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Philippine Rabbit Bus Lines and Felix Pangalangan, plaintiff-appellants vs.

Philippine-American Forwarders, Inc. (PAFI), Archimedes Balingit and
Fernando Pineda, defendant-appellees
GR No. L-25142, 25 March 1975, 63 SCRA 231
Doctrines
Remedial Law (Civil Procedure) – When a party deliberately adopts a certain
theory and the case is decided upon that theory in the court below, he will not
be permitted to change his theory on appeal because, to permit him to do so,
could be unfair to the adverse party.
Thus, the Supreme Court disregarded Pangalangan and Philippine Rabbit’s
argument that the doctrine of piercing the corporate veil be used against PAFI,
Archimedes Balingit and his wife. The issue was not raised in the trial court
below. The case has to be decided based on allegations stated in the pleadings
(complaint) of the appellants, where it was assumed that Balingit and his wife
has separate legal personality from Philippine-American Forwarders.
Civil Law (Torts) – The terms “employers” and “owners and managers of an
establishment or enterprise” (dueños o directores de un establicimiento o
empresa) used in Article 2180 of the New Civil Code (formerly Article 1903, the
1889 Civil Code of Spain/Old Civil Code) does not include manager of
corporation. The Supreme Court interpreted the term “manager” (directores,
Spanish) is used in the sense of employer, as it may be gathered from the
article’s context.
Thus, the Supreme Court held that Balingit, as manager and employee of
Philippine-American Forwarders, is not liable for damages awarded to
Pangalangan and Philippine Rabbit.
Type of Appeal
Appeal on pure question of law by Philippine Rabbit and Pangalangan of the
Court of the First Instance Tarlac decision, which dismissed liability of
Philippine-American Forwarders’ manager Archimedes Balingit.
Facts
Pangalangan and Philippine Rabbit alleged that on 24 November 1962,
Fernando Pineda drove recklessly the freight truck owned by his employer
Philippine-American Forwarders along the national highway at Sto. Tomas,
Pampanga. It bumped the Philippine Rabbit bus driven by Felix Pangalangan.
As a result of the accident, Pangalangan was injured and the damaged bus
/archie.manansala
CEU Law, Torts and Damages, AY 2015-2016

cannot be used for seventy-nine (79) days, causing loss of income amounting to
PhP8,665.81 to Philippine Rabbit.
Philippine Rabbit and Pangalangan as plaintiffs, filed a case for damages
against the defendants Philippine-American Forwarders, its manager
Archimedes Balingit and the driver Fernando Pineda for damages and lost
income sustained by Philippine Rabbit and the injuries sustained by
Pangalangan.
Balingit stated in defense that he is not Pineda’s employer and he asked for the
dismissal of the plaintiffs’ case as they had no cause of action against him.
The CFI Tarlac held only PAFI and Pineda liable for damages and injuries
sustained and dismissed Balingit’s liability. As a result, Philippine Rabbit and
Pangalangan appealed the trial court’s decision to the Supreme Court.
Issues
In their appeal, Felix Pangalangan and Philippine Rabbit raised the issues:
1. Whether the trial court was right in dismissing the liability of PAFI
manager Archimedes Balingit to the damage sustained by them?
2. Whether the issue that Phil-American Forwarders, Inc. and Balingit and
his wife should be treated as one and the same civil personality can be
raised and adjudged on appeal?
Legal Provisions
The New Civil Code states:
Article 2176. Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the parties,
is called a quasi-delict and is governed by the provisions of this Chapter.
(1902a)
Article 2180. The obligation imposed by article 2176 is demandable not only for
one's own acts or omissions, but also for those of persons for whom one is
responsible.
The father and, in case of his death or incapacity, the mother, are responsible
for the damages caused by the minor children who live in their company.
Guardians are liable for damages caused by the minors or incapacitated
persons who are under their authority and live in their company.
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CEU Law, Torts and Damages, AY 2015-2016

The owners and managers of an establishment or enterprise are likewise
responsible for damages caused by their employees in the service of the
branches in which the latter are employed or on the occasion of their functions.
Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even though
the former are not engaged in any business or industry.
The State is responsible in like manner when it acts through a special agent;
but not when the damage has been caused by the official to whom the task
done properly pertains, in which case what is provided in article 2176 shall be
applicable.
Lastly, teachers or heads of establishments of arts and trades shall be liable for
damages caused by their pupils and students or apprentices, so long as they
remain in their custody.
The responsibility treated of in this article shall cease when the persons herein
mentioned prove that they observed all the diligence of a good father of a family
to prevent damage. (1903a)
Held by the Supreme Court
The trial court’s decision on appeal is AFFIRMED and costs against plaintiffappellants.
The Supreme Court held that based on the allegations of the complaint of
appellants Philippine Rabbit and Pangalangan, Balingit has no liability based
on tort or quasi-delict as manager of Phil-American Forwarders, Inc. in
connection with the vehicular accident because he may be regarded as an
employee of Phil-American Forwarders, Inc. The Supreme Court interpreted the
term “manager” (directores, Spanish) is used in the sense of employer, as it
may be gathered from the article’s context.
The Supreme Court disregarded the appellant’s argument raised on appeal that
the doctrine of piercing the corporate veil be used against PAFI, Archimedes
Balingit and his wife. Since that issue was not raised in the trial court below, it
cannot be raised also on appeal. The case has to be decided based on
allegations stated in the pleadings (complaint) of the appellants, where it was
assumed that Balingit and his wife has a separate legal personality from that of
Philippine-American Forwarders, Inc.

/archie.manansala
CEU Law, Torts and Damages, AY 2015-2016