Negligence

CARRIER EXPRESS ITINERARY SPECIFIED RESTRICTIONS

Republic SUPREME Manila SECOND DIVISION

of

the

Philippines COURT

New York/Paris Air France NONENDORSABLE VALID ON AF ONLY Paris/Stockholm Air France NONENDORSABLE VALID ON AF ONLY Stockholm/Copenhagen None

G.R. No. 76093 March 21, 1989 Copenhagen/London None AIR FRANCE, petitioner, vs. THE COURT OF APPEALS AND NARCISO O. MORALES, respondents. Siguion Reyna, Montecillo & Ongsiako for petitioner. Morales & Joyas Law Office for private respondent. London/Amsterdam None Amsterdam/Hamburg None Humburg/Frankfurt None Frankfurt/Paris Air France NONENDORSABLE VALID ON AF ONLY PADILLA, J.: This is a petition for review on certiorari of the decision ** of the Court of Appeals, dated 1986, in CA-G.R. CV No. 69875, entitled "Narciso Morales vs. Air France," dismissing herein petitioner's appeal from the adverse ruling of the trial court (Branch 33, CFI of Rizal, Kalookan City) *** and the latter's denial of its motion for reconsideration. The respondent Court of Appeals likewise denied petitioner's motion for reconsideration of its decision in a resolution dated 25 September 1986. In reviewing the records, we find: Sometime in October 1977, private respondent Narciso Morales thru his representative, Ms. Janet Tolentino, purchased an airline ticket from Aspac Management Corporation, petitioner's General Sales Agent in Makati, for P 9,426.00 plus P 1,413.90 travel tax, of which P 413.90 were later refunded to Ms. Tolentino. The itinerary covered by the ticket included several cities, with certain segments thereof restricted by markings of "non endorsable' and 'valid on AF (meaning Air France) only', as herein specified: Paris/Geneva Air France NONENDORSABLE VALID ON AF ONLY Geneva/Madrid None Madrid/Nice Air France NONENDORSABLE VALID ON AF ONLY Nice/Rome Air France NONENDORSABLE VALID ON AF ONLY Rome/Athens None Athens/Tel Aviv None Tel Avive/Bangkok Air France NONENDORSABLE VALID ON AF ONLY Bangkok/Manila Air France NONENDORSABLE VALID ON AF ONLY 1 While in New York, U.S.A. on 3 November 1977, private respondent Morales obtained three (3) medical certificates (Exhibits G, G-1, G-2) attesting to ear an infection which necessitated medical treatment. From New York, he flew to Paris, Stockholm and then Copenhagen where he made representations with petitioner's office to shorten his trip

Page 1 of 28

by deleting some of the cities in the itinerary. Respondent Morales was informed that, as a matter of procedure, confirmation of petitioner's office in Manila (as ticketing office) must be secured before shortening of the route (already paid for). Air France in Amsterdam telexed AF Manila requesting for rerouting of the passenger to Amsterdam, Hamburg, Geneva, Rome, Hongkong, Manila. 2 As there was no immediate response to the telex, respondent proceeded to Hamburg where he was informed of AF Manila's negative reply. After reiterating his need to flying home on a shorter route due to his ear infection, and presentation of supporting medical certificates, again, the airline office made the necessary request to Manila on 23 November 1977 for a Hamburg, Paris, Geneva, Rome, Paris, Hongkong and Manila route. Still, the request was denied. Despite respondent as protest and offer to pay any fare difference, petitioner did not relent in its position. Respondent, therefore, had to buy an entirely new set of tickets, paying 1,914 German marks for the homeward route, namely: Itinerary Carrier Date Reservation Hamburg/Frankfurt LH 26 Nov. OK (Lufthansa) Frankfurt/Geneva SR 26 Nov. OK (Swissair) Geneva/Rome AZ 29 Nov. OK (Alitalia) Rome/Hongkong BA 02 Dec. OK (British Airways) Hongkong/Manila PR Open Open (Philippine Airlines) 3 Upon arrival in Manila, respondent sent a letter-complaint to Air France dated 20 December 1977 thru Aspac Management Corporation. Respondent Morales was advised to surrender the unused flight coupons for a refund of its value, but he kept the same and, instead, filed a complaint for breach of contract of carriage and damages. CFI Judge Marcelino Sayo found Air France in evident bad faith for violation of the contract of carriage, aggravated by the threatening attitude of its employees in Hamburg. Considering the social and economic standing of respondent, who is chairman of the board of directors of a multi-million corporation and a member of several civic and business organizations, an award of moral and exemplary damages, in addition to the actual damages incurred, was deemed proper under the circumstances. The dispositive part of the CFI decision states:

WHEREFORE, this Court hereby renders judgment for the plaintiff and orders the defendant to pay to the plaintiff the sum of 1,914 German Marks, in its equivalent in Philippine Peso, as actual damages, the sum of P 1,000,000.00 as moral damages, and the further sum of P 800,000.00 as exemplary damages, with legal interest thereon from date of the filing of the complaint until fully paid, plus the sum equal to 20% thereof as attorney's fees, with costs against the plaintiff. 4 On appeal to the Court of Appeals, the award of damages was modified as follows: ACCORDINGLY, the judgment appealed from is hereby modified so that it will read as follows: Judgment is hereby rendered in favor of the plaintiff against the defendant ordering ther defendant to pay to said plaintiff the following. (1) 1,914 German Marks in its equivalent in Philippine peso at prevailing rate of exchange as actual damages, with legal interest thereon from the date of the filing of the complaint until fully paid; (2) P 500,000.00, as moral damages; (3) P 150,000.00, as exemplary damages; and (4) 5% of the amount of actual, moral and exemplary damages which are recoverable, as attorney's fees. 5 Questioning the factual findings of the respondent court, petitioner comes to this court for review citing three (3) errors: 1. The conclusion that there is a breach of contract is premised on a misapprehension of facts. 2. Failure to apply the doctrine of avoidable consequence in the present case. 3. Award of exorbitant damages and attorney's fees. After considering respondent's comment, the Court resolved to give due courses to the petition, and required the parties to file their respective memoranda. Complying with

Page 2 of 28

the resolution of 26 October 1987, private respondent filed his reply memorandum on 17 December 1987. This is the last pleading on record. While this Court is not a trier of facts, yet, when the findings of respondent court are without citation of specific evidence on which they are based, there is sufficient reason for the Court to review the appellate court's decision.6 The respondent court's ruling that there was breach of contract of carriage is premised on petitioner's refusal to re-route respondent and, in effect, requiring him to purchase a new set of tickets. Petitioner refutes this conclusion, claiming that the original ticket was discounted and non-endorsable on certain segments. Eventually respondent flew on his chosen route with different airlines. Under the factual milieu, was there really a breach of contract of carriage on the part of the petitioner, as to justify the award to private respondent of actual, moral and exemplary damages? We find none. International Air Transportation Association (IATA) Resolution No. 275 e, 2., special note reads: "Where a fare is restricted and such restrictions are not clearly evident from the required entries on the ticket, such restrictions may be written, stamped or reprinted in plain language in the Endorsement/Restrictions" box of the applicable flight coupon(s); or attached thereto by use of an appropriate notice." 7 Voluntary changes to tickets, 8 while allowable, are also covered by (IATA) Resolution No. 1013, Art. II, which provides: "1. changes to the ticket requested by the passenger will be subject to carriers regulations. Private respondent wanted a rerouting to Hamburg, Geneva, Rome, Hongkong and Manilas 9 which shortened the original itinerary on the ticket issued by AF Manila through ASPAC, its general sales agent. Considering the original restrictions on the ticket, it was not unreasonable for Air France to deny the request. Besides, a recurring ear infection was pleaded as reason necessitating urgent return to Manila. Assumingarguendo a worsening pain or discomfort, private respondent appears to have still proceeded to four (4) other cities covering a period of at least six (6) days and leaving open his date of departure from Hongkong to Manila.10And, even if he claimed to have undergone medical examination upon arrival in Manila, no medical certificate was presented. He failed to even remember his date of arrival in Manila. With a claim for a large amount of damages, the Court finds it unsual for respondent, a lawyer, to easily forget vital information to substantiate his plea. It is also essential before an award of damages that the claimant must satisfactorily prove during the trial

the existence of the factual basis of the damages and its causal connection to defendant's acts.11 In KLM Royal Dutch Airlines v. CA, 12 the Court observed.... As noted by the Court of Appeals that condition was printed in letters so small that one would have to use a magnifying glass to read the words. Under the circumstances, it would be unfair and inequitable to charge the respondents with automatic knowledge or notice of the said condition so as to preclude any doubt that it was fairly and freely agreed upon by the respondents when they accepted the passage tickets issued to them by the KLM. As the airline which issued those tickets with the knowledge that the respondents would be flown on the various legs of their journey by different air carriers, the KLM was chargeable with the duty and responsibility of specifically informing the respondents of conditions prescribed in their tickets or in the very least, to ascertain that the respondent read them before they accepted their passage tickets. A thorough search of the records, however, inexplicably fails to show that any effort was exerted by the KLM officials or employees to discharge in a proper manner this responsibility to the respondents. Consequently, We hold that the respondents cannot be bound by the provision in question by which KLM unilaterally assumed the role of a mere ticket-issuing agent for other airlines and limited its liability only to untoward occurrences on its own lines. (Emphasis supplied) Unlike in the KLM case where the breach of contract was aggravated by the discourteous and arbitrary conduct of an official of the Aer Lingus which the KLM had engaged to transport the respondents, here. Air France employees in Hamburg informed private respondent that his tickets were partly stamped "non-endorsable" and "valid on Air France only."13 Mere refusal to accede to the passenger's wishes does not necessarily translate into damages in the absence of bad faith.14 To our mind, respondent has failed to show wanton, malevolent or reckless misconduct imputable to petitioner in its refusal to re-route. Air France Manila acted upon the advise of ASPAC in denying private respondent's request. There was no evident bad faith when it followed the advise not to authorize rerouting.15 At worst, the situation can be considered a case of inadvertence on the part of ASPAC in not explaining the non-endorsable character of the ticket. Of importance, however, is the fact that private respondent is a lawyer, and the restriction box 16 clearly indicated the non-endorsable character of the ticket.

Page 3 of 28

Omissions by ordinary passengers may be condoned but more is expected of members of the bar who cannot feign ignorance of such limitations and restrictions. An award of moral and exemplary damages cannot be sustained under the circumstances, but petitioner has to refund the unused coupons in the Air France ticket to the private respondent. WHEREFORE, the judgement appealed from is REVERSED and SET ASIDE. Petitioner is ordered, however, to refund to private respondent the value of the unused coupons in the passenger's ticket issued to him by the petitioner. No costs. SO ORDERED. Melencio-Herrera, (Chairperson), Paras, Sarmiento and Regalado JJ., concur: Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-21438 September 28, 1966 AIR FRANCE, petitioner, vs. RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS, respondents. Lichauco, Picazo and Agcaoili for petitioner. Bengzon Villegas and Zarraga for respondent R. Carrascoso. SANCHEZ, J.: 1 The Court of First Instance of Manila sentenced petitioner to pay respondent Rafael Carrascoso P25,000.00 by way of moral damages; P10,000.00 as exemplary damages; P393.20 representing the difference in fare between first class and tourist class for the portion of the trip Bangkok-Rome, these various amounts with interest at the legal rate, from the date of the filing of the complaint until paid; plus P3,000.00 for attorneys' fees; and the costs of suit. 2 On appeal, the Court of Appeals slightly reduced the amount of refund on Carrascoso's plane ticket from P393.20 to P383.10, and voted to affirm the appealed decision "in all other respects", with costs against petitioner. The case is now before us for review on certiorari. The facts declared by the Court of Appeals as " fully supported by the evidence of record", are: Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for Lourdes on March 30, 1958. On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air Lines, Inc., issued to plaintiff a "first class" round trip airplane ticket from

Manila to Rome. From Manila to Bangkok, plaintiff travelled in "first class", but at Bangkok, the Manager of the defendant airline forced plaintiff to vacate the "first class" seat that he was occupying because, in the words of the witness Ernesto G. Cuento, there was a "white man", who, the Manager alleged, had a "better right" to the seat. When asked to vacate his "first class" seat, the plaintiff, as was to be expected, refused, and told defendant's Manager that his seat would be taken over his dead body; a commotion ensued, and, according to said Ernesto G. Cuento, "many of the Filipino passengers got nervous in the tourist class; when they found out that Mr. Carrascoso was having a hot discussion with the white man [manager], they came all across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white man" (Transcript, p. 12, Hearing of May 26, 1959); and plaintiff reluctantly gave his "first 3 class" seat in the plane. 1. The trust of the relief petitioner now seeks is that we review "all the 4 findings" of respondent Court of Appeals. Petitioner charges that respondent court failed to make complete findings of fact on all the issues properly laid before it. We are asked to consider facts favorable to petitioner, and then, to overturn the appellate court's decision. Coming into focus is the constitutional mandate that "No decision shall be rendered by any court of record without expressing therein clearly and distinctly the 5 facts and the law on which it is based". This is echoed in the statutory demand that a judgment determining the merits of the case shall state "clearly and distinctly the facts 6 and the law on which it is based"; and that "Every decision of the Court of Appeals 7 shall contain complete findings of fact on all issues properly raised before it". A decision with absolutely nothing to support it is a nullity. It is open to direct 8 attack. The law, however, solely insists that a decision state the "essential ultimate 9 facts" upon which the court's conclusion is drawn. A court of justice is not hidebound 10 to write in its decision every bit and piece of evidence presented by one party and the other upon the issues raised. Neither is it to be burdened with the obligation "to 11 specify in the sentence the facts" which a party "considered as proved". This is but a part of the mental process from which the Court draws the essential ultimate facts. A decision is not to be so clogged with details such that prolixity, if not confusion, may result. So long as the decision of the Court of Appeals contains the necessary facts to warrant its conclusions, it is no error for said court to withhold therefrom "any specific finding of facts with respect to the evidence for the defense". Because as this Court 12 well observed, "There is no law that so requires". Indeed, "the mere failure to specify (in the decision) the contentions of the appellant and the reasons for refusing to believe them is not sufficient to hold the same contrary to the requirements of the provisions of law and the Constitution". It is in this setting that in Manigque, it was held that the mere fact that the findings "were based entirely on the evidence for the prosecution without taking into consideration or even mentioning the appellant's side in the controversy as shown by his own testimony", would not vitiate the 13 judgment. If the court did not recite in the decision the testimony of each witness for, or each item of evidence presented by, the defeated party, it does not mean that

Page 4 of 28

the court has overlooked such testimony or such item of evidence. At any rate, the legal presumptions are that official duty has been regularly performed, and that all the 15 matters within an issue in a case were laid before the court and passed upon by it. Findings of fact, which the Court of Appeals is required to make, maybe defined as "the written statement of the ultimate facts as found by the court ... and essential to 16 support the decision and judgment rendered thereon". They consist of the 17 court's "conclusions" with respect to the determinative facts in issue". A question of law, upon the other hand, has been declared as "one which does not call for an 18 examination of the probative value of the evidence presented by the parties." 2. By statute, "only questions of law may be raised" in an appeal by certiorari 19 from a judgment of the Court of Appeals. That judgment is conclusive as to the facts. It is not appropriately the business of this Court to alter the facts or to review the 20 questions of fact. With these guideposts, we now face the problem of whether the findings of fact of the Court of Appeals support its judgment. 3. Was Carrascoso entitled to the first class seat he claims? It is conceded in all quarters that on March 28, 1958 he paid to and received from petitioner a first class ticket. But petitioner asserts that said ticket did not represent the true and complete intent and agreement of the parties; that said respondent knew that he did not have confirmed reservations for first class on any specific flight, although he had tourist class protection; that, accordingly, the issuance of a first class ticket was no guarantee that he would have a first class ride, but that such would depend upon the availability of first class seats. These are matters which petitioner has thoroughly presented and discussed in its brief before the Court of Appeals under its third assignment of error, which reads: "The trial court erred in finding that plaintiff had confirmed reservations for, and a right to, first class seats on the "definite" segments of his journey, particularly that from Saigon 21 to Beirut". And, the Court of Appeals disposed of this contention thus: Defendant seems to capitalize on the argument that the issuance of a first-class ticket was no guarantee that the passenger to whom the same had been issued, would be accommodated in the first-class compartment, for as in the case of plaintiff he had yet to make arrangements upon arrival at every station for the necessary first-class reservation. We are not impressed by such a reasoning. We cannot understand how a reputable firm like defendant airplane company could have the indiscretion to give out tickets it never meant to honor at all. It received the corresponding amount in payment of first-class tickets and yet it allowed the passenger to be at the mercy of its employees. It is more in keeping with the ordinary course of business that the 22 company should know whether or riot the tickets it issues are to be honored or not. Not that the Court of Appeals is alone. The trial court similarly disposed of petitioner's contention, thus: On the fact that plaintiff paid for, and was issued a "First class" ticket, there can be no question. Apart from his testimony, see plaintiff's Exhibits "A", "A-1", "B", "B-1,"

14

"B-2", "C" and "C-1", and defendant's own witness, Rafael Altonaga, confirmed plaintiff's testimony and testified as follows: Q. In these tickets there are marks "O.K." From what you know, what does this OK mean? A. That the space is confirmed. Q. Confirmed for first class? A. Yes, "first class". (Transcript, p. 169) xxx xxx xxx Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and Rafael Altonaga that although plaintiff paid for, and was issued a "first class" airplane ticket, the ticket was subject to confirmation in Hongkong. The court cannot give credit to the testimony of said witnesses. Oral evidence cannot prevail over written evidence, and plaintiff's Exhibits "A", "A-l", "B", "B-l", "C" and "C-1" belie the testimony of said witnesses, and clearly show that the plaintiff was issued, and paid for, a first class ticket without any reservation whatever. Furthermore, as hereinabove shown, defendant's own witness Rafael Altonaga testified that the reservation for a "first class" accommodation for the plaintiff was confirmed. The court cannot believe that after such confirmation defendant had a verbal understanding with plaintiff that the "first class" ticket issued to him by 23 defendant would be subject to confirmation in Hongkong. We have heretofore adverted to the fact that except for a slight difference of a few pesos in the amount refunded on Carrascoso's ticket, the decision of the Court of First Instance was affirmed by the Court of Appeals in all other respects. We hold the view that such a judgment of affirmance has merged the judgment of the lower 24 court. Implicit in that affirmance is a determination by the Court of Appeals that the proceeding in the Court of First Instance was free from prejudicial error and "all questions raised by the assignments of error and all questions that might have been raised are to be regarded as finally adjudicated against the appellant". So also, the 25 judgment affirmed "must be regarded as free from all error". We reached this policy construction because nothing in the decision of the Court of Appeals on this point would suggest that its findings of fact are in any way at war with those of the trial court. Nor was said affirmance by the Court of Appeals upon a ground or grounds 26 different from those which were made the basis of the conclusions of the trial court. If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class seat, notwithstanding the fact that seat availability in specific flights is therein confirmed, then an air passenger is placed in the hollow of the hands of an airline. What security then can a passenger have? It will always be an easy matter for an airline aided by its employees, to strike out the very stipulations in the ticket, and say that there was a verbal agreement to the contrary. What if the passenger had a schedule to fulfill? We have long learned that, as a rule, a written document speaks a uniform language; that spoken word could be notoriously unreliable. If only to achieve stability in the relations between passenger and air carrier, adherence to the ticket so issued is

Page 5 of 28

desirable. Such is the case here. The lower courts refused to believe the oral evidence intended to defeat the covenants in the ticket. The foregoing are the considerations which point to the conclusion that there are facts upon which the Court of Appeals predicated the finding that respondent Carrascoso had a first class ticket and was entitled to a first class seat at Bangkok, 27 which is a stopover in the Saigon to Beirut leg of the flight. We perceive no "welter of distortions by the Court of Appeals of petitioner's statement of its position", as charged 28 by petitioner. Nor do we subscribe to petitioner's accusation that respondent 29 Carrascoso "surreptitiously took a first class seat to provoke an issue". And this because, as petitioner states, Carrascoso went to see the Manager at his office in Bangkok "to confirm my seat and because from Saigon I was told again to see the 30 Manager". Why, then, was he allowed to take a first class seat in the plane at Bangkok, if he had no seat? Or, if another had a better right to the seat? 4. Petitioner assails respondent court's award of moral damages. Petitioner's trenchant claim is that Carrascoso's action is planted upon breach of contract; that to authorize an award for moral damages there must be an averment of fraud or bad 31 faith; and that the decision of the Court of Appeals fails to make a finding of bad faith. The pivotal allegations in the complaint bearing on this issue are: 3. That ... plaintiff entered into a contract of air carriage with the Philippine Air Lines for a valuable consideration, the latter acting as general agents for and in behalf of the defendant, under which said contract, plaintiff was entitled to, as defendant agreed to furnish plaintiff, First Class passage on defendant's plane during the entire duration of plaintiff's tour of Europe with Hongkong as starting point up to and until plaintiff's return trip to Manila, ... . 4. That, during the first two legs of the trip from Hongkong to Saigon and from Saigon to Bangkok, defendant furnished to the plaintiff First Class accommodation but only after protestations, arguments and/or insistence were made by the plaintiff with defendant's employees. 5. That finally, defendant failed to provide First Class passage, but instead furnished plaintiff only TouristClass accommodations from Bangkok to Teheran and/or Casablanca, ... the plaintiff has been compelled by defendant's employees to leave the First Class accommodation berths at Bangkok after he was already seated. 6. That consequently, the plaintiff, desiring no repetition of the inconvenience and embarrassments brought by defendant's breach of contract was forced to take a Pan 32 American World Airways plane on his return trip from Madrid to Manila. xxx xxx xxx 2. That likewise, as a result of defendant's failure to furnish First Class accommodations aforesaid, plaintiff suffered inconveniences, embarrassments, and humiliations, thereby causing plaintiff mental anguish, serious anxiety, wounded feelings, social humiliation, and the like injury, resulting in moral damages in the 33 amount of P30,000.00. xxx xxx xxx

The foregoing, in our opinion, substantially aver: First, That there was a contract to furnish plaintiff a first class passage covering, amongst others, the Bangkok-Teheran leg; Second, That said contract was breached when petitioner failed to furnish first class transportation at Bangkok; and Third, that there was bad faith when petitioner's employee compelled Carrascoso to leave his first class accommodation berth "after he was already, seated" and to take a seat in the tourist class, by reason of which he suffered inconvenience, embarrassments and humiliations, thereby causing him mental anguish, serious anxiety, wounded feelings and social humiliation, resulting in moral damages. It is true that there is no specific mention of the term bad faith in the complaint. But, the inference of bad faith is there, it may be drawn from the facts and 34 circumstances set forth therein. The contract was averred to establish the relation between the parties. But the stress of the action is put on wrongful expulsion. Quite apart from the foregoing is that (a) right the start of the trial, respondent's counsel placed petitioner on guard on what Carrascoso intended to prove: That while sitting in the plane in Bangkok, Carrascoso wasousted by petitioner's manager who 35 gave his seat to a white man; and (b) evidence of bad faith in the fulfillment of the contract was presented without objection on the part of the petitioner. It is, therefore, unnecessary to inquire as to whether or not there is sufficient averment in the complaint to justify an award for moral damages. Deficiency in the complaint, if any, was cured by the evidence. An amendment thereof to conform to the evidence is not 36 even required. On the question of bad faith, the Court of Appeals declared: That the plaintiff was forced out of his seat in the first class compartment of the plane belonging to the defendant Air France while at Bangkok, and was transferred to the tourist class not only without his consent but against his will, has been sufficiently established by plaintiff in his testimony before the court, corroborated by the corresponding entry made by the purser of the plane in his notebook which notation reads as follows: "First-class passenger was forced to go to the tourist class against his will, and that the captain refused to intervene", and by the testimony of an eye-witness, Ernesto G. Cuento, who was a copassenger. The captain of the plane who was asked by the manager of defendant company at Bangkok to intervene even refused to do so. It is noteworthy that no one on behalf of defendant ever contradicted or denied this evidence for the plaintiff. It could have been easy for defendant to present its manager at Bangkok to testify at the 37 trial of the case, or yet to secure his disposition; but defendant did neither. The Court of appeals further stated Neither is there evidence as to whether or not a prior reservation was made by the white man. Hence, if the employees of the defendant at Bangkok sold a first-class ticket to him when all the seats had already been taken, surely the plaintiff should not have been picked out as the one to suffer the consequences and to be subjected to the humiliation and indignity of being ejected from his seat in the presence of others. Instead of explaining to the white man the improvidence committed by defendant's employees, the manager adopted the more drastic step of ousting the plaintiff who

Page 6 of 28

was then safely ensconsced in his rightful seat. We are strengthened in our belief that this probably was what happened there, by the testimony of defendant's witness Rafael Altonaga who, when asked to explain the meaning of the letters "O.K." appearing on the tickets of plaintiff, said "that the space is confirmed for first class. Likewise, Zenaida Faustino, another witness for defendant, who was the chief of the Reservation Office of defendant, testified as follows: "Q How does the person in the ticket-issuing office know what reservation the passenger has arranged with you? A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June 19, 1959) In this connection, we quote with approval what the trial Judge has said on this point: Why did the, using the words of witness Ernesto G. Cuento, "white man" have a "better right" to the seat occupied by Mr. Carrascoso? The record is silent. The defendant airline did not prove "any better", nay, any right on the part of the "white man" to the "First class" seat that the plaintiff was occupying and for which he paid and was issued a corresponding "first class" ticket. If there was a justified reason for the action of the defendant's Manager in Bangkok, the defendant could have easily proven it by having taken the testimony of the said Manager by deposition, but defendant did not do so; the presumption is that evidence willfully suppressed would be adverse if produced [Sec. 69, par (e), Rules of Court]; and, under the circumstances, the Court is constrained to find, as it does find, that the Manager of the defendant airline in Bangkok not merely asked but threatened the plaintiff to throw him out of the plane if he did not give up his "first class" seat because the said Manager wanted to accommodate, using the words of the witness 38 Ernesto G. Cuento, the "white man". It is really correct to say that the Court of Appeals in the quoted portion first transcribed did not use the term "bad faith". But can it be doubted that the recital of facts therein points to bad faith? The manager not only prevented Carrascoso from enjoying his right to a first class seat; worse, he imposed his arbitrary will; he forcibly ejected him from his seat, made him suffer the humiliation of having to go to the tourist class compartment - just to give way to another passenger whose right thereto has not been established. Certainly, this is bad faith. Unless, of course, bad faith has assumed a meaning different from what is understood in law. For, "bad faith" contemplates a "state of mind affirmatively operating with furtive design or with some 39 motive of self-interest or will or for ulterior purpose." And if the foregoing were not yet sufficient, there is the express finding of bad faith in the judgment of the Court of First Instance, thus: The evidence shows that the defendant violated its contract of transportation with plaintiff in bad faith, with the aggravating circumstances that defendant's Manager in Bangkok went to the extent of threatening the plaintiff in the presence of many passengers to have him thrown out of the airplane to give the "first class" seat that he was occupying to, again using the words of the witness Ernesto G. Cuento, a "white man" whom he (defendant's Manager) wished to accommodate, and the

defendant has not proven that this "white man" had any "better right" to occupy the "first class" seat that the plaintiff was occupying, duly paid for, and for which the 40 corresponding "first class" ticket was issued by the defendant to him. 5. The responsibility of an employer for the tortious act of its employees need not 41 be essayed. It is well settled in law. For the willful malevolent act of petitioner's manager, petitioner, his employer, must answer. Article 21 of the Civil Code says: ART. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. In parallel circumstances, we applied the foregoing legal precept; and, we held that upon the provisions of Article 2219 (10), Civil Code, moral damages are 42 recoverable. 6. A contract to transport passengers is quite different in kind and degree from 43 any other contractual relation. And this, because of the relation which an air-carrier sustains with the public. Its business is mainly with the travelling public. It invites people to avail of the comforts and advantages it offers. The contract of air carriage, therefore, generates a relation attended with a public duty. Neglect or malfeasance of the carrier's employees, naturally, could give ground for an action for damages. Passengers do not contract merely for transportation. They have a right to be treated by the carrier's employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct, injurious language, indignities and abuses from such employees. So it is, that any rule or discourteous conduct on the part of employees towards a passenger gives the latter an 44 action for damages against the carrier. 45 Thus, "Where a steamship company had accepted a passenger's check, it was a breach of contract and a tort, giving a right of action for its agent in the presence of third persons to falsely notify her that the check was worthless and demand payment under threat of ejection, though the language used was not insulting and she was not 46 ejected." And this, because, although the relation of passenger and carrier is "contractual both in origin and nature" nevertheless "the act that breaks the contract 47 may be also a tort". And in another case, "Where a passenger on a railroad train, when the conductor came to collect his fare tendered him the cash fare to a point where the train was scheduled not to stop, and told him that as soon as the train reached such point he would pay the cash fare from that point to destination, there was nothing in the conduct of the passenger which justified the conductor in using 48 insulting language to him, as by calling him a lunatic," and the Supreme Court of South Carolina there held the carrier liable for the mental suffering of said passenger.1awphl.nt Petitioner's contract with Carrascoso is one attended with public duty. The stress of Carrascoso's action as we have said, is placed upon his wrongful expulsion. This is a violation of public duty by the petitioner air carrier a case of quasi-delict. Damages are proper. 7. Petitioner draws our attention to respondent Carrascoso's testimony, thus

Page 7 of 28

Q You mentioned about an attendant. Who is that attendant and purser? A When we left already that was already in the trip I could not help it. So one of the flight attendants approached me and requested from me my ticket and I said, What for? and she said, "We will note that you transferred to the tourist class". I said, "Nothing of that kind. That is tantamount to accepting my transfer." And I also said, "You are not going to note anything there because I am protesting to this transfer". Q Was she able to note it? A No, because I did not give my ticket. Q About that purser? A Well, the seats there are so close that you feel uncomfortable and you don't have enough leg room, I stood up and I went to the pantry that was next to me and the purser was there. He told me, "I have recorded the incident in my notebook." He read it and translated it to me because it was recorded in French "First class passenger was forced to go to the tourist class against his will, and that the captain refused to intervene." Mr. VALTE I move to strike out the last part of the testimony of the witness because the best evidence would be the notes. Your Honor. COURT 49 I will allow that as part of his testimony. Petitioner charges that the finding of the Court of Appeals that the purser made an entry in his notebook reading "First class passenger was forced to go to the tourist class against his will, and that the captain refused to intervene" is predicated upon evidence [Carrascoso's testimony above] which is incompetent. We do not think so. The subject of inquiry is not the entry, but the ouster incident. Testimony on the entry does not come within the proscription of the best evidence rule. Such testimony is 49a admissible. Besides, from a reading of the transcript just quoted, when the dialogue happened, the impact of the startling occurrence was still fresh and continued to be felt. The excitement had not as yet died down. Statements then, in this environment, 50 are admissible as part of the res gestae. For, they grow "out of the nervous 51 excitement and mental and physical condition of the declarant". The utterance of the purser regarding his entry in the notebook was spontaneous, and related to the 52 circumstances of the ouster incident. Its trustworthiness has been guaranteed. It thus escapes the operation of the hearsay rule. It forms part of the res gestae. At all events, the entry was made outside the Philippines. And, by an employee of petitioner. It would have been an easy matter for petitioner to have contradicted Carrascoso's testimony. If it were really true that no such entry was made, the deposition of the purser could have cleared up the matter. We, therefore, hold that the transcribed testimony of Carrascoso is admissible in evidence. 8. Exemplary damages are well awarded. The Civil Code gives the court ample power to grant exemplary damages in contracts and quasi- contracts. The only

condition is that defendant should have "acted in a wanton, fraudulent, reckless, 53 oppressive, or malevolent manner." The manner of ejectment of respondent Carrascoso from his first class seat fits into this legal precept. And this, in addition to 54 moral damages. 9. The right to attorney's fees is fully established. The grant of exemplary damages justifies a similar judgment for attorneys' fees. The least that can be said is that the courts below felt that it is but just and equitable that attorneys' fees be 55 given. We do not intend to break faith with the tradition that discretion well exercised as it was here should not be disturbed. 10. Questioned as excessive are the amounts decreed by both the trial court and the Court of Appeals, thus: P25,000.00 as moral damages; P10,000.00, by way of exemplary damages, and P3,000.00 as attorneys' fees. The task of fixing these amounts 56 is primarily with the trial court. The Court of Appeals did not interfere with the same. The dictates of good sense suggest that we give our imprimatur thereto. Because, the 57 facts and circumstances point to the reasonableness thereof. On balance, we say that the judgment of the Court of Appeals does not suffer from reversible error. We accordingly vote to affirm the same. Costs against petitioner. So ordered. Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Zaldivar and Castro, JJ., concur. Bengzon, J.P., J., took no part. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-7664 August 29, 1958 MR. AND MRS. AMADOR C. ONG, plaintiffs-appellants, vs. METROPOLITAN WATER DISTRICT, defendant-appellee. Tomas Tria Tirona for appellants. Government Corporate Counsel Ambrosio Padilla and Juan C. Jimenez for appellee. BAUTISTA ANGELO, J.: Plaintiffs spouses seek to recover from defendant, a government-owned corporation, the sum of P50,000 as damages, P5,000 as funeral expenses, and P11,000 as attorneys' fees, for the death of their son Dominador Ong in one of the swimming pools operated by defendant. Defendant admits the fact that plaintiffs' son was drowned in one of its swimming pools but avers that his death was caused by his own negligence or by unavoidable accident. Defendant also avers that it had exercised due diligence in the selection of, and supervision over, its employees and that it had observed the diligence required by law under the circumstances.

Page 8 of 28

After trial, the lower court found that the action of plaintiffs is untenable and dismissed the complaint without pronouncement as to costs. Plaintiffs took the case on appeal directly to this Court because the amount involved exceeds the sum of P50,000. Defendant owns and operates three recreational swimming pools at its Balara filters, Diliman, Quezon City, to which people are invited and for which a nominal fee of P0.50 for adults and P0.20 for children is charged. The main pool it between two small pools of oval shape known as the "Wading pool" and the "Beginners Pool." There are diving boards in the big pools and the depths of the water at different parts are indicated by appropriate marks on the wall. The care and supervision of the pools and the users thereof is entrusted to a recreational section composed of Simeon Chongco as chief, Armando Rule, a male nurse, and six lifeguards who had taken the life-saving course given by the Philippine Red Cross at the YMCA in Manila. For the safety of its patrons, defendant has provided the pools with a ring buoy, toy roof, towing line, saving kit and a resuscitator. There is also a sanitary inspector who is in charge of a clinic established for the benefit of the patrons. Defendant has also on display in a conspicuous place certain rules and regulations governing the use of the pools, one of which prohibits the swimming in the pool alone or without any attendant. Although defendant does not maintain a full-time physician in the swimming pool compound, it has however a nurse and a sanitary inspector ready to administer injections or operate the oxygen resuscitator if the need should arise. In the afternoon of July 5, 1952, at about 1:00 o'clock, Dominador Ong, a 14-year old high school student and boy scout, and his brothers Ruben and Eusebio, went to defendant's swimming pools. This was not the first time that the three brothers had gone to said natatorium for they had already been there four or five times before. They arrived at the natatorium at about 1:45 p.m. After paying the requisite admission fee, they immediately went to one of the small pools where the water was shallow. At about 4:35 p.m., Dominador Ong told his brothers that he was going to the locker room in an adjoining building to drink a bottle of coke. Upon hearing this, Ruben and Eusebio went to the bigger pool leaving Dominador in the small pool and so they did not see the latter when he left the pool to get a bottle of coke. In that afternoon, there were two lifeguards on duty in the pool compound, namely, Manuel Abao and Mario Villanueva. The tour of duty of Abao was from 8:00 to 12:00 in the morning and from 2:00 to 6:00 in the afternoon, and of Villanueva from 7:30 to 11:30 a.m. and from 12:30 to 4:30 p.m. Between 4:00 to 5:00 that afternoon, there were about twenty bathers inside the pool area and Manuel Abao was going around the pools to observe the bathers in compliance with the instructions of his chief. Between 4:40 to 4:45 p.m., some boys who were in the pool area informed a bather by the name of Andres Hagad, Jr., that somebody was swimming under water for quite a long time. Another boy informed lifeguard Manuel Abao of the same happening and Abao immediately jumped into the big swimming pool and retrieved the apparently lifeless body of Dominador Ong from the bottom. The body was placed at the edge of the pool and Abao immediately applied manual artificial respiration. Soon after, male nurse Armando Rule came to render assistance, followed by sanitary inspector

Iluminado Vicente who, after being called by phone from the clinic by one of the security guards, boarded a jeep carrying with him the resuscitator and a medicine kit, and upon arriving he injected the boy with camphorated oil. After the injection, Vicente left on a jeep in order to fetch Dr. Ayuyao from the University of the Philippines. Meanwhile, Abao continued the artificial manual respiration, and when this failed to revive him, they applied the resuscitator until the two oxygen tanks were exhausted. Not long thereafter, Dr. Ayuyao arrived with another resuscitator, but the same became of no use because he found the boy already dead. The doctor ordered that the body be taken to the clinic. In the evening of the same day, July 5, 1952, the incident was investigated by the Police Department of Quezon City and in the investigation boys Ruben Ong and Andres Hagad, Jr. gave written statements. On the following day, July 6, 1952, an autopsy was performed by Dr. Enrique V. de los Santos, Chief, Medico Legal Division, National Bureau of Investigation, who found in the body of the deceased the following: an abrasion on the right elbow lateral aspect; contusion on the right forehead; hematoma on the scalp, frontal region, right side; a congestion in the brain with petechial subcortical hemorrhage, frontal lobe; cyanosis on the face and on the nails; the lung was soggy with fine froth in the bronchioles; dark fluid blood in the heart; congestion in the visceral organs, and brownish fluid in the stomach. The death was due to asphyxia by submersion in water. The issue posed in this appeal is whether the death of minor Dominador Ong can be attributed to the negligence of defendant and/or its employees so as to entitle plaintiffs to recover damages. The present action is governed by Article 2176 in relation to Article 2080 of the new Civil Code. The first article provides that "whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damages done." Such fault or negligence is called quasi-delict. Under the second article, this obligation is demandable not only for one's own acts or omissions but also for those of persons for whom one is responsible. In addition, we may quote the following authorities cited in the decision of the trial court: "The rule is well settled that the owners of resorts to which people generally are expressly or by implication invited are legally bound to exercise ordinary care and prudence in the management and maintenance of such resorts, to the end of making them reasonably safe for visitors" (Larkin vs. Saltair Beach Co., 30 Utah 86, 83 Pac. 686). "Although the proprietor of a natatorium is liable for injuries to a patron, resulting from lack of ordinary care in providing for his safety, without the fault of the patron, he is not, however, in any sense deemed to be the insurer of the safety of patrons. And the death of a patron within his premises does not cast upon him the burden of excusing himself from any presumption of negligence" (Bertalot vs. Kinnare. 72 Ill. App. 52, 22 A. L. R. 635; Flora vs. Bimini Water Co., 161 Cal. 495, 119 Pac. 661). Thus in Bertalot vs. Kinnare, supra, it was held that there could be no recovery for the death by drowning of a fifteen-year boy in defendant's natatorium, where it appeared merely

Page 9 of 28

that he was lastly seen alive in water at the shallow end of the pool, and some ten or fifteen minutes later was discovered unconscious, and perhaps lifeless, at the bottom of the pool, all efforts to resuscitate him being without avail. Since the present action is one for damages founded on culpable negligence, the principle to be observed is that the person claiming damages has the burden of proving that the damage is caused by the fault or negligence of the person from whom the damage is claimed, or of one of his employees (Walter A. Smith & Co. vs. Cadwallader Gibson Lumber Co., 55 Phil., 517). The question then that arises is: Have appellants established by sufficient evidence the existence of fault or negligence on the part of appellee so as to render it liable for damages for the death of Dominador Ong? There is no question that appellants had striven to prove that appellee failed to take the necessary precaution to protect the lives of its patrons by not placing at the swimming pools efficient and competent employees who may render help at a moment's notice, and they ascribed such negligence to appellee because the lifeguard it had on the occasion minor Ong was drowning was not available or was attending to something else with the result that his help came late. Thus, appellants tried to prove through the testimony of Andres Hagad, Jr. and Ruben Ong that when Eusebio Ong and Hagad, Jr. detected that there was a drowning person in the bottom of the big swimming pool and shouted to the lifeguard for help, lifeguard Manuel Abao did not immediately respond to the alarm and it was only upon the third call that he threw away the magazine he was reading and allowed three or four minutes to elapse before retrieving the body from the water. This negligence of Abao, they contend, is attributable to appellee. But the claim of these two witnesses not only was vehemently denied by lifeguard Abao, but is belied by the written statements given by them in the investigation conducted by the Police Department of Quezon City approximately three hours after the happening of the accident. Thus, these two boys admitted in the investigation that they narrated in their statements everything they knew of the accident, but, as found by the trial, nowhere in said statements do they state that the lifeguard was chatting with the security guard at the gate of the swimming pool or was reading a comic magazine when the alarm was given for which reason he failed to immediately respond to the alarm. On the contrary, what Ruben Ong particularly emphasized therein was that after the lifeguard heard the shouts for help, the latter immediately dived into the pool to retrieve the person under water who turned out to be his brother. For this reason, the trial court made this conclusion: "The testimony of Ruben Ong and Andres Hagad, Jr. as to the alleged failure of the lifeguard Abao to immediately respond to their callmay therefore be disregarded because they are belied by their written statements. (Emphasis supplied.) On the other hand, there is sufficient evidence to show that appellee has taken all necessary precautions to avoid danger to the lives of its patrons or prevent accident which may cause their death. Thus, it has been shown that the swimming pools of appellee are provided with a ring buoy, toy roof, towing line, oxygen resuscitator and a first aid medicine kit. The bottom of the pools is painted with black colors so as to

insure clear visibility. There is on display in a conspicuous place within the area certain rules and regulations governing the use of the pools. Appellee employs six lifeguards who are all trained as they had taken a course for that purpose and were issued certificates of proficiency. These lifeguards work on schedule prepared by their chief and arranged in such a way as to have two guards at a time on duty to look after the safety of the bathers. There is a male nurse and a sanitary inspector with a clinic provided with oxygen resuscitator. And there are security guards who are available always in case of emergency. The record also shows that when the body of minor Ong was retrieved from the bottom of the pool, the employees of appellee did everything possible to bring him back to life. Thus, after he was placed at the edge of the pool, lifeguard Abao immediately gave him manual artificial respiration. Soon thereafter, nurse Armando Rule arrived, followed by sanitary inspector Iluminado Vicente who brought with him an oxygen resuscitator. When they found that the pulse of the boy was abnormal, the inspector immediately injected him with camphorated oil. When the manual artificial respiration proved ineffective they applied the oxygen resuscitator until its contents were exhausted. And while all these efforts were being made, they sent for Dr. Ayuyao from the University of the Philippines who however came late because upon examining the body he found him to be already dead. All of the foregoing shows that appellee has done what is humanly possible under the circumstances to restore life to minor Ong and for that reason it is unfair to hold it liable for his death. Sensing that their former theory as regards the liability of appellee may not be of much help, appellants now switch to the theory that even if it be assumed that the deceased is partly to be blamed for the unfortunate incident, still appellee may be held liable under the doctrine of "last clear chance" for the reason that, having the last opportunity to save the victim, it failed to do so. We do not see how this doctrine may apply considering that the record does not show how minor Ong came into the big swimming pool. The only thing the record discloses is that minor Ong informed his elder brothers that he was going to the locker room to drink a bottle of coke but that from that time on nobody knew what happened to him until his lifeless body was retrieved. The doctrine of last clear chance simply means that the negligence of a claimant does not preclude a recovery for the negligence of defendant where it appears that the latter, by exercising reasonable care and prudence, might have avoided injurious consequences to claimant notwithstanding his negligence. Or, "As the doctrine usually is stated, a person who has the last clear chance or opportunity of avoiding an accident, notwithstanding the negligent acts of his opponent or the negligence of a third person which is imputed to his opponent, is considered in law solely responsible for the consequences of the accident." (38 Am. Jur. pp. 900-902) It goes without saying that the plaintiff himself was not free from fault, for he was guilty of antecedent negligence in planting himself in the wrong side of the road. But as we have already stated, the defendant was also negligent; and in such case the problem always is to discover which agent is immediately and directly responsible. It

Page 10 of 28

will be noted that the negligent acts of the two parties were not contemporaneous, since the negligence of the defendant succeeded the negligence of the plaintiff by an appreciable interval. Under these circumstances, the law is that a person who has the last clear chance to avoid the impending harm and fails to do so is chargeable with the consequences, without reference to the prior negligence of the other party. (Picart vs. Smith, 37 Phil., 809) Since it is not known how minor Ong came into the big swimming pool and it being apparent that he went there without any companion in violation of one of the regulations of appellee as regards the use of the pools, and it appearing that lifeguard Aba__o responded to the call for help as soon as his attention was called to it and immediately after retrieving the body all efforts at the disposal of appellee had been put into play in order to bring him back to life, it is clear that there is no room for the application of the doctrine now invoked by appellants to impute liability to appellee.. The last clear chance doctrine can never apply where the party charged is required to act instantaneously, and if the injury cannot be avoided by the application of all means at hand after the peril is or should have been discovered; at least in cases in which any previous negligence of the party charged cannot be said to have contributed to the injury. O'Mally vs. Eagan, 77 ALR 582, 43 Wyo. 233, 350, 2, P2d 1063. (A.L.R. Digest, Vol. 8, pp. 955-956) Before closing, we wish to quote the following observation of the trial court, which we find supported by the evidence: "There is (also) a strong suggestion coming from the expert evidence presented by both parties that Dominador Ong might have dived where the water was only 5.5 feet deep, and in so doing he might have hit or bumped his forehead against the bottom of the pool, as a consequence of which he was stunned, and which to his drowning. As a boy scout he must have received instructions in swimming. He knew, or have known that it was dangerous for him to dive in that part of the pool." Wherefore, the decision appealed from being in accordance with law and the evidence, we hereby affirm the same, without pronouncement as to costs. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. L-51806 November 8, 1988 CIVIL AERONAUTICS ADMINISTRATION, petitioner, vs. COURT OF APPEALS and ERNEST E. SIMKE, respondents. The Solicitor General for petitioner. Ledesma, Guytingco, Veleasco & Associates for respondent Ernest E. Simke. CORTES, J.:

Assailed in this petition for review on certiorari is the decision of the Court of Appeals affirming the trial court decision which reads as follows: WHEREFORE, judgment is hereby rendered ordering defendant to pay plaintiff the amount of P15,589.55 as full reimbursement of his actual medical and hospital expenses, with interest at the legal rate from the commencement of the suit; the amount of P20,200.00 as consequential damages; the amount of P30,000.00 as moral damages; the amount of P40,000.00 as exemplary damages; the further amount of P20,000.00 as attorney's fees and the costs [Rollo, p. 24]. The facts of the case are as follows: Private respondent is a naturalized Filipino citizen and at the time of the incident was the Honorary Consul Geileral of Israel in the Philippines. In the afternoon of December 13, 1968, private respondent with several other persons went to the Manila International Airport to meet his future son-in-law. In order to get a better view of the incoming passengers, he and his group proceeded to the viewing deck or terrace of the airport. While walking on the terrace, then filled with other people, private respondent slipped over an elevation about four (4) inches high at the far end of the terrace. As a result, private respondent fell on his back and broke his thigh bone. The next day, December 14, 1968, private respondent was operated on for about three hours. Private respondent then filed an action for damages based on quasi-delict with the Court of First Instance of Rizal, Branch VII against petitioner Civil Aeronautics Administration or CAA as the entity empowered "to administer, operate, manage, control, maintain and develop the Manila International Airport ... ." [Sec. 32 (24), R.A. 776]. Said claim for damages included, aside from the medical and hospital bills, consequential damages for the expenses of two lawyers who had to go abroad in private respondent's stead to finalize certain business transactions and for the publication of notices announcing the postponement of private respondent's daughter's wedding which had to be cancelled because of his accident [Record on Appeal, p. 5]. Judgment was rendered in private respondent's favor prompting petitioner to appeal to the Court of Appeals. The latter affirmed the trial court's decision. Petitioner then filed with the same court a Motion for, Reconsideration but this was denied. Petitioner now comes before this Court raising the following assignment of errors: 1. The Court of Appeals gravely erred in not holding that the present the CAA is really a suit against the Republic of the Philippines which cannot be sued without its consent, which was not given in this case. 2. The Court of Appeals gravely erred in finding that the injuries of respondent Ernest E. Simke were due to petitioner's negligence although there was no substantial evidence to support such finding; and that the inference that the hump or elevation the surface of the floor area of the terrace of the fold) MIA building is dangerous just because said respondent tripped over it is manifestly mistaken circumstances that

Page 11 of 28

justify a review by this Honorable Court of the said finding of fact of respondent appellate court (Garcia v. Court of Appeals, 33 SCRA 622; Ramos v. CA, 63 SCRA 331.) 3. The Court of Appeals gravely erred in ordering petitioner to pay actual, consequential, moral and exemplary damages, as well as attorney's fees to respondent Simke although there was no substantial and competent proof to support said awards I Rollo, pp. 93-94 1. I Invoking the rule that the State cannot be sued without its consent, petitioner contends that being an agency of the government, it cannot be made a partydefendant in this case. This Court has already held otherwise in the case of National Airports Corporation v. Teodoro, Sr. [91 Phil. 203 (1952)]. Petitioner contends that the said ruling does not apply in this case because: First, in the Teodoro case, the CAA was sued only in a substituted capacity, the National Airports Corporation being the original party. Second, in the Teodoro case, the cause of action was contractual in nature while here, the cause of action is based on a quasi-delict. Third, there is no specific provision in Republic Act No. 776, the law governing the CAA, which would justify the conclusion that petitioner was organized for business and not for governmental purposes. [Rollo, pp. 94-97]. Such arguments are untenable. First, the Teodoro case, far from stressing the point that the CAA was only substituted for the National Airports Corporation, in fact treated the CAA as the real party in interest when it stated that: xxx xxx xxx ... To all legal intents and practical purposes, the National Airports Corporation is dead and the Civil Aeronautics Administration is its heir or legal representative, acting by the law of its creation upon its own rights and in its own name. The better practice there should have been to make the Civil Aeronautics Administration the third party defendant instead of the National Airports Corporation. [National Airports Corp. v. Teodoro, supra, p. 208.] xxx xxx xxx Second, the Teodoro case did not make any qualification or limitation as to whether or not the CAA's power to sue and be sued applies only to contractual obligations. The Court in the Teodoro case ruled that Sections 3 and 4 of Executive Order 365 confer upon the CAA, without any qualification, the power to sue and be sued, albeit only by implication. Accordingly, this Court's pronouncement that where such power to sue and be sued has been granted without any qualification, it can include a claim based on tort or quasi-delict [Rayo v. Court of First Instance of Bulacan, G.R. Nos. 55273-83, December 19,1981, 1 1 0 SCRA 4561 finds relevance and applicability to the present case. Third, it has already been settled in the Teodoro case that the CAA as an agency is not immune from suit, it being engaged in functions pertaining to a private entity. xxx xxx xxx

The Civil Aeronautics Administration comes under the category of a private entity. Although not a body corporate it was created, like the National Airports Corporation, not to maintain a necessary function of government, but to run what is essentially a business, even if revenues be not its prime objective but rather the promotion of travel and the convenience of the travelling public. It is engaged in an enterprise which, far from being the exclusive prerogative of state, may, more than the construction of public roads, be undertaken by private concerns. [National Airports Corp. v. Teodoro, supra, p. 207.] xxx xxx xxx True, the law prevailing in 1952 when the Teodoro case was promulgated was Exec. Order 365 (Reorganizing the Civil Aeronautics Administration and Abolishing the National Airports Corporation). Republic Act No. 776 (Civil Aeronautics Act of the Philippines), subsequently enacted on June 20, 1952, did not alter the character of the CAA's objectives under Exec, Order 365. The pertinent provisions cited in the Teodoro case, particularly Secs. 3 and 4 of Exec. Order 365, which led the Court to consider the CAA in the category of a private entity were retained substantially in Republic Act 776, Sec. 32 (24) and (25).<re||an1w> Said Act provides: Sec. 32. Powers and Duties of the Administrator. Subject to the general control and supervision of the Department Head, the Administrator shall have among others, the following powers and duties: xxx xxx xxx (24) To administer, operate, manage, control, maintain and develop the Manila International Airport and all government-owned aerodromes except those controlled or operated by the Armed Forces of the Philippines including such powers and duties as: (a) to plan, design, construct, equip, expand, improve, repair or alter aerodromes or such structures, improvement or air navigation facilities; (b) to enter into, make and execute contracts of any kind with any person, firm, or public or private corporation or entity; ... . (25) To determine, fix, impose, collect and receive landing fees, parking space fees, royalties on sales or deliveries, direct or indirect, to any aircraft for its use of aviation gasoline, oil and lubricants, spare parts, accessories and supplies, tools, other royalties, fees or rentals for the use of any of the property under its management and control. xxx xxx xxx From the foregoing, it can be seen that the CAA is tasked with private or nongovernmental functions which operate to remove it from the purview of the rule on State immunity from suit. For the correct rule as set forth in the Tedoro case states: xxx xxx xxx Not all government entities, whether corporate or non-corporate, are immune from suits. Immunity functions suits is determined by the character of the objects for which the entity was organized. The rule is thus stated in Corpus Juris: Suits against State agencies with relation to matters in which they have assumed to act in private or non-governmental capacity, and various suits against certain corporations created by the state for public purposes, but to engage in matters partaking more of

Page 12 of 28

the nature of ordinary business rather than functions of a governmental or political character, are not regarded as suits against the state. The latter is true, although the state may own stock or property of such a corporation for by engaging in business operations through a corporation, the state divests itself so far of its sovereign character, and by implication consents to suits against the corporation. (59 C.J., 313) [National Airport Corporation v. Teodoro, supra, pp. 206-207; Emphasis supplied.] This doctrine has been reaffirmed in the recent case of Malong v. Philippine National Railways [G.R. No. L-49930, August 7, 1985, 138 SCRA 631, where it was held that the Philippine National Railways, although owned and operated by the government, was not immune from suit as it does not exercise sovereign but purely proprietary and business functions. Accordingly, as the CAA was created to undertake the management of airport operations which primarily involve proprietary functions, it cannot avail of the immunity from suit accorded to government agencies performing strictly governmental functions. II Petitioner tries to escape liability on the ground that there was no basis for a finding of negligence. There can be no negligence on its part, it alleged, because the elevation in question "had a legitimate purpose for being on the terrace and was never intended to trip down people and injure them. It was there for no other purpose but to drain water on the floor area of the terrace" [Rollo, P. 99]. To determine whether or not the construction of the elevation was done in a negligent manner, the trial court conducted an ocular inspection of the premises. xxx xxx xxx ... This Court after its ocular inspection found the elevation shown in Exhs. A or 6-A where plaintiff slipped to be a step, a dangerous sliding step, and the proximate cause of plaintiffs injury... xxx xxx xxx This Court during its ocular inspection also observed the dangerous and defective condition of the open terrace which has remained unrepaired through the years. It has observed the lack of maintenance and upkeep of the MIA terrace, typical of many government buildings and offices. Aside from the litter allowed to accumulate in the terrace, pot holes cause by missing tiles remained unrepaired and unattented. The several elevations shown in the exhibits presented were verified by this Court during the ocular inspection it undertook. Among these elevations is the one (Exh. A) where plaintiff slipped. This Court also observed the other hazard, the slanting or sliding step (Exh. B) as one passes the entrance door leading to the terrace [Record on Appeal, U.S., pp. 56 and 59; Emphasis supplied.] The Court of Appeals further noted that: The inclination itself is an architectural anomaly for as stated by the said witness, it is neither a ramp because a ramp is an inclined surface in such a way that it will prevent people or pedestrians from sliding. But if, it is a step then it will not serve its purpose, for pedestrian purposes. (tsn, p. 35, Id.) [rollo, p. 29.]

These factual findings are binding and conclusive upon this Court. Hence, the CAA cannot disclaim its liability for the negligent construction of the elevation since under Republic Act No. 776, it was charged with the duty of planning, designing, constructing, equipping, expanding, improving, repairing or altering aerodromes or such structures, improvements or air navigation facilities [Section 32, supra, R.A. 776]. In the discharge of this obligation, the CAA is duty-bound to exercise due diligence in overseeing the construction and maintenance of the viewing deck or terrace of the airport. It must be borne in mind that pursuant to Article 1173 of the Civil Code, "(t)he fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the person, of the time and of the place." Here, the obligation of the CAA in maintaining the viewing deck, a facility open to the public, requires that CAA insure the safety of the viewers using it. As these people come to the viewing deck to watch the planes and passengers, their tendency would be to look to where the planes and the incoming passengers are and not to look down on the floor or pavement of the viewing deck. The CAA should have thus made sure that no dangerous obstructions or elevations exist on the floor of the deck to prevent any undue harm to the public. The legal foundation of CAA's liability for quasi-delict can be found in Article 2176 of the Civil Code which provides that "(w)hoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done... As the CAA knew of the existence of the dangerous elevation which it claims though, was made precisely in accordance with the plans and specifications of the building for proper drainage of the open terrace [See Record on Appeal, pp. 13 and 57; Rollo, p. 391, its failure to have it repaired or altered in order to eliminate the existing hazard constitutes such negligence as to warrant a finding of liability based on quasi-delict upon CAA. The Court finds the contention that private respondent was, at the very least, guilty of contributory negligence, thus reducing the damages that plaintiff may recover, unmeritorious. Contributory negligence under Article 2179 of the Civil Code contemplates a negligent act or omission on the part of the plaintiff, which although not the proximate cause of his injury, contributed to his own damage, the proximate cause of the plaintiffs own injury being the defendant's lack of due care. In the instant case, no contributory negligence can be imputed to the private respondent, considering the following test formulated in the early case of Picart v. Smith, 37 Phil. 809 (1918): The test by which to determine the existence of negligence in a particular case may be stated as follows: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent man would have used in the same situation? If not, then he is guilty of negligence. The law here in effect adopts the standard supposed to be supplied by the imaginary conduct of the discreet paterfamilias of the Roman law. The existence of the negligence in a given case is not determined by reference to the personal judgment of the actor in the situation before him. The law considers what would be reckless, blameworthy, or

Page 13 of 28

negligent in the man of ordinary intelligence and prudence and determines liability by that. The question as to what would constitute the conduct of a prudent man in a given situation must of course be always determined in the light of human experience and in view of the facts involved in the particular case. Abstract speculations cannot be here of much value but this much can be profitably said: Reasonable men-overn their conduct by the circumstances which are before them or known to them. They are not, and are not supposed to be omniscient of the future. Hence they can be expected to take care only when there is something before them to suggest or warn of danger. Could a prudent man, in the case under consideration, foresee harm as a result of the course actually pursued' If so, it was the duty of the actor to take precautions to guard against that harm. Reasonable foresight of harm, followed by the ignoring of the suggestion born of this prevision, is always necessary before negligence can be held to exist.... [Picart v. Smith, supra, p. 813; Emphasis supplied.] The private respondent, who was the plaintiff in the case before the lower court, could not have reasonably foreseen the harm that would befall him, considering the attendant factual circumstances. Even if the private respondent had been looking where he was going, the step in question could not easily be noticed because of its construction. As the trial court found: In connection with the incident testified to, a sketch, Exhibit O, shows a section of the floorings oil which plaintiff had tripped, This sketch reveals two pavements adjoining each other, one being elevated by four and one-fourth inches than the other. From the architectural standpoint the higher, pavement is a step. However, unlike a step commonly seen around, the edge of the elevated pavement slanted outward as one walks to one interior of the terrace. The length of the inclination between the edges of the two pavements is three inches. Obviously, plaintiff had stepped on the inclination because had his foot landed on the lower pavement he would not have lost his balance. The same sketch shows that both pavements including the inclined portion are tiled in red cement, and as shown by the photograph Exhibit A, the lines of the tilings are continuous. It would therefore be difficult for a pedestrian to see the inclination especially where there are plenty of persons in the terrace as was the situation when plaintiff fell down. There was no warning sign to direct one's attention to the change in the elevation of the floorings. [Rollo, pp. 2829.] III Finally, petitioner appeals to this Court the award of damages to private respondent. The liability of CAA to answer for damages, whether actual, moral or exemplary, cannot be seriously doubted in view of one conferment of the power to sue and be sued upon it, which, as held in the case of Rayo v. Court of First Instance, supra, includes liability on a claim for quasi-dilict. In the aforestated case, the liability of the National Power Corporation to answer for damages resulting from its act of sudden, precipitate and simultaneous opening of the Angat Dam, which caused the death of several residents of the area and the destruction of properties, was upheld since the

o,rant of the power to sue and be sued upon it necessarily implies that it can be held answerable for its tortious acts or any wrongful act for that matter. With respect to actual or compensatory damages, the law mandates that the same be proven. Art. 2199. Except as provided by law or by stipulation, one are entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. Such compensation is referred to as actual on compensatory damages [New Civil Code]. Private respondent claims P15,589.55 representing medical and hospitalization bills. This Court finds the same to have been duly proven through the testimony of Dr. Ambrosio Tangco, the physician who attended to private respondent (Rollo, p. 26) and who Identified Exh. "H" which was his bill for professional services [Rollo, p. 31]. Concerning the P20,200.00 alleged to have been spent for other expenses such as the transportation of the two lawyers who had to represent private respondent abroad and the publication of the postponement notices of the wedding, the Court holds that the same had also been duly proven. Private respondent had adequately shown the existence of such losses and the amount thereof in the testimonies before the trial court [CA decision, p. 81. At any rate, the findings of the Court of Appeals with respect to this are findings of facts [One Heart Sporting Club, Inc. v. Court of Appeals, G.R. Nos. 5379053972, Oct. 23, 1981, 108 SCRA 4161 which, as had been held time and again, are, as a general rule, conclusive before this Court [Sese v. Intermediate Appellate Court, G.R. No. 66186, July 31, 1987,152 SCRA 585]. With respect to the P30,000.00 awarded as moral damages, the Court holds private respondent entitled thereto because of the physical suffering and physical injuries caused by the negligence of the CAA [Arts. 2217 and 2219 (2), New Civil Code]. With respect to the award of exemplary damages, the Civil Code explicitly, states: Art. 2229. Exemplary or corrective damages, are imposed, by way of example or correction for the public good, in addition to the moral, liquidated or compensatory Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence. Gross negligence which, according to the Court, is equivalent to the term "notorious negligence" and consists in the failure to exercise even slight care [Caunan v. Compania General de Tabacos, 56 Phil. 542 (1932)] can be attributed to the CAA for its failure to remedy the dangerous condition of the questioned elevation or to even post a warning sign directing the attention of the viewers to the change in the elevation of the floorings notwithstanding its knowledge of the hazard posed by such elevation [Rollo, pp. 28-29; Record oil Appeal, p. 57]. The wanton disregard by the CAA of the safety of the people using the viewing deck, who are charged an admission fee, including the petitioner who paid the entrance fees to get inside the vantage place [CA decision, p. 2; Rollo, p. 25] and are, therefore, entitled to expect a facility that is properly and safely maintained justifies the award of exemplary damages against the CAA, as a deterrent and by way of example or correction for the public good. The award of P40,000.00 by the trial court as exemplary damages appropriately underscores the point that as an entity changed with providing service to the public, the CAA. like all

Page 14 of 28

other entities serving the public. has the obligation to provide the public with reasonably safe service. Finally, the award of attorney's fees is also upheld considering that under Art. 2208 (1) of the Civil Code, the same may be awarded whenever exemplary damages are awarded, as in this case, and,at any rate, under Art. 2208 (11), the Court has the discretion to grant the same when it is just and equitable. However, since the Manila International Airport Authority (MIAA) has taken over the management and operations of the Manila International Airport [renamed Ninoy Aquino International Airport under Republic Act No. 6639] pursuant to Executive Order No. 778 as amended by executive Orders Nos. 903 (1983), 909 (1983) and 298 (1987) and under Section 24 of the said Exec. Order 778, the MIAA has assumed all the debts, liabilities and obligations of the now defunct Civil Aeronautics Administration (CAA), the liabilities of the CAA have now been transferred to the MIAA. WHEREFORE, finding no reversible error, the Petition for review on certiorari is DENIED and the decision of the Court of Appeals in CA-G.R. No. 51172-R is AFFIRMED. SO ORDERED. Fernan, C.J., Gutierrez, Jr., Feliciano and Bidin, JJ., concur. SECOND DIVISION [G.R. No. 119602. October 6, 2000] WILDVALLEY SHIPPING CO., LTD. petitioner, vs. COURT OF APPEALS and PHILIPPINE PRESIDENT LINES INC., respondents. DECISION BUENA, J.: This is a petition for review on certiorari seeking to set aside the decision of the Court of Appeals which reversed the decision of the lower court in CA-G.R. CV No. 36821, entitled "Wildvalley Shipping Co., Ltd., plaintiff-appellant, versus Philippine President Lines, Inc., defendant-appellant." The antecedent facts of the case are as follows: Sometime in February 1988, the Philippine Roxas, a vessel owned by Philippine President Lines, Inc., private respondent herein, arrived in Puerto Ordaz, Venezuela, to load iron ore. Upon the completion of the loading and when the vessel was ready to leave port, Mr. Ezzar del Valle Solarzano Vasquez, an official pilot of Venezuela, was designated by the harbour authorities in Puerto Ordaz to navigate the Philippine Roxas [1] through the Orinoco River. He was asked to pilot the said vessel on February 11, [2] [3] 1988 boarding it that night at 11:00 p.m. The master (captain) of the Philippine Roxas, Captain Nicandro Colon, was at the bridge together with the pilot (Vasquez), the vessel's third mate (then the officer on watch), [4] and a helmsman when the vessel left the port at 1:40 a.m. on February 12, [5] [6] 1988. Captain Colon left the bridge when the vessel was under way. The Philippine Roxas experienced some vibrations when it entered the San Roque [7] Channel at mile 172. The vessel proceeded on its way, with the pilot assuring the [8] watch officer that the vibration was a result of the shallowness of the channel.

Between mile 158 and 157, the vessel again experienced some vibrations. These [10] occurred at 4:12 a.m. It was then that the watch officer called the master to the [11] bridge. [12] The master (captain) checked the position of the vessel and verified that it was in [13] the centre of the channel. He then went to confirm, or set down, the position of the [14] vessel on the chart. He ordered Simplicio A. Monis, Chief Officer of the President [15] Roxas, to check all the double bottom tanks. [16] At around 4:35 a.m., the Philippine Roxas ran aground in the Orinoco River, thus obstructing the ingress and egress of vessels. As a result of the blockage, the Malandrinon, a vessel owned by herein petitioner Wildvalley Shipping Company, Ltd., was unable to sail out of Puerto Ordaz on that day. Subsequently, Wildvalley Shipping Company, Ltd. filed a suit with the Regional Trial Court of Manila, Branch III against Philippine President Lines, Inc. and Pioneer Insurance Company (the underwriter/insurer of Philippine Roxas) for damages in the form of unearned profits, and interest thereon amounting to US $400,000.00 plus attorney's fees, costs, and expenses of litigation. The complaint against Pioneer [17] Insurance Company was dismissed in an Order dated November 7, 1988. At the pre-trial conference, the parties agreed on the following facts: "1. The jurisdictional facts, as specified in their respective pleadings; "2. That defendant PPL was the owner of the vessel Philippine Roxas at the time of the incident; "3. That defendant Pioneer Insurance was the insurance underwriter for defendant PPL; "4. That plaintiff Wildvalley Shipping Co., Inc. is the owner of the vessel Malandrinon, whose passage was obstructed by the vessel Philippine Roxas at Puerto Ordaz, Venezuela, as specified in par. 4, page 2 of the complaint; "5. That on February 12, 1988, while the Philippine Roxas was navigating the channel at Puerto Ordaz, the said vessel grounded and as a result, obstructed navigation at the channel; "6. That the Orinoco River in Puerto Ordaz is a compulsory pilotage channel; "7. That at the time of the incident, the vessel, Philippine Roxas, was under the command of the pilot Ezzar Solarzano, assigned by the government thereat, but plaintiff claims that it is under the command of the master; "8. The plaintiff filed a case in Middleburg, Holland which is related to the present case; "9. The plaintiff caused the arrest of the Philippine Collier, a vessel owned by the defendant PPL; "10. The Orinoco River is 150 miles long and it takes approximately 12 hours to navigate out of the said river; "11. That no security for the plaintiff's claim was given until after the Philippine Collier was arrested; and "12. That a letter of guarantee, dated 12-May-88 was issued by the Steamship Mutual [18] Underwriters Ltd."

[9]

Page 15 of 28

The trial court rendered its decision on October 16, 1991 in favor of the petitioner, Wildvalley Shipping Co., Ltd. The dispositive portion thereof reads as follows: "WHEREFORE, judgment is rendered for the plaintiff, ordering defendant Philippine President Lines, Inc. to pay to the plaintiff the sum of U.S. $259,243.43, as actual and compensatory damages, and U.S. $162,031.53, as expenses incurred abroad for its foreign lawyers, plus additional sum of U.S. $22,000.00, as and for attorney's fees of plaintiff's local lawyer, and to pay the cost of this suit. "Defendant's counterclaim is dismissed for lack of merit. [19] "SO ORDERED." Both parties appealed: the petitioner appealing the non-award of interest with the private respondent questioning the decision on the merits of the case. After the requisite pleadings had been filed, the Court of Appeals came out with its [20] questioned decision dated June 14, 1994, the dispositive portion of which reads as follows: "WHEREFORE, finding defendant-appellant's appeal to be meritorious, judgment is hereby rendered reversing the Decision of the lower court. Plaintiff-appellant's Complaint is dismissed and it is ordered to pay defendant-appellant the amount of Three Hundred Twenty-three Thousand, Forty-two Pesos and Fifty-three Centavos (P323,042.53) as and for attorney's fees plus cost of suit. Plaintiff-appellant's appeal is DISMISSED. [21] "SO ORDERED." [22] Petitioner filed a motion for reconsideration but the same was denied for lack of [23] merit in the resolution dated March 29, 1995. Hence, this petition. The petitioner assigns the following errors to the court a quo: 1. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT UNDER PHILIPPINE LAW NO FAULT OR NEGLIGENCE CAN BE ATTRIBUTED TO THE MASTER NOR THE OWNER OF THE "PHILIPPINE ROXAS" FOR THE GROUNDING OF SAID VESSEL RESULTING IN THE BLOCKAGE OF THE RIO ORINOCO; 2. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE FINDINGS OF FACTS OF THE TRIAL COURT CONTRARY TO EVIDENCE; 3. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT THE "PHILIPPINE ROXAS" IS SEAWORTHY; 4. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN DISREGARDING VENEZUELAN LAW DESPITE THE FACT THAT THE SAME HAS BEEN SUBSTANTIALLY PROVED IN THE TRIAL COURT WITHOUT ANY OBJECTION FROM PRIVATE RESPONDENT, AND WHOSE OBJECTION WAS INTERPOSED BELATEDLY ON APPEAL; 5. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN AWARDING ATTORNEY'S FEES AND COSTS TO PRIVATE RESPONDENT WITHOUT ANY FAIR OR REASONABLE BASIS WHATSOEVER; 6. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN NOT FINDING THAT PETITIONER'S CAUSE IS MERITORIOUS HENCE, PETITIONER SHOULD BE ENTITLED TO ATTORNEY'S FEES, COSTS AND INTEREST.

The petition is without merit. The primary issue to be determined is whether or not Venezuelan law is applicable to the case at bar. It is well-settled that foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to take judicial notice of them.Like any other fact, they must [24] be alleged and proved. A distinction is to be made as to the manner of proving a written and an unwritten law. The former falls under Section 24, Rule 132 of the Rules of Court, as amended, the entire provision of which is quoted hereunder. Where the foreign law sought to be proved is "unwritten," the oral testimony of expert witnesses is admissible, as are printed and published books of reports of decisions of the courts of the country [25] concerned if proved to be commonly admitted in such courts. Section 24 of Rule 132 of the Rules of Court, as amended, provides: "Sec. 24. Proof of official record. -- The record of public documents referred to in paragraph (a) of Section 19, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. If the office in which the record is kept is in a foreign country, the certificate may be made by a secretary of the embassy or legation, consul general, consul, vice consul, or consular agent or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of his office." (Underscoring supplied) The court has interpreted Section 25 (now Section 24) to include competent evidence [26] like the testimony of a witness to prove the existence of a written foreign law. [27] In the noted case of Willamette Iron & Steel Works vs. Muzzal, it was held that: " Mr. Arthur W. Bolton, an attorney-at-law of San Francisco, California, since the year 1918 under oath, quoted verbatim section 322 of the California Civil Code and stated that said section was in force at the time the obligations of defendant to the plaintiff were incurred, i.e. on November 5, 1928 and December 22, 1928. This evidence sufficiently established the fact that the section in question was the law of the State of California on the above dates. A reading of sections 300 and 301 of our Code of Civil Procedure will convince one that these sections do not exclude the presentation of other competent evidence to prove the existence of a foreign law. "`The foreign law is a matter of fact You ask the witness what the law is; he may, from his recollection, or on producing and referring to books, say what it is.' (Lord Campbell concurring in an opinion of Lord Chief Justice Denman in a well-known English case where a witness was called upon to prove the Roman laws of marriage and was permitted to testify, though he referred to a book containing the decrees of the Council of Trent as controlling, Jones on Evidence, Second Edition, Volume 4, pages 3148-3152.) x x x. We do not dispute the competency of Capt. Oscar Leon Monzon, the Assistant Harbor [28] Master and Chief of Pilots at Puerto Ordaz, Venezuela, to testify on the existence of

Page 16 of 28

the Reglamento General de la Ley de Pilotaje (pilotage law of Venezuela) and o the Reglamento Para la Zona de Pilotaje N 1 del Orinoco (rules governing the navigation of the Orinoco River). Captain Monzon has held the aforementioned posts [30] for eight years. As such he is in charge of designating the pilots for maneuvering and navigating the Orinoco River. He is also in charge of the documents that come into the [31] office of the harbour masters. Nevertheless, we take note that these written laws were not proven in the manner provided by Section 24 of Rule 132 of the Rules of Court. [32] The Reglamento General de la Ley de Pilotaje was published in the Gaceta Oficial of the Republic of Venezuela. A photocopy of theGaceta Oficial was presented in evidence as an official publication of the Republic of Venezuela. o The Reglamento Para la Zona de Pilotaje N 1 del Orinoco is published in a book issued [33] by the Ministerio de Comunicaciones of Venezuela. Only a photocopy of the said rules was likewise presented as evidence. Both of these documents are considered in Philippine jurisprudence to be public documents for they are the written official acts, or records of the official acts of the [34] sovereign authority, official bodies and tribunals, and public officers of Venezuela. For a copy of a foreign public document to be admissible, the following requisites are mandatory: (1) It must be attested by the officer having legal custody of the records or by his deputy; and (2) It must be accompanied by a certificate by a secretary of the embassy or legation, consul general, consul, vice consular or consular agent or foreign [35] service officer, and with the seal of his office. The latter requirement is not a mere technicality but is intended to justify the giving of full faith and credit to the [36] genuineness of a document in a foreign country. It is not enough that the Gaceta Oficial, or a book published by the Ministerio de Comunicaciones of Venezuela, was presented as evidence with Captain Monzon attesting it. It is also required by Section 24 of Rule 132 of the Rules of Court that a certificate that Captain Monzon, who attested the documents, is the officer who had legal custody of those records made by a secretary of the embassy or legation, consul general, consul, vice consul or consular agent or by any officer in the foreign service of the Philippines stationed in Venezuela, and authenticated by the seal of his office accompanying the copy of the public document. No such certificate could be found in the records of the case. With respect to proof of written laws, parol proof is objectionable, for the written law itself is the best evidence. According to the weight of authority, when a foreign statute is involved, the best evidence rule requires that it be proved by a duly authenticated [37] copy of the statute. At this juncture, we have to point out that the Venezuelan law was not pleaded before the lower court. A foreign law is considered to be pleaded if there is an allegation in the pleading about the existence of the foreign law, its import and legal consequence on the event or [38] transaction in issue.

[29]

A review of the Complaint revealed that it was never alleged or invoked despite the fact that the grounding of the M/V Philippine Roxas occurred within the territorial jurisdiction of Venezuela. We reiterate that under the rules of private international law, a foreign law must be properly pleaded and proved as a fact. In the absence of pleading and proof, the laws of a foreign country, or state, will be presumed to be the same as our own local or [40] domestic law and this is known as processual presumption. Having cleared this point, we now proceed to a thorough study of the errors assigned by the petitioner. Petitioner alleges that there was negligence on the part of the private respondent that would warrant the award of damages. There being no contractual obligation, the private respondent is obliged to give only the diligence required of a good father of a family in accordance with the provisions of Article 1173 of the New Civil Code, thus: Art. 1173. The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place. When negligence shows bad faith, the provisions of articles 1171 and 2201, paragraph 2, shall apply. If the law or contract does not state the diligence which is to be observed in the performance, that which is expected of a good father of a family shall be required. The diligence of a good father of a family requires only that diligence which an ordinary prudent man would exercise with regard to his own property. This we have found private respondent to have exercised when the vessel sailed only after the "main engine, machineries, and other auxiliaries" were checked and found to be in good [41] running condition; when the master left a competent officer, the officer on watch on the bridge with a pilot who is experienced in navigating the Orinoco River; when the master ordered the inspection of the vessel's double bottom tanks when the vibrations [42] occurred anew. The Philippine rules on pilotage, embodied in Philippine Ports Authority Administrative Order No. 03-85, otherwise known as the Rules and Regulations Governing Pilotage Services, the Conduct of Pilots and Pilotage Fees in Philippine Ports enunciate the duties and responsibilities of a master of a vessel and its pilot, among other things. The pertinent provisions of the said administrative order governing these persons are quoted hereunder: Sec. 11. Control of Vessels and Liability for Damage. -- On compulsory pilotage grounds, the Harbor Pilot providing the service to a vessel shall be responsible for the damage caused to a vessel or to life and property at ports due to his negligence or fault. He can be absolved from liability if the accident is caused by force majeure or natural calamities provided he has exercised prudence and extra diligence to prevent or minimize the damage. The Master shall retain overall command of the vessel even on pilotage grounds whereby he can countermand or overrule the order or command of the Harbor Pilot on board. In such event, any damage caused to a vessel or to life and property at ports by

[39]

Page 17 of 28

reason of the fault or negligence of the Master shall be the responsibility and liability of the registered owner of the vessel concerned without prejudice to recourse against said Master. Such liability of the owner or Master of the vessel or its pilots shall be determined by competent authority in appropriate proceedings in the light of the facts and circumstances of each particular case. x x x Sec. 32. Duties and Responsibilities of the Pilots or Pilots Association. -- The duties and responsibilities of the Harbor Pilot shall be as follows: x x x f) A pilot shall be held responsible for the direction of a vessel from the time he assumes his work as a pilot thereof until he leaves it anchored or berthed safely; Provided, however, that his responsibility shall cease at the moment the Master neglects or refuses to carry out his order." The Code of Commerce likewise provides for the obligations expected of a captain of a vessel, to wit: Art. 612. The following obligations shall be inherent in the office of captain: x x x "7. To be on deck on reaching land and to take command on entering and leaving ports, canals, roadsteads, and rivers, unless there is a pilot on board discharging his duties. x x x. The law is very explicit. The master remains the overall commander of the vessel even when there is a pilot on board. He remains in control of the ship as he can still perform [43] the duties conferred upon him by law despite the presence of a pilot who is temporarily in charge of the vessel. It is not required of him to be on the bridge while the vessel is being navigated by a pilot. However, Section 8 of PPA Administrative Order No. 03-85, provides: Sec. 8. Compulsory Pilotage Service - For entering a harbor and anchoring thereat, or passing through rivers or straits within a pilotage district, as well as docking and undocking at any pier/wharf, or shifting from one berth or another, every vessel engaged in coastwise and foreign trade shall be under compulsory pilotage. xxx. The Orinoco River being a compulsory pilotage channel necessitated the engaging of a pilot who was presumed to be knowledgeable of every shoal, bank, deep and shallow ends of the river. In his deposition, pilot Ezzar Solarzano Vasquez testified that he is an [44] official pilot in the Harbour at Port Ordaz, Venezuela, and that he had been a pilot [45] for twelve (12) years. He also had experience in navigating the waters of the Orinoco [46] River. The law does provide that the master can countermand or overrule the order or command of the harbor pilot on board. The master of the Philippine Roxas deemed it [47] best not to order him (the pilot) to stop the vessel, mayhap, because the latter had assured him that they were navigating normally before the grounding of the [48] vessel. Moreover, the pilot had admitted that on account of his experience he was

very familiar with the configuration of the river as well as the course headings, and that [49] he does not even refer to river charts when navigating the Orinoco River. Based on these declarations, it comes as no surprise to us that the master chose not to regain control of the ship. Admitting his limited knowledge of the Orinoco River, Captain Colon relied on the knowledge and experience of pilot Vasquez to guide the vessel safely. Licensed pilots, enjoying the emoluments of compulsory pilotage, are in a different class from ordinary employees, for they assume to have a skill and a knowledge of navigation in the particular waters over which their licenses extend superior to that of the master; pilots are bound to use due diligence and reasonable care and skill. A pilot's ordinary skill is in proportion to the pilot's responsibilities, and implies a knowledge and observance of the usual rules of navigation, acquaintance with the waters piloted in their ordinary condition, and nautical skill in avoiding all known obstructions. The character of the skill and knowledge required of a pilot in charge of a vessel on the rivers of a country is very different from that which enables a navigator to carry a vessel safely in the ocean. On the ocean, a knowledge of the rules of navigation, with charts that disclose the places of hidden rocks, dangerous shores, or other dangers of the way, are the main elements of a pilot's knowledge and skill. But the pilot of a river vessel, like the harbor pilot, is selected for the individual's personal [50] knowledge of the topography through which the vessel is steered." We find that the grounding of the vessel is attributable to the pilot. When the vibrations were first felt the watch officer asked him what was going on, and pilot Vasquez replied that "(they) were in the middle of the channel and that the vibration [51] was as (sic) a result of the shallowness of the channel." Pilot Ezzar Solarzano Vasquez was assigned to pilot the vessel Philippine Roxas as well as other vessels on the Orinoco River due to his knowledge of the same. In his experience as a pilot, he should have been aware of the portions which are shallow and which are not. His failure to determine the depth of the said river and his decision to plod on his set course, in all probability, caused damage to the vessel. Thus, we hold him as negligent and liable for its grounding. In the case of Homer Ramsdell Transportation Company vs. La Compagnie Generale Transatlantique, 182 U.S. 406, it was held that: x x x The master of a ship, and the owner also, is liable for any injury done by the negligence of the crew employed in the ship. The same doctrine will apply to the case of a pilot employed by the master or owner, by whose negligence any injury happens to a third person or his property: as, for example, by a collision with another ship, occasioned by his negligence. And it will make no difference in the case that the pilot, if any is employed, is required to be a licensed pilot; provided the master is at liberty to take a pilot, or not, at his pleasure, for in such a case the master acts voluntarily, although he is necessarily required to select from a particular class. On the other hand, if it is compulsive upon the master to take a pilot, and, a fortiori, if he is bound to do so under penalty, then, and in such case, neither he nor the owner will be liable for injuries occasioned by the negligence of the pilot; for in such a case the pilot

Page 18 of 28

cannot be deemed properly the servant of the master or the owner, but is forced upon them, and the maxim Qui facit per alium facit per se does not apply." (Underscoring supplied) [52] Anent the river passage plan, we find that, while there was none, the voyage has been sufficiently planned and monitored as shown by the following actions undertaken by the pilot, Ezzar Solarzano Vasquez, to wit: contacting the radio marina via VHF for [53] information regarding the channel, river traffic, soundings of the river, depth of the [54] [55] river, bulletin on the buoys. The officer on watch also monitored the voyage. We, therefore, do not find the absence of a river passage plan to be the cause for the grounding of the vessel. The doctrine of res ipsa loquitur does not apply to the case at bar because the circumstances surrounding the injury do not clearly indicate negligence on the part of the private respondent. For the said doctrine to apply, the following conditions must be met: (1) the accident was of such character as to warrant an inference that it would not have happened except for defendant's negligence; (2) the accident must have been caused by an agency or instrumentality within the exclusive management or control of the person charged with the negligence complained of; and (3) the accident must not have been due to any voluntary action or contribution on the part of the person [56] injured. As has already been held above, there was a temporary shift of control over the ship from the master of the vessel to the pilot on a compulsory pilotage channel. Thus, two of the requisites necessary for the doctrine to apply, i.e., negligence and control, to render the respondent liable, are absent. As to the claim that the ship was unseaworthy, we hold that it is not. The Lloyds Register of Shipping confirmed the vessels seaworthiness in a Confirmation of Class issued on February 16, 1988 by finding that "the above named ship (Philippine Roxas) maintained the class "+100A1 Strengthened for Ore Cargoes, Nos. 2 and 8 Holds may be empty (CC) and +LMC" from 31/12/87 up until the time of casualty on or about [57] 12/2/88." The same would not have been issued had not the vessel been built according to the standards set by Lloyd's. Samuel Lim, a marine surveyor, at Lloyd's Register of Shipping testified thus: "Q Now, in your opinion, as a surveyor, did top side tank have any bearing at all to the seaworthiness of the vessel? "A Well, judging on this particular vessel, and also basing on the class record of the vessel, wherein recommendations were made on the top side tank, and it was given sufficient time to be repaired, it means that the vessel is fit to travel even with those defects on the ship. "COURT What do you mean by that? You explain. The vessel is fit to travel even with defects? Is that what you mean? Explain. "WITNESS

"A Yes, your Honor. Because the class society which register (sic) is the third party looking into the condition of the vessel and as far as their record states, the vessel was class or maintained, and she is fit to travel during that voyage." x x x "ATTY. MISA Before we proceed to other matter, will you kindly tell us what is (sic) the 'class +100A1 Strengthened for Ore Cargoes', mean? "WITNESS "A Plus 100A1 means that the vessel was built according to Lloyd's rules and she is capable of carrying ore bulk cargoes, but she is particularly capable of carrying Ore Cargoes with No. 2 and No. 8 holds empty. x x x "COURT The vessel is classed, meaning? [58] "A Meaning she is fit to travel, your Honor, or seaworthy." It is not required that the vessel must be perfect. To be seaworthy, a ship must be reasonably fit to perform the services, and to encounter the ordinary perils of the [59] voyage, contemplated by the parties to the policy. As further evidence that the vessel was seaworthy, we quote the deposition of pilot Vasquez: "Q Was there any instance when your orders or directions were not complied with because of the inability of the vessel to do so? "A No. "Q. Was the vessel able to respond to all your commands and orders? [60] "A. The vessel was navigating normally. Eduardo P. Mata, Second Engineer of the Philippine Roxas submitted an accident report wherein he stated that on February 11, 1988, he checked and prepared the main engine, machineries and all other auxiliaries and found them all to be in good running condition and ready for maneuvering. That same day the main engine, bridge [61] and engine telegraph and steering gear motor were also tested. Engineer Mata also prepared the fuel for consumption for maneuvering and checked the engine [62] generators. Finally, we find the award of attorneys fee justified. Article 2208 of the New Civil Code provides that: "Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except: x x x "(11) In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered. x x x Due to the unfounded filing of this case, the private respondent was unjustifiably forced to litigate, thus the award of attorneys fees was proper.

Page 19 of 28

WHEREFORE, IN VIEW OF THE FOREGOING, the petition is DENIED and the decision of the Court of Appeals in CA G.R. CV No. 36821 is AFFIRMED. SO ORDERED. Bellosillo, (Chairman), Mendoza, Quisumbing, and De leon, Jr., JJ., concur. FIRST DIVISION G.R. No. 144785. September 11, 2003] YOLANDA GARCIA, Petitioner, vs. PEOPLE OF THE PHILIPPINES respondent. DECISION YNARES-SANTIAGO, J.: This is an appeal from the decision[1 dated August 30, 2000 of the Court of Appeals in CA-G.R. CR No. 22771 affirming in toto the decision of the Regional Trial Court, Branch 43 of Manila which found petitioner Yolanda Garcia guilty beyond reasonable doubt of the crime of estafa, and sentenced her to suffer the penalty of imprisonment ranging from six (6) years and one (1) day to ten (10) years and one (1) day of prision mayor, to indemnify the complainant in the amount of P87,000.00, and to pay the costs. Petitioner Yolanda Garcia was charged with estafa in an information which reads: That on or about and during the period comprised between June 20, 1995, and August 15, 1995, inclusive, in the City of Manila, Philippines, the said accused did then and there willfully, unlawfully and feloniously defraud one DOLORES S. APOLONIO in the following manner, to wit: the said accused by means of false manifestations and fraudulent representations which she made to said DOLORES S. APOLONIO to the effect that accused has three (3) checks which according to her have sufficient funds and if encashed, the same will not be dishonored; and by means of other deceits of similar import, induced and succeeded in inducing the said DOLORES S. APOLONIO to accept the following checks: Name of Bank Check No. Amount Date Payable to Phil Natl Bank 046884 P28,000.00 6-20-95 Cash -do- 047416 34,000.00 8-15-95 -doPilipinas Bank 60042087 25,000.00 7-25-95 Garcia Vegetable Dealer as payments of assorted vegetables which accused purchased and received from said DOLORES S. APOLONIO in the total amount of P87,000.00, said accused knowing fully well that the said manifestations and representations were all false and untrue as said checks when presented to the bank for payment were all dishonored for the reason Drawn Against Insufficient Funds, and were made solely for the purpose of obtaining, as in fact she did obtain assorted vegetables in the amount of P87,000.00; which once in her possession and with intent to defraud, she willfully, unlawfully and feloniously misappropriated, misapplied and converted the said assorted vegetables or the value thereof to her own personal use and benefit, to the damage and prejudice of the said owner in the aforesaid amount of P87,000.00, Philippine Currency. CONTRARY TO LAW.[2 Petitioner pleaded not guilty when arraigned. Trial on the merits then ensued.

For more than a year, petitioner had been buying assorted vegetables from Dolores Apolonio in Divisoria, Manila. Petitioner always paid in cash. However, in May 1995, petitioner thrice bought vegetables from Apolonio using three checks: one postdated June 20, 1995 for P28,000.00, drawn by her husband, Manuel Garcia; the second postdated July 25, 1995 for P34,000.00, drawn by her daughter Gigi Garcia; and the third postdated August 15, 1995 for P25,000.00, drawn by her nephew Jose Nadongga Jr. When the three checks were presented for payment, they were all dishonored for insufficiency of funds. Hence, Apolonio instituted the aforesaid criminal case against petitioner. In her defense, petitioner claimed that the amounts of the checks were already paid and that the same did not belong to her as they were only paid to her by her customers. She also maintained she did not have any transaction with the complainant in May 1995. On December 29, 1998, the trial court rendered a decision, the dispositive portion of which reads: WHEREFORE, in view of all the foregoing considerations, the Court finds the accused guilty beyond reasonable doubt of the crime of Estafa under Art. 315, Sec. 2(2) (sic) of the Revised Penal Code, as amended and there being no mitigating or aggravating circumstances and taking into account the provisions of the Indeterminate Sentence Law, the Court hereby sentences the accused Yolanda Garcia to suffer the indeterminate penalty of SIX (6) YEARS and ONE (1) DAY to TEN YEARS and ONE (1) DAY of prision mayor as maximum. She should also indemnify the complainant in the amount of P87,000.00 without 3 subsidiary imprisonment in case of insolvency and to pay the costs. Petitioner appealed her conviction to the Court of Appeals, which, on August 30, 2000, rendered the assailed decision affirming the judgment of conviction rendered by the trial court. In this petition for review, petitioner alleges that the Court of Appeals erred: 1. In affirming the trial courts decision finding her guilty of the crime of estafa under Article 315, Section 2[d] of the Revised Penal Code as amended for issuing postdated checks, when she was charged in the information for the crime of estafa through false pretenses punishable under Art. 315, Section 2[a] of the Revised Penal Code. 2. In convicting her of estafa under Article 315, Section 2[d] of the Revised Penal Code which penalizes those who issue postdated checks when petitioner did not issue or draw the postdated checks. 3. In convicting her of estafa under Article 315, Section 2[d] of the Revised Penal Code when there is no evidence that she had knowledge that the postdated checks she allegedly delivered to complainant were without sufficient funds. 4. In not considering that she delivered said checks to complainant in payment of a preexisting obligation so that her liability if at all is civil in nature. 5. In not reversing and setting aside the trial courts decision and in not acquitting her instead.[4

Page 20 of 28

Petitioner basically claims that her constitutional right to be informed of the nature and cause of the accusation against her was violated because, although she was charged with estafa under Article 315, Section 2[a], as amended, which penalizes false manifestations or fraudulent representations in defraudation of another, she was instead convicted of estafa under Article 315, Section 2[d] which penalizes the issuance of postdated checks that were not funded or were insufficiently funded. Petitioner further claims she was not the issuer or the drawer of said checks, and had no knowledge that they were unfunded or underfunded. In any case, assuming that she indeed issued or drew the checks, they were in payment of a pre-existing obligation. Consequently, she could not be held liable for estafa and her liability is only civil in nature. Section 14(2) of Article III of the 1987 Constitution provides that an accused has the right to be informed of the nature and cause of the accusation against him. Indeed, Section 6, Rule 110 of the Revised Rules of Criminal Procedure requires that the acts and omissions complained of as constituting the offense must be alleged in the Information. Section 8 thereof provides that the Information shall state the designation of the offense given by the statute and aver the acts or omissions constituting the offense. The real nature of the crime charged is determined by the facts alleged in the Information and not by the title or designation of the offense contained in the caption of the Information. It is fundamental that every element of which the offense is comprised must be alleged in the Information. What facts and circumstances are necessary to be alleged in the Information must be determined by reference to the definition and essential elements of the specific crimes.[5 Article 315, paragraph 2(a) of the Revised Penal Code provides that swindling or estafa by false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud is committed by using fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, or by other similar deceits. The elements of estafa under this penal provision are: (1) the accused defrauded another by means of deceit; and (2) damage or prejudice capable of pecuniary estimation is caused to the offended party or third party.[6 A careful reading of the Information clearly shows that petitioner was charged with estafa under Article 315, paragraph 2 (a) of the Revised Penal Code. The Information alleged that petitioner by means of false manifestations and fraudulent representations x x x to the effect that accused has three checks which according to her have sufficient funds and if encashed the same will not be dishonored; x x x induced x x x Dolores S. Apolonio to accept the following checks x x x as payment of 7 assorted vegetables x x x in the total amount of P87,000.00. There is, however, no basis for petitioner to conclude that she was convicted for estafa under Article 315, paragraph 2(d) of the Revised Penal Code which penalizes any person who shall defraud another by postdating or issuing a check or issuing a check in payment of an obligation when the offender has no funds in the bank or his funds deposited therein are not sufficient to cover the amount of check. The elements of this

form of estafa are: (1) postdating or issuing a check in payment of an obligation contracted at the time the check was issued; (2) lack or insufficiency of funds to cover the check; and (3) damage to the payee thereof.[8 While the typographical error in the dispositive portion of the trial courts decision did not help in clearing this matter by saying that, x x x the Court finds the accused guilty beyond reasonable doubt of the crime of Estafa under Art. 315, Sec. 2(2) of the Revised 9 Penal Code, x x x, the body of the trial courts decision clearly discusses the elements of estafa under Article 315, paragraph 2(a), thus: The elements of estafa are (1) that the accused defrauded another by abuse of confidence or by means of deceit; and (2) that the damage or prejudice capable of pecuniary estimation is caused to the offended party. In the instant case when accused convinced the complainant assuring her that the postdated checks she was giving as payment of the vegetables of the same amount that she got, are funded as they belong to her relatives, when actually they are bad checks, she employed deceit. In so doing, the complainant is damaged to the tune of P87,000.00 which is the value of the vegetables. Another element to be proven in estafa is knowledge that at the time she negotiated the checks, the drawer has no sufficient funds in the bank. The fact that the checks were postdated at some future date is evidence enough to show that at the time of negotiation the drawer did not have sufficient funds in the bank or his funds deposited 10 therein were not sufficient to cover the amount of the checks. Even supposing that the trial court apparently discussed estafa under Article 315, paragraph 2(d), it was only pointing out the absurdity of petitioners argument, thus: When accused testified that she does not use the checks of other persons, what did she mean during the pre-trial that the checks subject of this case belong to her customers and given to her in payment? Is she not in effect saying that she gave to the complainant the three checks of her customers to pay her own purchases? This again is an admission that she really used the checks of other persons to pay her obligation. Maybe she has in mind that since she is not the maker of the checks she cannot be guilty of estafa. But she is wrong. In the case of People v. Isleta, et.al., 61 Phil. 332 and reiterated in the case of Zalgado v. CA, 178 SCRA 146, it was held that the appellant who only negotiated directly and personally the check drawn by another is guilty of estafa because he had guilty knowledge that at the time he negotiated the check, the drawer has no sufficient funds.[11 In other words, whether petitioner was charged under either paragraph 2(a) or 2(d) of Article 315 of the Revised Penal Code, she would still be guilty of estafa because damage and deceit, which are essential elements of the offense, have been established with satisfactory proof. The fraudulent act was committed prior to or simultaneous with the issuance of the bad check. The guarantee and the simultaneous delivery of the checks by petitioner were the enticement and the efficient cause of the defraudation committed against Apolonio who suffered damage amounting to P87,000.00 as a result of the fraud committed by petitioner in paying him underfunded checks drawn by three different persons.

Page 21 of 28

Fraud, in its general sense, is deemed to comprise anything calculated to deceive, including all acts, omissions, and concealment involving a breach of legal or equitable duty, trust, or confidences justly reposed, resulting in damage to another, or by which an undue and unconscientious advantage is taken of another. It is a generic term embracing all multifarious means which human ingenuity can device, and which are resorted to by one individual to secure an advantage over another by false suggestions or by suppression of truth and includes all surprise, trick, cunning, dissembling and any 12 unfair way by which another is cheated. Deceit is a specie of fraud. In fact, the Court of Appeals saw through petitioners deceit when it observed, thus: Appellants scheme is obvious. She wanted to get vegetables from Apolonio for free. In order to escape from any criminal liability, she asked her husband, daughter and nephew to issue the bouncing checks. And certainly, the scheme was deceitful. The appellant could not have been unaware of the insufficient funds of her relatives to support the checks they issued but she tendered the checks to Apolonio with the assurance that they were funded. Appellant could have exerted efforts to settle her account upon notice of the dishonored checks if she were in good faith.[13 In view of the foregoing, we see no need to discuss the other assigned errors. Petitioner was charged with estafa under Article 315, paragraph 2[a] of the Revised Penal Code. The proper imposable penalty is prision correccional in its maximum period to prision mayor in its minimum period, if the amount of fraud is over P12,000.00 but does not exceed P22,000.00; and if such amount exceeds the latter sum, the penalty provided in this paragraph shall be imposed in its maximum period, adding one year for each additional P10,000.00; but the total penalty which may be imposed shall not exceed twenty years. In such cases, the penalty shall be termed prision mayor or reclusion temporal, as the case may be.[14 Under the Indeterminate Sentence Law, if the offense is punished by the Revised Penal Code, such as estafa, the court shall sentence the accused to an indeterminate penalty, the maximum term of which shall be that which, in view of the attending circumstances, could be properly imposed under the rules of the Revised Penal Code, and the minimum term of which shall be within the range of the penalty next lower to that prescribed by the Code for the offense. The penalty next lower should be based on the penalty prescribed by the Code for the offense, without first considering any modifying circumstance attendant to the commission of the crime. The determination of the minimum penalty is left by law to the sound discretion of the court and it can be anywhere within the range of the penalty next lower without any reference to the periods into which it might be subdivided. The modifying circumstances are considered only in the imposition of the maximum term of the indeterminate sentence.[15 In this case, petitioner defrauded Apolonio in the amount of P87,000.00. The fact that the amount exceeds P22,000.00 should not be considered in the initial determination of the indeterminate penalty; instead the matter should be so taken as analogous to modifying circumstances in the imposition of the maximum term of the full indeterminate sentence. This accords with the rule that penal laws are construed in 16 favor of the accused.

Hence, the maximum penalty to be imposed on petitioner should be taken from the maximum period of the basic penalty, i.e., prision mayor in its minimum period, which ranges from four (4) years, two (2) months and one (1) day to eight (8) years. The minimum penalty, applying the Indeterminate Sentence Law, shall be taken from the penalty next lower in degree than the basic penalty which is prision correccional in its minimum and medium period, in any of its periods, the range of which is from six (6) months and one (1) day to four (4) years and two (2) months. Thus, the trial court erred in imposing the penalty which ranges from six (6) years and one (1) day to ten (10) years and one (1) day. The proper penalty should be four (4) years and two (2) months of prision correccional, as minimum, to fourteen (14) years of reclusion temporal, as maximum. WHEREFORE, in light of the foregoing, the Court hereby AFFIRMS with MODIFICATION the decision of the trial court finding Yolanda Garcia guilty of estafa under Article 315, paragraph 2[a] of the Revised Penal Code, and sentencing her to suffer the indeterminate penalty of four (4) years and two (2) months of prision correccional, as minimum, to fourteen (14) years of reclusion temporal, as maximum, and to indemnify the complainant in the amount of P87,000.00. With costs. SO ORDERED. Davide, Jr., C.J., (Chairman), Vitug, and Carpio, JJ., concur. Azcuna, J., on official leave. Republic of the Philippines SUPREME COURT Manila FIRST DIVISON G.R. No. 115024 February 7, 1996 MA. LOURDES VALENZUELA, petitioner, vs. COURT OF APPEALS, RICHARD LI and ALEXANDER COMMERCIAL, INC., respondents. 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 G.R. No. 117944 February 7, 1996 RICHARD LI, petitioner, vs. COURT OF APPEALS and LOURDES VALENZUELA, respondents. DECISION KAPUNAN, J.: These two petitions for review on certiorari under Rule 45 of the Revised Rules of Court stem from an action to recover damages by petitioner Lourdes Valenzuela in the Regional Trial Court of Quezon City for injuries sustained by her in a vehicular accident in the early morning of June 24, 1990. The facts found by the trial court are succinctly summarized by the Court of Appeals below: This is an action to recover damages based on quasi-delict, for serious physical injuries sustained in a vehicular accident.

Page 22 of 28

Plaintiff's version of the accident is as follows: At around 2:00 in the morning of June 24, 1990, plaintiff Ma. Lourdes Valenzuela was driving a blue Mitsubishi 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. with a companion, Cecilia Ramon, heading towards the direction of Manila. Before reaching A. Lake Street, she noticed something wrong with her tires; she stopped at a lighted place where there were people, to verify whether she had a flat tire and to solicit help if needed. Having been told by the people present that her rear right tire was flat and that she cannot reach her home in that car's condition, she parked along the sidewalk, about 11/2 feet away, put on her emergency lights, alighted from the car, and went to the rear to open the trunk. She was standing at the left side of the rear of her car pointing to the tools to a man who will help her fix the tire when she was suddenly bumped by a 1987 Mitsubishi Lancer driven by defendant Richard Li and registered in the name of defendant Alexander Commercial, Inc. Because of the impact plaintiff was thrown against the windshield of the car of the defendant, which was destroyed, and then fell to the ground. She was pulled out from under defendant's car. Plaintiff's left leg was severed up to the middle of her thigh, with only some skin and sucle connected to the rest of the body. She was brought to the UERM 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 hospital for twenty (20) days and was eventually fitted with an artificial leg. The expenses for the hospital confinement (P120,000.00) and the cost of the artificial leg (P27,000.00) were paid by defendants from the car insurance. 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 related expenses amounting to a total of P180,000.00, including loss of expected earnings. Defendant Richard Li denied that he was negligent. He was on his way home, travelling at 55 kph; considering that it was raining, visibility was affected and the road was wet. Traffic was light. He testified that he was driving along the inner portion of the right lane of Aurora Blvd. towards the direction of Araneta Avenue, when he was suddenly confronted, in the vicinity of A. Lake Street, San 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 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 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. 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 on the sidewalk. Defendants counterclaimed for damages, alleging that plaintiff was reckless or negligent, as she was not a licensed driver. The police investigator, Pfc. Felic Ramos, who prepared the vehicular accident report and the sketch of the three cars involved in the accident, testified that the plaintiff's car was "near the sidewalk"; this witness did not remember whether the hazard lights

of plaintiff's car were on, and did not notice if there was an early warning device; there was a street light at the corner of Aurora Blvd. and F. Roman, about 100 meters away. It was not mostly dark, i.e. "things can be seen" (p. 16, tsn, Oct. 28, 1991). A witness for the plaintiff, Rogelio Rodriguez, testified that after plaintiff alighted from her car and opened the trunk compartment, defendant's car came approaching very fast ten meters from the scene; the car was "zigzagging". The rear left side of plaintiff's car was bumped by the front right portion of defendant's car; as a consequence, the plaintiff's car swerved to the right and hit the parked car on the sidewalk. Plaintiff was thrown to the windshield of defendant's car, which was destroyed, and landed under the car. He stated that defendant was under the influence of liquor as he could "smell it very well" (pp. 43, 79, tsn, June 17, 1991). After trial, the lower court sustained the plaintiff's submissions and found defendant Richard Li guilty of gross negligence and liable for damages under Article 2176 of the Civil Code. The trial court likewise held Alexander Commercial, Inc., Li's employer, jointly and severally liable for damages pursuant to Article 2180. It ordered the defendants to jointly and severally pay the following amounts: 1. P41,840.00, as actual damages, representing the miscellaneous expenses of the plaintiff as a result of her severed left leg; 2. The sums of (a) P37,500.00, for the unrealized profits because of the stoppage of plaintiff's Bistro La Conga restaurant three (3) weeks after the accident on June 24, 1990; (b) P20,000.00, a month, as unrealized profits of the plaintiff in her Bistro La Conga restaurant, from August, 1990 until the date of this judgment and (c) P30,000.00, a month for unrealized profits in plaintiff's two (2) beauty salons from July, 1990 until the date of this decision; 3. P1,000,000.00, in moral damages; 4. P50,000.00, as exemplary damages; 5. P60,000.00, as reasonable attorney's fees; and 6. Costs. 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. Richard Li), tending to show that the point of impact, as depicted by the pieces of glass/debris from the parties' cars, appeared to be at the center of the right lane of Aurora Blvd. The trial court denied the motion. Defendants forthwith filed an appeal with the respondent Court of Appeals. In a Decision rendered March 30, 1994, the Court of Appeals found that there was "ample basis from the evidence of record for the trial court's finding that the plaintiff's car was properly parked at the right, 1 beside the sidewalk when it was bumped by defendant's car." 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 of the right lane was never presented during 2 the trial of the case. The respondent court furthermore observed that: Defendant Li's testimony that he was driving at a safe speed of 55 km./hour is self serving; it was not corroborated. It was in fact contradicted by eyewitness Rodriguez

Page 23 of 28

who stated that he was outside his beerhouse located at Aurora Boulevard after A. Lake Street, at or about 2:00 a.m. of June 24, 1990 when his attention was caught by a beautiful lady (referring to the plaintiff) alighting from her car and opening the trunk compartment; he noticed the car of Richard Li "approaching very fast ten (10) meters away from the scene"; defendant's car was zigzagging", although there were no holes and hazards on the street, and "bumped the leg of the plaintiff" who was thrown against the windshield of defendant's care, causing its destruction. He came to the rescue of the plaintiff, who was pulled out from under defendant's car and was able to say "hurting words" to Richard Li because he noticed that the latter was under the influence of liquor, because he "could smell it very well" (p. 36, et. seq., tsn, June 17, 1991). He knew that plaintiff owned a beerhouse in Sta. Mesa in the 1970's, but did not know either plaintiff or defendant Li before the accident. In agreeing with the trial court that the defendant Li was liable for the injuries sustained by the plaintiff, the Court of Appeals, in its decision, however, absolved the Li's employer, Alexander Commercial, Inc. from any liability towards petitioner Lourdes Valenzuela and reduced the amount of moral damages to P500,000.00. Finding justification for exemplary damages, the respondent court allowed an award of P50,000.00 for the same, in addition to costs, attorney's fees and the other damages. 3 The Court of Appeals, likewise, dismissed the defendants' counterclaims. Consequently, both parties assail the respondent court's decision by filing two separate petitions before this Court. Richard Li, in G.R. No. 117944, contends that he should not be held liable for damages because the proximate cause of the accident was Ma. Lourdes Valenzuela's own negligence. Alternatively, he argues that in the event that this Court finds him negligent, such negligence ought to be mitigated by the contributory negligence of Valenzuela. On the other hand, in G.R. No. 115024, Ma. Lourdes Valenzuela assails the respondent court's decision insofar as it absolves Alexander Commercial, Inc. from liability as the owner of the car driven by Richard Li and insofar as it reduces the amount of the actual 4 and moral damages awarded by the trial court. As the issues are intimately related, both petitions are hereby consolidated. It is plainly evident that the petition for review in G.R. No. 117944 raises no substantial 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 negligent in driving the Mitsubishi Lancer provided by his company in the early morning hours of June 24, 1990. This we will not do. As a general rule, findings of fact of the Court of Appeals are binding and conclusive upon us, and this Court will not normally disturb 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 5 on a misapprehension of facts. In the first place, Valenzuela's version of the incident was fully corroborated by an uninterested witness, Rogelio Rodriguez, the owner-operator of an establishment located just across the scene of the accident. On trial, he testified that he observed a car being driven at a "very fast" speed, racing towards the general direction of Araneta

Avenue. Rodriguez further added that he was standing in front of his establishment, just ten to twenty feet away from the scene of the accident, when he saw the car hit Valenzuela, hurtling her against the windshield of the defendant's Mitsubishi Lancer, from where she eventually fell under the defendant's car. Spontaneously reacting to the incident, he crossed the street, noting that a man reeking with the smell of liquor 7 had alighted from the offending vehicle in order to survey the incident. Equally important, Rodriguez declared that he observed Valenzuela's car parked parallel and 8 very near the sidewalk, contrary to Li's allegation that Valenzuela's car was close to the center of the 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 gave a statement of the incident similar to his testimony to the investigator immediately after the incident, the latter's testimony deserves greater weight. As the court emphasized: The issue is one of credibility and from Our own examination of the transcript, We are not prepared to set aside the trial court's reliance on the testimony of Rodriguez negating defendant's assertion that he was driving at a safe speed. While Rodriguez drives only a motorcycle, his perception of speed is not necessarily impaired. He was subjected to cross-examination and no attempt was made to question .his competence or the accuracy of his statement that defendant was driving "very fast". This was the same statement he gave to the police investigator after the incident, as told to a newspaper report (Exh. "P"). We see no compelling basis for disregarding his testimony. The alleged inconsistencies in Rodriguez' testimony are not borne out by an examination of the testimony. Rodriguez testified that the scene of the accident was across the street where his beerhouse is located about ten to twenty feet away (pp. 35-36, tsn, June 17, 1991). He did not state that the accident transpired immediately in front of his establishment. The ownership of the Lambingan se 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 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 Boulevard and F. Roman Street (p. 45, tsn, Oct. 20, 1991). With respect to the weather condition, Rodriguez testified that there was only a drizzle, not a heavy rain and the rain has stopped and he was outside his establishment at the time the accident transpired (pp. 64-65, tsn, June 17, 1991). This was consistent with plaintiff's testimony that it was no longer raining when she left Bistro La Conga (pp. 10-11, tsn, April 29, 1991). It was defendant Li who stated that it was raining all the way in an attempt to explain why he was travelling at only 50-55 kph. (p. 11, tsn, Oct. 14, 1991). As to the testimony of Pfc. Ramos that it was raining, he arrived at the scene only in response to a telephone call after the accident had transpired (pp. 9-10, tsn, Oct. 28, 1991). We find no substantial inconsistencies in Rodriguez's testimony that

Page 24 of 28

would impair the essential integrity of his testimony or reflect on his honesty. We are compelled to affirm the trial court's acceptance of the testimony of said eyewitness. Against the unassailable testimony of witness Rodriguez we note that Li's testimony was peppered with so many inconsistencies leading us to conclude that his version of the accident was merely adroitly crafted to provide a version, obviously self-serving, which would exculpate him from any and all liability in the incident. Against Valenzuela's 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 speed of 55 kph. when "out of nowhere he saw a dark maroon lancer right in front of him, which was (the) plaintiff's car". He alleged that upon seeing 9 this sudden "apparition" he put on his brakes to no avail as the road was slippery. One will have to suspend disbelief in order to give credence to Li's disingenuous and patently self-serving asseverations. The average motorist alert to road conditions will have no difficulty applying the brakes to a car traveling at the speed claimed by Li. Given a light rainfall, the visibility of the street, and the road conditions on a principal metropolitan thoroughfare like Aurora Boulevard, Li would have had ample time to react to the changing conditions of the road if he were alert - as every driver should be - to those conditions. Driving exacts a more than usual toll on the senses. Physiological 10 "fight or flight" mechanisms are at work, provided such mechanisms were not dulled 11 by drugs, alcohol, exhaustion, drowsiness, etc. Li's failure to react in a manner which would have avoided the accident could therefore have been only due to either or both of the two factors: 1) that he was driving at a "very fast" speed as testified by 12 Rodriguez; and 2) that he was under the influence of alcohol. Either factor working independently would have diminished his responsiveness to road conditions, since normally he would have slowed down prior to reaching Valenzuela's car, rather than be in a situation forcing him to suddenly apply his brakes. As the trial court noted (quoted with approval by respondent court): 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 plaintiff's car, indicating, again, thereby that, indeed, he was driving very fast, oblivious of his surroundings and the road ahead of him, because if he was not, then he could not have missed noticing at a still far distance the parked car of the plaintiff at the right side near the sidewalk which had its emergency lights on, thereby avoiding forcefully bumping at the plaintiff who was then standing at the left rear edge of her car. Since, according to him, in his narration to the San Juan Police, he put on his brakes when he saw the plaintiff's car in front of him, but that it failed as the road was wet and slippery, this goes to show again, that, contrary to his claim, he was, indeed, running very fast. For, were it otherwise, he could have easily completely stopped his car, thereby avoiding the bumping of the plaintiff, notwithstanding that the road was wet and slippery. Verily, since, if, indeed, he was running slow, as he claimed, at only about 55 kilometers per hour, then, inspite of the wet and slippery road, he could have

avoided hitting the plaintiff by the mere expedient or applying his brakes at the proper time and distance. It could not be true, therefore, as he now claims during his testimony, which is contrary to what he told the police immediately after the accident and is, therefore, more believable, that he did not actually step on his brakes but simply swerved a little to the right when he saw the on-coming car with glaring headlights, from the opposite direction, in order to avoid it. For, had this been what he did, he would not have bumped the car of the plaintiff which was properly parked at the right beside the sidewalk. And, it was not even necessary for him to swerve a little to the right in order to safely avoid a 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 space for both cars, since her car was running at the right lane going towards Manila on the on-coming car was also 13 on its right lane going to Cubao. Having come to the conclusion that Li was negligent in driving his company-issued Mitsubishi Lancer, the next question for us to determine is whether or not Valenzuela was likewise guilty of contributory negligence in parking her car alongside Aurora Boulevard, which entire area Li points out, is a no parking zone. We agree with the respondent court that Valenzuela was not guilty of contributory negligence. Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is 14 required to conform for his own protection. Based on the foregoing definition, the standard or act to which, according to petitioner Li, Valenzuela ought to have conformed for her own protection was not to park at all at any point of Aurora Boulevard, a no parking zone. We cannot agree. Courts have traditionally been compelled to recognize that an actor who is confronted with an emergency is not to be held up to the standard of conduct normally applied to an individual who is in no such situation. The law takes stock of impulses of humanity when placed in threatening or dangerous situations and does not require the same standard of thoughtful and reflective care from persons confronted by unusual and 15 oftentimes threatening conditions. 16 Under the "emergency rule" adopted by this Court in Gan vs. Court of Appeals, an individual who suddenly finds himself in a situation of danger and is required to act without much time to consider the best means that may be adopted to avoid the impending danger, is not guilty of negligence if he fails to undertake what subsequently and upon reflection may appear to be a better solution, unless the emergency was 17 brought by his own negligence. Applying this principle to a case in which the victims in a vehicular accident swerved to the wrong lane to avoid hitting two children suddenly darting into the street, we held, 18 in Mc Kee vs. Intermediate Appellate Court, that the driver therein, Jose Koh, "adopted the best means possible in the given situation" to avoid hitting the children. Using the "emergency rule" the Court concluded that Koh, in spite of the fact that he

Page 25 of 28

was in the wrong lane when the collision with an oncoming truck occurred, was not 19 guilty of negligence. While the emergency rule applies to those cases in which reflective thought, or the opportunity to adequately weigh a threatening situation is absent, the conduct which is required of an individual in such cases is dictated not exclusively by the suddenness of the event which absolutely negates thoroughful care, but by the over-all nature of the circumstances. A woman driving a vehicle suddenly crippled by a flat tire on a rainy night will not be faulted for stopping at a point which is both convenient for her to do so and which is not a hazard to other motorists. She is not expected to run the entire boulevard in search for a parking zone or turn on a dark street or alley where she would likely find no one to help her. It would be hazardous for her not to stop and assess the emergency (simply because the entire length of Aurora Boulevard is a noparking zone) because the hobbling vehicle would be both a threat to her safety and to other motorists. In the instant 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 at a lighted place where there were people, to verify whether she had a flat tire and to solicit help if needed. Having been told by the people present that her rear right tire was flat and that she cannot reach her home she 20 parked along the sidewalk, about 1 1/2 feet away, behind a Toyota Corona Car." In fact, respondent court noted, Pfc. Felix Ramos, the investigator on the scene of the 21 accident confirmed that Valenzuela's car was parked very close to the sidewalk. The sketch which he prepared after the incident showed Valenzuela's car partly straddling the sidewalk, clear and at a convenient distance from motorists passing the right lane of Aurora Boulevard. This fact was itself corroborated by the testimony of witness 22 Rodriguez. Under the circumstances described, Valenzuela did exercise the standard reasonably dictated by the emergency and could not be considered to have contributed to the unfortunate circumstances which eventually led to the amputation of one of her lower extremities. The emergency which led her to park her car on a sidewalk in Aurora Boulevard was not of her own making, and it was evident that she had taken all reasonable precautions. Obviously in the case at bench, the only negligence ascribable was the negligence of Li on the night of the accident. "Negligence, as it is commonly understood is conduct 23 which creates an undue risk of harm to others." It is the failure to observe that degree of care, precaution, and vigilance which the circumstances justly demand, whereby 24 such other person suffers injury. We stressed, in Corliss vs. Manila Railroad 25 Company, that negligence is the want of care required by the circumstances. The circumstances established by the evidence adduced in the court below plainly demonstrate that Li was grossly negligent in driving his Mitsubishi Lancer. It bears emphasis that he was driving at a fast speed at about 2:00 A.M. after a heavy downpour had settled into a drizzle rendering the street slippery. There is ample testimonial evidence on record to show that he was under the influence of liquor.

Under these conditions, his chances of effectively dealing with changing conditions on the road were significantly lessened. As Presser and Keaton emphasize: [U]nder present day traffic conditions, any driver of an automobile must be prepared for the sudden appearance of obstacles and persons on the highway, and of other vehicles at intersections, such as one who sees a child on the curb may be required to anticipate its sudden dash into the street, and his failure to act properly when they 26 appear may be found to amount to negligence. Li's obvious unpreparedness to cope with the situation confronting him on the night of the accident was clearly of his own making. We now come to the question of the liability of Alexander Commercial, Inc. Li's employer. In denying liability on the part of Alexander Commercial, the respondent court held that: There is no evidence, not even defendant Li's testimony, that the visit was in connection with official matters. His functions as assistant manager sometimes required him to perform work outside the office as he has to visit buyers and company clients, but he admitted that on the night of the accident he came from BF Homes Paranaque he did not have "business from the company" (pp. 25-26, ten, Sept. 23, 1991). The use of the company car was partly required by the nature of his work, but the privilege of using it for non-official business is a "benefit", apparently referring to the fringe benefits attaching to his position. 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 not respondeat superior, but the relationship of pater familias, which theory bases the liability of the master ultimately on his own negligence and not on that of his servant (Cuison v. Norton and Harrison Co., 55 Phil. 18). Before an employer may be held liable for the negligence of his employee, the act or omission which caused damage must have occurred while an employee was in the actual 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 that this includes any act done by an employee, in furtherance of the interests of the employer or for the account of the employer at the time of the infliction of the injury or damage (Filamer Christian Institute vs. Intermediate Appellate Court, 212 SCRA 637). An employer is expected to impose upon its employees the necessary discipline called for in the performance of any act "indispensable to the business and beneficial to their employer" (at p. 645). In light of the foregoing, We are unable to sustain the trial court's finding that 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 the company car in the service of his employer or on the occasion of his functions. Driving the company car was not among his functions as assistant manager; using it for non-official purposes would appear to be a fringe benefit, one of the perks attached to his position. But to impose liability upon the employer under Article 2180 of the Civil Code, earlier quoted, there must be a showing that the damage was caused by their employees in the service

Page 26 of 28

of the 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 company's business or its interests, or at least for its benefit. The imposition of solidary liability 27 against defendant Alexander Commercial Corporation must therefore fail. We agree with the respondent court that the relationship in question is not based on the principle of respondeat superior, which holds the master liable for acts of the servant, but that of pater familias, in which the liability ultimately falls upon the employer, for his failure to exercise the diligence of a good father of the family in the selection and supervision of his employees. It is up to this point, however, that our agreement with the respondent court ends. Utilizing the bonus pater familias standard 28 expressed in Article 2180 of the Civil Code, we are of the opinion that Li's employer, Alexander Commercial, Inc. is jointly and solidarily liable for the damage caused by the accident of June 24, 1990. 29 First, the case of St. Francis High School vs. Court of Appeals upon which respondent court 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 on special parental authority found in Art. 218 of the Family Code which generally encompasses all authorized school activities, whether inside or outside school premises. Second, the employer's primary liability under the concept of pater familias embodied by Art 2180 (in relation to Art. 2176) of the Civil Code is quasi-delictual or tortious in character. His liability is relieved on a showing that he exercised the diligence of a good father of the family in the selection and supervision of its employees. Once evidence is introduced showing that the employer exercised the required amount of care in selecting its employees, half of the employer's burden is overcome. The question of diligent supervision, however, depends on the circumstances of employment. Ordinarily, evidence demonstrating that the employer has exercised diligent supervision of its employee during the performance of the latter's assigned tasks would be enough to relieve him of the liability imposed by Article 2180 in relation to Article 2176 of the Civil Code. The employer is not expected to exercise supervision over either the employee's private activities or during the performance of tasks either unsanctioned by the former or 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 managerial rank or their representatives. It is customary for large companies to provide certain classes of their employees with courtesy vehicles. These company cars are either wholly owned and maintained by the company itself or are subject to various plans through which employees eventually acquire their vehicles after a given period of service, or after paying a token amount. Many companies provide liberal "car plans" to enable their managerial or other employees of rank to purchase cars, which, given the cost of vehicles these days, they would not otherwise be able to purchase on their own. Under the first example, the company actually owns and maintains the car up to the point of turnover of ownership to the employee; in the second example, the car is

really owned and maintained by the employee himself. In furnishing vehicles to such employees, are companies totally absolved of responsibility when an accident involving a company-issued car occurs during private use after normal office hours? Most pharmaceutical companies, for instance, which provide cars under the first plan, require rigorous tests of road worthiness from their agents prior to turning over the car (subject of company maintenance) to their representatives. In other words, like a good father of a family, they entrust the company vehicle only after they are satisfied that the employee to whom the car has been given full use of the said company car for company or private purposes will not be a threat or menace to himself, the company or to others. 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 privilege reasonably and responsively. In the ordinary course of business, not all company employees are given the privilege of using a company-issued car. For large companies other than those cited in the example of 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 general, or - for practical and utilitarian reasons - to enable its managerial and other employees of rank or its sales agents to reach clients conveniently. In most cases, providing a company car serves both purposes. Since important business transactions and decisions may occur at all hours in all sorts of situations and under all kinds of guises, the provision for the unlimited use of a company car therefore principally serves the business and goodwill of a company and only incidentally the private purposes of the 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 it that the managerial or other employees to whom it entrusts virtually unlimited use of a company issued car are able to use the company issue capably and responsibly. In the instant case, Li was an Assistant Manager of Alexander Commercial, Inc. In his testimony before the trial court, he admitted that his functions as Assistant Manager did not require him to scrupulously keep normal office hours as he was required quite often to perform work outside the office, visiting prospective buyers and contacting 30 and meeting with company clients. These meetings, clearly, were not strictly confined to routine hours because, as a managerial employee tasked with the job of representing his company with its clients, meetings with clients were both social as well as work-related functions. The service car assigned to Li by Alexander Commercial, Inc. therefore enabled 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 and its clients by providing the former with a convenient mode of travel. Moreover, Li's claim that he happened to be on the road on the night of the accident because he was coming from a social visit with an officemate in Paranaque was a bare allegation which was never corroborated in the court below. It was obviously self-

Page 27 of 28

serving. Assuming he really came from his officemate's place, the same could give rise to 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. In fine, Alexander Commercial, inc. has not demonstrated, to our satisfaction, that it exercised the care and diligence of a good father of the family in entrusting its company car to Li. No allegations were made as to whether or not the company took the steps necessary to determine or ascertain the driving proficiency and history of Li, 31 to whom it gave full and unlimited use of a company car. Not having been able to overcome the burden of demonstrating that it should be absolved of liability for entrusting its company 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 during the accident. Finally, we find no reason to overturn the amount of damages awarded by the respondent court, except as to the amount of moral damages. In the case of moral damages, while the said damages are not intended to enrich the plaintiff at the expense of a defendant, the award should nonetheless be commensurate to the suffering inflicted. In the instant case we are of the opinion that the reduction in moral damages from an amount of P1,000,000.00 to P800,000,00 by the Court of Appeals was not justified considering the nature of the resulting damage and the predictable sequelae of the injury. As a result of the accident, Ma. Lourdes Valenzuela underwent a traumatic amputation of her left lower extremity at the distal left thigh just above the knee. Because of this, Valenzuela will forever be deprived of the full ambulatory functions of her left extremity, even with the use of state of the art prosthetic technology. Well beyond the period of 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. These adjustments entail costs, prosthetic replacements and months of physical and 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 the biological changes of middle-age, menopause and aging. Assuming she reaches menopause, for example, the prosthetic will have to be adjusted to respond to the changes in bone resulting from a precipitate decrease in calcium levels observed in the bones of all post-menopausal women. In other words, the damage done to her would not only be permanent and lasting, it would also be permanently changing and adjusting to the physiologic changes which her body would normally undergo through the years. The replacements, changes, and adjustments will require corresponding adjustive physical and occupational therapy. All of these adjustments, it has been documented, are painful. The foregoing discussion does not even scratch the surface of the nature of the resulting 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 human body. A prosthetic device, however technologically advanced,

will only allow a reasonable amount of functional restoration of the motor functions of the lower limb. The sensory functions are forever lost. The resultant anxiety, sleeplessness, psychological injury, mental and physical pain are inestimable. 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 with the extent and nature of the injury - physical and psychological - suffered by Valenzuela as a result of Li's grossly negligent driving of his Mitsubishi Lancer in the early morning hours of the accident. WHEREFORE, PREMISES CONSIDERED, the decision of the Court of Appeals is modified with the effect of REINSTATING the judgment of the Regional Trial Court. SO ORDERED. Padilla, Bellosillo and Hermosisima, Jr., JJ., concur.

Page 28 of 28