observations make it unnecessary to examine the question of the driver's school further argued that Article 2180, 7th paragraph, of the Civil Code did not apply,
alleged negligence or the lack of diligence on the part of the petitioner in the selection and since said paragraph holds teachers and heads of establishment of arts and trades liable
supervision of his employee. These questions have not arisen because the employment for damages caused by their pupils and students or apprentices, while security guard
relationship contemplated in Article 1860 of the Civil Code has not been established. Jimmy Solomon was not a pupil, student or apprentice of the school.

In an order dated 29 November 1983, respondent Judge granted private respondent

school's motion to dismiss, holding that security guard Jimmy Solomon was not an

2
employee of the school which accordingly could not be held liable for his acts or the contract for services entered into with the security agency. There being no employer-
omissions. Petitioner moved for reconsideration, without success. employee relationship between the Colleges and Jimmy Solomon, petitioner student
cannot impose vicarious liability upon the Colleges for the acts of security guard
In this Petition for Certiorari and Prohibition, it is contended that respondent trial judge Solomon.
committed a grave abuse of discretion when he refused to apply the provisions of Article
2180, as well as those of Articles 349, 350 and 352, of the Civil Code and granted the Since there is no question that Jimmy Solomon was not a pupil or student or an apprentice
school's motion to dismiss. of the Colleges, he being in fact an employee of the R.L. Security Agency Inc., the other
above-quoted paragraph of Article 2180 of the Civil Code is similarly not available for
Under Article 2180 of the Civil Code, the obligation to respond for damage inflicted by imposing liability upon the Republic Central Colleges for the acts or omissions of Jimmy
one against another by fault or negligence exists not only for one's own act or omission, Solomon.
but also for acts or omissions of a person for whom one is by law responsible. Among the
persons held vicariously responsible for acts or omissions of another person are the The relevant portions of the other Articles of the Civil Code invoked by petitioner are as
following: follows:

xxx xxx xxx Art. 349. The following persons shall exercise substitute parental
authority:
Employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks, xxx xxx xxx
even though the former are not engaged in any business or industry.
(2) Teachers and professors;
xxx xxx xxx
xxx xxx xxx
Lastly, teachers or heads of establishments of arts and trades shall be
liable for damages caused by their pupils, their students or apprentices, (4) Directors of trade establishments with regard to apprentices;
so long as they remain in their custody.
xxx xxx xxx
xxx xxx xxx
Art. 350. The persons named in the preceding article shall exercise
The first paragraph quoted above offers no basis for holding the Colleges liable for the reasonable supervision over the conduct of the child.
alleged wrongful acts of security guard Jimmy B. Solomon inflicted upon petitioner
Soliman, Jr. Private respondent school was not the employer of Jimmy Solomon. The
xxx xxx xxx
employer of Jimmy Solomon was the R.L. Security Agency Inc., while the school was the
client or customer of the R.L. Security Agency Inc. It is settled that where the security
agency, as here, recruits, hires and assigns the work of its watchmen or security guards, Art. 352. The relations between teacher and pupil, professor and
the agency is the employer of such guards or watchmen. 2 Liability for illegal or harmful student are fixed by government regulations and those of each school
acts committed by the security guards attaches to the employer agency, and not to the or institution. In no case shall corporal punishment be countenanced.
clients or customers of such agency. 3 As a general rule, a client or customer of a security The teacher or professor shall cultivate the best potentialities of the
agency has no hand in selecting who among the pool of security guards or watchmen heart and mind of the pupil or student.
employed by the agency shall be assigned to it; the duty to observe the diligence of a good
father of a family in the selection of the guards cannot, in the ordinary course of events, In Palisoc v. Brillantes, 4 invoked by petitioner, the Court held the owner and president of
be demanded from the client whose premises or property are protected by the security a school of arts and trades known as the "Manila Technical Institute," Quezon Blvd.,
guards. The fact that a client company may give instructions or directions to the security Manila, responsible in damages for the death of Dominador Palisoc, a student of Institute,
guards assigned to it, does not, by itself, render the client responsible as an employer of which resulted from fist blows delivered by Virgilio L. Daffon, another student of the
the security guards concerned and liable for their wrongful acts or omissions. Those Institute. It will be seen that the facts of Palisoc v. Brillantes brought it expressly within the
instructions or directions are ordinarily no more than requests commonly envisaged in

3
7th paragraph of Article 2180, quoted above; but those facts are entirely different from In the circumstances obtaining in the case at bar, however, there is, as yet, no
the facts existing in the instant case. finding that the contract between the school and Bautista had been breached thru
the former's negligence in providing proper security measures. This would be for
Persons exercising substitute parental authority are made responsible for damage the trial court to determine. And, even if there be a finding of negligence, the same
inflicted upon a third person by the child or person subject to such substitute parental could give rise generally to a breach of contractual obligation only. Using the test
authority. In the instant case, as already noted, Jimmy Solomon who committed allegedly of Cangco, supra, the negligence of the school would not be relevant absent a
tortious acts resulting in injury to petitioner, was not a pupil, student or apprentice of the contract. In fact, that negligence becomes material only because of the contractual
Republic Central Colleges; the school had no substitute parental authority over Solomon. relation between PSBA and Bautista. In other words, a contractual relation is a
condition sine qua non to the school's liability. The negligence of the school cannot
exist independently of the contract, unless the negligence occurs under the
Clearly, within the confines of its limited logic, i.e., treating the petitioner's claim as one
circumstances set out in Article 21 of the Civil Code.
based wholly and exclusively on Article 2180 of the Civil Code, the order of the
respondent trial judge was correct. Does it follow, however, that respondent Colleges
could not be held liable upon any other basis in law, for or in respect of the injury The Court is not unmindful of the attendant difficulties posed by the obligation of
sustained by petitioner, so as to entitle respondent school to dismissal of petitioner's schools, above-mentioned, for conceptually a school, like a common carrier,
complaint in respect of itself? cannot be an insurer of its students against all risks. This is specially true in the
populous student communities of the so-called "university belt" in Manila where
there have been reported several incidents ranging from gang wars to other forms
The very recent case of the Philippine School of Business Administration (PSBA) v. Court of
of hooliganism. It would not be equitable to expect of schools to anticipate all types
Appeals, 5 requires us to give a negative answer to that question.
of violent trespass upon their premises, for notwithstanding the security measures
installed, the same may still fail against an individual or group determined to
In PSBA, the Court held that Article 2180 of the Civil Code was not applicable where a carry out a nefarious deed inside school premises and environs. Should this be the
student had been injured by one who was an outsider or by one over whom the school case, the school may still avoid liability by proving that the breach of its
did not exercise any custody or control or supervision. At the same time, however, the contractual obligation to the students was not due to its negligence, here
Court stressed that an implied contract may be held to be established between a school statutorily defined to be the omission of that degree of diligence which is required
which accepts students for enrollment, on the one hand, and the students who are by the nature of obligation and corresponding to the circumstances of person, time
enrolled, on the other hand, which contract results in obligations for both parties: and place. 7

When an academic institution accepts students for enrollment, there is established In the PSBA case, the trial court had denied the school's motion to dismiss the complaint
a contract between them, resulting in bilateral obligations which parties are bound against it, and both the Court of Appeals and this Court affirmed the trial court's order.
to comply with. For its part, the school undertakes to provide the student with an In the case at bar, the court a quo granted the motion to dismiss filed by respondent
education that would presumably suffice to equip him with the necessary tools Colleges, upon the assumption that petitioner's cause of action was based, and could have
and skills to pursue higher education or a profession. On the other hand, the been based, only on Article 2180 of the Civil Code. As PSBA, however, states, acts which
student covenants to abide by the school's academic requirements and observe its are tortious or allegedly tortious in character may at the same time constitute breach of a
rules and regulations. contractual, or other legal, obligation. Respondent trial judge was in serious error when
he supposed that petitioner could have no cause of action other than one based on Article
Institutions of learning must also meet the implicit or "built-in" obligation of 2180 of the Civil Code. Respondent trial judge should not have granted the motion to
providing their students with an atmosphere that promotes or assists in attaining dismiss but rather should have, in the interest of justice, allowed petitioner to prove acts
its primary undertaking of imparting knowledge. Certainly, no student can absorb constituting breach of an obligation ex contractu or ex lege on the part of respondent
the intricacies of physics or higher mathematics or explore the realm of the arts Colleges.
and other sciences when bullets are flying or grenades exploding in the air or
where there looms around the school premises a constant threat to life and limb. In line, therefore, with the most recent jurisprudence of this Court, and in order to avoid
Necessarily, the school must ensure that adequate steps are taken to maintain a possible substantial miscarriage of justice, and putting aside technical considerations,
peace and order within the campus premises and to prevent the breakdown we consider that respondent trial judge committed serious error correctible by this Court
thereof. 6 in the instant case.

In that case, the Court was careful to point out that:

4
ACCORDINGLY, the Court Resolved to GRANT DUE COURSE to the Petition, to TREAT hose from which the gasoline was spouting. It burned the truck and the
the comment of respondent Colleges as its answer, and to REVERSE and SET ASIDE the following accessorias and residences.
Order dated 29 November 1983. This case is REMANDED to the court a quo for further
proceedings consistent with this Resolution. 2. The Fire Department report: —

G.R. No. L-12986 March 31, 1966 In connection with their allegation that the premises was (sic) subleased for the
THE SPOUSES BERNABE AFRICA and SOLEDAD C. AFRICA, and the HEIRS OF installation of a coca-cola and cigarette stand, the complainants furnished this
DOMINGA ONG, petitioners-appellants, vs. CALTEX (PHIL.), INC., MATEO Office a copy of a photograph taken during the fire and which is submitted
BOQUIREN and THE COURT OF APPEALS, respondents-appellees. herewith. it appears in this picture that there are in the premises a coca-cola
MAKALINTAL., J.: cooler and a rack which according to information gathered in the neighborhood
contained cigarettes and matches, installed between the gasoline pumps and the
This case is before us on a petition for review of the decision of the Court of Appeals, underground tanks.
which affirmed that of the Court of First Instance of Manila dismissing petitioners' second
amended complaint against respondents. The report of Captain Tinio reproduced information given by a certain Benito Morales
regarding the history of the gasoline station and what the chief of the fire department had
The action is for damages under Articles 1902 and 1903 of the old Civil Code. It appears told him on the same subject.
that in the afternoon of March 18, 1948 a fire broke out at the Caltex service station at the
corner of Antipolo street and Rizal Avenue, Manila. It started while gasoline was being The foregoing reports were ruled out as "double hearsay" by the Court of Appeals and
hosed from a tank truck into the underground storage, right at the opening of the hence inadmissible. This ruling is now assigned as error. It is contended: first, that said
receiving tank where the nozzle of the hose was inserted. The fire spread to and burned reports were admitted by the trial court without objection on the part of respondents;
several neighboring houses, including the personal properties and effects inside them. secondly, that with respect to the police report (Exhibit V-Africa) which appears signed
Their owners, among them petitioners here, sued respondents Caltex (Phil.), Inc. and by a Detective Zapanta allegedly "for Salvador Capacillo," the latter was presented as
Mateo Boquiren, the first as alleged owner of the station and the second as its agent in witness but respondents waived their right to cross-examine him although they had the
charge of operation. Negligence on the part of both of them was attributed as the cause opportunity to do so; and thirdly, that in any event the said reports are admissible as an
of the fire. exception to the hearsay rule under section 35 of Rule 123, now Rule 130.

The trial court and the Court of Appeals found that petitioners failed to prove negligence The first contention is not borne out by the record. The transcript of the hearing of
and that respondents had exercised due care in the premises and with respect to the September 17, 1953 (pp. 167-170) shows that the reports in question, when offered as
supervision of their employees. evidence, were objected to by counsel for each of respondents on the ground that they
were hearsay and that they were "irrelevant, immaterial and impertinent." Indeed, in the
The first question before Us refers to the admissibility of certain reports on the fire court's resolution only Exhibits J, K, K-5 and X-6 were admitted without objection; the
prepared by the Manila Police and Fire Departments and by a certain Captain Tinio of the admission of the others, including the disputed ones, carried no such explanation.
Armed Forces of the Philippines. Portions of the first two reports are as follows:
On the second point, although Detective Capacillo did take the witness stand, he was not
1. Police Department report: — examined and he did not testify as to the facts mentioned in his alleged report (signed by
Detective Zapanta). All he said was that he was one of those who investigated "the
Investigation disclosed that at about 4:00 P.M. March 18, 1948, while location of the fire and, if possible, gather witnesses as to the occurrence, and that he
Leandro Flores was transferring gasoline from a tank truck, plate No. brought the report with him. There was nothing, therefore, on which he need be cross-
T-5292 into the underground tank of the Caltex Gasoline Station examined; and the contents of the report, as to which he did not testify, did not thereby
located at the corner of Rizal Avenue and Antipolo Street, this City, an become competent evidence. And even if he had testified, his testimony would still have
unknown Filipino lighted a cigarette and threw the burning match stick been objectionable as far as information gathered by him from third persons was
near the main valve of the said underground tank. Due to the gasoline concerned.
fumes, fire suddenly blazed. Quick action of Leandro Flores in pulling
off the gasoline hose connecting the truck with the underground tank Petitioners maintain, however, that the reports in themselves, that is, without further
prevented a terrific explosion. However, the flames scattered due to the testimonial evidence on their contents, fall within the scope of section 35, Rule 123, which
provides that "entries in official records made in the performance of his duty by a public
5
officer of the Philippines, or by a person in the performance of a duty specially enjoined parted, and one of the broken ends hit the head of the plaintiff as he was about
by law, are prima facie evidence of the facts therein stated." to board the truck. As a result, plaintiff received the full shock of 4,400 volts
carried by the wire and was knocked unconscious to the ground. The electric
There are three requisites for admissibility under the rule just mentioned: (a) that the charge coursed through his body and caused extensive and serious multiple
entry was made by a public officer, or by another person specially enjoined by law to do burns from skull to legs, leaving the bone exposed in some parts and causing
so; (b) that it was made by the public officer in the performance of his duties, or by such intense pain and wounds that were not completely healed when the case was
other person in the performance of a duty specially enjoined by law; and (c) that the public tried on June 18, 1947, over one year after the mishap.
officer or other person had sufficient knowledge of the facts by him stated, which must
have been acquired by him personally or through official information (Moran, Comments The defendant therein disclaimed liability on the ground that the plaintiff had failed to
on the Rules of Court, Vol. 3 [1957] p. 398). show any specific act of negligence, but the appellate court overruled the defense under
the doctrine of res ipsa loquitur. The court said:
Of the three requisites just stated, only the last need be considered here. Obviously the
material facts recited in the reports as to the cause and circumstances of the fire were not The first point is directed against the sufficiency of plaintiff's evidence to place
within the personal knowledge of the officers who conducted the investigation. Was appellant on its defense. While it is the rule, as contended by the appellant, that
knowledge of such facts, however, acquired by them through official information? As to in case of noncontractual negligence, or culpa aquiliana, the burden of proof is on
some facts the sources thereof are not even identified. Others are attributed to Leopoldo the plaintiff to establish that the proximate cause of his injury was the negligence
Medina, referred to as an employee at the gas station were the fire occurred; to Leandro of the defendant, it is also a recognized principal that "where the thing which
Flores, driver of the tank truck from which gasoline was being transferred at the time to caused injury, without fault of the injured person, is under the exclusive control
the underground tank of the station; and to respondent Mateo Boquiren, who could not, of the defendant and the injury is such as in the ordinary course of things does
according to Exhibit V-Africa, give any reason as to the origin of the fire. To qualify their not occur if he having such control use proper care, it affords reasonable
statements as "official information" acquired by the officers who prepared the reports, the evidence, in the absence of the explanation, that the injury arose from
persons who made the statements not only must have personal knowledge of the facts defendant's want of care."
stated but must have the duty to give such statements for record. 1
And the burden of evidence is shifted to him to establish that he has observed
The reports in question do not constitute an exception to the hearsay rule; the facts stated due care and diligence. (San Juan Light & Transit Co. v. Requena, 244, U.S. 89,
therein were not acquired by the reporting officers through official information, not 56 L. ed. 680.) This rule is known by the name of res ipsa loquitur (the transaction
having been given by the informants pursuant to any duty to do so. speaks for itself), and is peculiarly applicable to the case at bar, where it is
unquestioned that the plaintiff had every right to be on the highway, and the
The next question is whether or not, without proof as to the cause and origin of the fire, electric wire was under the sole control of defendant company. In the ordinary
the doctrine of res ipsa loquitur should apply so as to presume negligence on the part of course of events, electric wires do not part suddenly in fair weather and injure
appellees. Both the trial court and the appellate court refused to apply the doctrine in the people, unless they are subjected to unusual strain and stress or there are defects
instant case on the grounds that "as to (its) applicability ... in the Philippines, there seems in their installation, maintenance and supervision; just as barrels do not
to he nothing definite," and that while the rules do not prohibit its adoption in appropriate ordinarily roll out of the warehouse windows to injure passersby, unless some
cases, "in the case at bar, however, we find no practical use for such doctrine." The one was negligent. (Byrne v. Boadle, 2 H & Co. 722; 159 Eng. Reprint 299, the
question deserves more than such summary dismissal. The doctrine has actually been leading case that established that rule). Consequently, in the absence of
applied in this jurisdiction, in the case of Espiritu vs. Philippine Power and Development Co. contributory negligence (which is admittedly not present), the fact that the wire
(CA-G.R. No. 3240-R, September 20, 1949), wherein the decision of the Court of Appeals snapped suffices to raise a reasonable presumption of negligence in its
was penned by Mr. Justice J.B.L. Reyes now a member of the Supreme Court. installation, care and maintenance. Thereafter, as observed by Chief Baron
Pollock, "if there are any facts inconsistent with negligence, it is for the defendant
to prove."
The facts of that case are stated in the decision as follows:

It is true of course that decisions of the Court of Appeals do not lay down doctrines
In the afternoon of May 5, 1946, while the plaintiff-appellee and other
binding on the Supreme Court, but we do not consider this a reason for not applying the
companions were loading grass between the municipalities of Bay and Calauan,
particular doctrine of res ipsa loquitur in the case at bar. Gasoline is a highly combustible
in the province of Laguna, with clear weather and without any wind blowing,
material, in the storage and sale of which extreme care must be taken. On the other hand,
an electric transmission wire, installed and maintained by the defendant
fire is not considered a fortuitous event, as it arises almost invariably from some act of
Philippine Power and Development Co., Inc. alongside the road, suddenly
6
man. A case strikingly similar to the one before Us is Jones vs. Shell Petroleum ordinary course of things does not happen if those who have its management or
Corporation, et al., 171 So. 447: control use proper care, it affords reasonable evidence, in absence of explanation
by defendant, that the accident arose from want of care. (45 C.J. #768, p. 1193).
Arthur O. Jones is the owner of a building in the city of Hammon which in the
year 1934 was leased to the Shell Petroleum Corporation for a gasoline filling This statement of the rule of res ipsa loquitur has been widely approved and
station. On October 8, 1934, during the term of the lease, while gasoline was adopted by the courts of last resort. Some of the cases in this jurisdiction in which
being transferred from the tank wagon, also operated by the Shell Petroleum the doctrine has been applied are the following, viz.: Maus v. Broderick, 51 La.
Corporation, to the underground tank of the station, a fire started with resulting Ann. 1153, 25 So. 977; Hebert v. Lake Charles Ice, etc., Co., 111 La. 522, 35 So.
damages to the building owned by Jones. Alleging that the damages to his 731, 64 L.R.A. 101, 100 Am. St. Rep. 505; Willis v. Vicksburg, etc., R. Co., 115 La.
building amounted to $516.95, Jones sued the Shell Petroleum Corporation for 63, 38 So. 892; Bents v. Page, 115 La. 560, 39 So. 599.
the recovery of that amount. The judge of the district court, after hearing the
testimony, concluded that plaintiff was entitled to a recovery and rendered The principle enunciated in the aforequoted case applies with equal force here. The
judgment in his favor for $427.82. The Court of Appeals for the First Circuit gasoline station, with all its appliances, equipment and employees, was under the control
reversed this judgment, on the ground the testimony failed to show with of appellees. A fire occurred therein and spread to and burned the neighboring houses.
reasonable certainty any negligence on the part of the Shell Petroleum The persons who knew or could have known how the fire started were appellees and
Corporation or any of its agents or employees. Plaintiff applied to this Court for their employees, but they gave no explanation thereof whatsoever. It is a fair and
a Writ of Review which was granted, and the case is now before us for reasonable inference that the incident happened because of want of care.
decision.1äwphï1.ñët
In the report submitted by Captain Leoncio Mariano of the Manila Police Department
In resolving the issue of negligence, the Supreme Court of Louisiana held: (Exh. X-1 Africa) the following appears:

Plaintiff's petition contains two distinct charges of negligence — one relating to Investigation of the basic complaint disclosed that the Caltex Gasoline Station
the cause of the fire and the other relating to the spreading of the gasoline about complained of occupies a lot approximately 10 m x 10 m at the southwest corner
the filling station. of Rizal Avenue and Antipolo. The location is within a very busy business
district near the Obrero Market, a railroad crossing and very thickly populated
Other than an expert to assess the damages caused plaintiff's building by the neighborhood where a great number of people mill around t
fire, no witnesses were placed on the stand by the defendant.
until
Taking up plaintiff's charge of negligence relating to the cause of the fire, we find
it established by the record that the filling station and the tank truck were under gasoline
the control of the defendant and operated by its agents or employees. We further
find from the uncontradicted testimony of plaintiff's witnesses that fire started
tever be theWactjvities of these peopleor lighting a cigarette cannot be excluded
in the underground tank attached to the filling station while it was being filled
and this constitute a secondary hazard to its operation which in turn endangers
from the tank truck and while both the tank and the truck were in charge of and
the entire neighborhood to conflagration.
being operated by the agents or employees of the defendant, extended to the
hose and tank truck, and was communicated from the burning hose, tank truck,
and escaping gasoline to the building owned by the plaintiff. Furthermore, aside from precautions already taken by its operator the concrete
walls south and west adjoining the neighborhood are only 2-1/2 meters high at
most and cannot avoid the flames from leaping over it in case of fire.
Predicated on these circumstances and the further circumstance of defendant's
failure to explain the cause of the fire or to show its lack of knowledge of the
cause, plaintiff has evoked the doctrine of res ipsa loquitur. There are many cases Records show that there have been two cases of fire which caused not only
in which the doctrine may be successfully invoked and this, we think, is one of material damages but desperation and also panic in the neighborhood.
them.
Although the soft drinks stand had been eliminated, this gasoline service station
Where the thing which caused the injury complained of is shown to be under is also used by its operator as a garage and repair shop for his fleet of taxicabs
the management of defendant or his servants and the accident is such as in the
7
 numbering ten or more, adding another risk to the possible outbreak of fire at The next issue is whether Caltex should be held liable for the damages caused to
this already small but crowded gasoline station. appellants. This issue depends on whether Boquiren was an independent contractor, as
held by the Court of Appeals, or an agent of Caltex. This question, in the light of the facts
The foregoing report, having been submitted by a police officer in the performance of his not controverted, is one of law and hence may be passed upon by this Court. These facts
duties on the basis of his own personal observation of the facts reported, may properly are: (1) Boquiren made an admission that he was an agent of Caltex; (2) at the time of the
be considered as an exception to the hearsay rule. These facts, descriptive of the location fire Caltex owned the gasoline station and all the equipment therein; (3) Caltex exercised
and objective circumstances surrounding the operation of the gasoline station in question, control over Boquiren in the management of the state; (4) the delivery truck used in
strengthen the presumption of negligence under the doctrine of res ipsa loquitur, since delivering gasoline to the station had the name of CALTEX painted on it; and (5) the
on their face they called for more stringent measures of caution than those which would license to store gasoline at the station was in the name of Caltex, which paid the license
satisfy the standard of due diligence under ordinary circumstances. There is no more fees. (Exhibit T-Africa; Exhibit U-Africa; Exhibit X-5 Africa; Exhibit X-6 Africa; Exhibit Y-
eloquent demonstration of this than the statement of Leandro Flores before the police Africa).
investigator. Flores was the driver of the gasoline tank wagon who, alone and without
assistance, was transferring the contents thereof into the underground storage when the In Boquiren's amended answer to the second amended complaint, he denied that he
fire broke out. He said: "Before loading the underground tank there were no people, but directed one of his drivers to remove gasoline from the truck into the tank and alleged
while the loading was going on, there were people who went to drink coca-cola (at the that the "alleged driver, if one there was, was not in his employ, the driver being an
coca-cola stand) which is about a meter from the hole leading to the underground tank." employee of the Caltex (Phil.) Inc. and/or the owners of the gasoline station." It is true
He added that when the tank was almost filled he went to the tank truck to close the that Boquiren later on amended his answer, and that among the changes was one to the
valve, and while he had his back turned to the "manhole" he, heard someone shout "fire." effect that he was not acting as agent of Caltex. But then again, in his motion to dismiss
appellants' second amended complaint the ground alleged was that it stated no cause of
Even then the fire possibly would not have spread to the neighboring houses were it not action since under the allegations thereof he was merely acting as agent of Caltex, such
for another negligent omission on the part of defendants, namely, their failure to provide that he could not have incurred personal liability. A motion to dismiss on this ground is
a concrete wall high enough to prevent the flames from leaping over it. As it was the deemed to be an admission of the facts alleged in the complaint.
concrete wall was only 2-1/2 meters high, and beyond that height it consisted merely of
galvanized iron sheets, which would predictably crumple and melt when subjected to Caltex admits that it owned the gasoline station as well as the equipment therein, but
intense heat. Defendants' negligence, therefore, was not only with respect to the cause of claims that the business conducted at the service station in question was owned and
the fire but also with respect to the spread thereof to the neighboring houses. operated by Boquiren. But Caltex did not present any contract with Boquiren that would
reveal the nature of their relationship at the time of the fire. There must have been one in
There is an admission on the part of Boquiren in his amended answer to the second existence at that time. Instead, what was presented was a license agreement manifestly
amended complaint that "the fire was caused through the acts of a stranger who, without tailored for purposes of this case, since it was entered into shortly before the expiration
authority, or permission of answering defendant, passed through the gasoline station and of the one-year period it was intended to operate. This so-called license agreement
negligently threw a lighted match in the premises." No evidence on this point was (Exhibit 5-Caltex) was executed on November 29, 1948, but made effective as of January
adduced, but assuming the allegation to be true — certainly any unfavorable inference 1, 1948 so as to cover the date of the fire, namely, March 18, 1948. This retroactivity
from the admission may be taken against Boquiren — it does not extenuate his negligence. provision is quite significant, and gives rise to the conclusion that it was designed
A decision of the Supreme Court of Texas, upon facts analogous to those of the present precisely to free Caltex from any responsibility with respect to the fire, as shown by the
case, states the rule which we find acceptable here. "It is the rule that those who distribute clause that Caltex "shall not be liable for any injury to person or property while in the
a dangerous article or agent, owe a degree of protection to the public proportionate to property herein licensed, it being understood and agreed that LICENSEE (Boquiren) is
and commensurate with a danger involved ... we think it is the generally accepted rule as not an employee, representative or agent of LICENSOR (Caltex)."
applied to torts that 'if the effects of the actor's negligent conduct actively and
continuously operate to bring about harm to another, the fact that the active and But even if the license agreement were to govern, Boquiren can hardly be considered an
substantially simultaneous operation of the effects of a third person's innocent, tortious independent contractor. Under that agreement Boquiren would pay Caltex the purely
or criminal act is also a substantial factor in bringing about the harm, does not protect the nominal sum of P1.00 for the use of the premises and all the equipment therein. He could
actor from liability.' (Restatement of the Law of Torts, vol. 2, p. 1184, #439). Stated in sell only Caltex Products. Maintenance of the station and its equipment was subject to the
another way, "The intention of an unforeseen and unexpected cause, is not sufficient to approval, in other words control, of Caltex. Boquiren could not assign or transfer his
relieve a wrongdoer from consequences of negligence, if such negligence directly and rights as licensee without the consent of Caltex. The license agreement was supposed to
proximately cooperates with the independent cause in the resulting injury." (MacAfee, et be from January 1, 1948 to December 31, 1948, and thereafter until terminated by Caltex
al. vs. Traver's Gas Corporation, 153 S.W. 2nd 442.) upon two days prior written notice. Caltex could at any time cancel and terminate the
agreement in case Boquiren ceased to sell Caltex products, or did not conduct the business
8
with due diligence, in the judgment of Caltex. Termination of the contract was therefore now challenged as erroneous on the ground that Article 2207 of the New Civil Code,
a right granted only to Caltex but not to Boquiren. These provisions of the contract show which provides for the subrogation of the insurer to the rights of the insured, was not yet
the extent of the control of Caltex over Boquiren. The control was such that the latter was in effect when the loss took place. However, regardless of the silence of the law on this
virtually an employee of the former. point at that time, the amount that should be recovered be measured by the damages
actually suffered, otherwise the principle prohibiting unjust enrichment would be
Taking into consideration the fact that the operator owed his position to the violated. With respect to the claim of the heirs of Ong P7,500.00 was adjudged by the
company and the latter could remove him or terminate his services at will; that lower court on the basis of the assessed value of the property destroyed, namely,
the service station belonged to the company and bore its tradename and the P1,500.00, disregarding the testimony of one of the Ong children that said property was
operator sold only the products of the company; that the equipment used by the worth P4,000.00. We agree that the court erred, since it is of common knowledge that the
operator belonged to the company and were just loaned to the operator and the assessment for taxation purposes is not an accurate gauge of fair market value, and in this
company took charge of their repair and maintenance; that an employee of the case should not prevail over positive evidence of such value. The heirs of Ong are
company supervised the operator and conducted periodic inspection of the therefore entitled to P10,000.00.
company's gasoline and service station; that the price of the products sold by the
operator was fixed by the company and not by the operator; and that the receipts Wherefore, the decision appealed from is reversed and respondents-appellees are held
signed by the operator indicated that he was a mere agent, the finding of the liable solidarily to appellants, and ordered to pay them the aforesaid sum of P9,005.80
Court of Appeals that the operator was an agent of the company and not an and P10,000.00, respectively, with interest from the filing of the complaint, and costs.
independent contractor should not be disturbed.
G.R. No. 115024 February 7, 1996
To determine the nature of a contract courts do not have or are not bound to rely MA. LOURDES VALENZUELA, petitioner, vs. COURT OF APPEALS, RICHARD LI
upon the name or title given it by the contracting parties, should thereby a and ALEXANDER COMMERCIAL, INC., respondents.
controversy as to what they really had intended to enter into, but the way the x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x
contracting parties do or perform their respective obligations stipulated or G.R. No. 117944 February 7, 1996
agreed upon may be shown and inquired into, and should such performance RICHARD LI, petitioner, vs. COURT OF APPEALS and LOURDES
conflict with the name or title given the contract by the parties, the former must VALENZUELA, respondents.
prevail over the latter. (Shell Company of the Philippines, Ltd. vs. Firemens' DECISION
Insurance Company of Newark, New Jersey, 100 Phil. 757). KAPUNAN, J.:

The written contract was apparently drawn for the purpose of creating the These two petitions for review on certiorari under Rule 45 of the Revised Rules of Court
apparent relationship of employer and independent contractor, and of avoiding stem from an action to recover damages by petitioner Lourdes Valenzuela in the Regional
liability for the negligence of the employees about the station; but the company Trial Court of Quezon City for injuries sustained by her in a vehicular accident in the
was not satisfied to allow such relationship to exist. The evidence shows that it early morning of June 24, 1990. The facts found by the trial court are succinctly
immediately assumed control, and proceeded to direct the method by which the summarized by the Court of Appeals below:
work contracted for should be performed. By reserving the right to terminate
the contract at will, it retained the means of compelling submission to its orders. This is an action to recover damages based on quasi-delict, for serious physical
Having elected to assume control and to direct the means and methods by which injuries sustained in a vehicular accident.
the work has to be performed, it must be held liable for the negligence of those
performing service under its direction. We think the evidence was sufficient to Plaintiff's version of the accident is as follows: At around 2:00 in the morning of
sustain the verdict of the jury. (Gulf Refining Company v. Rogers, 57 S.W. 2d, June 24, 1990, plaintiff Ma. Lourdes Valenzuela was driving a blue Mitsubishi
183).
lancer with Plate No. FFU 542 from her restaurant at Marcos highway to her
home at Palanza Street, Araneta Avenue. She was travelling along Aurora Blvd.
Caltex further argues that the gasoline stored in the station belonged to Boquiren. But no with a companion, Cecilia Ramon, heading towards the direction of Manila.
cash invoices were presented to show that Boquiren had bought said gasoline from Before reaching A. Lake Street, she noticed something wrong with her tires; she
Caltex. Neither was there a sales contract to prove the same. stopped at a lighted place where there were people, to verify whether she had a
flat tire and to solicit help if needed. Having been told by the people present that
As found by the trial court the Africas sustained a loss of P9,005.80, after deducting the her rear right tire was flat and that she cannot reach her home in that car's
amount of P2,000.00 collected by them on the insurance of the house. The deduction is condition, she parked along the sidewalk, about 1-1/2 feet away, put on her

9
emergency lights, alighted from the car, and went to the rear to open the trunk. A witness for the plaintiff, Rogelio Rodriguez, testified that after plaintiff
She was standing at the left side of the rear of her car pointing to the tools to a alighted from her car and opened the trunk compartment, defendant's car came
man who will help her fix the tire when she was suddenly bumped by a 1987 approaching very fast ten meters from the scene; the car was "zigzagging". The
Mitsubishi Lancer driven by defendant Richard Li and registered in the name of rear left side of plaintiff's car was bumped by the front right portion of
defendant Alexander Commercial, Inc. Because of the impact plaintiff was defendant's car; as a consequence, the plaintiff's car swerved to the right and hit
thrown against the windshield of the car of the defendant, which was destroyed, the parked car on the sidewalk. Plaintiff was thrown to the windshield of
and then fell to the ground. She was pulled out from under defendant's car. defendant's car, which was destroyed, and landed under the car. He stated that
Plaintiff's left leg was severed up to the middle of her thigh, with only some skin defendant was under the influence of liquor as he could "smell it very well" (pp.
and sucle connected to the rest of the body. She was brought to the UERM 43, 79, tsn, June 17, 1991).
Medical Memorial Center where she was found to have a "traumatic
amputation, leg, left up to distal thigh (above knee)". She was confined in the After trial, the lower court sustained the plaintiff's submissions and found defendant
hospital for twenty (20) days and was eventually fitted with an artificial leg. The Richard Li guilty of gross negligence and liable for damages under Article 2176 of the
expenses for the hospital confinement (P120,000.00) and the cost of the artificial Civil Code. The trial court likewise held Alexander Commercial, Inc., Li's employer,
leg (P27,000.00) were paid by defendants from the car insurance. jointly and severally liable for damages pursuant to Article 2180. It ordered the
defendants to jointly and severally pay the following amounts:
In her complaint, plaintiff prayed for moral damages in the amount of P1
million, exemplary damages in the amount of P100,000.00 and other medical and 1. P41,840.00, as actual damages, representing the miscellaneous expenses of the
related expenses amounting to a total of P180,000.00, including loss of expected plaintiff as a result of her severed left leg;
earnings.
2. The sums of (a) P37,500.00, for the unrealized profits because of the stoppage
Defendant Richard Li denied that he was negligent. He was on his way home, of plaintiff's Bistro La Conga restaurant three (3) weeks after the accident on June
travelling at 55 kph; considering that it was raining, visibility was affected and 24, 1990; (b) P20,000.00, a month, as unrealized profits of the plaintiff in her
the road was wet. Traffic was light. He testified that he was driving along the Bistro La Conga restaurant, from August, 1990 until the date of this judgment
inner portion of the right lane of Aurora Blvd. towards the direction of Araneta and (c) P30,000.00, a month for unrealized profits in plaintiff's two (2) beauty
Avenue, when he was suddenly confronted, in the vicinity of A. Lake Street, San salons from July, 1990 until the date of this decision;
Juan, with a car coming from the opposite direction, travelling at 80 kph, with
"full bright lights". Temporarily blinded, he instinctively swerved to the right to
3. P1,000,000.00, in moral damages;
avoid colliding with the oncoming vehicle, and bumped plaintiff's car, which he
did not see because it was midnight blue in color, with no parking lights or early
warning device, and the area was poorly lighted. He alleged in his defense that 4. P50,000.00, as exemplary damages;
the left rear portion of plaintiff's car was protruding as it was then "at a standstill
diagonally" on the outer portion of the right lane towards Araneta Avenue (par. 5. P60,000.00, as reasonable attorney's fees; and
18, Answer). He confirmed the testimony of plaintiff's witness that after being
bumped the car of the plaintiff swerved to the right and hit another car parked 6. Costs.
on the sidewalk. Defendants counterclaimed for damages, alleging that plaintiff
was reckless or negligent, as she was not a licensed driver.
As a result of the trial court's decision, defendants filed an Omnibus Motion for New Trial
and for Reconsideration, citing testimony in Criminal Case O.C. No. 804367 (People vs.
The police investigator, Pfc. Felic Ramos, who prepared the vehicular accident Richard Li), tending to show that the point of impact, as depicted by the pieces of
report and the sketch of the three cars involved in the accident, testified that the glass/debris from the parties' cars, appeared to be at the center of the right lane of Aurora
plaintiff's car was "near the sidewalk"; this witness did not remember whether Blvd. The trial court denied the motion. Defendants forthwith filed an appeal with the
the hazard lights of plaintiff's car were on, and did not notice if there was an respondent Court of Appeals. In a Decision rendered March 30, 1994, the Court of
early warning device; there was a street light at the corner of Aurora Blvd. and Appeals found that there was "ample basis from the evidence of record for the trial court's
F. Roman, about 100 meters away. It was not mostly dark, i.e. "things can be finding that the plaintiff's car was properly parked at the right, beside the sidewalk when
seen" (p. 16, tsn, Oct. 28, 1991). it was bumped by defendant's car."1 Dismissing the defendants' argument that the
plaintiff's car was improperly parked, almost at the center of the road, the respondent
court noted that evidence which was supposed to prove that the car was at or near center

10
of the right lane was never presented during the trial of the case.2 The respondent court of Appeals are binding and conclusive upon us, and this Court will not normally disturb
furthermore observed that: such factual findings unless the findings of fact of the said court are palpably
unsupported by the evidence on record or unless the judgment itself is based on a
Defendant Li's testimony that he was driving at a safe speed of 55 km./hour is misapprehension of facts.5
self serving; it was not corroborated. It was in fact contradicted by eyewitness
Rodriguez who stated that he was outside his beerhouse located at Aurora In the first place, Valenzuela's version of the incident was fully corroborated by an
Boulevard after A. Lake Street, at or about 2:00 a.m. of June 24, 1990 when his uninterested witness, Rogelio Rodriguez, the owner-operator of an establishment located
attention was caught by a beautiful lady (referring to the plaintiff) alighting from just across the scene of the accident. On trial, he testified that he observed a car being
her car and opening the trunk compartment; he noticed the car of Richard Li driven at a "very fast" speed, racing towards the general direction of Araneta
"approaching very fast ten (10) meters away from the scene"; defendant's car was Avenue.6 Rodriguez further added that he was standing in front of his establishment, just
zigzagging", although there were no holes and hazards on the street, and ten to twenty feet away from the scene of the accident, when he saw the car hit
"bumped the leg of the plaintiff" who was thrown against the windshield of Valenzuela, hurtling her against the windshield of the defendant's Mitsubishi Lancer,
defendant's care, causing its destruction. He came to the rescue of the plaintiff, from where she eventually fell under the defendant's car. Spontaneously reacting to the
who was pulled out from under defendant's car and was able to say "hurting incident, he crossed the street, noting that a man reeking with the smell of liquor had
words" to Richard Li because he noticed that the latter was under the influence alighted from the offending vehicle in order to survey the incident. 7 Equally important,
of liquor, because he "could smell it very well" (p. 36, et. seq., tsn, June 17, 1991). Rodriguez declared that he observed Valenzuela's car parked parallel and very near the
He knew that plaintiff owned a beerhouse in Sta. Mesa in the 1970's, but did not sidewalk,8 contrary to Li's allegation that Valenzuela's car was close to the center of the
know either plaintiff or defendant Li before the accident. right lane. We agree that as between Li's "self-serving" asseverations and the observations
of a witness who did not even know the accident victim personally and who immediately
In agreeing with the trial court that the defendant Li was liable for the injuries sustained gave a statement of the incident similar to his testimony to the investigator immediately
by the plaintiff, the Court of Appeals, in its decision, however, absolved the Li's employer, after the incident, the latter's testimony deserves greater weight. As the court emphasized:
Alexander Commercial, Inc. from any liability towards petitioner Lourdes Valenzuela
and reduced the amount of moral damages to P500,000.00. Finding justification for The issue is one of credibility and from Our own examination of the transcript,
exemplary damages, the respondent court allowed an award of P50,000.00 for the same, We are not prepared to set aside the trial court's reliance on the testimony of
in addition to costs, attorney's fees and the other damages. The Court of Appeals, Rodriguez negating defendant's assertion that he was driving at a safe speed.
likewise, dismissed the defendants' counterclaims.3 While Rodriguez drives only a motorcycle, his perception of speed is not
necessarily impaired. He was subjected to cross-examination and no attempt
Consequently, both parties assail the respondent court's decision by filing two separate was made to question .his competence or the accuracy of his statement that
petitions before this Court. Richard Li, in G.R. No. 117944, contends that he should not be defendant was driving "very fast". This was the same statement he gave to the
held liable for damages because the proximate cause of the accident was Ma. Lourdes police investigator after the incident, as told to a newspaper report (Exh. "P").
Valenzuela's own negligence. Alternatively, he argues that in the event that this Court We see no compelling basis for disregarding his testimony.
finds him negligent, such negligence ought to be mitigated by the contributory negligence
of Valenzuela. The alleged inconsistencies in Rodriguez' testimony are not borne out by an
examination of the testimony. Rodriguez testified that the scene of the accident
On the other hand, in G.R. No. 115024, Ma. Lourdes Valenzuela assails the respondent was across the street where his beerhouse is located about ten to twenty feet
court's decision insofar as it absolves Alexander Commercial, Inc. from liability as the away (pp. 35-36, tsn, June 17, 1991). He did not state that the accident transpired
owner of the car driven by Richard Li and insofar as it reduces the amount of the actual immediately in front of his establishment. The ownership of the Lambingan se
and moral damages awarded by the trial court.4 Kambingan is not material; the business is registered in the name of his mother,
but he explained that he owns the establishment (p. 5, tsn, June 20, 1991).
Moreover, the testimony that the streetlights on his side of Aurora Boulevard
As the issues are intimately related, both petitions are hereby consolidated.
were on the night the accident transpired (p. 8) is not necessarily contradictory
to the testimony of Pfc. Ramos that there was a streetlight at the corner of Aurora
It is plainly evident that the petition for review in G.R. No. 117944 raises no substantial Boulevard and F. Roman Street (p. 45, tsn, Oct. 20, 1991).
questions of law. What it, in effect, attempts to have this Court review are factual findings
of the trial court, as sustained by the Court of Appeals finding Richard Li grossly
With respect to the weather condition, Rodriguez testified that there was only a
negligent in driving the Mitsubishi Lancer provided by his company in the early morning
drizzle, not a heavy rain and the rain has stopped and he was outside his
hours of June 24, 1990. This we will not do. As a general rule, findings of fact of the Court
11
 establishment at the time the accident transpired (pp. 64-65, tsn, June 17, 1991). Since, according to him, in his narration to the San Juan Police, he put on his
This was consistent with plaintiff's testimony that it was no longer raining when brakes when he saw the plaintiff's car in front of him, but that it failed as the
she left Bistro La Conga (pp. 10-11, tsn, April 29, 1991). It was defendant Li who road was wet and slippery, this goes to show again, that, contrary to his claim,
stated that it was raining all the way in an attempt to explain why he was he was, indeed, running very fast. For, were it otherwise, he could have easily
travelling at only 50-55 kph. (p. 11, tsn, Oct. 14, 1991). As to the testimony of Pfc. completely stopped his car, thereby avoiding the bumping of the plaintiff,
Ramos that it was raining, he arrived at the scene only in response to a telephone notwithstanding that the road was wet and slippery. Verily, since, if, indeed, he
call after the accident had transpired (pp. 9-10, tsn, Oct. 28, 1991). We find no was running slow, as he claimed, at only about 55 kilometers per hour, then,
substantial inconsistencies in Rodriguez's testimony that would impair the inspite of the wet and slippery road, he could have avoided hitting the plaintiff
essential integrity of his testimony or reflect on his honesty. We are compelled by the mere expedient or applying his brakes at the proper time and distance.
to affirm the trial court's acceptance of the testimony of said eyewitness.
It could not be true, therefore, as he now claims during his testimony, which is
Against the unassailable testimony of witness Rodriguez we note that Li's testimony was contrary to what he told the police immediately after the accident and is,
peppered with so many inconsistencies leading us to conclude that his version of the therefore, more believable, that he did not actually step on his brakes but simply
accident was merely adroitly crafted to provide a version, obviously self-serving, which swerved a little to the right when he saw the on-coming car with glaring
would exculpate him from any and all liability in the incident. Against Valenzuela's headlights, from the opposite direction, in order to avoid it.
corroborated claims, his allegations were neither backed up by other witnesses nor by the
circumstances proven in the course of trial. He claimed that he was driving merely at a For, had this been what he did, he would not have bumped the car of the plaintiff
speed of 55 kph. when "out of nowhere he saw a dark maroon lancer right in front of him, which was properly parked at the right beside the sidewalk. And, it was not
which was (the) plaintiff's car". He alleged that upon seeing this sudden "apparition" he even necessary for him to swerve a little to the right in order to safely avoid a
put on his brakes to no avail as the road was slippery.9 collision with the on-coming car, considering that Aurora Blvd. is a double lane
avenue separated at the center by a dotted white paint, and there is plenty of
One will have to suspend disbelief in order to give credence to Li's disingenuous and space for both cars, since her car was running at the right lane going towards
patently self-serving asseverations. The average motorist alert to road conditions will have Manila on the on-coming car was also on its right lane going to Cubao.13
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 Having come to the conclusion that Li was negligent in driving his company-issued
metropolitan thoroughfare like Aurora Boulevard, Li would have had ample time to react Mitsubishi Lancer, the next question for us to determine is whether or not Valenzuela was
to the changing conditions of the road if he were alert - as every driver should be - to likewise guilty of contributory negligence in parking her car alongside Aurora Boulevard,
those conditions. Driving exacts a more than usual toll on the senses. Physiological "fight which entire area Li points out, is a no parking zone.
or flight" 10 mechanisms are at work, provided such mechanisms were not dulled by
drugs, alcohol, exhaustion, drowsiness, etc.11 Li's failure to react in a manner which would
We agree with the respondent court that Valenzuela was not guilty of contributory
have avoided the accident could therefore have been only due to either or both of the two
negligence.
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.12 Either factor working independently would have
diminished his responsiveness to road conditions, since normally he would have slowed Contributory negligence is conduct on the part of the injured party, contributing as a legal
down prior to reaching Valenzuela's car, rather than be in a situation forcing him to cause to the harm he has suffered, which falls below the standard to which he is required
suddenly apply his brakes. As the trial court noted (quoted with approval by respondent to conform for his own protection.14 Based on the foregoing definition, the standard or act
court): 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.
Secondly, as narrated by defendant Richard Li to the San Juan Police
immediately after the incident, he said that while driving along Aurora Blvd.,
out of nowhere he saw a dark maroon lancer right in front of him which was Courts have traditionally been compelled to recognize that an actor who is confronted
plaintiff's car, indicating, again, thereby that, indeed, he was driving very fast, with an emergency is not to be held up to the standard of conduct normally applied to an
oblivious of his surroundings and the road ahead of him, because if he was not, individual who is in no such situation. The law takes stock of impulses of humanity when
then he could not have missed noticing at a still far distance the parked car of placed in threatening or dangerous situations and does not require the same standard of
the plaintiff at the right side near the sidewalk which had its emergency lights thoughtful and reflective care from persons confronted by unusual and oftentimes
on, thereby avoiding forcefully bumping at the plaintiff who was then standing threatening conditions.15
at the left rear edge of her car.
12
Under the "emergency rule" adopted by this Court in Gan vs. Court of Appeals,16 an Obviously in the case at bench, the only negligence ascribable was the negligence of Li on
individual who suddenly finds himself in a situation of danger and is required to act the night of the accident. "Negligence, as it is commonly understood is conduct which
without much time to consider the best means that may be adopted to avoid the creates an undue risk of harm to others."23 It is the failure to observe that degree of care,
impending danger, is not guilty of negligence if he fails to undertake what subsequently precaution, and vigilance which the circumstances justly demand, whereby such other
and upon reflection may appear to be a better solution, unless the emergency was brought person suffers injury.24 We stressed, in Corliss vs. Manila Railroad Company,25 that
by his own negligence.17 negligence is the want of care required by the circumstances.

Applying this principle to a case in which the victims in a vehicular accident swerved to The circumstances established by the evidence adduced in the court below plainly
the wrong lane to avoid hitting two children suddenly darting into the street, we held, demonstrate that Li was grossly negligent in driving his Mitsubishi Lancer. It bears
in Mc Kee vs. Intermediate Appellate Court,18 that the driver therein, Jose Koh, "adopted the emphasis that he was driving at a fast speed at about 2:00 A.M. after a heavy downpour
best means possible in the given situation" to avoid hitting the children. Using the had settled into a drizzle rendering the street slippery. There is ample testimonial
"emergency rule" the Court concluded that Koh, in spite of the fact that he was in the evidence on record to show that he was under the influence of liquor. Under these
wrong lane when the collision with an oncoming truck occurred, was not guilty of conditions, his chances of effectively dealing with changing conditions on the road were
negligence.19 significantly lessened. As Presser and Keaton emphasize:

While the emergency rule applies to those cases in which reflective thought, or the [U]nder present day traffic conditions, any driver of an automobile must be
opportunity to adequately weigh a threatening situation is absent, the conduct which is prepared for the sudden appearance of obstacles and persons on the highway,
required of an individual in such cases is dictated not exclusively by the suddenness of and of other vehicles at intersections, such as one who sees a child on the curb
the event which absolutely negates thoroughful care, but by the over-all nature of the may be required to anticipate its sudden dash into the street, and his failure to
circumstances. A woman driving a vehicle suddenly crippled by a flat tire on a rainy night act properly when they appear may be found to amount to negligence.26
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 Li's obvious unpreparedness to cope with the situation confronting him on the night of
in search for a parking zone or turn on a dark street or alley where she would likely find the accident was clearly of his own making.
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
We now come to the question of the liability of Alexander Commercial, Inc. Li's employer.
hobbling vehicle would be both a threat to her safety and to other motorists. In the instant
In denying liability on the part of Alexander Commercial, the respondent court held that:
case, Valenzuela, upon reaching that portion of Aurora Boulevard close to A. Lake St.,
noticed that she had a flat tire. To avoid putting herself and other motorists in danger,
she did what was best under the situation. As narrated by respondent court: "She stopped There is no evidence, not even defendant Li's testimony, that the visit was in
at a lighted place where there were people, to verify whether she had a flat tire and to connection with official matters. His functions as assistant manager sometimes
solicit help if needed. Having been told by the people present that her rear right tire was required him to perform work outside the office as he has to visit buyers and
flat and that she cannot reach her home she parked along the sidewalk, about 1 1/2 feet company clients, but he admitted that on the night of the accident he came from
away, behind a Toyota Corona Car."20 In fact, respondent court noted, Pfc. Felix Ramos, BF Homes Paranaque he did not have "business from the company" (pp. 25-26,
the investigator on the scene of the accident confirmed that Valenzuela's car was parked ten, Sept. 23, 1991). The use of the company car was partly required by the nature
very close to the sidewalk.21 The sketch which he prepared after the incident showed of his work, but the privilege of using it for non-official business is a "benefit",
Valenzuela's car partly straddling the sidewalk, clear and at a convenient distance from apparently referring to the fringe benefits attaching to his position.
motorists passing the right lane of Aurora Boulevard. This fact was itself corroborated by
the testimony of witness Rodriguez.22 Under the civil law, an employer is liable for the negligence of his employees in
the discharge of their respective duties, the basis of which liability is
Under the circumstances described, Valenzuela did exercise the standard reasonably not respondeat superior, but the relationship of pater familias, which theory bases
dictated by the emergency and could not be considered to have contributed to the the liability of the master ultimately on his own negligence and not on that of
unfortunate circumstances which eventually led to the amputation of one of her lower his servant (Cuison v. Norton and Harrison Co., 55 Phil. 18). Before an employer
extremities. The emergency which led her to park her car on a sidewalk in Aurora may be held liable for the negligence of his employee, the act or omission which
Boulevard was not of her own making, and it was evident that she had taken all caused damage must have occurred while an employee was in the actual
reasonable precautions. performance of his assigned tasks or duties (Francis High School vs. Court of
Appeals, 194 SCRA 341). In defining an employer's liability for the acts done
within the scope of the employee's assigned tasks, the Supreme Court has held
13
 that this includes any act done by an employee, in furtherance of the interests of Ordinarily, evidence demonstrating that the employer has exercised diligent supervision
the employer or for the account of the employer at the time of the infliction of of its employee during the performance of the latter's assigned tasks would be enough to
the injury or damage (Filamer Christian Institute vs. Intermediate Appellate relieve him of the liability imposed by Article 2180 in relation to Article 2176 of the Civil
Court, 212 SCRA 637). An employer is expected to impose upon its employees Code. The employer is not expected to exercise supervision over either the employee's
the necessary discipline called for in the performance of any act "indispensable private activities or during the performance of tasks either unsanctioned by the former or
to the business and beneficial to their employer" (at p. 645). unrelated to the employee's tasks. The case at bench presents a situation of a different
character, involving a practice utilized by large companies with either their employees of
In light of the foregoing, We are unable to sustain the trial court's finding that managerial rank or their representatives.
since defendant Li was authorized by the company to use the company car
"either officially or socially or even bring it home", he can be considered as using It is customary for large companies to provide certain classes of their employees with
the company car in the service of his employer or on the occasion of his courtesy vehicles. These company cars are either wholly owned and maintained by the
functions. Driving the company car was not among his functions as assistant company itself or are subject to various plans through which employees eventually
manager; using it for non-official purposes would appear to be a fringe benefit, acquire their vehicles after a given period of service, or after paying a token amount.
one of the perks attached to his position. But to impose liability upon the Many companies provide liberal "car plans" to enable their managerial or other
employer under Article 2180 of the Civil Code, earlier quoted, there must be a employees of rank to purchase cars, which, given the cost of vehicles these days, they
showing that the damage was caused by their employees in the service of the would not otherwise be able to purchase on their own.
employer or on the occasion of their functions. There is no evidence that Richard
Li was at the time of the accident performing any act in furtherance of the Under the first example, the company actually owns and maintains the car up to the point
company's business or its interests, or at least for its benefit. The imposition of of turnover of ownership to the employee; in the second example, the car is really owned
solidary liability against defendant Alexander Commercial Corporation must and maintained by the employee himself. In furnishing vehicles to such employees, are
therefore fail.27 companies totally absolved of responsibility when an accident involving a company-
issued car occurs during private use after normal office hours?
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 Most pharmaceutical companies, for instance, which provide cars under the first plan,
that of pater familias, in which the liability ultimately falls upon the employer, for his require rigorous tests of road worthiness from their agents prior to turning over the car
failure to exercise the diligence of a good father of the family in the selection and (subject of company maintenance) to their representatives. In other words, like a good
supervision of his employees. It is up to this point, however, that our agreement with the father of a family, they entrust the company vehicle only after they are satisfied that the
respondent court ends. Utilizing the bonus pater familias standard expressed in Article employee to whom the car has been given full use of the said company car for company
2180 of the Civil Code, 28 we are of the opinion that Li's employer, Alexander Commercial, or private purposes will not be a threat or menace to himself, the company or to others.
Inc. is jointly and solidarily liable for the damage caused by the accident of June 24, 1990. When a company gives full use and enjoyment of a company car to its employee, it in
effect guarantees that it is, like every good father, satisfied that its employee will use the
First, the case of St. Francis High School vs. Court of Appeals29 upon which respondent court privilege reasonably and responsively.
has placed undue reliance, dealt with the subject of a school and its teacher's supervision
of students during an extracurricular activity. These cases now fall under the provision In the ordinary course of business, not all company employees are given the privilege of
on special parental authority found in Art. 218 of the Family Code which generally using a company-issued car. For large companies other than those cited in the example of
encompasses all authorized school activities, whether inside or outside school premises. the preceding paragraph, the privilege serves important business purposes either related
to the image of success an entity intends to present to its clients and to the public in
Second, the employer's primary liability under the concept of pater familias embodied by general, or - for practical and utilitarian reasons - to enable its managerial and other
Art 2180 (in relation to Art. 2176) of the Civil Code is quasi-delictual or tortious in employees of rank or its sales agents to reach clients conveniently. In most cases,
character. His liability is relieved on a showing that he exercised the diligence of a good providing a company car serves both purposes. Since important business transactions
father of the family in the selection and supervision of its employees. Once evidence is and decisions may occur at all hours in all sorts of situations and under all kinds of guises,
introduced showing that the employer exercised the required amount of care in selecting the provision for the unlimited use of a company car therefore principally serves the
its employees, half of the employer's burden is overcome. The question of business and goodwill of a company and only incidentally the private purposes of the
diligent supervision, however, depends on the circumstances of employment. individual who actually uses the car, the managerial employee or company sales agent.
As such, in providing for a company car for business use and/or for the purpose of
furthering the company's image, a company owes a responsibility to the public to see to

14
it that the managerial or other employees to whom it entrusts virtually unlimited use of These adjustments entail costs, prosthetic replacements and months of physical and
a company issued car are able to use the company issue capably and responsibly. occupational rehabilitation and therapy. During her lifetime, the prosthetic devise will
have to be replaced and re-adjusted to changes in the size of her lower limb effected by
In the instant case, Li was an Assistant Manager of Alexander Commercial, Inc. In his the biological changes of middle-age, menopause and aging. Assuming she reaches
testimony before the trial court, he admitted that his functions as Assistant Manager did menopause, for example, the prosthetic will have to be adjusted to respond to the changes
not require him to scrupulously keep normal office hours as he was required quite often in bone resulting from a precipitate decrease in calcium levels observed in the bones of
to perform work outside the office, visiting prospective buyers and contacting and all post-menopausal women. In other words, the damage done to her would not only be
meeting with company clients. 30 These meetings, clearly, were not strictly confined to permanent and lasting, it would also be permanently changing and adjusting to the
routine hours because, as a managerial employee tasked with the job of representing his physiologic changes which her body would normally undergo through the years. The
company with its clients, meetings with clients were both social as well as work-related replacements, changes, and adjustments will require corresponding adjustive physical
functions. The service car assigned to Li by Alexander Commercial, Inc. therefore enabled and occupational therapy. All of these adjustments, it has been documented, are painful.
both Li - as well as the corporation - to put up the front of a highly successful entity,
increasing the latter's goodwill before its clientele. It also facilitated meeting between Li The foregoing discussion does not even scratch the surface of the nature of the resulting
and its clients by providing the former with a convenient mode of travel. damage because it would be highly speculative to estimate the amount of psychological
pain, damage and injury which goes with the sudden severing of a vital portion of the
Moreover, Li's claim that he happened to be on the road on the night of the accident human body. A prosthetic device, however technologically advanced, will only allow a
because he was coming from a social visit with an officemate in Paranaque was a bare reasonable amount of functional restoration of the motor functions of the lower limb. The
allegation which was never corroborated in the court below. It was obviously self-serving. sensory functions are forever lost. The resultant anxiety, sleeplessness, psychological
Assuming he really came from his officemate's place, the same could give rise to injury, mental and physical pain are inestimable.
speculation that he and his officemate had just been from a work-related function, or they
were together to discuss sales and other work related strategies. As the amount of moral damages are subject to this Court's discretion, we are of the
opinion that the amount of P1,000,000.00 granted by the trial court is in greater accord
In fine, Alexander Commercial, inc. has not demonstrated, to our satisfaction, that it with the extent and nature of the injury - physical and psychological - suffered by
exercised the care and diligence of a good father of the family in entrusting its company Valenzuela as a result of Li's grossly negligent driving of his Mitsubishi Lancer in the
car to Li. No allegations were made as to whether or not the company took the steps early morning hours of the accident.
necessary to determine or ascertain the driving proficiency and history of Li, to whom it
gave full and unlimited use of a company car.31 Not having been able to overcome the WHEREFORE, PREMISES CONSIDERED, the decision of the Court of Appeals is
burden of demonstrating that it should be absolved of liability for entrusting its company modified with the effect of REINSTATING the judgment of the Regional Trial Court.
car to Li, said company, based on the principle of bonus pater familias, ought to be jointly
and severally liable with the former for the injuries sustained by Ma. Lourdes Valenzuela SO ORDERED.
during the accident.
G.R. No. L-11154 March 21, 1916
Finally, we find no reason to overturn the amount of damages awarded by the respondent E. MERRITT, plaintiff-appellant, vs. GOVERNMENT OF THE PHILIPPINE
court, except as to the amount of moral damages. In the case of moral damages, while the ISLANDS, defendant-appellant.
said damages are not intended to enrich the plaintiff at the expense of a defendant, the TRENT, J.:
award should nonetheless be commensurate to the suffering inflicted. In the instant case This is an appeal by both parties from a judgment of the Court of First Instance of the city
we are of the opinion that the reduction in moral damages from an amount of of Manila in favor of the plaintiff for the sum of P14,741, together with the costs of the
P1,000,000.00 to P800,000,00 by the Court of Appeals was not justified considering the cause.
nature of the resulting damage and the predictable sequelae of the injury.
Counsel for the plaintiff insist that the trial court erred (1) "in limiting the general
As a result of the accident, Ma. Lourdes Valenzuela underwent a traumatic amputation damages which the plaintiff suffered to P5,000, instead of P25,000 as claimed in the
of her left lower extremity at the distal left thigh just above the knee. Because of this, complaint," and (2) "in limiting the time when plaintiff was entirely disabled to two
Valenzuela will forever be deprived of the full ambulatory functions of her left extremity, months and twenty-one days and fixing the damage accordingly in the sum of P2,666,
even with the use of state of the art prosthetic technology. Well beyond the period of instead of P6,000 as claimed by plaintiff in his complaint."
hospitalization (which was paid for by Li), she will be required to undergo adjustments
in her prosthetic devise due to the shrinkage of the stump from the process of healing.

15
The Attorney-General on behalf of the defendant urges that the trial court erred: (a) in According to the various merchants who testified as witnesses, the plaintiff's
finding that the collision between the plaintiff's motorcycle and the ambulance of the mental and physical condition prior to the accident was excellent, and that after
General Hospital was due to the negligence of the chauffeur; (b) in holding that the having received the injuries that have been discussed, his physical condition had
Government of the Philippine Islands is liable for the damages sustained by the plaintiff undergone a noticeable depreciation, for he had lost the agility, energy, and
as a result of the collision, even if it be true that the collision was due to the negligence of ability that he had constantly displayed before the accident as one of the best
the chauffeur; and (c) in rendering judgment against the defendant for the sum of P14,741. constructors of wooden buildings and he could not now earn even a half of the
income that he had secured for his work because he had lost 50 per cent of his
The trial court's findings of fact, which are fully supported by the record, are as follows: efficiency. As a contractor, he could no longer, as he had before done, climb up
ladders and scaffoldings to reach the highest parts of the building.
It is a fact not disputed by counsel for the defendant that when the plaintiff,
riding on a motorcycle, was going toward the western part of Calle Padre Faura, As a consequence of the loss the plaintiff suffered in the efficiency of his work
passing along the west side thereof at a speed of ten to twelve miles an hour, as a contractor, he had to dissolved the partnership he had formed with the
upon crossing Taft Avenue and when he was ten feet from the southwestern engineer. Wilson, because he was incapacitated from making mathematical
intersection of said streets, the General Hospital ambulance, upon reaching said calculations on account of the condition of his leg and of his mental faculties,
avenue, instead of turning toward the south, after passing the center thereof, so and he had to give up a contract he had for the construction of the Uy Chaco
that it would be on the left side of said avenue, as is prescribed by the ordinance building."
and the Motor Vehicle Act, turned suddenly and unexpectedly and long before
reaching the center of the street, into the right side of Taft Avenue, without We may say at the outset that we are in full accord with the trial court to the effect that
having sounded any whistle or horn, by which movement it struck the plaintiff, the collision between the plaintiff's motorcycle and the ambulance of the General Hospital
who was already six feet from the southwestern point or from the post place was due solely to the negligence of the chauffeur.
there.
The two items which constitute a part of the P14,741 and which are drawn in question by
By reason of the resulting collision, the plaintiff was so severely injured that, the plaintiff are (a) P5,000, the award awarded for permanent injuries, and (b) the P2,666,
according to Dr. Saleeby, who examined him on the very same day that he was the amount allowed for the loss of wages during the time the plaintiff was incapacitated
taken to the General Hospital, he was suffering from a depression in the left from pursuing his occupation. We find nothing in the record which would justify us in
parietal region, a would in the same place and in the back part of his head, while increasing the amount of the first. As to the second, the record shows, and the trial court
blood issued from his nose and he was entirely unconscious. so found, that the plaintiff's services as a contractor were worth P1,000 per month. The
court, however, limited the time to two months and twenty-one days, which the plaintiff
The marks revealed that he had one or more fractures of the skull and that the was actually confined in the hospital. In this we think there was error, because it was
grey matter and brain was had suffered material injury. At ten o'clock of the clearly established that the plaintiff was wholly incapacitated for a period of six months.
night in question, which was the time set for performing the operation, his pulse The mere fact that he remained in the hospital only two months and twenty-one days
was so weak and so irregular that, in his opinion, there was little hope that he while the remainder of the six months was spent in his home, would not prevent recovery
would live. His right leg was broken in such a way that the fracture extended to for the whole time. We, therefore, find that the amount of damages sustained by the
the outer skin in such manner that it might be regarded as double and the would plaintiff, without any fault on his part, is P18,075.
be exposed to infection, for which reason it was of the most serious nature.
As the negligence which caused the collision is a tort committed by an agent or employee
At another examination six days before the day of the trial, Dr. Saleeby noticed of the Government, the inquiry at once arises whether the Government is legally-liable
that the plaintiff's leg showed a contraction of an inch and a half and a curvature for the damages resulting therefrom.
that made his leg very weak and painful at the point of the fracture. Examination
of his head revealed a notable readjustment of the functions of the brain and Act No. 2457, effective February 3, 1915, reads:
nerves. The patient apparently was slightly deaf, had a light weakness in his
eyes and in his mental condition. This latter weakness was always noticed when An Act authorizing E. Merritt to bring suit against the Government of the
the plaintiff had to do any difficult mental labor, especially when he attempted Philippine Islands and authorizing the Attorney-General of said Islands to
to use his money for mathematical calculations. appear in said suit.

16
 Whereas a claim has been filed against the Government of the Philippine Islands the chauffeur, who was at the time an employee of the defendant, and we have also fixed
by Mr. E. Merritt, of Manila, for damages resulting from a collision between his the amount of damages sustained by the plaintiff as a result of the collision. Does the Act
motorcycle and the ambulance of the General Hospital on March twenty-fifth, authorize us to hold that the Government is legally liable for that amount? If not, we must
nineteen hundred and thirteen; look elsewhere for such authority, if it exists.

Whereas it is not known who is responsible for the accident nor is it possible to The Government of the Philippine Islands having been "modeled after the Federal and
determine the amount of damages, if any, to which the claimant is entitled; and State Governments in the United States," we may look to the decisions of the high courts
of that country for aid in determining the purpose and scope of Act No. 2457.
Whereas the Director of Public Works and the Attorney-General recommended
that an Act be passed by the Legislature authorizing Mr. E. Merritt to bring suit In the United States the rule that the state is not liable for the torts committed by its officers
in the courts against the Government, in order that said questions may be or agents whom it employs, except when expressly made so by legislative enactment, is
decided: Now, therefore, well settled. "The Government," says Justice Story, "does not undertake to guarantee to
any person the fidelity of the officers or agents whom it employs, since that would involve
By authority of the United States, be it enacted by the Philippine Legislature, that: it in all its operations in endless embarrassments, difficulties and losses, which would be
subversive of the public interest." (Claussen vs. City of Luverne, 103 Minn., 491, citing U.
S. vs. Kirkpatrick, 9 Wheat, 720; 6 L. Ed., 199; and Beers vs. States, 20 How., 527; 15 L. Ed.,
SECTION 1. E. Merritt is hereby authorized to bring suit in the Court of First
991.)
Instance of the city of Manila against the Government of the Philippine Islands
in order to fix the responsibility for the collision between his motorcycle and the
ambulance of the General Hospital, and to determine the amount of the In the case of Melvin vs. State (121 Cal., 16), the plaintiff sought to recover damages from
damages, if any, to which Mr. E. Merritt is entitled on account of said collision, the state for personal injuries received on account of the negligence of the state officers at
and the Attorney-General of the Philippine Islands is hereby authorized and the state fair, a state institution created by the legislature for the purpose of improving
directed to appear at the trial on the behalf of the Government of said Islands, to agricultural and kindred industries; to disseminate information calculated to educate and
defendant said Government at the same. benefit the industrial classes; and to advance by such means the material interests of the
state, being objects similar to those sought by the public school system. In passing upon
the question of the state's liability for the negligent acts of its officers or agents, the court
SEC. 2. This Act shall take effect on its passage.
said:

Enacted, February 3, 1915.

No claim arises against any government is favor of an individual, by reason of
the misfeasance, laches, or unauthorized exercise of powers by its officers or
Did the defendant, in enacting the above quoted Act, simply waive its immunity from agents. (Citing Gibbons vs. U. S., 8 Wall., 269; Clodfelter vs. State, 86 N. C., 51,
suit or did it also concede its liability to the plaintiff? If only the former, then it cannot be 53; 41 Am. Rep., 440; Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158;
held that the Act created any new cause of action in favor of the plaintiff or extended the Green vs. State, 73 Cal., 29; Bourn vs. Hart, 93 Cal., 321; 27 Am. St. Rep., 203;
defendant's liability to any case not previously recognized. Story on Agency, sec. 319.)

All admit that the Insular Government (the defendant) cannot be sued by an individual As to the scope of legislative enactments permitting individuals to sue the state where the
without its consent. It is also admitted that the instant case is one against the Government. cause of action arises out of either fort or contract, the rule is stated in 36 Cyc., 915, thus:
As the consent of the Government to be sued by the plaintiff was entirely voluntary on
its part, it is our duty to look carefully into the terms of the consent, and render judgment
By consenting to be sued a state simply waives its immunity from suit. It does
accordingly.
not thereby concede its liability to plaintiff, or create any cause of action in his
favor, or extend its liability to any cause not previously recognized. It merely
The plaintiff was authorized to bring this action against the Government "in order to fix gives a remedy to enforce a preexisting liability and submits itself to the
the responsibility for the collision between his motorcycle and the ambulance of the jurisdiction of the court, subject to its right to interpose any lawful defense.
General Hospital and to determine the amount of the damages, if any, to which Mr. E.
Merritt is entitled on account of said collision, . . . ." These were the two questions
In Apfelbacher vs. State (152 N. W., 144, advanced sheets), decided April 16, 1915, the Act
submitted to the court for determination. The Act was passed "in order that said questions
of 1913, which authorized the bringing of this suit, read:
may be decided." We have "decided" that the accident was due solely to the negligence of

17
 SECTION 1. Authority is hereby given to George Apfelbacher, of the town of A statute of Massachusetts enacted in 1887 gave to the superior court "jurisdiction of all
Summit, Waukesha County, Wisconsin, to bring suit in such court or courts and claims against the commonwealth, whether at law or in equity," with an exception not
in such form or forms as he may be advised for the purpose of settling and necessary to be here mentioned. In construing this statute the court, in Murdock Grate Co.
determining all controversies which he may now have with the State of vs. Commonwealth (152 Mass., 28), said:
Wisconsin, or its duly authorized officers and agents, relative to the mill
property of said George Apfelbacher, the fish hatchery of the State of Wisconsin The statute we are discussing disclose no intention to create against the state a
on the Bark River, and the mill property of Evan Humphrey at the lower end of new and heretofore unrecognized class of liabilities, but only an intention to
Nagawicka Lake, and relative to the use of the waters of said Bark River and provide a judicial tribunal where well recognized existing liabilities can be
Nagawicka Lake, all in the county of Waukesha, Wisconsin. adjudicated.

In determining the scope of this act, the court said: In Sipple vs. State (99 N. Y., 284), where the board of the canal claims had, by the terms of
the statute of New York, jurisdiction of claims for damages for injuries in the management
Plaintiff claims that by the enactment of this law the legislature admitted liability of the canals such as the plaintiff had sustained, Chief Justice Ruger remarks: "It must be
on the part of the state for the acts of its officers, and that the suit now stands conceded that the state can be made liable for injuries arising from the negligence of its
just as it would stand between private parties. It is difficult to see how the act agents or servants, only by force of some positive statute assuming such liability."
does, or was intended to do, more than remove the state's immunity from suit.
It simply gives authority to commence suit for the purpose of settling plaintiff's It being quite clear that Act No. 2457 does not operate to extend the Government's liability
controversies with the estate. Nowhere in the act is there a whisper or suggestion to any cause not previously recognized, we will now examine the substantive law
that the court or courts in the disposition of the suit shall depart from well touching the defendant's liability for the negligent acts of its officers, agents, and
established principles of law, or that the amount of damages is the only question employees. Paragraph 5 of article 1903 of the Civil Code reads:
to be settled. The act opened the door of the court to the plaintiff. It did not pass
upon the question of liability, but left the suit just where it would be in the
The state is liable in this sense when it acts through a special agent, but not when
absence of the state's immunity from suit. If the Legislature had intended to
the damage should have been caused by the official to whom properly it
change the rule that obtained in this state so long and to declare liability on the
pertained to do the act performed, in which case the provisions of the preceding
part of the state, it would not have left so important a matter to mere inference,
article shall be applicable.
but would have done so in express terms. (Murdock Grate Co. vs.
Commonwealth, 152 Mass., 28; 24 N.E., 854; 8 L. R. A., 399.)
The supreme court of Spain in defining the scope of this paragraph said:
In Denning vs. State (123 Cal., 316), the provisions of the Act of 1893, relied upon and
considered, are as follows: That the obligation to indemnify for damages which a third person causes to
another by his fault or negligence is based, as is evidenced by the same Law 3,
Title 15, Partida 7, on that the person obligated, by his own fault or negligence,
All persons who have, or shall hereafter have, claims on contract or for
takes part in the act or omission of the third party who caused the damage. It
negligence against the state not allowed by the state board of examiners, are
follows therefrom that the state, by virtue of such provisions of law, is not
hereby authorized, on the terms and conditions herein contained, to bring suit
responsible for the damages suffered by private individuals in consequence of
thereon against the state in any of the courts of this state of competent
acts performed by its employees in the discharge of the functions pertaining to
jurisdiction, and prosecute the same to final judgment. The rules of practice in
their office, because neither fault nor even negligence can be presumed on the
civil cases shall apply to such suits, except as herein otherwise provided.
part of the state in the organization of branches of public service and in the
appointment of its agents; on the contrary, we must presuppose all foresight
And the court said: humanly possible on its part in order that each branch of service serves the
general weal an that of private persons interested in its operation. Between these
This statute has been considered by this court in at least two cases, arising under latter and the state, therefore, no relations of a private nature governed by the
different facts, and in both it was held that said statute did not create any liability civil law can arise except in a case where the state acts as a judicial person
or cause of action against the state where none existed before, but merely gave capable of acquiring rights and contracting obligations. (Supreme Court of
an additional remedy to enforce such liability as would have existed if the statute Spain, January 7, 1898; 83 Jur. Civ., 24.)
had not been enacted. (Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158;
Melvin vs. State, 121 Cal., 16.)
18
That the Civil Code in chapter 2, title 16, book 4, regulates the obligations which the claim is based on acts or omissions imputable to a public official charged
arise out of fault or negligence; and whereas in the first article thereof. No. 1902, with some administrative or technical office who can be held to the proper
where the general principle is laid down that where a person who by an act or responsibility in the manner laid down by the law of civil responsibility.
omission causes damage to another through fault or negligence, shall be obliged Consequently, the trial court in not so deciding and in sentencing the said entity
to repair the damage so done, reference is made to acts or omissions of the to the payment of damages, caused by an official of the second class referred to,
persons who directly or indirectly cause the damage, the following articles refers has by erroneous interpretation infringed the provisions of articles 1902 and
to this persons and imposes an identical obligation upon those who maintain 1903 of the Civil Code. (Supreme Court of Spain, July 30, 1911; 122 Jur. Civ., 146.)
fixed relations of authority and superiority over the authors of the damage,
because the law presumes that in consequence of such relations the evil caused It is, therefore, evidence that the State (the Government of the Philippine Islands) is only
by their own fault or negligence is imputable to them. This legal presumption liable, according to the above quoted decisions of the Supreme Court of Spain, for the acts
gives way to proof, however, because, as held in the last paragraph of article of its agents, officers and employees when they act as special agents within the meaning
1903, responsibility for acts of third persons ceases when the persons mentioned of paragraph 5 of article 1903, supra, and that the chauffeur of the ambulance of the
in said article prove that they employed all the diligence of a good father of a General Hospital was not such an agent.
family to avoid the damage, and among these persons, called upon to answer in
a direct and not a subsidiary manner, are found, in addition to the mother or the
For the foregoing reasons, the judgment appealed from must be reversed, without costs
father in a proper case, guardians and owners or directors of an establishment
in this instance. Whether the Government intends to make itself legally liable for the
or enterprise, the state, but not always, except when it acts through the agency
amount of damages above set forth, which the plaintiff has sustained by reason of the
of a special agent, doubtless because and only in this case, the fault or negligence,
negligent acts of one of its employees, by legislative enactment and by appropriating
which is the original basis of this kind of objections, must be presumed to lie
sufficient funds therefor, we are not called upon to determine. This matter rests solely
with the state.
with the Legislature and not with the courts.

That although in some cases the state might by virtue of the general principle set
G.R. No. 70547 January 22, 1993
forth in article 1902 respond for all the damage that is occasioned to private
PHILIPPINE NATIONAL RAILWAYS and HONORIO CABARDO, petitioners, vs.
parties by orders or resolutions which by fault or negligence are made by
INTERMEDIATE APPELLATE COURT, and BALIWAG TRANSIT,
branches of the central administration acting in the name and representation of
INC., respondents..
the state itself and as an external expression of its sovereignty in the exercise of
MELO, J.:
its executive powers, yet said article is not applicable in the case of damages said
to have been occasioned to the petitioners by an executive official, acting in the
exercise of his powers, in proceedings to enforce the collections of certain The imputation of culpa on the part of herein petitioners as a result of the collision
property taxes owing by the owner of the property which they hold in sublease. between its strain, bound for Manila from La Union, with a Baliwag transit bus at the
railroad crossing on the road going to Hagonoy, Bulacan on August l0, 1974, is the subject
of the petition at bar directed against the judgment of affirmance rendered by respondent
That the responsibility of the state is limited by article 1903 to the case wherein
court, through the Fourth Civil Cases Division (Sison, Bidin (P), Veloso, JJ.), vis-a-vis the
it acts through a special agent(and a special agent, in the sense in which these
decretal portion handed down by the court of origin in:
words are employed, is one who receives a definite and fixed order or
commission, foreign to the exercise of the duties of his office if he is a special
official) so that in representation of the state and being bound to act as an agent 1. Ordering the defendants, jointly and severally to pay the plaintiff the amount of
thereof, he executes the trust confided to him. This concept does not apply to P179,511.52 as actual damages.
any executive agent who is an employee of the acting administration and who
on his own responsibility performs the functions which are inherent in and 2. Ordering the defendants jointly and severally to pay the plaintiff P436,642.03 as
naturally pertain to his office and which are regulated by law and the reimbursement for the damages paid by the plaintiff to death, injury and damage
regulations." (Supreme Court of Spain, May 18, 1904; 98 Jur. Civ., 389, 390.) claimants.

That according to paragraph 5 of article 1903 of the Civil Code and the principle 3. Ordering the defendants jointly and severally to pay exemplary damages in the
laid down in a decision, among others, of the 18th of May, 1904, in a damage amount of P50, 000.00 to the plaintiff.
case, the responsibility of the state is limited to that which it contracts through a
special agent, duly empowered by a definite order or commission to perform some
act or charged with some definite purpose which gives rise to the claim, and not where
19
 4. Ordering the defendants jointly and severally to pay the plaintiff attorney's fees No. 741, with capacity to sue and be sued, and is likewise engaged in transporting
in the amount of P5, 000.00. passengers and cargoes by trains and buses and that, it operates a train line
between San Fernando, La Union and Manila particularly Passenger Express Train
5. Ordering the defendants, jointly and severally to pay the plaintiff interest at the with Body No. 73, passing along the intersection of Barrio Balungao, Calumpit,
legal rate on the above amounts due the plaintiff from August 10, 1974 until fully Bulacan, in going to San Fernando, La Union from Manila and return;
paid.
3. That on August 10, 1974, at about 1:20 o'clock in the afternoon, a Baliuag Transit
6. Ordering the defendants to pay the cost of this suit. Bus with Body No. 1066 and Plate No. XS-929 PUB-Bulacan '74 was driven by its
authorized driver Romeo Hughes and PNR Train No. 73 was operated by Train
Engineer Honorio Cabardo alias Honorio Cirbado and at the railroad intersection
7. Ordering the dismissal of the defendants' counterclaim for lack of factual and
at Barrio Balungao, Calumpit, Bulacan, said passenger train No. 73 hit and
legal basis. (p. 101, Record on Appeal; p. 103. Rollo.)
bumped the right mid portion of the plaintiff's passenger bus No. 1066, while the
rear portion of said bus was at the railroad track and its direction was towards
Culled from the text of the assailed disposition are the facts of the case at bar which are Hagonoy, Bulacan at about 1:30 o'clock in the afternoon;
hereunder adopted verbatim:
4. That at the time of the collision there was a slight rainfall in the vicinity of the
The case arose from a collision of a passenger express train of defendant Philippine scene of the accident and that there was at said intersection no bars, semaphores,
National Railways, (PNR) coming from San Fernando, La Union and bound for and signal lights that would warn the public of the approaching train that was
Manila and a passenger bus of Baliwag Transit, Inc. which was on its way to Hagonoy, about to pass through the intersection and likewise there was no warning devices
Bulacan, from Manila, but upon reaching the railroad crossing at Barrio Balungao, to passing trains showing that they were about to pass an intersection in going to
Calumpit, Bulacan at about 1:30 in the afternoon of August 10, 1974, got stalled and Manila from San Fernando, La Union and back;
was hit by defendant's express train causing damages to plaintiff's bus and its
passengers, eighteen (18) of whom died and fifty-three (53) others suffered physical
5. That on account of said collision, the Baliuag Transit Bus with Body No. 1066
injuries. Plaintiff alleging that the proximate cause of the collision was the negligence
driven by Romeo Hughes was damaged and eighteen (18) of its passengers died
and imprudence of defendant PNR and its locomotive engineer, Honorio Cirbado, in
and the rest who were more than fifty three (53) passengers suffered physical
operating its passenger train in a busy intersection without any bars, semaphores,
injuries;
signal lights, flagman or switchman to warn the public of approaching train that
would pass through the crossing, filed the instant action for Damages against
defendants. The defendants, in their Answer traversed the material allegation of the 6. That after the investigation the Chief of Police of Calumpit, Bulacan, filed a
Complaint and as affirmative defense alleged that the collision was caused by the criminal case of Reckless Imprudence Causing Multiple Homicide with Multiple
negligence, imprudence and lack of foresight of plaintiff's bus driver, Romeo Hughes. Physical Injuries and Damage to Property against Romeo Hughes y Parfan, driver
of the Baliuag Transit bus docketed under Crim. Case No. 2392; while the train
Engineer Honorio Cabardo alias Honorio Cirbado was not included as an accused
At the pre-trial conference held on June 23, 1976, the parties agreed on a partial
in said case, although his train No. 73 was the one that hit and bumped the right
stipulation of facts and issues which as amplified at the continuation of the pre-trial
rear portion of the said bus;
conference, on July 12, 1976, are as follows:

7. That immediately after the said accident Major Manuel A. Macam, Chief of the
1 That plaintiff is a duly constituted corporation registered with the Securities and
Municipal Police of Calumpit, Bulacan, together with some of his policemen
Exchange Commission engaged in the business of transportation and operating
conducted an investigation of the accident;
public utility buses for the public with lines covering Manila, Caloocan City,
Quezon City, Malabon, Rizal, Bulacan, Pampanga and Nueva Ecija, and
particularly from Manila to Hagonoy, Bulacan and return in the month of August, 8. That at the railroad crossing in Calumpit, Bulacan where the accident took place
l974 passing thru the town of Calumpit Bulacan, temporarily while the bridge at there is no railroad crossing bar, however, during the pre-war days there was a
Hagonoy, Bulacan was under construction; railroad crossing bar at said intersection; that, however, there was only one sign
of railroad crossing "Stop, Look and Listen" placed on a concrete slab and attached
to a concrete post existing at the approach of the railroad track from the Highway
2 That defendant Philippine National Railways is a purely government owned and
going towards Hagonoy, Bulacan and that after the said railroad track there was
controlled corporation duly registered and existing virtue of Presidential Decree

20
 a designated jeep parking area at the right side in the direction from the Highway Defendants endeavored to show that the proximate and immediate cause of the
to Hagonoy Bulacan; collision was the negligence of the bus driver because the driver did not make a stop
before ascending the railtrack; he did not heed the warning or shoutings of bystanders
9. That the train No. 73 driven by Train Engineer Honorio Cabardo alias Honorio and passengers and proceeded in traversing the railtrack at a fast speed; that the bus
Cirbado stopped after passing the railroad crossing at a distance of about 50 driver was in fact violating Section 42(d) of R.A. 4136, otherwise known as the Land
meters from the said intersection after the collision on August, 1974; Transportation and Traffic Code for failure to "stop, look, and listen" at the
intersection, before crossing the railtrack; that it is incumbent upon him to take the
necessary precautions at the intersection because the railroad track is in itself a
10. That the expected time of arrival of said Train No. 73 in Manila was 2:41 P.M.
warning; and the bus driver ignored such a warning and must assume the
and its departure time from San Fernando, La Union was 9:00 A.M. and its
responsibility for the result of the motion taken by him (U.S. v. Mananquil, 42 Phil.
expected arrival at Calumpit, Bulacan was 1:41 P.M. with no stop at Calumpit,
90)
Bulacan.

Except the testimony of the train engineer Cabardo, there is no admissible evidence
SIMPLIFICATION OF ISSUES
to show that indeed, the bus driver did not take the necessary precaution in traversing
the track. Note that he first noticed the bus when it was only 15 meters away from
11. That the principal issue in the instant case is who between the driver Romeo him; he could not have possibly noticed the position of the bus before negotiating the
Hughes of Baliuag Transit, Incorporated and the train engineer Honorio Cabardo track.
alias Honorio Cirbado of the Philippine National Railways was negligent or
whether or not both are negligent; that likewise which of said companies was
On the other hand, it was shown by plaintiff that the bus driver Romeo Hughes took
negligent at said railroad intersection;
the necessary precautions in traversing the track.

12. That another additional issue is whether the Baliuag Transit Incorporated has
The bus driver had stopped before traversing the track and in fact asked the conductor
exercised the diligence of a good father of the family in the selection and
to alight and made a "Look and Listen" before proceeding; the conductor had done
supervision of its employees. (pp.
just that and made a signal to proceed when he did not see any oncoming train. (TSN,
85-87, Record on Appeal). ( Annex A, Petition; pp. 79-82, Rollo)
October 2l, 1976, p. 4); plaintiff's bus drivers and conductors are enjoined to observe
such a precautionary measure in seminars conducted by the company. (TSN,
In addition, respondent court deemed it necessary to reflect the salient findings of September 23, 1976. pp. 26-27).
the case for damages as formulated by the trial court:
The evidence disclosed that the train was running fast because by his own testimony,
Posed for resolution are the following issues: Who between the driver Romeo Hughes the train engineer had testified that before reaching the station of Calumpit the terrain
of the Baliuag Transit Incorporated and Honorio Cabardo, train Engineer of the was downgrade and levelled only after passing the Calumpit bridge (TSN, July 28,
Philippine National Railways was negligent in the operation of their respective 1976, p. 14 ); the tendency of the train, coming from a high point is to accelerate as the
vehicles, or whether or both were negligent? Could either of the companies Baliuag gravity will necessarily make it so, especially when it is pulling seven coaches loaded
Transit Incorporated and the Philippine National Railways be held accountable for with goods and passengers.
the collision because of negligence?
Moreover, upon impact, the bus loaded with passengers was dragged and thrown
The defendants presented several statements or affidavits of alleged witnesses to the into a ditch several meters away; the train had stopped only after the engine portion
collision, specifically Exhibits 2, 3, 4, 5, 6, 11, 13, 14, 15, 16, 17, 18 and 19; the Court is was about 190 meters away from the fallen bus; several passengers were injured and
at a loss as to why the persons who gave the said statements were not presented as at least 20 died; such facts conclusively indicate that the train was speeding, because
witnesses during the trial of the if it were moving at moderate speed, it would not run some 190 meters after impact
case, as aptly said, the statements are hearsay evidence (Azcueta v. Cabangbang, — and throw the bus at quite a distance especially so when it is claimed that the train's
45 O.G. 144); at most they be taken as proof only of the fact that statements of said emergency brakes were applied.
persons were taken and that investigation was conducted of the incident; the Court
cannot consider the averments in said statements as testimonies or evidence of truth.
Further, the train was an express train; its departure was 9:00 A.M. at San
Fernando, La Union and expected in Manila at 2:41 P.M.; the collision occurred at

21
1:30 P.M. or 4 1/2 hours after it left La Union; surely, the train could have not A railroad is not required to have a gate (crossing bar) or a flagman, or to maintain
negotiated such a distance in so short a time if it were not running at fast speed. signals at every intersection; only at such places reasonably necessary; what is
considered reasonably necessary will depend on the amount of travel upon the
It may be argued that a railroad is not subject to the same restrictions to the speed road, the frequency with which trains pass over it and the view which could be
of its train as a motorists (Mckelvey v. Delaware L. and W.R. Co. 253 App. D.V. obtained of trains as they approach the crossing, and other conditions (Pari v. Los
109, 300 NYS 1263 ); but it does not follow that a train will be permitted to run fast Angeles, Ry. Corporation (Cal A2d) 128 p2d 563; Swdyk v. Indiana Harbor Belt R.
under all conditions at any rate of speed it may choose. It must regulate its speed Co. 148 F. 2d 795, and others).
with proper regard for the safety of human life and property (Johnson v. Southern
Pacific Company (Cal. App. 288 p. 81), considering the surrounding circumstances As has been amply discussed, the crossroad at the intersection at Calumpit is one
particularly the nature of the locality (Atchinson, T. and SFR Co. v. Nicks (Arts) which is a busy thoroughfare; it leads to the Poblacion at Calumpit and other
165 p. 2d 167). barrios as well as the town of Hagonoy; the vicinity is utilized as a parking and
waiting area for passengers of jeepneys that ply between the barrios, clearly, the
Cabardo's route included the passage over the said intersection; he could have flow of vehicular traffic thereat is huge. It can be said also that, since there is no
noticed that it is a very busy intersection because the crossroad leads to the other railtrack going North except that one passing at Calumpit, trains pass over
Calumpit Poblacion as well as to the neighboring town of Hagonoy; there was a it frequently;
parking lot by the side of the track whereat passengers board jeepneys for the
neighboring barrios and towns; stalls abound in the vicinity and bystanders A portion of the intersection is being used as a parking area with stalls and other
congregate nearby. A prudent train operator must, under the circumstances, obstructions present making it difficult, if not impossible, to see approaching
slacken his speed almost for the protection of motorists and pedestrians, not only trains (see photographs).
when a collision is inevitable but even if no hindrance is apparent on the way;
The failure of the Philippine National Railways to put a cross bar, or signal light,
Moreover, there was an intermittent rain at the time of the collision (see stipulation flagman or switchman, or semaphores is evidence of negligence and disregard of
of facts and photographs); the condition of the weather was such that even if for the safety of the public, even if there is no law or ordinance requiring it, because
this reason alone, the train engineer should have foreseen that danger of collision public safety demands that said devices or equipments be installed, in the light of
lurked because of poor visibility of slippery road; he should have taken extra aforesaid jurisprudence. In the opinion of this Court the X sign or the presence of
precaution by considerably slackening its speed. This he failed to do even if the "STOP, LOOK, LISTEN" warnings would not be sufficient protection of the
nature of his job required him to observe care exercised by a prudent man. motoring public as well as the pedestrians, in the said intersection;

Contributory negligence may not be ascribed to the bus driver; it was evident that The parties likewise have stipulated that during the pre-war days, there was a
he had taken the necessary precautions before passing over the railway track; if railroad crossing bar at the said intersection (Par-8, Stipulation of Facts). It appears
the bus was hit, it was for reasons beyond the control of the bus driver because he that it was a self imposed requirement which has been abandoned. In a case it was
had no place to go; there were vehicles to his left which prevented him in swerving held that where the use of a flagman was self imposed, the abandonment thereof
towards that direction; his bus stalled in view of the obstructions in his front where may constitute negligence. (Fleming v. Missouri and A. Ry. Co. 198 ARDC 290,
a sand and gravel truck stopped because of a jeep maneuvering into a garage up 128 S.W. 2d 286 and others; cited in Sec. 1082 SCRWARTZ, Vol. 2). Similarly, the
front. All the wheels at the bus have already passed the rail portion of the track abandonment by the PNR of the use of the crossing bar at the intersection at
and only the rear portion of the bus' body occupied or covered the railtrack. This Calumpit constitutes negligence, as its installation has become imperative,
was evident because the part of the bus hit by the train was the rear since the bus because of the prevailing circumstances in the place.
fell on a nearby ditch. Otherwise, if the bus was really hit in mid-body, the bus
could have been halved into two because of the force of the impact. A railroad company has been adjudged guilty of negligence and civilly liable for
damages when it failed to install semaphores, or where it does not see to it that its
The stipulation of facts between the parties show that there was no crossing bar at flagman or switchman comply with their duties faithfully, to motorist injured by
the railroad intersection at Calumpit, Bulacan at the time of collision (par. 8, a crossing train as long as he had crossed without negligence on his part (Lilius
Stipulation of Facts); the plaintiff contended and the defendants did not deny, that vs. MRR, 39 Phil. 758). (Decision, pages 94-100, R A.; pp. 83-89, Rollo).
there were no signal lights, semaphores, flagman or switchman thereat; the
absence of such devices, the plaintiff argues constitute negligence on the part of On the aspect of whether the Philippine National Railways enjoys immunity from suit,
the Philippine National Railways. respondent court initially noted that an exculpation of this nature that was raised for the
22
first time on appeal may no longer be entertained in view of the proscription under stopped 190 meters from the point of impact and arrived at Calumpit, Bulacan earlier
Section 2, Rule 9 of the Revised Rules of Court, apart from the fact that the lawyer of than its expected time of arrival thereat.
petitioner agreed to stipulate inter alia that the railroad company had capacity to sue and
be sued. This being so, respondent court continued, PNR was perforce estopped from Moreover, respondent court agreed with the conclusion reached by the trial court that the
disavowing the prejudicial repercussion of an admission in judicio. Even as the laws absence of a crossing bar, signal light, flagman or switchman to warn the public of an
governing the creation and rehabilitation of the PNR were entirely mute on its power to approaching train constitutes negligence per the pronouncement of this Court in Lilius vs.
sue and be sued, respondent court nonetheless opined that such prerogative was implied Manila Railroad Company (59 Phil 758 [1934]).
from the general power to transact business pertinent or indispensable to the attainment
of the goals of the railroad company under Section 4 of Republic Act No. 4156 as amended
Concerning the exercise of diligence normally expected of an employer in the selection
by Republic Act No. 6366:
and supervision of its employees, respondent court expressed the view that PNR was
remiss on this score since it allowed Honorio Cabardo, who finished only primary
Sec. 4 General Powers — The Philippine National Railways shall have education and became an engineer only through sheer experience, to operate the
the following general powers: locomotive, not to mention the fact that such plea in avoidance was not asserted in the
answer and was thus belatedly raised on appeal.
(a) To do all such other things and to transact all such business directly
or indirectly necessary, incidental or conducive to the attainment of the Petitioner moved to reconsider, but respondent court was far from persuaded. Hence, the
purpose of the corporation; and petition before Us which, in essence, incorporates similar disputations anent PNR's
immunity from suit and the attempt to toss the burden of negligence from the train
(b) Generally, to exercise all powers of a railroad corporation under the engineer to the bus driver of herein private respondent.
Corporation law.
The bone of contention for exculpation is premised on the familiar maxim in political law
in conjunction with Section 2(b) of Presidential Decree No. 741: that the State, by virtue of its sovereign nature and as reaffirmed by constitutional
precept, is insulated from suits without its consent (Article 16, Section 3, 1987 Constitution).
(b) To own or operate railroad transways, bus lines, trucklines, However, equally conceded is the legal proposition that the acquiescence of the State to
subways, and other kinds of land transportation, vessels, and pipelines, be sued can be manifested expressly through a general or special law, or indicated
for the purpose of transporting for consideration, passengers, mail and implicitly, as when the State commences litigation for the purpose of asserting an
property between any points in the Philippines; affirmative relief or when it enters into a contract (Cruz,Philippine Political Law, 1991
edition, page 33; Sinco, Philippine Political Law, Eleventh Edition, 1962, page 34). When
the State participates in a covenant, it is deemed to have descended from its superior
Thus, respondent court utilized the doctrine of implied powers announced in National
position to the level of an ordinary citizen and thus virtually opens itself to judicial
Airports Corporation vs. Teodoro, Sr. and Philippine Airlines, Inc. (91 Phil. 203 [1952]), to the
process. Of course, We realize that this Court qualified this form of consent only to those
effect that the power to sue and be sued is implicit from the faculty to transact private
contracts concluded in a proprietary capacity and therefore immunity will attach for those
business. At any rate, respondent court characterized the railroad company as a private
contracts entered into in a governmental capacity, following the ruling in the 1985 case
entity created not to discharge a governmental function but, among other things, to
of United States of America vs. Ruiz (136 SCRA 487 [1985]; cited by Cruz, supra at pages 36-
operate a transport service which is essentially a business concern, and thus barred from
37). But the restrictive interpretation laid down therein is of no practical worth nor can it
invoking immunity from suit.
give rise to herein petitioner PNR's exoneration since the case of Malong vs. Philippine
National Railways (138 SCRA 63, [1985]); 3 Padilla, 1987 Constitution with Comments and
In brushing aside petitioners' asseveration that the bus driver outraced the train at the Cases, 1991 edition, page 644), decided three months after Ruiz was promulgated, was
crossing, respondent court observed that the bus was hit by the train at its rear portion categorical enough to specify that the Philippine National Railways "is not performing
then protruding over the tracks as the bus could not move because another truck at its any governmental function" (supra, at page 68).
front was equally immobile due to a jeep maneuvering into a nearby parking area. Under
these tight conditions, respondent court blamed the train engineer who admitted to have
In Malong, Justice Aquino, speaking for the Court en banc, declared:
seen the maneuvering jeep at a distance (TSN, July 28, 1976, page 18) and had the last
clear chance to apply the brakes, knowing fully well that the vehicles following the jeep
could not move away from the path of the train. Apart from these considerations, it was The Manila Railroad Company, the PNR's predecessor, as a common
perceived below that the train was running fast during the entire trip since the train carrier, was not immune from suit under Act No. 1510, its charter.

23
 The PNR Charter, Republic Act No. 4156, as amended by Republic Act . . . in the instant case the State divested itself of its sovereign capacity when it
No. 6366 and Presidential Decree No. 741, provides that the PNR is a organized the PNR which is no different from its predecessor, the Manila Railroad
government instrumentality under government ownership during its Company. The PNR did not become immune from suit. It did not remove itself from
50-year term, 1964 to 2014. It is under the Office of the President of the the operation of Articles 1732 to 1766 of the Civil Code on common carriers.
Philippines. Republic Act No. 6366 provides:
The correct rule is that "not all government entities, whether corporate or
Sec. 1-a. Statement of policy. — The Philippine National Railways, being a factor noncorporate, are immune from suits. Immunity from suit is determined by the
for socio-economic development and growth, shall be a part of the infrastructure character of the objects for which the entity was organized." (Nat. Airports Corp. vs.
program of the government and as such shall remain in and under government Teodoro and Phil. Airlines, Inc., 91 Phil. 203, 206; Santos vs. Santos, 92 Phil. 281, 285;
ownership during its corporate existence. The Philippine National Railways Harry Lyons, Inc. vs. USA, 104 Phil. 593).
must be administered with the view of serving the interests of the public by
providing them the maximum of service and, while aiming at its greatest utility Suits against State agencies with respect to matters in which they have assumed to act
by the public, the economy of operation must be ensured so that service can be in a private or nongovernmental capacity are not suits against the State (81 C.J.S. 1319).
rendered at the minimum passenger and freight prices possible.
Suits against State agencies with relation to matters in which they have assumed
The charter also provides: to act in a private or nongovernmental capacity, and various suits against certain
corporations created by the State for public purposes, but to engage in matters
Sec. 4. General powers. — The Philippine National Railways shall have the partaking more of the nature of ordinary business rather than functions of a
following general powers: governmental or political character, are not regarded as suits against the State.

(a) To do all such other things and to transact all such business directly or The latter is true, although the State may own the stock or property of such a
indirectly necessary, incidental or conducive to the attainment of the purpose of corporation, for by engaging in business operations through a corporation the
the corporation; and State divests itself so far of its sovereign character, and by implicating consents to
suits against the corporation. (81 C.J.S. 1319).
(b) Generally, to exercise all powers of a railroad corporation under the
Corporation Law. (This refers to Sections 81 to 102 of the Corporation Law on The foregoing rule was applied to State Dock Commissions carrying on business
railroad corporations, not reproduced in the Corporation Code.) relating to pilots, terminals and transportation (Standard Oil Co. of New Jersey vs.
U.S., 27 Fed. 2nd 370) and to State Highways Commissions created to build public
Section 36 of the Corporation Code provides that every corporation has the power to sue roads and given appropriations in advance to discharge obligations incurred in their
and be sued in its corporate name. Section 13(2) of the Corporation Law provides that behalf (Arkansas State Highway Commission vs. Dodge, 26 SW 2nd 879 and State
every corporation has the power to sue and be sued in any court. Highway Commission of Missouri vs. Bates, 296 SW 418, cited in National Airports
case).
A sovereign is exempt from suit, not because of any formal conception
or obsolete theory, but on the logical and practical ground that there can be no The point is that when the government enters into a commercial business it abandons
legal right as against the authority that makes the law on which the right depends its sovereign capacity and is to be treated like any other private corporation (Bank of
(Justice Holmes in Kawananakoa vs. Polyblank, 205 U.S. 353, 51 L. 3d 834). the U.S. vs. Planters' Bank, 9 Wheat. 904, 6 L ed. 244, cited in Manila Hotel Employees
Association vs. Manila Hotel Company, et al., 73 Phil. 374, 388). The Manila Hotel case
also relied on the following rulings:
The public service would be hindered, and public safety endangered,
if the supreme authority could be subjected to suit at the instance of every citizen
and, consequently, controlled in the use and disposition of the means required for By engaging in a particular business through the instrumentality of a corporation,
the proper administration of the Government (The Siren vs. U.S., 7 Wall. 152, 19 L. the government divests itself pro hac vice of its sovereign character, so as to render
ed. 129). (at pp. 65-66). the corporation subject to the rules of law governing private corporations.

To the pivotal issue of whether the State acted in a sovereign capacity when it organized When the State acts in its proprietary capacity, it is amenable to all the rules of law
the PNR for the purpose of engaging in transportation, Malong continued to hold that: which bind private individuals.

24
 There is not one law for the sovereign and another for the subject, but when the otherwise, as may be reasonably necessary to avoid injury to him.
sovereign engages in business and the conduct of business enterprises, and (65 Am. Jur., Second Edition. p. 649).
contracts with individuals, whenever the contract in any form comes before the
courts, the rights and obligation of the contracting parties must be adjusted upon Likewise, it was established that the weather condition was characterized with
the same principles as if both contracting parties were private persons. Both stand intermittent rain which should have prompted the train engineer to exercise extra
upon equality before the law, and the sovereign is merged in the dealer, contractor precaution. Also, the train reached Calumpit, Bulacan ahead of scheduled arrival thereat,
and suitor (People vs. Stephens, 71 N.Y. 549). indicating that the train was travelling more than the normal speed of 30 kilometers per
hour. If the train were really running at 30 kilometers per hour when it was approaching
It should be noted that in Philippine National Railways vs. Union de Maquinistas, the intersection, it would probably not have travelled 190 meters more from the place of
etc., L-31948, July 25, 1978, 84 SCRA 223, it was held that the PNR funds could be the accident (page 10, Brief for Petitioners). All of these factors, taken collectively,
garnished at the instance of a labor union. engendered the concrete and yes, correct conclusion that the train engineer was negligent
who, moreover, despite the last opportunity within his hands vis-a-vis the weather
It would be unjust if the heirs of the victim of an alleged negligence of the PNR condition including the presence of people near the intersection, could have obviated the
employees could not sue the PNR for damages. Like any private common carrier, the impending collision had he slackened his speed and applied the brakes (Picart vs. Smith,
PNR is subject to the obligations of persons engaged in that private enterprise. It is 37 Phil. 809 [1918]).Withal, these considerations were addressed to the trial judge who,
not performing any governmental function. unlike appellate magistrates, was in a better position to assign weight on factual
questions. Having resolved the question of negligence between the train engineer and the
bus driver after collating the mass of evidence, the conclusion reached thereafter thus
Thus, the National Development Company is not immune from suit. It does not
commands great respect especially so in this case where respondent court gave its nod of
exercise sovereign functions. It is an agency for the performance of purely corporate,
approval to the findings of the court of origin (Co vs. Court of Appeals, 193 SCRA 198;
proprietary or business functions (National Development Company vs. Tobias, 117
206 [1991]); Amigo vs. Teves, 50 O.G. 5799; Regalado, Remedial Law Compendium, Fifth
Phil. 703, 705 and cases cited therein; National Development Company vs. NDC
edition, page 353).
Employees and Workers' Union, L-32387, August 19, 1975, 66 SCRA 18l, 184).

What exacerbates against petitioners' contention is the authority in this jurisdiction to the
Other government agencies not enjoying immunity from suit are the Social Security
effect that the failure of a railroad company to install a semaphore or at the very least, to
System (Social Security System vs. Court of Appeals, L-41299, February 21, 1983, 120
post a flagman or watchman to warn the public of the passing train amounts to negligence
SCRA 707) and the Philippine National Bank (Republic vs. Philippine National Bank,
(Lilius vs. Manila Railroad Company, 59 Phil. 758 [1934]).
121 Phil. 26). (at pp. 66-68).

WHEREFORE, the petition is hereby DISMISSED and the decision of respondent court
We come now to the question of whether respondent court properly agreed with the trial
AFFIRMED.
court in imputing negligence on the part of the train engineer and his employer.

SO ORDERED.
It was demonstrated beyond cavil in the course of the pre-trial hearings held for the
purpose of stipulating on crucial facts that the bus was hit on the rear portion thereof after
it crossed the railroad tracks. Then, too the train engineer was frank enough to say that G.R. No. 61516 March 21, 1989
he saw the jeep maneuvering into a parking area near the crossing which caused the FLORENTINA A. GUILATCO, petitioner, vs. CITY OF DAGUPAN, and the
obstruction in the flow of traffic such that the gravel and sand truck including the bus of HONORABLE COURT OF APPEALS, respondents.
herein private respondent were not able to move forward or to take the opposite lane due SARMIENTO, J.:
to other vehicles. The unmindful demeanor of the train engineer in surging forward
despite the obstruction before him is definitely anathema to the conduct of a prudent In a civil action 1 for recovery of damages filed by the petitioner Florentina A. Guilatco,
person placed under the same set of perceived danger. Indeed: the following judgment was rendered against the respondent City of Dagupan:

When it is apparent, or when in the exercise of reasonable diligence xxx

commensurate with the surroundings it should be apparent, to the
company that a person on its track or to get on its track is unaware of (1) Ordering defendant City of Dagupan to pay plaintiff actual damages in the
his danger or cannot get out of the way, it becomes the duty of the amount of P 15,924 (namely P8,054.00 as hospital, medical and other expenses
company to use such precautions, by warnings, applying brakes, or
25
 [Exhs. H to H-60], P 7,420.00 as lost income for one (1) year [Exh. F] and P 450.00 sidewalk along Perez Blvd., at the time of the incident on July 25, 1978 which was
as bonus). P 150,000.00 as moral damages, P 50,000.00 as exemplary damages, and partially covered by a concrete flower pot by leaving gaping hole about 2 ft. long
P 3,000.00 as attorney's fees, and litigation expenses, plus costs and to appropriate by 1 1/2 feet wide or 42 cms. wide by 75 cms. long by 150 cms. deep (see Exhs. D
through its Sangguniang Panglunsod (City Council) said amounts for said and D-1).
purpose;
Defendant Alfredo Tangco, City Engineer of Dagupan City and admittedly ex-
(2) Dismissing plaintiffs complaint as against defendant City Engr. Alfredo G. officio Highway Engineer, City Engineer of the Public Works and Building Official
Tangco; and for Dagupan City, admitted the existence of said manhole along the sidewalk in
Perez Blvd., admittedly a National Road in front of the Luzon Colleges. He also
(3) Dismissing the counterclaims of defendant City of Dagupan and defendant admitted that said manhole (there are at least 11 in all in Perez Blvd.) is owned by
City Engr. Alfredo G. Tangco, for lack of merit. 2 the National Government and the sidewalk on which they are found along Perez
Blvd. are also owned by the National Government. But as City Engineer of
Dagupan City, he supervises the maintenance of said manholes or drainage
The facts found by the trial court are as follows: 3
system and sees to it that they are properly covered, and the job is specifically done
by his subordinates, Mr. Santiago de Vera (Maintenance Foreman) and Engr.
It would appear from the evidences that on July 25, 1978, herein plaintiff, a Court Ernesto Solermo also a maintenance Engineer. In his answer defendant Tangco
Interpreter of Branch III, CFI--Dagupan City, while she was about to board a expressly admitted in par. 7-1 thereof, that in his capacity as ex-officio Highway
motorized tricycle at a sidewalk located at Perez Blvd. (a National Road, under the Engineer for Dagupan City he exercises supervision and control over National
control and supervision of the City of Dagupan) accidentally fell into a manhole roads, including the Perez Blvd. where the incident happened.
located on said sidewalk, thereby causing her right leg to be fractured. As a result
thereof, she had to be hospitalized, operated on, confined, at first at the
On appeal by the respondent City of Dagupan, the appellate court 4 reversed the lower
Pangasinan Provincial Hospital, from July 25 to August 3, 1978 (or for a period of
court findings on the ground that no evidence was presented by the plaintiff- appellee to
16 days). She also incurred hospitalization, medication and other expenses to the
prove that the City of Dagupan had "control or supervision" over Perez Boulevard. 5
tune of P 8,053.65 (Exh. H to H-60) or a total of P 10,000.00 in all, as other receipts
were either lost or misplaced; during the period of her confinement in said two
hospitals, plaintiff suffered severe or excruciating pain not only on her right leg The city contends that Perez Boulevard, where the fatal drainage hole is located, is a
which was fractured but also on all parts of her body; the pain has persisted even national road that is not under the control or supervision of the City of Dagupan. Hence,
after her discharge from the Medical City General Hospital on October 9, 1978, to no liability should attach to the city. It submits that it is actually the Ministry of Public
the present. Despite her discharge from the Hospital plaintiff is presently still Highways that has control or supervision through the Highway Engineer which, by mere
wearing crutches and the Court has actually observed that she has difficulty in coincidence, is held concurrently by the same person who is also the City Engineer of
locomotion. From the time of the mishap on July 25, 1978 up to the present, Dagupan.
plaintiff has not yet reported for duty as court interpreter, as she has difficulty of
locomotion in going up the stairs of her office, located near the city hall in After examination of the findings and conclusions of the trial court and those of the
Dagupan City. She earns at least P 720.00 a month consisting of her monthly salary appellate court, as well as the arguments presented by the parties, we agree with those of
and other means of income, but since July 25, 1978 up to the present she has been the trial court and of the petitioner. Hence, we grant the petition.
deprived of said income as she has already consumed her accrued leaves in the
government service. She has lost several pounds as a result of the accident and she In this review on certiorari, we have simplified the errors assigned by the petitioner to a
is no longer her former jovial self, she has been unable to perform her religious, single issue: whether or not control or supervision over a national road by the City of
social, and other activities which she used to do prior to the incident. Dagupan exists, in effect binding the city to answer for damages in accordance with article
2189 of the Civil Code.
Dr. Norberto Felix and Dr. Dominado Manzano of the Provincial Hospital, as well
as Dr. Antonio Sison of the Medical City General Hospital in Mandaluyong Rizal The liability of public corporations for damages arising from injuries suffered by
(Exh. I; see also Exhs. F, G, G-1 to G-19) have confirmed beyond shadow of any pedestrians from the defective condition of roads is expressed in the Civil Code as
doubt the extent of the fracture and injuries sustained by the plaintiff as a result of follows:
the mishap. On the other hand, Patrolman Claveria, De Asis and Cerezo
corroborated the testimony of the plaintiff regarding the mishap and they have
Article 2189. Provinces, cities and municipalities shall be liable for
confirmed the existence of the manhole (Exhs. A, B, C and sub-exhibits) on the
damages for the death of, or injuries suffered by, any person by reason
26
 of the defective condition of roads, streets, bridges, public buildings, than as a city officer. This is because while he is entitled to an honorarium from the
and other public works under their control or supervision. Ministry of Public Highways, his salary from the city government substantially exceeds
the honorarium.
It is not even necessary for the defective road or street to belong to the province, city or
municipality for liability to attach. The article only requires that either control or We do not agree.
supervision is exercised over the defective road or street. 6
Alfredo G. Tangco "(i)n his official capacity as City Engineer of Dagupan, as Ex- Officio
In the case at bar, this control or supervision is provided for in the charter of Dagupan Highway Engineer, as Ex-Officio City Engineer of the Bureau of Public Works, and, last
and is exercised through the City Engineer who has the following duties: but not the least, as Building Official for Dagupan City, receives the following monthly
compensation: P 1,810.66 from Dagupan City; P 200.00 from the Ministry of Public
Sec. 22. The City Engineer--His powers, duties and compensation- Highways; P 100.00 from the Bureau of Public Works and P 500.00 by virtue of P.D. 1096,
There shall be a city engineer, who shall be in charge of the department respectively." 10 This function of supervision over streets, public buildings, and other
of Engineering and Public Works. He shall receive a salary of not public works pertaining to the City Engineer is coursed through a Maintenance Foreman
exceeding three thousand pesos per annum. He shall have the and a Maintenance Engineer.11 Although these last two officials are employees of the
following duties: National Government, they are detailed with the City of Dagupan and hence receive
instruction and supervision from the city through the City Engineer.
xxx
There is, therefore, no doubt that the City Engineer exercises control or supervision over
the public works in question. Hence, the liability of the city to the petitioner under article
(j) He shall have the care and custody of the public system of
2198 of the Civil Code is clear.
waterworks and sewers, and all sources of water supply, and shall
control, maintain and regulate the use of the same, in accordance with
the ordinance relating thereto; shall inspect and regulate the use of all Be all that as it may, the actual damages awarded to the petitioner in the amount of P
private systems for supplying water to the city and its inhabitants, and 10,000.00 should be reduced to the proven expenses of P 8,053.65 only. The trial court
all private sewers, and their connection with the public sewer system. should not have rounded off the amount. In determining actual damages, the court can
not rely on "speculation, conjecture or guess work" as to the amount. Without the actual
proof of loss, the award of actual damages becomes erroneous. 12
xxx

On the other hand, moral damages may be awarded even without proof of pecuniary loss,
The same charter of Dagupan also provides that the laying out, construction and
inasmuch as the determination of the amount is discretionary on the court.13 Though
improvement of streets, avenues and alleys and sidewalks, and regulation of the use
incapable of pecuniary estimation, moral damages are in the nature of an award to
thereof, may be legislated by the Municipal Board . 7 Thus the charter clearly indicates
compensate the claimant for actual injury suffered but which for some reason can not be
that the city indeed has supervision and control over the sidewalk where the open
proven. However, in awarding moral damages, the following should be taken into
drainage hole is located.
consideration:

The express provision in the charter holding the city not liable for damages or injuries
(1) First, the proximate cause of the injury must be the claimee's acts.14
sustained by persons or property due to the failure of any city officer to enforce the
provisions of the charter, can not be used to exempt the city, as in the case at bar.8
(2) Second, there must be compensatory or actual damages as
satisfactory proof of the factual basis for damages.15
The charter only lays down general rules regulating the liability of the city. On the other
hand article 2189 applies in particular to the liability arising from "defective streets, public
buildings and other public works." 9 (3) Third, the award of moral damages must be predicated on any of
the cases enumerated in the Civil Code. 16
The City Engineer, Mr. Alfredo G. Tangco, admits that he exercises control or supervision
over the said road. But the city can not be excused from liability by the argument that the In the case at bar, the physical suffering and mental anguish suffered by the petitioner
duty of the City Engineer to supervise or control the said provincial road belongs more were proven. Witnesses from the petitioner's place of work testified to the degeneration
to his functions as an ex-officio Highway Engineer of the Ministry of Public Highway
27
in her disposition-from being jovial to depressed. She refrained from attending social and (1) Ordering the defendant City of Dagupan to pay the plaintiff actual
civic activities.17 damages in the amount of P 15,924 (namely P 8,054.00 as hospital,
medical and other expenses; P 7,420.00 as lost income for one (1) year
Nevertheless the award of moral damages at P 150,000.00 is excessive. Her handicap was and P 450.00 as bonus); P 20,000.00 as moral damages and P 10,000.00
not permanent and disabled her only during her treatment which lasted for one year. as exemplary damages.
Though evidence of moral loss and anguish existed to warrant the award of
damages,18 the moderating hand of the law is called for. The Court has time and again The attorney's fees of P 3,000.00 remain the same.
called attention to the reprehensible propensity of trial judges to award damages without
basis,19 resulting in exhorbitant amounts.20 SO ORDERED.

Although the assessment of the amount is better left to the discretion of the trial G.R. No. 150304 June 15, 2005
court 21 under preceding jurisprudence, the amount of moral damages should be QUEZON CITY GOVERNMENT and Engineer RAMIR J. TIAMZON, Petitioners, vs.
reduced to P 20,000.00. FULGENCIO DACARA*, Respondent.
DECISION
As for the award of exemplary damages, the trial court correctly pointed out the basis: PANGANIBAN, J.:

To serve as an example for the public good, it is high time that the Court, through The review of cases under Rule 45 of the Rules of Court is limited to errors of law. Unless
this case, should serve warning to the city or cities concerned to be more conscious there is a showing that the findings of the lower court are totally devoid of support or are
of their duty and responsibility to their constituents, especially when they are glaringly erroneous, this Court will not analyze or weigh evidence all over again. Under
engaged in construction work or when there are manholes on their sidewalks or the circumstance, the factual findings and conclusions of the Court of Appeals affirming
streets which are uncovered, to immediately cover the same, in order to minimize those of the trial courts will be conclusive upon the Supreme Court. Furthermore, well-
or prevent accidents to the poor pedestrians.22 entrenched is the rule that points of law, theories, issues and arguments not brought to
the attention of the trial court cannot be raised for the first time on appeal or certiorari.
Too often in the zeal to put up "public impact" projects such as beautification drives, the Finally, this Court reiterates the principle that moral damages are designed to compensate
end is more important than the manner in which the work is carried out. Because of this the claimant for actual injury suffered, not to impose a penalty on the wrongdoer. Hence,
obsession for showing off, such trivial details as misplaced flower pots betray the careless absent any definite finding as to what they consist of, the alleged moral damages suffered
execution of the projects, causing public inconvenience and inviting accidents. would become a penalty rather than a compensation for actual injury suffered.

Pending appeal by the respondent City of Dagupan from the trial court to the appellate The Case
court, the petitioner was able to secure an order for garnishment of the funds of the City
deposited with the Philippine National Bank, from the then presiding judge, Hon. Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the
Willelmo Fortun. This order for garnishment was revoked subsequently by the February 21, 2001 Decision2and the October 9, 2001 Resolution3 of the Court of Appeals
succeeding presiding judge, Hon. Romeo D. Magat, and became the basis for the (CA) in CA-GR CV No. 29392. The challenged Decision disposed as follows:
petitioner's motion for reconsideration which was also denied. 23
"WHEREFORE, premises considered, the Decision dated June 29, 1990 in Civil Case No.
We rule that the execution of the judgment of the trial court pending appeal was Q-88-233 should be AFFIRMED, with costs against the appellants."4
premature. We do not find any good reason to justify the issuance of an order of execution
even before the expiration of the time to appeal .24 The assailed Resolution denied petitioners' Motion for Reconsideration.

WHEREFORE, the petition is GRANTED. The assailed decision and resolution of the The Facts
respondent Court of Appeals are hereby REVERSED and SET ASIDE and the decision of
the trial court, dated March 12, 1979 and amended on March 13, 1979, is hereby
The CA summarized the facts in this manner:
REINSTATED with the indicated modifications as regards the amounts awarded:

"Sometime on February 28, 1988 at about 1:00 A.M., Fulgencio Dacara, Jr., son of
Fulgencio P. Dacara, Sr. and owner of '87 Toyota Corolla 4-door Sedan with Plate No. 877
28
(sic), while driving the said vehicle, rammed into a pile of earth/street diggings found at The CA agreed with the RTC's finding that petitioners' negligence was the proximate
Matahimik St., Quezon City, which was then being repaired by the Quezon City cause of the damage suffered by respondent.9 Noting the failure of petitioners to present
government. As a result, Dacarra (sic), Jr. allegedly sustained bodily injuries and the evidence to support their contention that precautionary measures had indeed been
vehicle suffered extensive damage for it turned turtle when it hit the pile of earth. observed, it ruled thus:

"Indemnification was sought from the city government (Record, p. 22), which however, "x x x. Sadly, the evidence indicates that [petitioners] failed to show that they placed
yielded negative results. Consequently, Fulgencio P. Dacara (hereinafter referred to as sufficient and adequate precautionary signs at Matahimik Street to minimize or prevent
FULGENCIO), for and in behalf of his minor son, Jr., filed a Complaint (Record, p. 1) for the dangers to life and limb under the circumstances. Contrary to the testimony of the
damages against the Quezon City and Engr. Ramir Tiamzon, as defendants, before the witnesses for the [petitioners], namely Engr. Ramir Tiamzon, Ernesto Landrito and
Regional Trial Court, National Capital Judicial Region, Branch 101, Quezon City, Eduardo Castillo, that there were signs, gasera which was buried so that its light could
docketed as Civil Case No. Q-88-233. FULGENCIO prayed that the amount of not less not be blown off by the wind and barricade, none was ever presented to stress and prove
than ₱20,000.00 actual or compensatory damages, ₱150,000.00 moral damages, ₱30,000.00 the sufficiency and adequacy of said contention."10
exemplary damages, and ₱20,000.00 attorney's fees and costs of the suit be awarded to
him. Further upholding the trial court's finding of negligence on the part of herein petitioners,
the CA gave this opinion:
"In an Answer with Affirmative and/or Special Defenses (Record, p. 11), defendants
admitted the occurrence of the incident but alleged that the subject diggings was "x x x. As observed by the trial court, the negligence of [petitioners] was clear based on
provided with a moun[d] of soil and barricaded with reflectorized traffic paint with sticks the investigation report of Pfc. William P. Villafranca stating to the effect 'that the subject
placed before or after it which was visible during the incident on February 28, 1988 at 1:00 vehicle rammed into a pile of earth from a deep excavation thereat without any warning
A.M. In short, defendants claimed that they exercised due care by providing the area of devi[c]e whatsoever and as a consequence thereof, Dacara, Jr. lost control of his driven
the diggings all necessary measures to avoid accident. Hence, the reason why Fulgencio car and finally turned-turtle causing substantial damage to the same.' As a defense against
Dacara, Jr. fell into the diggings was precisely because of the latter's negligence and failure liability on the basis of quasi-delict, one must have exercised the diligence of a good father
to exercise due care."5 of a family which [petitioners] failed to establish in the instant case." 11

After trial on the merits, the Regional Trial Court (RTC), Branch 101, Quezon City, Whether Article 2189 is applicable to cases in which there has been no death or physical
rendered its Decision6 dated June 29, 1990. The evidence proffered by the complainant injury, the CA ruled in the affirmative:
(herein respondent) was found to be sufficient proof of the negligence of herein
petitioners. Under Article 2189 of the Civil Code,7 the latter were held liable as follows:
"x x x. More importantly, we find it illogical to limit the liability to death or personal injury
only as argued by appellants in the case at bar applying the foregoing provisions. For,
"WHEREFORE, premises above considered, based on the quantum of evidence presented injury is an act that damages, harms or hurts and mean in common as the act or result of
by the plaintiff which tilts in their favor elucidating the negligent acts of the city inflicting on a person or thing something that causes loss, pain, distress, or impairment.
government together with its employees when considered in the light of Article 2189, Injury is the most comprehensive, applying to an act or result involving an impairment
judgment is hereby rendered ordering the defendants to indemnify the plaintiff the sum or destruction of right, health, freedom, soundness, or loss of something of value." 12
of twenty thousand pesos as actual/compensatory damages, ₱10,000.00 as moral
damages, ₱5,000.00 as exemplary damages, ₱10,000.00 as attorney's fees and other costs
Hence, this Petition.13
of suit."8

Issues
In their appeal to the CA, petitioners maintained that they had observed due diligence
and care in installing preventive warning devices, and that it was in fact the plaintiff who
had failed to exercise prudence by driving too fast to avoid the diggings. Moreover, the Petitioners raise the following issues for our consideration:
lower court allegedly erred in using Article 2189 of the Civil Code, which supposedly
applied only to liability for the death or injuries suffered by a person, not for damage to "1. The Honorable Court of Appeals decided a question of law/substance
property. contrary to applicable law and jurisprudence when it affirmed the award of
moral damage suit (sic) the amount of ₱10,000.00.
Ruling of the Court of Appeals

29
 2. The Honorable Court of Appeals decided a question of law/substance "Facts obtaining in this case are crystal clear that the accident of February 28, 1988 which
contrary to applicable law and jurisprudence when it affirmed the award of caused almost the life and limb of Fulgencio Dacara, Jr. when his car turned turtle was
exemplary damage sin (sic) the amount of ₱5,000.00 and attorney's fee in the the existence of a pile of earth from a digging done relative to the base failure at
[a]mount of ₱10,000.00. Matahimik Street nary a lighting device or a reflectorized barricade or sign perhaps which
could have served as an adequate warning to motorist especially during the thick of the
3. The Honorable Court of Appeals gravely erred and/;or (sic) had acted with night where darkness is pervasive.
grave abuse of discretion amounting to lack and/or excess of jurisdiction when
it refused to hold that respondent's son in the person of Fulgencio Dacara, Jr. "Contrary to the testimony of the witnesses for the defense that there were signs, gasera
was negligent at the time of incident."14 which was buried so that its light could not be blown off by the wind and
barricade, none was ever presented to stress the point that sufficient and adequate
Because the issues regarding the liability of petitioners for moral and exemplary damages precautionary signs were placed at Matahimik Street. If indeed signs were placed thereat,
presuppose that their negligence caused the vehicular accident, we first resolve the how then could it be explained that according to the report even of the policeman which
question of negligence or the proximate cause of the incident. for clarity is quoted again, none was found at the scene of the accident.

The Court's Ruling xxxxxxxxx

The Petition is partly meritorious. "Negligence of a person whether natural or juridical over a particular set of events is
transfixed by the attending circumstances so that the greater the danger known or
reasonably anticipated, the greater is the degree of care required to be observed.
First Issue:

xxxxxxxxx
Negligence

"The provisions of Article 2189 of the New Civil Code capsulizes the responsibility of the
Maintaining that they were not negligent, petitioners insist that they placed all the
city government relative to the maintenance of roads and bridges since it exercises the
necessary precautionary signs to alert the public of a roadside construction. They argue
control and supervision over the same. Failure of the defendant to comply with the
that the driver (Fulgencio Dacara Jr.) of respondent's car was overspeeding, and that his
statutory provision found in the subject-article is tantamount to negligence per se which
own negligence was therefore the sole cause of the incident.
renders the City government liable. Harsh application of the law ensues as a result thereof
but the state assumed the responsibility for the maintenance and repair of the roads and
Proximate cause is defined as any cause that produces injury in a natural and continuous bridges and neither exception nor exculpation from liability would deem just and
sequence, unbroken by any efficient intervening cause, such that the result would not equitable."20 (Emphasis supplied)
have occurred otherwise.15 Proximate cause is determined from the facts of each case,
upon a combined consideration of logic, common sense, policy and precedent.16
Petitioners belatedly point out that Fulgencio Jr. was driving at the speed of 60 kilometers
per hour (kph) when he met the accident. This speed was allegedly well above the
What really caused the subject vehicle to turn turtle is a factual issue that this Court cannot maximum limit of 30 kph allowed on "city streets with light traffic, when not designated
pass upon, absent any whimsical or capricious exercise of judgment by the lower courts 'through streets,'" as provided under the Land Transportation and Traffic Code (Republic
or an ample showing that they lacked any basis for their conclusions. 17 The unanimity of Act 4136). Thus, petitioners assert that Fulgencio Jr., having violated a traffic regulation,
the CA and the trial court in their factual ascertainment that petitioners' negligence was should be presumed negligent pursuant to Article 2185 21 of the Civil Code.22
the proximate cause of the accident bars us from supplanting their findings and
substituting these with our own. The function of this Court is limited to the review of the
These matters were, however, not raised by petitioners at any time during the trial. It is
appellate court's alleged errors of law. It is not required to weigh all over again the factual
evident from the records that they brought up for the first time the matter of violation of
evidence already considered in the proceedings below.18 Petitioners have not shown that
RA 4136 in their Motion for Reconsideration23 of the CA Decision dated February 21, 2001.
they are entitled to an exception to this rule.19 They have not sufficiently demonstrated
It is too late in the day for them to raise this new issue. It is well-settled that points of law,
any special circumstances to justify a factual review.
theories or arguments not brought out in the original proceedings cannot be considered
on review or appeal.24 To consider their belatedly raised arguments at this stage of the
That the negligence of petitioners was the proximate cause of the accident was aptly proceedings would trample on the basic principles of fair play, justice, and due process. 25
discussed in the lower court's finding, which we quote:
30
Indeed, both the trial and the appellate courts' findings, which are amply substantiated mention of any statement regarding moral suffering, such as mental anguish, besmirched
by the evidence on record, clearly point to petitioners' negligence as the proximate cause reputation, wounded feelings, social humiliation and the like.
of the damages suffered by respondent's car. No adequate reason has been given to
overturn this factual conclusion. Moral damages are not punitive in nature, but are designed to compensate and alleviate
in some way the physical suffering, mental anguish, fright, serious anxiety, besmirched
Second Issue: reputation, wounded feelings, moral shock, social humiliation, and similar injury
unjustly inflicted on a person.31 Intended for the restoration of the psychological or
Moral Damages emotional status quo ante, the award of moral damages is designed to compensate
emotional injury suffered, not to impose a penalty on the wrongdoer.
Petitioners argue that moral damages are recoverable only in the instances specified in
Article 221926 of the Civil Code. Although the instant case is an action for quasi-delict, For the court to arrive upon a judicious approximation of emotional or moral injury,
petitioners contend that moral damages are not recoverable, because no evidence of competent and substantial proof of the suffering experienced must be laid before it.
physical injury were presented before the trial court.27 Essential to this approximation are definite findings as to what the supposed moral
damages suffered consisted of; otherwise, such damages would become a penalty rather
than a compensation for actual injury suffered.32
To award moral damages, a court must be satisfied with proof of the following requisites:
(1) an injury -- whether physical, mental, or psychological -- clearly sustained by the
claimant; (2) a culpable act or omission factually established; (3) a wrongful act or Furthermore, well-settled is the rule that moral damages cannot be awarded -- whether
omission of the defendant as the proximate cause of the injury sustained by the claimant; in a civil33 or a criminal case34 -- in the absence of proof of physical suffering, mental
and (4) the award of damages predicated on any of the cases stated in Article 2219. 28 anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock,
social humiliation, or similar injury.35 The award of moral damages must be solidly
anchored on a definite showing that respondent actually experienced emotional and
Article 2219(2) specifically allows moral damages to be recovered for quasi-
mental sufferings. Mere allegations do not suffice; they must be substantiated by clear
delicts, provided that the act or omission caused physical injuries. There can be no recovery
and convincing proof.36
of moral damages unless the quasi-delict resulted in physical injury.29 This rule was
enunciated in Malonzo v. Galang30 as follows:
Third Issue:
"x x x. Besides, Article 2219 specifically mentions 'quasi-delicts causing physical injuries,'
as an instance when moral damages may be allowed, thereby implying that all other Exemplary Damages
quasi-delicts not resulting in physical injuries are excluded, excepting of course, the
special torts referred to in Art. 309 (par. 9, Art. 2219) and in Arts. 21, 26, 27, 28, 29, 30, 32, Petitioners argue that exemplary damages and attorney's fees are not recoverable.
34 and 35 on the chapter on human relations (par. 10, Art. 2219)." Allegedly, the RTC and the CA "did not find that petitioners were guilty of gross
negligence in the performance of their duty and responsibilities." 37
In the present case, the Complaint alleged that respondent's son Fulgencio Jr. sustained
physical injuries. The son testified that he suffered a deep cut on his left arm when the car Exemplary damages cannot be recovered as a matter of right. 38 While granting them is
overturned after hitting a pile of earth that had been left in the open without any warning subject to the discretion of the court, they can be awarded only after claimants have
device whatsoever. shown their entitlement to moral, temperate or compensatory damages. 39 In the case
before us, respondent sufficiently proved before the courts a quo that petitioners'
It is apparent from the Decisions of the trial and the appellate courts, however, that no negligence was the proximate cause of the incident, thereby establishing his right to actual
other evidence (such as a medical certificate or proof of medical expenses) was presented or compensatory damages. He has adduced adequate proof to justify his claim for the
to prove Fulgencio Jr.'s bare assertion of physical injury. Thus, there was no credible proof damages caused his car. The question that remains, therefore, is whether exemplary
that would justify an award of moral damages based on Article 2219(2) of the Civil Code. damages may be awarded in addition to compensatory damages.

Moreover, the Decisions are conspicuously silent with respect to the claim of respondent Article 2231 of the Civil Code mandates that in cases of quasi-delicts, exemplary damages
that his moral sufferings were due to the negligence of petitioners. The Decision of the may be recovered if the defendant acted with gross negligence.40 Gross negligence means
trial court, which summarizes the testimony of respondent's four witnesses, makes no such utter want of care as to raise a presumption that the persons at fault must have been
conscious of the probable consequences of their carelessness, and that they must have

31
nevertheless been indifferent (or worse) to the danger of injury to the person or property Petitioner,
of others.41 The negligence must amount to a reckless disregard for the safety of persons Present:
or property. Such a circumstance obtains in the instant case.
PANGANIBAN, J., Chairman
A finding of gross negligence can be discerned from the Decisions of both the CA and the - versus - SANDOVAL-GUTIERREZ,
trial court. We quote from the RTC Decision: CORONA,
CARPIO MORALES, and
"Sad to state that the City Government through its instrumentalities have (sic) failed to GARCIA, JJ.
show the modicum of responsibility, much less, care expected of them (sic) by the THE HON. COURT OF APPEALS, LAURA BIGLANG-
constituents of this City. It is even more deplorable that it was a case of a street digging AWA, METROPOLITAN WATERWORKS AND Promulgated:
in a side street which caused the accident in the so-called 'premier city.'"421avvphi1.zw+ SEWERAGE SYSTEM (MWSS), and KWOK CHEUNG,
Respondents. August 9, 2005
The CA reiterated the finding of the trial court that petitioners' negligence was clear,
considering that there was no warning device whatsoever43 at the excavation site. x-------------------------------------------------------------------------------------x
DECISION
The facts of the case show a complete disregard by petitioners of any adverse consequence
of their failure to install even a single warning device at the area under renovation. GARCIA, J.:
Considering further that the street was dimly lit,44 the need for adequate precautionary
measures was even greater. By carrying on the road diggings without any warning or
barricade, petitioners demonstrated a wanton disregard for public safety. Indeed, the
In this appeal by way of a petition for review on certiorari under Rule 45 of the
February 28, 1988 incident was bound to happen due to their gross negligence. It is clear
that under the circumstances, there is sufficient factual basis for a finding of gross Rules of Court, petitioner Municipality of San Juan urges us to annul and set aside
negligence on their part. the decision dated 08 September 1995[1] of the Court of Appeals in CA-G.R. CV No.
38906, affirming with modification an earlier decision of the Regional Trial Court at Pasig
Article 2229 of the Civil Code provides that exemplary damages may be imposed by way City in an action for damages thereat commenced by private respondent Laura Biglang-
of example or correction for the public good. The award of these damages is meant to be awa against, among others, the herein petitioner.
a deterrent to socially deleterious actions.45 Public policy requires such imposition to
suppress wanton acts of an offender.46 It must be emphasized that local governments and
their employees should be responsible not only for the maintenance of roads and streets, The material facts are not at all disputed:
but also for the safety of the public. Thus, they must secure construction areas with
adequate precautionary measures.
Under a Contract For Water Service Connections[2] entered into by and between the
Not only is the work of petitioners impressed with public interest; their very existence is Metropolitan Waterworks and Sewerage System (MWSS) and Kwok Cheung as sole
justified only by public service. Hence, local governments have the paramount proprietor of K.C. Waterworks System Construction (KC, for short), the former engaged
responsibility of keeping the interests of the public foremost in their agenda. For these the services of the latter to install water service connections. Article 11 (Scope of Work),
reasons, it is most disturbing to note that the present petitioners are the very parties paragraph 2.01 of the agreement provides:
responsible for endangering the public through such a rash and reckless act.

WHEREFORE, the Petition is hereby PARTLY GRANTED. The Decision of the Court of 2.01 The CONTRACTOR agrees to install water service connections,
Appeals is AFFIRMED, with the MODIFICATION that the award of moral damages transfer location of tapping to the nearest main, undertake separation
is DELETED. No costs. of service connection, change rusted connections, within the service
area of the MWSS specified in each job order covered by this Contract,
SO ORDERED. from the water main up to the installation of the verticals. Tapping of
the service pipe connection and mounting of water meter shall be
THE MUNICIPALITY OF SAN JUAN, METRO MANILA, G.R. No. 121920 undertaken exclusively or solely by the MWSS;

32
 On 20 May 1988, KC was given a Job Order by the South Sector Office of MWSS
to conduct and effect excavations at the corner of M. Paterno and Santolan Road, San Later, Biglang-awa amended her complaint twice. In her second amended
Juan, Metro Manila, a national road, for the laying of water pipes and tapping of water to complaint, she included KC as one of the defendants.
the respective houses of water concessionaires.
After due proceedings, the trial court rendered judgment in favor of Biglang-awa
adjudging MWSS and the Municipality of San Juan jointly and severally liable to her.
That same day, KC dispatched five (5) of its workers under Project Engineer
Dated 29 February 1992, the decision[5] dispositively reads in full, thus:
Ernesto Battad, Jr. to conduct the digging operations in the specified place. The workers
installed four (4) barricades made up of two-inch thick GI pipes welded together, 1.3
WHEREFORE, foregoing considered, judgment is hereby
meters wide and 1.2 meters high, at the area where the digging is to take place. The
rendered declaring the Municipality of San Juan, Metro Manila and the
digging operations started at 9 oclock in the morning and ended at about 3 oclock in the
Metropolitan Waterworks and Sewerage System jointly and severally
afternoon. The workers dug a hole one (1) meter wide and 1.5 meters deep, after which
liable to the plaintiff [Biglang-awa]. Both defendants are ordered to pay
they refilled the excavated portion of the road with the same gravel and stone excavated
plaintiff the amounts of:
from the area. At that time, only of the job was finished in view of the fact that the workers
were still required to re-excavate that particular portion for the tapping of pipes for the
(a) P18,389.55, for actual damages suffered by the plaintiff;
water connections to the concessionaires.
(b) P15,000.00, for moral damages;
Meanwhile, between 10 oclock and 11 oclock in the evening of 31 May 1988,
Priscilla Chan was driving her Toyota Crown car with Plate No. PDK 991 at a speed of
(c) P10,000.00, for exemplary damages;
thirty (30) kilometers per hour on the right side of Santolan Road towards the direction
of Pinaglabanan, San Juan, Metro Manila. With her on board the car and seated on the
(d) P5,000.00, for attorneys fees; and
right front seat was Assistant City Prosecutor Laura Biglang-awa. The road was flooded
as it was then raining hard. Suddenly, the left front wheel of the car fell on a manhole
(e) to pay the costs.
where the workers of KC had earlier made excavations. As a result, the humerus on the
right arm of Prosecutor Biglang-awa was fractured. Thereupon, Priscilla Chan contacted
SO ORDERED.
Biglang-awas husband who immediately arrived at the scene and brought his wife to the
Cardinal Santos Hospital.
Unable to accept the judgment, both Biglang-awa and the Municipality of San
Juan went to the Court of Appeals via ordinary appeal under Rule 41 of the Rules of
Dispatched to the scene of the accident to conduct an investigation thereof, Pfc.
Court, which appeal was thereat docketed as CA-G.R. CV No. 38906.
Felix Ramos of the Traffic Division of the San Juan Police Station, upon arriving thereat,
saw Priscilla Chans car already extracted from the manhole and placed beside the
As stated at the outset hereof, the appellate court, in a decision dated 08
excavated portion of the road. According to this police officer, he did not see any
September 1995, affirmed with modification that of the trial court, to wit:
barricades at the scene when he arrived less than an hour later. A Traffic Accident
Investigation Report[3] was thereafter prepared and signed by Pfc. Ramos.
IN THE LIGHT OF ALL THE FOREGOING, the Decision
appealed from is AFFIRMED but modified as follows:
At the hospital, the attending physician, after having performed a close
1. The Appellees KC and MWSS and the
reduction and application of abduction splint on Biglang-awa, placed a plastic cast on her
Appellant San Juan are hereby ordered to pay, jointly and severally, to
right arm. Barring complications, the injury she suffered was expected to heal in four (4)
[Biglang-awa] the amounts of P50,000.00 by way of moral
to six (6) weeks, although she must revisit her doctor from time to time for check-up and
damages, P50,000.00 by way of exemplary damages and P5,000.00 by
rehabilitation. After some time, the plastic cast was removed. Biglang-awa sustained no
way of attorneys fees, without prejudice to the right of the Appellee
deformity and no tenderness of the area of the injury but she could not sleep on her right
MWSS for reimbursement from the Appellee KC under the
side because she still felt pain in that portion of her body. A Medical Certificate[4] on her
Contract, Exhibit 3-MWSS:
injuries was issued by Dr. Antonio Rivera.
2. The counterclaims of the Appellees and
Consequent to the foregoing incident, Biglang-awa filed before the Regional
Appellant San Juan and the cross-claim of the latter are DISMISSED.
Trial Court at Pasig, Metro Manila a complaint for damages against MWSS, the
Without pronouncement as to costs.
Municipality of San Juan and a number of San Juan municipal officials.

33
 SO ORDERED. (Words in bracket supplied). The petition must have to be denied.

Therefrom, petitioner Municipality of San Juan came to this Court thru the Jurisprudence[7] teaches that for liability to arise under Article 2189[8] of the Civil
present recourse, on its submissions that: Code, ownership of the roads, streets, bridges, public buildings and other public works,
is not a controlling factor, it being sufficient that a province, city or municipality has
I. control or supervision thereof. This, we made clear in City of Manila vs. Teotico, et al[9]:

THE RESPONDENT APPELLATE COURT HAS DECIDED A At any rate, under Article 2189 of the Civil Code, it is not
QUESTION OF SUBSTANCE NOT HEREFORE DECIDED BY THE necessary for the liability therein established to attach that the defective
SUPREME COURT. roads or streets belong to the province, city or municipality from which
II. responsibility is exacted. What said article requires is that the province,
city or municipality have either "control or supervision" over said street
THE RESPONDENT APPELLATE COURT HAS DECIDED A or road. x x x
QUESTION PROBABLY NOT IN ACCORD WITH THE LAW AND It is argued, however, that under Section 149, [1][z] of the Local Government
JURISPRUDENCE. Code, petitioner has control or supervision only over municipal and not national roads,
like Santolan Road.
With no similar recourse having been taken by the other parties, the Court shall
limit itself to the liability or non-liability of petitioner municipality for the injury sustained Sadly, petitioner failed to take note of the other provisions of Section 149 of the same
by Biglang-awa. Code, more particularly the following:

In denying liability for the subject accident, petitioner essentially anchored its Section 149. Powers and Duties. (1) The sangguniang bayan shall:
defense on two provisions of laws, namely: (1) Section 149, [1][z] of Batas Pambansa Blg. (bb) Regulate the drilling and excavation of the ground for the laying of gas,
337, otherwise known as the Local Government Code of 1983; and (2) Section 8, Ordinance water, sewer, and other pipes; the building and repair of tunnels, sewers, drains
82-01, of the Metropolitan Manila Commission. and other similar structures; erecting of poles and the use of crosswalks, curbs
and gutters therein, and adopt measures to ensure public safety against open
Petitioner maintains that under Section 149, [1][z] of the Local Government canals, manholes, live wires and other similar hazards to life and property, and
Code,[6] it is obliged to provide for the construction, improvement, repair and provide just compensation or relief for persons suffering from them;
maintenance of only municipal streets, avenues, alleys, sidewalks, bridges, parks and (Underscoring supplied)
other public places. Ergo, since Santolan Road is concededly a national and not a Clear it is from the above that the Municipality of San Juan can regulate the
municipal road, it cannot be held liable for the injuries suffered by Biglang-awa on drilling and excavation of the ground for the laying of gas, water, sewer, and other pipes
account of the accident that occurred on said road. within its territorial jurisdiction.

Additionally, petitioner contends that under Section 8, Ordinance No. 82-01, of Doubtless, the term regulate found in the aforequoted provision of Section 149
the Metropolitan Manila Commission, which reads: can only mean that petitioner municipality exercises the power of control, or, at the very
least, supervision over all excavations for the laying of gas, water, sewer and other pipes
In the event of death, injury and/or damages caused by the non- within its territory.
completion of such works and/or failure of one undertaking the work
to adopt the required precautionary measures for the protection of the We must emphasize that under paragraph [1][bb] of Section 149, supra, of the
general public or violation of any of the terms or conditions of the Local Government Code, the phrases regulate the drilling and excavation of the ground
permit, the permittee/excavator shall assume fully all liabilities for for the laying of gas, water, sewer, and other pipes, and adopt measures to ensure public
such death, injury or damage arising therefrom. For this purpose, the safety against open canals, manholes, live wires and other similar hazards to life and
excavator/permittee shall purchase insurance coverage to answer for property, are not modified by the term municipal road. And neither can it be fairly
third party liability, inferred from the same provision of Section 149 that petitioners power of regulation vis--
vis the activities therein mentioned applies only in cases where such activities are to be
performed in municipal roads. To our mind, the municipalitys liability for injuries caused
only the Project Engineer of KC and MWSS can be held liable for the same accident. by its failure to regulate the drilling and excavation of the ground for the laying of gas,
water, sewer, and other pipes, attaches regardless of whether the drilling or excavation is

34
made on a national or municipal road, for as long as the same is within its territorial It is the duty of the municipal authorities to
jurisdiction. exercise an active vigilance over the streets; to see
that they are kept in a reasonably safe condition for
We are thus in full accord with the following pronouncements of the appellate public travel. They cannot fold their arms and shut
court in the decision under review: their eyes and say they have no notice.
While it may be true that the Department of Public Works and (Todd versus City of Troy, 61 New York 506).
Highways may have issued the requisite permit to the Appellee KC (Words in bracket supplied).
and/or concessionaires for the excavation on said road, the Appellant
San Juan is not thereby relieved of its liability to [Biglang-awa] for its Nor can petitioner seek shelter on Section 8 of Ordinance 82-01 of the Metropolitan
own gross negligence. Indeed, Evangeline Alfonso, the witness for the Manila Commission.
Appellant San Juan unabashedly [sic] admitted, when she testified in
the Court a quo, that even if the Department of Public Works and Concededly, Section 8 of the Ordinance makes the permittee/excavator liable for death,
Highways failed to effect the requisite refilling, the Appellant San Juan injury and/or damages caused by the non-completion of works and/or failure of the one
was mandated to undertake the necessary precautionary measures to undertaking the works to adopt the required precautionary measures for the protection
avert accidents and insure the safety of pedestrians and commuters: of the general public. Significantly, however, nowhere can it be found in said Ordinance
any provision exempting municipalities in Metro Manila from liabilities caused by their
xxx own negligent acts. Afortiori, nothing prevents this Court from applying other relevant
laws concerning petitioners liability for the injuries sustained by Biglang-awa on that
The [petitioner] cannot validly shirk from its obligation to maintain and fateful rainy evening of 31 May 1988.
insure the safe condition of the road merely because the permit for the
excavation may have been issued by a government entity or unit other WHEREFORE, the instant petition is DENIED and the assailed decision of the
than the Appellant San Juan or that the excavation may have been done appellate court AFFIRMED.
by a contractor under contract with a public entity like the Appellee Costs against petitioner.
MWSS.

Neither is the [petitioner] relieved of liability based on its purported

SO ORDERED.
lack of knowledge of the excavation and the condition of the road
during the period from May 20, 1988 up to May 30, 1988 when the
G.R. No. 171705
accident occurred. It must be borne in mind that the obligation of the
EDUARDO VARELA, Petitioner, - versus - MA. DAISY REVALEZ,
[petitioner] to maintain the safe condition of the road within its
Respondents. July 29, 2010
territory is a continuing one which is not suspended while a street is
MENDOZA, JJ.
being repaired
x-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
(Corpus Juris Secundum, MunicipalCorporations, page 120).
Knowledge of the condition of the road and the defects and/or
RESOLUTION
obstructions on the road may be actual or constructive. It is enough that
the authorities should have known of the aforesaid circumstances in CARPIO, J.:
the exercise of ordinary care
(City of Louisevilleversus Harris, 180 Southwestern Reporter. page 65 The Case
). In the present recourse, Santolan Road and the Greenhills area
coming from Ortigas Avenue going to Pinaglabanan, San Juan, Metro This is a petition for review on certiorari under Rule 45 of the Rules of Court. The petition
Manila is a busy thoroughfare. The gaping hole in the middle of the challenges the 17 August 2005 Decision[1] and 27 February 2006 Resolution[2] of the Court
road of Santolan Road could not have been missed by the authorities of Appeals in CA-G.R. CV No. 73212. The Court of Appeals affirmed with modification
concerned. After all, the [petitioner] San Juan is mandated to effect a the 20 June 2001 Decision[3] of the Regional Trial Court (RTC), Negros Occidental, Judicial
constant and unabated monitoring of the conditions of the roads to Region 6, Branch 60, Cadiz City in Civil Case No. 547-C.
insure the safety of motorists. Persuasive authority has it that:
The Facts

35
Petitioner Eduardo G. Varela (Varela) was the mayor of Cadiz City. He created a attorneys fees, P20,000 litigation expenses, and court appearance fees at P3,000 per
reorganization committee. On 22 September 1998, he submitted to the Sangguniang hearing. The RTC found that Varela acted in bad faith. The Court held:
Panlungsod of Cadiz City the committees Proposed Reorganizational Structure and
Staffing Pattern of Cadiz City. On the same day, 22 September 1998, the Sangguniang There is no question that the Sangguniang Panlungsod of Cadiz City is
Panlungsod approved without modification and without hearing the proposal. The the legislative arm of the local government unit and as such it possesses
Sangguniang Panlungsod passed Resolution No. 98-112 authorizing and appropriating the power to enact the questioned resolution. Plaintiffs however
funds for the reorganization of the city government. Resolution No. 98-112 declared all challenge the manner Res. 98-112 was enacted, and the indecent haste
positions in the city government vacant, except elective positions and positions in the city that accompanied its passage. The proposal emanated from the office
and assistant city treasurer. On 15 October 1998, Varela signed Resolution No. 98-112. of defendant mayor and in a short time after its submission the measure
was passed. The requisite deliberations, if at all there was one, could
On 10 November 1998, Varela gave notices of termination to the city government hardly be considered adequate and could best be described as
employees, informing them that their employment would end at the close of business perfunctory.The minutes of the SP say it all. The deliberations reflected
hours on 31 December 1998. The employees opposed and questioned the legality of a lackluster effort and a wimpish attempt by the members of the
Resolution No. 98-112. Varela ignored them. Sangguniang Panlungsod to justify the grant to the mayor of legislative
authority to carry out the reorganization. There absolutely was no
Varela created a placement committee with City Administrator Philip G. Zamora, Delina, public hearing.The proposal coming as it did from the mayor, was a
Negosa, Jimmy Navarro, Jerry Batislaon and Napud as members. The committee fait accompli, a done deal in a manner of speaking. x x x
allegedly met three times.
xxxx
On 31 December 1998, Varela again gave notices of termination to the city government
employees, informing them that their employment would end at the close of business Careful examination of the evidence submitted by the defendant,
hours on 31 December 1998. On 4 January 1999, the employees tried to report for work however, would reveal a systematic effort to purge the city
but were barred from entering their offices. government of personnel who opposed the mayor politically, or
disagreed with him in his policies. Furthermore, perusal of the
Among those laid off was Community Affairs Officer IV Ramon Borromeo minutes of the deliberations of the Sangguniang Panlungsod reveals
(Borromeo). His department, the special services department, was replaced by the that the City of Cadiz was not in dire financial straits necessitating
community and barangay affairs division. The head of the community and barangay radical measures like mass lay-off of personnel. x x x
affairs division performed the same functions as the head of the special services
department. Three new positions were created in the community and barangay affairs x x x The City of Cadiz as of 1998, was not in financial extremis. It
division. The three new positions were given to Oscar Magbanua (Magbanua), Moises had the money, the resources to fund the salaries of personnel. x x
Seoren (Seoren), and Santos Ortega (Ortega). Magbanua, Seoren and Ortega were x [Varela] even ignored the concern of a city councilor who said that
political supporters of Varela and defeated barangay captain candidates. at that time (1998) the City already lacked the required personnel, and
Around half of the 101 employees of the city health department were laid off. Those laid so why abolish certain positions? The defendant mayor simply gave
off were the same ones who filed a case, involving the magna carta for health workers, the assurance that they can create any position when the need arises
against Varela. They were also perceived not to have voted for Varela as mayor. and the city has the money. This statement betrayed the real
intentions of the defendant insofar as the reorganization is
On 12 January 1999, Ma. Daisy G. Revalez and 40 other city government employees filed concerned.
with the RTC a complaint[4] against Varela for the declaration of nullity of Resolution No.
98-112 and for damages. In a motion[5] dated 29 January 1999, 47 other city government x x x The Mayor did not even explain what basic services would be
employees intervened. In the complaint, the employees stated that, due to the illegal acts affected. As a matter of fact, the office hardest hit and greatly affected
of the Defendant, Plaintiffs suffered mental torture and anguish, sleepless nights, by the mass layoff was the health services department where 50 or so
wounded feelings, besmirched reputation and social humiliation. [6] of the 101 personnel complement were laid off. Does it mean that the
delivery of health services is the least of the priorities of Cadiz City? Or
The RTCs Ruling does it mean that health service from the point of view of the defendant
city mayor is not a basic service? The truth of the matter is that the
In its 20 June 2001 Decision, the RTC declared Resolution No. 98-112 void and ordered health workers of Cadiz filed a case against the mayor for his refusal
Varela to pay the government employees P10,000 each for moral damages, P200,000 to implement provisions of the Magna Carta for Health
Workers. Talk of vindictiveness. The poor health workers laid off
36
were on the receiving end of the ire of the defendant mayor. There captains who were defeated in the last barangay
seemed to be no rhyme or reason to the reorganization scheme. elections.(TSN-Cerbo, pp. 8-10, May 3, 2000).

xxxx From the afore-quoted testimony it is clear that the abolition of the
office of Mr. Borromeo in the guise of reorganization was not done
Was the reorganization of the Cadiz City government under Res. 98- in good faith. The abolition was done for political reasons, (Arao vs.
112, done in good faith?The testimony of Ramon Borromeo, which is Luspo, L-23982, July 21, 1967, 20 SCRA 722). As stated in Urgello, if the
uncontradicted, will show the true intent of the reorganization, and abolition merely resulted in placing another person or appointee with
whether or not it was done in good faith: a different designation or name but substantially the same duties, then
it will be considered a device to unseat the incumbent. Clearly the
Q (Atty. Lobrido) What about your position, Mr. reorganization is not genuine and it is nothing but a ruse to defeat the
Witness? constitutionally protected right of security of tenure.
A My position as Community Affairs Officer was
abolished but instead an Executive xxxx
Assistant IV was made under
the Division Head of the Community and Since all the offices of the personnel of Cadiz City were declared vacant,
Barangay Affairs Division. and notices of initial termination sent on November 10, 1998, the
placement Committee barely had twenty (20) days to submit a final
report to defendant mayor. With 741 personnel to be reevaluated and
screened, plus other new applicants, the committee did not have
enough time to do their work as envisioned. The Committee had to
Q What is the function of the Community and screen and evaluate all applications to about 649 positions included in
Barangay Affairs Unit? the new plantilla. Notwithstanding time constraints, the Committee
A It performs the same function as that of the Community did not meet until November 17, barely two (2) weeks from their
Affairs Unit of which I am the Division Head as deadline. Subsequently they met three (3) times. On their first meeting,
Community Affairs Officer IV. the report states, the placement Committee merely agreed to ask the
defendant mayor to turn over to the Committee all the application
Q Considering that you were laid off who took over your letters. Nothing by way of screening or evaluation was done that
function? day. On the second meeting November 18, the applications were
A The Executive Assistant IV, but considering that lumped in bundles or files, and segregated by department.Then they
the position is coterminous with that of the mayor, suggested to borrow the qualification standards from the Human
the appointment of Executive Assistant IV Resource Management Office. Due to time constraints, it was
was disapproved by the Civil Service Commission suggested that the screening should start immediately, and they agreed
as head of the Community Affairs Unit and the to meet November 19, 1998. As of the second meeting the screening and
present situation as of now is that the community evaluation had barely began. On November 19, 1998 the committee met
Affairs and Barangay Unit is without a division head with Mr. Zamora suggesting that qualification standards be used
and that three new positions were created. mainly eligibility performance rating, education and attainment,
experience and awards and training received. Mr. Napud suggested
Q Who were appointed to the three new positions that the department heads be interviewed. As of November 19, the
you mentioned a while ago? committee had not started its deliberations and screening, but lo and
A Those appointed are Oscar Magbanua, behold Mr. Zamora came up with a complete list in time for the last
Moises Seoren, and Santos Ortega. meeting. On November 29, 1998, Mr. Zamora presented to the
members of the committee the list of employees selected by the
Q Why do you know these three persons? Placement Committee. Then the list was submitted to the mayor. These
A Because they are supporters of the defendant were reflected in Minutes of the meeting of the Placement Committee.
city mayor and also because they are barangay

37
On the other hand, what did Mr. Zamora say about the deliberations of committee. Which explains Mr. Zamoras memory lapses. Nothing of
the Placement Committee in his capacity as chairman. His testimony is the sort happened. What happened was that the minutes were hastily
very instructive. produced as an afterthought and later passed on as the real thing. The
entire proceedings was [sic] a sham, a rigmarole intended to put a
Q (Atty. Lobrido) And when was the first meeting? stamp of legitimacy to what otherwise was a well calculated, well
A I think November 17, 1998. planned scheme to rid Cadiz City of employees who were the
political opponents of the defendant mayor. The ploy was to use the
Q What transpired during the first meeting? law as a subterfuge to defeat the security of tenure clause of the
A I cannot remember. constitution. On top of this masquerade, the defendant city mayor did
not show any compunction or any hesitation to ram the
xxx xxx reorganization down the throats of plaintiffs who resisted the move
and they actually complained. He did not give them the benefit of
Q After November 18, 1998 meeting, was there the doubt, nor listened to their plea for justice. He simply ran
other meeting of the placement committee? roughshod over all of them discarding any pretense to uphold due
A Yes, sir. process of law. It was shocking no less to the 166 plaintiffs who
become [sic] sacrificial lambs in the altar of political convenience and
Q When was that? expediency. This is anathema in a democratic system where the rule of
A On November 19, 1998. law reigns supreme.[7] (Emphasis supplied)

Q And what transpired during that meeting Cadiz City Chief Executive Salvador G. Escalante, Jr., through the Office of the City Legal
on November 19, 1998? Officer, filed with the RTC a motion[8] to clarify who between Varela, in his personal
A I cannot remember. capacity, and Cadiz City was liable for the payment of moral damages, attorneys fees,
litigation expenses and court appearance fees. In its 26 July 2001 Order,[9] the RTC held
It seems incredulous that Mr. Philip Zamora, designated to represent that, it is the municipal corporation which is liable for the acts of its officers committed
defendant mayor, would not be able to recall what transpired during while in the performance of official duties.[10]
the deliberations of the placement committee.Unless it is shown that
Mr. Zamora suffered severe bouts of amnesia, it would be the height of Cadiz City, through the Office of the City Legal Officer, appealed to the Court of Appeals.
tomfoolery to accept that he would not be able to recall the significant
highlights of the meetings. Which can only lead this Court to the The Court of Appeals Ruling
inescapable conclusion that the minutes (Exhibits 15 to 15-C) were
fabricated and contrived, and done after the fact. x x x In its 17 August 2005 Decision, the Court of Appeals affirmed with modification the RTCs
20 June 2001 Decision. The Court of Appeals held that Varela was personally liable for
the payment of moral damages, attorneys fees, litigation expenses and court appearance
fees. It reduced the amounts of attorneys fees and litigation expenses from P200,000
to P100,000 and from P20,000 to P10,000, respectively, and deleted the award of court
appearance fees. The Court of Appeals held that:
x x x Why would Philip Zamora present a list of employees selected to
members of the Placement Committee and tell them this is the result of OUR jurisprudence is replete with cases involving the issue of whether
their evaluation? Were not the members of the committee the ones who or not a public officer may be held liable for damages in the
evaluated and selected the employees? The logical manner that should performance of their [sic] duties, to quote:
have taken place would be that the committee members themselves
would submit the list to the chairman telling him that this was the A public official is by law not immune from damages
result of their evaluation and screening and they were ready to submit in his personal capacity for acts done in bad faith
the list to the mayor. As it appears the list was a done deal, a fait which, being outside the scope of his authority, are
accompli, and the members were merely told to put their imprimatur no longer protected by the mantle of immunity for
to it. The truth of matter however, as can be gleaned from Mr. Zamoras official actions.
testimony, is that no meetings were ever conducted by the placement

38
 Settled is the principle that a public official may be Varela was sued in his personal capacity, not in his official capacity. In the complaint, the
liable in his personal capacity for whatever damage employees stated that, due to the illegal acts of the Defendant, Plaintiffs suffered mental
he may have caused by his act done with malice and torture and anguish, sleepless nights, wounded feelings, besmirched reputation and
in bad faith or beyond the scope of his authority or social humiliation. The State can never be the author of illegal acts.
jurisdiction.
The complaint merely identified Varela as the mayor of Cadiz City. It did not
In addition, Book I, Chapter 9 of the Administrative Code of 1987 categorically state that Varela was being sued in his official capacity. The identification
provides, to quote: and mention of Varela as the mayor of Cadiz City did not automatically transform the
action into one against Varela in his official capacity. The allegations in the complaint
Section 38. Liability of Superior Officers. (1) A public determine the nature of the cause of action.
officer shall not be civilly liable for acts done in the
performance of his official duties, unless there is a In Pascual v. Beltran,[14] the Court held that:
clear showing of bad faith, malice or gross
negligence. x x x [I]n the case at bar, petitioner is actually sued in his personal capacity
inasmuch as his principal, the State, can never be the author of any
In the case at bar, the court a quo found that bad faith attended the wrongful act. The Complaint filed by the private respondent with
performance of the official acts of the original defendant, Eduardo G. the RTC merely identified petitioner as Director of the
Varela. x x x Telecommunications Office, but did not categorically state that he
was being sued in his official capacity. The mere mention in the
WE find no reason to disturb the finding of bad faith by the court a quo Complaint of the petitioners position as Regional Director of the
considering that the same was amply supported by evidence.[11] Telecommunications Office does not transform the action into one
against petitioner in his official capacity. What is determinative of
Hence, the present petition. the nature of the cause of action are the allegations in the
complaint. It is settled that the nature of a cause of action is determined
The Issue by the facts alleged in the complaint as constituting the cause of
action.The purpose of an action or suit and the law to govern it is to be
Varela raises as issue that, THE HONORABLE COURT OF APPEALS ERRED IN determined not by the claim of the party filling [sic] the action, made
HOLDING THE PETITIONER PERSONALLY LIABLE FOR THE PAYMENT OF in his argument or brief, but rather by the complaint itself, its
DAMAGES, ATTORNEYS FEES AND LITIGATION EXPENSES AS THE PETITIONER allegations and prayer for relief.[15] (Emphasis supplied)
WAS SUED IN HIS OFFICIAL, AND NOT IN HIS PERSONAL CAPACITY. [12] Varela
states that:
WHEREFORE, the Court DENIES the petition. The Court AFFIRMS the 17 August 2005
All the proceedings in the lower court show beyond question that the Decision and 27 February 2006 Resolution of the Court of Appeals in CA-G.R. CV No.
petitioner was charged in his official capacity as then mayor of the real 73212.
party-defendant, the respondent City of Capiz.
SO ORDERED.
This is expressly shown by the very title, caption and allegations of G.R. No. 73928 August 31, 1987
private respondents complaint dated January 12, 1999. The fact that JOSE E. GENSON, petitioner, vs. SPS. EDUARDO ADARLE and SHERLITA MARI-
petitioner was sued in his representative and official capacity was not ON, and INTERMEDIATE APPELLATE COURT, respondents.
contested, and, in fact, admitted by the parties. [13] GUTIERREZ, JR., J.:

This is a Petition for review which seeks to set aside the decision in CA-G.R. No. 00783 on
The Courts Ruling the ground that the findings of the respondent Court of Appeals are based on
misapprehension of facts and conflict with those of the trial court and that the conclusions
The petition is unmeritorious. drawn therefrom are based on speculations and conjectures.

39
Arturo Arbatin was the successful bidder in the sale at public auction of junk and other Thus, on January 19, 1982, the trial court rendered a decision finding all the defendants
unserviceable government property located at the compound of the Highway District liable for damages under Articles 1172 and 2176 of the New Civil Code. The dispositive
Engineer's Office of Roxas City. Private respondent Eduardo Adarle was hired as a portion of the decision reads:
laborer by Arbatin to gather and take away scrap iron from the said compound with a
daily wage of P12.00 or about 312.00 a month. WHEREFORE, this court orders the defendants to pay to plaintiff the amounts
stated in the complainant's prayer as follows:
On September 8, 1979, at 4:00 o'clock in the morning, on a Saturday and a non-working
day, while the private respondent was tying a cable to a pile of scrap iron to be loaded on Ordering the defendants jointly and severally to pay the plaintiff the sum of 312.00
a truck inside the premises of the compound, and while the bucket of the payloader monthly from September 8, 1979 until his release from the hospital.
driven by Ramon Buensalido was being raised, the bucket suddenly fell and hit Adarle
on the right back portion of his head just below the nape of his neck. Adarle was rushed
Ordering the defendants jointly and severally to pay the plaintiff the sum of
to the St. Anthony Hospital, Roxas City. According to the medical certificate issued by
P7,410.63 for hospital expenses up to January 14, 1980 and an additional amount
the attending physician, the private respondent suffered the following injuries:
for further hospitalization until the release of plaintiff from the hospital;

1) Comminuted fracture of the vertebral body of 13 with extreme

Ordering the defendants jointly and severally to pay the plaintiff the sum of at
Kyphosis of the segment by x-ray.
least P100,000.00 as actual and compensatory damages, considering that plaintiff
Eduardo Adarle is totally incapacitated for any employment for life;
2) Cord compression 2nd to the injury with paralysis of the lower
extremity, inability to defecate and urinate. (E Exh. A, Exhibits for the
Ordering the defendants jointly and severally to pay the plaintiff the sum of
plaintiff-appellant, Original Records.)
P20,000.00 as moral damages and another sum for exemplary damages which we
leave to the sound discretion of the Honorable Court;
The medical certificate also reported that:
Ordering the defendants jointly and severally to pay the plaintiff the sum of
The patient recovered the use of his urinary bladder and was able to P5,000.00 as attorney's fees. (pp. 129- 130, Original Records).
defecate 2 months after surgery. He is paralyzed from the knee down
to his toes. He can only sit on a wheel chair. The above residual damage
The petitioner appealed to the Intermediate Appellate Court which affirmed the decision
is permanent 2nd to the injury incurred by Mr. Adarle, he is still
of the trial court and further ordered the defendants to pay P5,000.00 exemplary damages.
confined in the Hospital. (idem)
Defendant Candelario Marcelino was, however, absolved from liability.

While still in the hospital, the private respondent instituted the action below for damages
In its decision, the appellate court ruled:
against Arbatin, his employer; Buensalido, the payloader operator; Candelario Marcelino,
the civil engineer; and petitioner, the Highway District Engineer.
That payloader owned by the Government, as found by the lower court, should
not have been operated that Saturday, September 8, 1979, a Saturday, a non-
During the trial on the merits, the petitioner put up the defense that he had no knowledge
working holiday. There is no official order from the proper authorities authorizing
of or participation in the accident and that, when it happened, he was not present in the
Arbatin and plaintiff to work and Buensalido to operate the payloader on that day
government compound. Apart from the fact that it was a Saturday and a non-working
inside the Highway compound. Thereabouts, we can logically deduce that Arbatin
day, he was in Iloilo. As part of his evidence, the petitioner presented a memorandum
and plaintiff went to the compound to work with the previous knowledge and
directed to a certain Mr. Orlando Panaguiton ordering the latter to take charge of the
consent of Highway District Engineer Jose E. Genson. And allowed him, probably
district until his return (Exh. 1).
upon the request of Arbatin. We have noted that Genson testified that his office
does not authorize work on Saturdays.
The trial court found that, with the exception of the petitioner, all of the defendants were
present at the Highway's compound when the accident occurred. However, it still
Genson testified that he was in Iloilo from September 9 and 10, 1979. The accident
adjudged the petitioner liable for damages because the petitioner was supposed to know
occurred on September 8, in the morning. In his answer, Genson did not allege his
what his men do with their government equipment within an area under his supervision.
presence in Iloilo on September 9 and 10 ... .

40
 We fully concur with the lower court's conclusions regarding the physical There being no proof that the making of the tortious inducement was
presence of appellants inside the compound on that fateful day, pursuant to a authorized, neither the State nor its funds can be made liable therefor.
previous understanding with Arbatin for plaintiff to work on the scrap iron and
for Buensalido to operate the payloader inside the compound. Arbatin and Therefore, the defense of the petitioner that he cannot be made liable under the principle
plaintiff would not go to the compound on that Saturday, if there was no previous of non-suability of the state cannot be sustained.
understanding with Genson and Buensalido.
With regard to the main contention of the petitioner that the appellate court based its
The liability of Genson is based on fault, intentional and voluntary or negligent conclusions on an erroneous finding of fact, we agree with him that the appellate court's
(Eleano v. Hill, 77 SCRA 106; Jimena v. Lincallo, 63 O.G. 11,15, 8 C. A.R. 2567). He finding that he was present within the premises when the accident happened is not
gave permission to Arbatin, plaintiff and Buensalido to work on Saturday, a non- supported by evidence indisputably showing that he was indeed there.
working day, in contravention of his office' rules and regulations outlawing work
on Saturdays.. (pp. 29-30, Rollo)
Since the evidence fails to establish petitioner Genson's presence when the payloader's
bucket fell on the head of Mr. Adarle, any liability on his part would be based only on his
In this present petition, the petitioner contends that the appellate court committed a alleged failure to exercise proper supervision over his subordinates (See Umali v. Bacani,
palpable error when it ruled that the petitioner was present when the accident happened 69 SCRA 263, 267-268).
and that he had given permission to the other defendants to work on a Saturday, a non-
working day. The petitioner argues that considering these were the facts relied upon by
According to the trial court, Mr. Genson authorized work on a Saturday when no work
the said court in holding that he was negligent and thus liable for damages, such a
was supposed to be done. It stated that the petitioner should know what his men do with
conclusion, is without basis.
their government equipment and he should neither be lax nor lenient in his supervision
over them.
The petitioner further contends that the appellate court erred in not holding that the suit
against the petitioner was, in effect, a suit against the government and, therefore, should
The petitioner contends that:
be dismissed under the principle of non-suability of the state.

1. No evidence on record exists that Genson gave authority to Adarle and Arbatin,
As regards the petitioner's second contention, we hold that the petitioner's Identification
either verbally or in writing, to enter the work inside the Highways Compound on
as the Highway District Engineer in the complaint filed by the private respondent did not
September 8, 1979;
result in the said complaint's becoming a suit against the government or state.

2. Genson never knew or met Arbatin until the trial of the case. This fact was never
In Belizar v. Brazas, (2 SCRA 526), we ruled that "the fact that the duties and positions of
denied by Arbatin nor rebutted by Adarle. How then could Genson have ordered or
the defendants are indicated does not mean that they are being sued in their official
allowed Arbatin to enter the Highways Compound with Adarle?
capacities, especially as the present action is not one against the Government."
Furthermore, the accident in the case at bar happened on a non-working day and there
was no showing that the work performed on that day was authorized by the government. 3. Adarle himself repeatedly admitted that Arbatin, his employer, gave him the
While the equipment used belongs to the Government, the work was private in nature, instructions to enter the compound, thus:
for the benefit of a purchaser of junk. As we have held in the case of Republic v. Palacio (23
SCRA 899,906). Q. Now particularly on September 8, 1979, did Arbatin ask you to go to the
compound in the Highway?
xxx xxx xxx A. Yes sr.
Q. Are you sure of that?
A. Yes, sir.
the ISU liability thus arose from tort and not from contract, and it is a
Q. Where did he say that to you?
well-entrenched rule in this jurisdiction, embodied in Article 2180 of
A. We went to the Highway compound for many times already and that was the
the Civil Code of the Philippines, that the State is liable only for torts
time when I met the incident.
caused by its special agents, specially commissioned to carry out the
Q. The particular day in question September 8. 1979, did you see Arturo Arbatin
acts complained of outside of such agent's regular duties (Merritt v.
and he asked you to go the compound on that day?
Insular Government, supra; Rosete v. Auditor General, 81 Phil. 453)

41
 A. That date was included on the first day when "he instructed us to gather scrap Bonifacio, G.R. No. L-11844, August 31, 1960) The question, therefore,
iron until that work could be finished." (pp. 25-26, tsn., October 10, 1980) is whether petitioner did act in any of the manner aforesaid.
(Emphasis supplied)
Q. Who told you to work there? Petitioner contends that, contrary to the holding of the respondent
A. "Through the instruction of Arturo Arbatin" (pp. 32, tsn., Oct. 10, 1980) (Emphasis Court of Appeals, he was not sued in his personal capacity, but in his
supplied) (pp. 12-13, Rollo). official capacity. Neither was malice or bad faith alleged against him in
the complaint, much less proven by the evidence, as the respondent
Insofar as work on a Saturday is concerned, and assuming Mr. Genson verbally allowed court made no such finding of malice or bad faith.
it, we see nothing wrong in the petitioner's authorizing work on that day. As a matter of
fact, it could even be required that the hauling of junk and unserviceable equipment sold Examining the allegations of the complaint and reviewing the evidence
at public auction must be done on non-working days. The regular work of the District it would indeed be correct to say that petitioner was sued in his official
Engineer's office would not be disturbed or prejudiced by a private bidder bringing in his capacity, and that the most that was imputed to him is act of culpable
trucks and obstructing the smooth flow of traffic and the daily routine within the neglect, inefficiency and gross indifference in the performance of his
compound. Obviously, it would also be safer for all concerned to effect the clearing of the official duties. Verily, this is not imputation of bad faith or malice, and
junk pile when everything is peaceful and quiet. what is more was not convincingly proven.

There is no showing from the records that it is against regulations to use government According to the respondent court, "Genson and Buensalido divested themselves of their
cranes and payloaders to load items sold at public auction on the trucks of the winning public positions and privileges to accomodate an acquaintance or probably for inordinate
bidder. The items were formerly government property. Unless the contract specifies gain." (p. 31, Rollo).
otherwise, it may be presumed that all the parties were in agreement regarding the use
of equipment already there for that purpose. Of course, it would be different if the junk
There is no showing from the records that Genson received anything which could be
pile is in a compound where there is no equipment for loading or unloading and the
called "inordinate gain." It is possible that he permitted work on a Saturday to accomodate
cranes or payloaders have to be brought there.
an acquaintance but it is more plausible that he simply wanted to clear his compound of
junk and the best time for the winning bidder to do it was on a non-working day.
There is likewise no sufficient basis for the "master-servant" doctrine in tort law to apply.
Buensalido was not working overtime as a government employee. It is doubtful if the
At any rate, we see no malice, bad faith, or gross negligence on the part of Genson to hold
district engineer can be considered an "employer" for purposes of tort liability who may
him liable for the acts of Buensalido and Arbatin.
be liable even if he was not there. No evidence was presented to show that an application
for overtime work or a claim for overtime pay from the district engineer's office was ever
filed. It is more logical to presume that Buensalido, the operator of the payloader, was WHEREFORE, the decision of the Intermediate Appellate Court is hereby REVERSED
trying to earn a little money on the side from the junk buyer and that his presence in the and SET ASIDE. The complaint against Jesus Genson is DISMISSED.
compound on that Saturday was a purely private arrangement. From the records of this
case, we are not disposed to rule that a supervisor who tolerates his subordinates to SO ORDERED.
moonlight on a non-working day in their office premises can be held liable for everything
that happens on that day. It would have been preferable if Mr. Arbatin brought his own G.R. No. L-53064 September 25, 1980
payloader operator and perhaps, his own equipment but we are not dealing with sound FELIX LANUZO, plaintiff-appellee, vs. SY BON PING and SALVADOR
office practice in this case. The issue before us is subsidiary liability for tort comitted by a MENDOZA, defendants-appellants.
government employee who is moonlighting on a non-working day. MELENCIO-HERRERA, J.:

This Court ruled in Dumlao v. Court of Appeals (114 SCRA 247, 251): Appeal certified to Us by the Court of Appeals 1 as it involves pure legal questions.

Nevertheless, it is a well-settled principle of law that a public official On November 25, 1969, a Complaint for damages was instituted in the Court of First
may be liable in his personal private capacity for whatever damage he Instance of Camarines Sur (Civil Case No. 6847) by plaintiff Felix Lanuzo against Sy Bon
may have caused by his act done with malice and in bad faith, Ping, the owner and operator of a freight truck bearing Plate No. T-57266, and his driver,
(Mindanao realty Corp. v. Kintanar, 6 SCRA 814) or beyond the scope Salvador Mendoza. As alleged therein, at about five o'clock in the afternoon of July 24,
of his authority or jurisdiction. (the Philippine Racing Club v. 1969, while Salvador Mendoza was driving the truck along the national highway in the
42
Barrio of San Ramon, Nabua, Camarines Sur, and because of his reckless negligence, we A distinction exists between the civil liability arising from a crime and
rammed into the residential house and store of plaintiff. As a result, the house and store the responsibility for cuasi-delitos or culpa-extracontractual. The same
were completely razed to the ground causing damage to plaintiff in the total amount of negligent act causing damages may produce civil liability arising from
P13,000.00. Plaintiff averred that by reason thereof he became destitute as he lost his a crime under article 100 of the Revised Penal Code, or create an action
means of livelihood from the store which used to give him a monthly income of P300.00. for cuasi-delito or culpa extracontractual under articles 1902-1910 of the
Civil Code. Plaintiffs were free to choose which remedy to enforce.
The defendants moved to dismiss on the ground that another action, Criminal Case No.
4250 for Damage to Property through Reckless Imprudence, was pending in the Plaintiff's reservation before the Municipal Court in the criminal case of his right to
Municipal Court of Nabua, Camarines Sur, between the same parties for the same cause. institute a civil action separately is quoted hereunder in full:
Plaintiff opposed the dismissal stressing that he had made an express reservation in the
criminal case to institute a civil action for damages separate and distinct from the criminal UNDERSIGNED offended party in the above-entitled case before this
suit. Honorable Court respectfully alleges:

The lower Court denied the Motion to Dismiss for lack of merit. 1. That this action which was commenced by the Chief of Police
included in the complaint the claim of the undersigned for civil
On August 13, 1970, the trial Court rendered a default judgment in plaintiff's favor, the liability;
dispositive portion of which reads:
2. That the undersigned is reserving his right to institute the civil action
WHEREFORE, judgment is hereby rendered (a) ordering the for damages, docketed as Civil Case No. 6847 of the Court of First
defendants to pay jointly and severally the amount of P13,000.00 as Instance of Camarines Sur, against accused herein and his employer;
damages, resulting to the loss of the store including the merchandise
for sale therein, the residential house of mixed materials, furnitures, WHEREFORE, it is respectfully prayed that reservation be made of
clothing and households fixtures; (b) ordering the said defendants to record therein and that the civil aspect of the above-entitled case be not
pay jointly and severally P300.00 monthly from July 24, 1969 which included herein.
represents plaintiff's monthly income from his store until the whole
amount of P13,000.00 is fully paid; and (c) for attorney's fees an amount
xxx xxx xxx 3
equivalent to 20% of the total amount claimed by the plaintiff, plus the
costs of this suit.
The terms of plaintiff's reservation clearly and unmistakably make out a case for quasi-
delict. This is also evident from the recitals in plaintiff's Complaint averring the employer-
Defendants' "Motion for Reconsideration and/or New Trial and To Set Aside Order of
employee relationship between the appellants, alleging that damages to the house and
Default" was denied.
store were caused by the fact that Salvador Mendoza had driven the truck "recklessly,
with gross negligence and imprudence, without observance of traffic rules and
Upon elevation by the defendants of the case to the Court of Appeals (CA-G.R. No. 48399- regulations and without regard to the safety of persons and property", and praying that
R) they urged that the civil action was prematurely instituted in view of Rule 111, section appellants be held jointly and solidarity liable for damages. These are, basically, what
3, providing in part that "after the criminal action has been commenced the civil action should be alleged in actions based on quasi-delict. 4
cannot be instituted until final judgment has been rendered in the criminal action."
Additionally, they contended that even assuming their liability, the lower Court
As it is quite apparent that plaintiff had predicated his present claim for damages
nevertheless committed an error in holding them jointly and severally liable.
on quasi-delict, he is not barred from proceeding with this independent civil suit. The
institution of a criminal action cannot have the effect of interrupting the civil action based
On February 20, 1980, the Court of Appeals certified the case to this instance on pure on quasi-delict. 5 And the separate civil action for quasi-delict may proceed independently
questions of law. and regardless of the result of the criminal case, 6 except that a plaintiff cannot recover
damages twice for the same act or commission of the defendant. 7
We start from the fundamental premise, clearly enunciated as early as the case of Barredo
vs. Garcia, et al., 2 that:

43
The civil action referred to in Sections 3(a) and (b) of Rule 111 of the Rules of Court, which default and for a new trial and which considered the judgment by default as standing
should be suspended after the institution of the criminal action, is that arising from delict, with full force and effect.
and not the civil action based on quasi-delict or culpa aquiliana.
In the evening of February 6, 1965, at about 8:35 o'clock, Pantaleon Malijan, who was
We come now to the subject of liability of the appellants herein. For his own negligence walking with his companion Leonardo Amante on the shoulder of the road in Barrio San
in recklessly driving the truck owned and operated by his employer, the driver, Salvador Felix, Sto. Tomas, Batangas, was hit by a gasoline tanker and was thrown to the ground.
Mendoza, is primarily liable under Article 2176 of the Civil Code. On the other hand, the While he was sprawling on the ground Malijan was run over by the tanker's right wheel
liability of his employer, Sy Bon Ping, is also primary and direct under Article 2180 of the that got detached from its axle. Malijan's companion, with the aid of the barrio captain,
same Code, which explicitly provides: brought Malijan to the San Pablo City Hospital where he died that same night, the cause
of death being "possible traumatic cerebral hemorrhage due to vehicular accident."
Employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks, The gasoline tanker with Plate No. T-52573, series of 1964, driven at the time of the
even though the former are not engaged in any business or industry. accident by herein appellant Ernesto Labsan, was being used in connection with the
gasoline business of the owner, the herein appellant Lily Lim Tan.
For failure of the appellant Sy Bon Ping to rebut the legal presumption of his negligence
in the selection and supervision of this employee, 8 he is likewise responsible for the Representations and demands for payment of damage having been ignored by
damages caused by the negligent act of his employee (driver) Salvador Mendoza, and his appellants, appellees filed on May 18, 1966 a complaint in the Court of First Instance of
liability is primary and solidary. Batangas praying that appellants be condemned to pay, jointly and severally, the
damages as specified in said complaint. The appellees are the mother and the minor
... What needs only to be alleged under the aforequoted provision brothers and sisters of the deceased Pantaleon Malijan.
(Article 2180, Civil Code) is that the employee (driver) has, by his
negligence (quasi-delict) caused damage to make the employer, Appellants were duly served with summons on May 19, 1966, but they failed to file their
likewise, responsible for the tortious act of the employee, and his answer within the reglementary period. Upon appellees' motion of June 8, 1966 the trial
liability is, as earlier observed, primary and solidary 9 court, in an order dated June 10, 1966, declare the appellants in default, and appellees
were permitted to present their evidence in the absence of the appellants. The trial court
But although the employer is solidarity liable with the employee for damages, the rendered a decision, dated July 1, 1966, the dispositive portion of which reads as follows:
employer may demand reimbursement from his employee (driver) for whatever amount
the employer will have to pay the offended party to satisfy the latter's claim. 10 WHEREFORE, finding the averments in the complaint as supported by
the evidence to be reasonable and justified, judgment is hereby
WHEREFORE, the appealed decision is hereby affirmed. Costs against defendants- rendered in favor of the plaintiffs and against the defendants. The
appellants. defendant driver, Ernesto Labsan, is ordered (1) to pay the sum of
P2,100.00 to the plaintiffs for expenses for hospitalization, medical
treatment, vigil and burial of Pantaleon Malijan; (2) to pay to the
SO ORDERED.
plaintiffs the sum of P6,000.00 for the death of said victim; (3) to pay to
the plaintiffs the sum of P20,000.00 for the loss of earnings of said
G.R. No. L-27730 January 21, 1974 deceased for a period of five years; (4) to pay to the plaintiffs the sum
PRIMA MALIPOL, in her own behalf and as guardian ad litem of her minor children, of P5,000.00 for moral damages; (5) to pay to the plaintiffs the sum of
LYDIA MALIJAN, JOSEFINA MALIJAN, TEODORA MALIJAN, and SEBASTIAN P2,000.00 for attorney's fees and P500.00 for incidental and litigation
MALIJAN, plaintiffs-appellees, vs. LILY LIM TAN and ERNESTO expenses; and (6) to pay the costs of the suit. Should Ernesto Labsan
LABSAN, defendants-appellants. not be able to pay the foregoing damages, they shall be paid for by
ZALDIVAR, J.:1äwphï1.ñët defendant Lily Lim Tan, who by law, being the owner and operator of
the gasoline tanker that featured in the accident, is subsidiarily liable.
Appeal on questions of law from the decision dated July 1, 1966, a judgment by default,
and from the order dated October 10, 1966, of the Court of First Instance of Batangas in Copy of the decision was received by the appellees August on 23, 1966.
its Civil Case No. 1732 which denied defendants-appellants' motion to lift the order of

44
A motion for execution was filed on August 26, 1966 by appellees but the trial court held appellant Ernesto Labsan in Criminal Case No. 2200 of Court of First Instance of Batangas
its resolution in abeyance until September 22, 1966 when the judgment would become for homicide thru reckless imprudence — which case arose from the very accident subject
final. of appellees' complaint; that appellant Lily Lim Tan, furthermore, had instructed her
employee, Eleuterio Dizon, to handcarry the summons and to deliver it to nobody except
On September 21, 1966 appellants filed a verified motion to lift the order of default and to Atty. Chavez; that Atty. Chavez, in a distance telephone conversation with appellant
for a new trial, alleging that they were deprived of their day in court when the order of Lily Lim Tan, assured the latter that he would attend to the complaint.
default was issued and a decision rendered after; that they had good and valid defenses,
namely: (a) that the accident which gave rise to the case was due to force majeure; (b) that We do not find merit in the contention of counsel for appellants. It is within the sound
appellant Ernesto Labsan was without fault in the accident that gave rise to the case; and discretion of the court to set aside an order of default and to permit a defendant to file his
(c) that appellant Lily Lim Tan had exercised the due diligence required of a good father answer and to be heard on the merits even after the reglementary period for the filing of
of a family to prevent damage. Finding said motion to be without merit, the trial court the answer has expired, but it is not error, or an abuse of discretion, on the part of the
denied the same on October 10, 1966. Hence, this appeal wherein appellants made court to refuse to set aside its order of default and to refuse to accept the answer where it
assignment of errors, as follows: finds no justifiable reason for the delay in the filing of the answer. In the motions for
reconsideration of an order of default, the moving party has the burden of showing such
(a) The trial court erred in finding that appellants took the complaint diligence as would justify his being excused from not filing the answer with the
for granted by reason of the fact that appellants referred to their lawyer reglementary period as provided by the Rules of Court, otherwise these guidelines for an
the complaint for answer only after the lapse of eleven (11) days from orderly and expeditious procedure would be rendered meaningless. 1 Unless it is shown
receipt thereof ; clearly that a party has justifiable reason for the delay the court will not ordinarily exercise
its discretion in his favor.2
(b) The trial court erred in not holding that the mistake committed by
the late Atty. Daniel Chavez in giving the wrong date of receipt by In the instant case, We agree with the trial court that appellants have not shown that they
appellants of the summons and the complaint to Atty. Romulo R. de exercised such diligence as an ordinary prudent person would exercise, to have the
Castro on June 10, 1966 due to the abnormal mental condition of the answer filed within the reglementary period. Appellant Lily Lim Tan admitted in her
late Atty. Daniel Chavez on June 10, 1966 which thereafter resulted in affidavit3 that she received the summons and copy of the complaint on May 19, 1966, and
the commission of suicide by the latter on June 17, 1966, constitutes the that having read the complaint she found out that she was being sued, together with her
mistake and accident in law which warrant the relief from default and driver, for damages in connection with the accident of February 6, 1965 at Sto. Tomas,
the granting of the new trial; Batangas. The damages asked in the complaint amounts to P36,600.00. The summons
required them to answer the complaint within 15 days from receipt thereof, and warned
them that should they fail to answer within said period the plaintiffs would take
(c) The trial court erred in not holding that the fact that appellants,
judgment against them for the relief demanded in the complaint. The damages demanded
through Atty. Romulo R. de Castro, filed on June 10, 1966 a motion for
was not a negligible sum, and appellant Lily Lim Tan, who is a business woman, should
extension of time to file answer, and thereafter actually did file their
have considered the matter a serious one. Ordinary prudence would dictate that she
answer to the complaint on June 20, 1966 wherein they alleged good,
should concern herself about the matter, that she should refer said complaint with the
valid and meritorious defenses against the claim of plaintiffs in the
least possible delay to her lawyer. But, for reasons she did not explain, she referred the
complaint, should warrant favorable consideration of appellants'
complaint to her lawyer only after the lapse of ten (10) days from receipt thereof, i.e., on
motion to lift order of default and for new trial; and
May 30, 1966. She should have considered that four days might not be sufficient time for
her lawyer to prepare and file the answer.
(d) The trial court erred in not holding that the fact that appellants'
motion to lift order of default and for new trial.
Appellants, however, contend that their lawyer, Atty. Chavez, could very well prepare
the answer within the remaining four days of the reglementary period, for he was
1. In support of their first assignment of error, counsel for appellants contends that the conversant with the facts of the case. Be that as it may, the fact was that Atty. Chavez
finding of the trial court, that the appellants took the complaint for granted when they failed to file the answer. Because Atty. Chavez assured her, in their long distance
referred the complaint to their lawyer only on the eleventh day after receipt thereof, was telephone conversation that he would take care the complaint, appellant Lily Lim Tan
unwarranted, because appellants had 15 days from receipt of the summons and complaint took for granted that the answer would be filed on time. Said appellant should have
to answer and their lawyer, the late Atty. Daniel Chavez, after the complaint was referred checked before the expiration of the period for filing the answer whether the complaint
to him on the eleventh day, had still four days to file the answer, which he could very was really taken care of, or not. But this, appellant Lily Lim Tan failed to do, and this is
well do inasmuch as he was well acquainted with the facts because he was the lawyer of another instance showing her lack of concern over the complaint. There was, therefore,
45
no showing of due diligence on the part of appellants which would excuse their failure to over the interests of his client. These specific actions of Atty. Chavez indicated that as of
file their answer on time. There is no showing either that the other appellant, Ernesto May 30, 1966 he had a sound mind.
Labsan, had taken any step to have an answer filed in his behalf — evidently he was
relying on his employer. It is claimed by appellants that on June 10, 1966 Atty. Chavez endorsed the complaint to
Atty. de Castro, and told the latter that the summons and complaint were received by the
2. In support of the second assignment of error, appellants contend that the facts show appellants on May 30, 1966. It is further claimed by appellants that this information given
that on June 10, 1966, Atty. Chavez, who was then acting strangely, endorsed the by Atty. Chavez — that the summons and complaint were received by the appellants on
summons and complaint to Atty. Romulo R. de Castro; that upon inquiry by Atty. de May 30, 1966 — was the mistake that caused the delay of the filing of the answer. But it
Castro from Atty. Chavez the latter informed him that the summons was served on should be noted that on June 10, 1966 when Atty. Chavez endorsed the complaint to Atty.
appellants on May 30, 1966; that appellant Lily Lim Tan, who was assured by Atty. de Castro and informed the latter that the summons and complaint were received by the
Chavez in their long distance telephone conversation that the complaint would be appellants on May 30, 1966, the period within which the answer should be filed had
attended to, could not, by the exercise of ordinary diligence, have foreseen, and avoided, already expired — the expiry date being June 3, 1966.<äre||anº•1àw> There is no
the circumstance that at the time she referred the summons to Atty. Chavez, the latter showing that between May 30, when Atty. Chavez received the summons and complaint
was already in an abnormal condition which later resulted in his committing suicide on from the employee of Lily Lim Tan, and June 3, 1973 Atty. Chavez was incapacitated to
June 17, 1966; that it was Atty. Chavez's abnormal condition and his having given to Atty. file the answer. And so it is clear that before the case was endorsed to Atty. de Castro, the
de Castro the wrong date of the receipt of the summons by the appellees that caused the appellants were already in default. The failure to file the answer on time may well be
delay in the filing of the answer; that said circumstances constituted mistake and accident attributed to the mistake or "negligence of Atty. Chavez. The appellants are bound by the
which entitled appellants to relief from default and a grant of new trial. mistakes, and may suffer by the negligence, of their lawyer. In fact, on June 8, 1966, or
two days before Atty. Chavez endorsed the case to Atty. de Castro, the appellees had filed
Appellants' contention that the delay in filing the answer was due to mistake and accident a motion in court to declare the defendants (now the appellants) in default. The moves
is untenable. taken by Atty. de Castro — in filing a motion for extension of time to file an answer on
June 10, 1966, and in finally filing an answer on June 20, 1966 — were already late.
The mistake, according to appellants, consisted in Atty. Chavez's having told Atty. de
Castro on June 10, 1966 that appellants received the summons and complaint on May 30, The fact that Atty. Chavez committed suicide on June 17, 1966 does not necessarily prove
1966. Even if Atty. Chavez had told Atty. de Castro the correct date, that is, that appellants that he was abnormal, incompetent or insane on May 30, 1966. Although there is a judicial
received the summons on May 19, 1966, the answer could not have been filed on time by declaration that a sane man would not commit suicide, cognizance is nevertheless taken
Atty. de Castro, because the reglementary period for filing the answer expired on June 3, of the fact that circumstances at some given time may impel a person to commit
1966, and it was already June 10, 1966, when the complaint was endorsed by Atty. Chavez suicide.4 The probative value of suicide in determining the sanity of a person is dependent
to Atty. de Castro. on the factual situation in each case. Such matters as the reasons for the act of self-
destruction, the circumstances indicating the person's state of mind at the time, and other
pertinent facts must be considered. The appellants had not indicated to the trial court any
The accident, according to appellants' counsel, consisted in Atty. Chavez's being in an
circumstance from which the trial court could form an opinion of the mental condition of
abnormal condition at the time the complaint was given to him on May 30, 1966. This
Atty. Chavez before he committed suicide. The trial court, therefore, did not err when it
claim of appellants is not supported by the record.
did not favorably consider the claim of the appellant that their failure to file their answer
to the complaint was due to accident or mistake, as contemplated in Section 3 of Rule 18
The record does not show that Atty. Chavez was suffering from an abnormal mind on of the Rules of Court.
May 30, 1966. His actuations on May 30 were those that could be expected of a normal
person. Atty. Chavez asked the employee of appellant Lily Lim Tan about the date when
3. In support of the third assignment of error, appellants argue that acting on the wrong
his employer received the summons and complaint, and because the employee could not
information given by Atty. Chavez, Atty. Romulo de Castro filed on June 10, 1966 a
give him the desired information Atty. Chavez placed a long distance telephone call to
motion for an extension of 20 days within which to file an answer and that he did file the
appellant Lily Lim Tan to ask about said date. This action of Atty. Chavez showed that
answer with good, valid and meritorious defenses on June 20, 1966; that on June 27, 1966
he was very much aware that the reglementary period within which the answer should
when appellees were allowed to present their evidence ex-parte, the motion for extension
be filed was to be computed from the date of the receipt of the summons and the
of time and the answer already formed part of the records of the case; that inasmuch as
complaint. It also showed that Atty. Chavez knew the easiest and the most practical
the late filing of the answer was due to accident and mistake, and appellants had good,
means to get the information that he needed — that was by a long distance telephone call
valid, and meritorious defenses, the motion to lift the order of default and for new trial
to his client, Lily Lim Tan. These actuations of Atty. Chavez showed that he knew the
should have been favorably considered by the court.5
importance of the matter at hand, and he was exercising the ordinary and reasonable care

46
Let it be noted that the lower court rendered its decision on July 1, 1966, and the appellees WHEREFORE, the decision of the Court of First Instance of Batangas, dated July 1, 1966,
received notice of said decision on August 23, 1966. The decision would have become as modified in accordance with the observations We made in the preceding paragraph,
final on September 22, 1966. On September 21, 1966 the appellants filed their motion to and the order, dated October 10, 1966, denying appellants' motion for the lifting of the
lift the order of default and for new trial. The motion of the appellants therefore, was in order of default and for new trial, in Civil Case No. 1732, are affirmed. Costs against
the nature of a motion for a new trial based on fraud, accident, mistake or excusable defendants-appellees.
negligence under paragraph (a) of Section 1 of Rule 37 of the Rules of Court. Under
Section 2 of said Rule 37 the moving party must show that he has a meritorious defense. It is so ordered.
The facts constituting the movant's good and substantial defense, which he may prove if
the petition were granted, must be shown in the affidavit which should accompany the
motion for a new trial.6 In the instant case, the motion to lift the order of default and for
new trial as well as the affidavit of merits accompanying the motion did not contain clear
statements of the facts constituting a good and valid defense which the appellants might
prove if they were given a chance to introduce evidence.<äre||anº•1àw> The allegations
in the motion that defendants have good and valid defenses, namely: that the accident
which gave rise to the case was force majeure; that defendant Ernesto Labsan is absolutely
without fault in the accident that gave rise to the case; and that defendant Lily Lim Tan
has exercised due diligence required of a good father of a family to prevent damage7, are
mere conclusions which did not provide the court with any basis for determining the
nature and merit of the probable defense. An affidavit of merit should state facts, and not
mere opinion or conclusions of law.

Hence the trial court correctly denied the motion to set aside order of default and for new
trial.

We must, however, point out a flaw in the decision of the lower court. It is stated in the
decision appealed from that the driver, Ernesto Labsan, was primarily liable for the
payment of damages adjudged therein, and the appellant Lily Lim Tan, being the owner
and operator of the gasoline tanker that figured in the accident, is subsidiarily liable, that
is, liable only in case Ernesto Labsan was not able to pay. This is not correct. The action
in the instant case was brought not to demand civil liability arising from a crime. The
complaint makes no mention of a crime having been committed, much less of the driver
Ernesto Labsan having been convicted of a crime. But there is an allegation in the
complaint that Ernesto Labsan was the authorized driver of the truck that figured in the
accident, which truck was operated by appellant Lily Lim Tan in connection with her
gasoline business. The prayer in the complaint, furthermore, sought to hold appellants
jointly and solidarily liable for damages. The instant action, therefore, was based, as the
complaint shows, on quasi delict.8 Under Article 218 of the Civil Code, which treats of quasi
delicts, the liability of the owners and managers of an establishment or enterprise for
damages caused by their employees is primary and direct, not subsidiary.9 The employer,
however, can demand from his employee reimbursement of the amount which he paid
under his liability. 10 The employer, appellant Lily Lim Tan, must be held primarily and
directly, not subsidiarily, liable for damages awarded in the decision of the lower court.
This is, of course, without prejudice to the right of appellant Lily Lim Tan to demand from
her co-appellant Ernesto Labsan reimbursement of the damages that she would have to
pay to appellees.

47