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G.R. No. 72275 November 13, 1991

This is a petition for review on certiorari of the decision (pp 21-31, Rollo) of the Intermediate Appellate Court
(now Court of Appeals) in AC-G.R. C.V. No. 02753, 1 which modified the decision of the trial court against
herein private respondent Roberto Regala, Jr., one of the defendants in the case for sum of money filed by
Pacific Banking Corporation.
The facts of the case as adopted by the respondent appellant court from herein petitioner's brief before said
court are as follows:
On October 24, 1975, defendant Celia Syjuco Regala (hereinafter referred to as Celia
Regala for brevity), applied for and obtained from the plaintiff the issuance and use of
Pacificard credit card (Exhs. "A", "A-l",), under the Terms and Conditions Governing the
Issuance and Use of Pacificard (Exh. "B" and hereinafter referred to as Terms and
Conditions), a copy of which was issued to and received by the said defendant on the
date of the application and expressly agreed that the use of the Pacificard is governed by
said Terms and Conditions. On the same date, the defendant-appelant Robert Regala, Jr.,
spouse of defendant Celia Regala, executed a "Guarantor's Undertaking" (Exh. "A-1-a") in
favor of the appellee Bank, whereby the latter agreed "jointly and severally of Celia
Aurora Syjuco Regala, to pay the Pacific Banking Corporation upon demand, any and all
indebtedness, obligations, charges or liabilities due and incurred by said Celia Aurora
Syjuco Regala with the use of the Pacificard, or renewals thereof, issued in her favor by
the Pacific Banking Corporation". It was also agreed that "any changes of or novation in
the terms and conditions in connection with the issuance or use of the Pacificard, or any
extension of time to pay such obligations, charges or liabilities shall not in any manner
release me/us from responsibility hereunder, it being understood that I fully agree to such
charges, novation or extension, and that this understanding is a continuing one and shall
subsist and bind me until the liabilities of the said Celia Syjuco Regala have been fully
satisfied or paid.
Plaintiff-appellee Pacific Banking Corporation has contracted with accredited business
establishments to honor purchases of goods and/or services by Pacificard holders and the
cost thereof to be advanced by the plaintiff-appellee for the account of the defendant
cardholder, and the latter undertook to pay any statements of account rendered by the
plaintiff-appellee for the advances thus made within thirty (30) days from the date of the

statement, provided that any overdue account shall earn interest at the rate of 14% per
annum from date of default.
The defendant Celia Regala, as such Pacificard holder, had purchased goods and/or
services on credit (Exh. "C", "C-l" to "C-112") under her Pacificard, for which the plaintiff
advanced the cost amounting to P92,803.98 at the time of the filing of the complaint.
In view of defendant Celia Regala's failure to settle her account for the purchases made
thru the use of the Pacificard, a written demand (Exh. "D") was sent to the latter and also
to the defendant Roberto Regala, Jr. (Exh. " ") under his "Guarantor's Undertaking."
A complaint was subsequently filed in Court for defendant's (sic) repeated failure to settle
their obligation. Defendant Celia Regala was declared in default for her failure to file her
answer within the reglementary period. Defendant-appellant Roberto Regala, Jr., on the
other hand, filed his Answer with Counterclaim admitting his execution of the
"Guarantor's Understanding", "but with the understanding that his liability would be
limited to P2,000.00 per month."
In view of the solidary nature of the liability of the parties, the presentation of
evidence ex-parte as against the defendant Celia Regala was jointly held with the trial of
the case as against defendant Roberto Regala.
After the presentation of plaintiff's testimonial and documentary evidence, fire struck the
City Hall of Manila, including the court where the instant case was pending, as well as all
its records.
Upon plaintiff-appellee's petition for reconstitution, the records of the instant case were
duly reconstituted. Thereafter, the case was set for pre-trial conference with respect to
the defendant-appellant Roberto Regala on plaintiff-appellee's motion, after furnishing the
latter a copy of the same. No opposition thereto having been interposed by defendantappellant, the trial court set the case for pre-trial conference. Neither did said defendantappellant nor his counsel appear on the date scheduled by the trial court for said
conference despite due notice. Consequently, plaintiff-appellee moved that the defendantappellant Roberto Regala he declared as in default and that it be allowed to present its
evidence ex-parte, which motion was granted. On July 21, 1983, plaintiff-appellee
presented its evidence ex-parte. (pp. 23-26, Rollo)
After trial, the court a quo rendered judgment on December 5, 1983, the dispositive portion of which reads:
WHEREFORE, the Court renders judgment for the plaintiff and against the defendants
condemning the latter, jointly and severally, to pay said plaintiff the amount of
P92,803.98, with interest thereon at 14% per annum, compounded annually, from the
time of demand on November 17, 1978 until said principal amount is fully paid; plus 15%
of the principal obligation as and for attorney's fees and expense of suit; and the costs.
The counterclaim of defendant Roberto Regala, Jr. is dismissed for lack of merit.

should fail to comply with the contract. or any extension of time to pay such obligations. October 29.00 per month with 14% interest from the filing of the complaint. . in fact. 2047.00 a month and only for the advances made during the one year period of the card's effectivity counted from October 29. in a contract of suretyship.R. "(A) guarantor may bind himself for less. The dispositive portion of the decision states: WHEREFORE. with interest from the filing of the complaint up to the payment at the rate of 14% per annum without pronouncement as to costs. the undersigned." Roberto. charges or liabilities due and incurred by said Celia Syjuco Regala with the use of the Pacificard or renewals thereof issued in his favor by the Pacific Banking Corporation. Concha. Any changes of or novation in the terms and conditions in connection with the issuance or use of said Pacificard. 1983 is modified only as to appellant Roberto Regala.000. As a surety he bound himself jointly and severally with the debtor Celia Regala "to pay the Pacific Banking Corporation upon demand. he voluntarily agreed to be bound as a surety.Rollo) The undertaking signed by Roberto Regala. . Any changes of or Novation in the terms and conditions in connection with the issuance or use of said Pacificard." This undertaking was also provided as a condition in the issuance of the Pacificard to Celia Regala. 1976.'s undertaking.e. (p. A Pacificard is issued to a Pacificard-holder against the joint and several signature of a third party and as such. but not for more than the principal debtor.000. the surety binds himself solidarily with the principal debtor (Art. 14. 1985 (p. made his commitment as a surety a continuing one. a surety may secure additional and future debts of the principal debtor the amount of which is not yet known (see Article 2053. at P2. signed in favor of Pacific Banking Corporation provides: I/We. although the defendants bound themselves in solidum. expressly bound himself up to the extent of the debtor's (Celia) indebtedness likewise expressly waiving any "discharge in case of any change or novation of the terms and conditions in connection with the issuance of the Pacificard credit card. No. 33. the liability of the Surety under its bond would arise only if its co-defendants.SO ORDERED.'s liability should be limited to that extent. . 1985. any and all indebtedness. although denominated "Guarantor's Undertaking. 1979. August 30. was made liable only to the extent of the monthly credit limit granted to Celia Regala. Civil Code of the Philippines). The application by respondent court of the ruling in Government v.. As distinguished from a contract of guaranty where the guarantor binds himself to the creditor to fulfill the obligation of the principal debtor only in case the latter should fail to do so. It is true that under Article 2054 of the Civil Code. Rollo) A motion for reconsideration was filed by Pacific Banking Corporation which the respondent appellate court denied for lack of merit on September 19. that Roberto Jr. Rollo) The respondent appellate court held that "all the other rights of the guarantor are not thereby lost by the guarantor becoming liable solidarily and therefore a surety. it being understood that the undertaking is a continuing one and shall subsist and bind me/us until all the liabilities of the said Celia Syjuco Regala have been fully satisfied or paid.00 per month and that Celia Regala succeeded in using the card beyond the original period of its effectivity. Jr. thus: There is merit in this petition. 1967. We need not look elsewhere to determine the nature and extent of private respondent Roberto Regala. the judgment of the trial court dated December 5.000. Private respondent Roberto Regala. (p. thus: 5. binding upon himself until all the liabilities of Celia Regala have been fully paid. for the purchases of goods and services with the use of a Pacificard credit card in the total amount of P92. Private respondent Roberto Regala.'s liability only for purchases made by Celia Regala with the use of the card from October 29. (pp. i. 2 It is likewise not disputed by the parties that the credit limit granted to Celia Regala was P2. 12. the liability of the Surety is "consequent upon the liability" of Tizon. Jr. hereby agree. On August 12.000. 1975 up to October 29. Jr. Tizon. On November 8. We do not agree however. It was held in that case that: ." was in substance a contract of surety. All these were clear under the "Guarantor's Undertaking" Roberto signed. To paraphrase the ruling in the case of Municipality of Orion vs. G. supra is misplaced. 1976 up to the amount of P2. 12. As in guaranty. . Jr. or "so . (p.. 1975 up to October 29. . Tizon. The pertinent portion of the "Guarantor's Undertaking" which private respondent Roberto Regala. as surety of his wife. 32. Article 2054 of the Civil Code providing for a limited liability on the part of the guarantor or debtor still applies. 1976 up to the amount of P2.98 with 14% interest per annum." It further ruled that although the surety's liability is like that of a joint and several debtor. charges or liabilities shall not in any manner release me/us from the responsibility hereunder. charges or liabilities shall not in any manner release me/us from the responsibility hereunder. L-22108. 1985. so as to make him liable only for the purchases made by defendant Celia Aurora Syjuco Regala with the use of the Pacificard from October 29.803. obligations. notwithstanding. Jr. 22-23. (p. Rollo). Consequently. Jr. relying on the case of Government of the Philippines v. it erred in limiting private respondent Roberto Regala. supra. Rollo) The defendants appealed from the decision of the court a quo to the Intermediate Appellate Court. it does not make him the debtor but still the guarantor (or the surety). supra). respondent appellate court rendered judgment modifying the decision of the trial court. 1975 up to October 29. both as regards the amount and the onerous nature of the conditions. emphasis supplied) Private respondent Roberto Regala. it being understood that the undertaking is a continuing one and shall subsist and bind me/us until all the liabilities of the said Celia Syjuco Regala have been fully satisfied or paid. The petitioner contends that while the appellate court correctly recognized Celia Regala's obligation to Pacific Banking Corp. had been made aware by the terms of the undertaking of future changes in the terms and conditions governing the issuance of the credit card to his wife and that. charges or liabilities due and incurred by said Celia Syjuco Regala with the use of Pacificard or renewals thereof issued in (her) favor by Pacific Banking Corporation. the Pacificard holder and the guarantor assume joint and several liabilities for any and all amount arising out of the use of the Pacificard. or any extension of time to pay such obligations. Pacificard filed this petition.. the principal obligor. obligations.00 per month only. Jr. 20 SCRA 1182. jointly and severally with Celia Syjuco Regala to pay the Pacific Banking Corporation upon demand any and all indebtedness. Jr.

by the insertion of the words "AND/OR" between "Antonio Gonzales/Industrial Management Development Corporation and Filipinas Carbon . "You may collect your legal expenses from the respondents as provided for by law. and petitioner No appeal was filed within the reglementary period thus. (INIMACO). vs. or the total aggregate award of ONE HUNDRED THIRTYEIGHT THOUSAND FIVE HUNDRED EIGHTY-EIGHT PESOS AND 31/100 (P138. their liability to pay the plaintiff would be solidary. to all the foregoing. VII in Cebu City against Filipinas Carbon Mining Corporation. petitioner filed a "Motion to Quash Alias Writ of Execution and Set Aside Decision. On June 16. Roberto Nemenzo. although solidarily liable with the principal debtor.565.R. ROBERTO NEMENZO AND DARIO GO or to this Office for appropriate disposition. you are hereby authorized to cause the satisfaction of the same on the movable or immovable property(s) of respondents not exempt from execution. The questioned decision of respondent appellate court is SET ASIDE and the decision of the trial court is REINSTATED. for payment of separation pay and unpaid wages.71. May 11. Chiu Chin Gin and Lo Kuan Chin. to pay complainants Enrique Sulit. the above Decision became final and executory. that the surety cannot be held liable to the same extent as the principal debtor. TITA BACUSMO. the Labor Arbiter issued a writ of execution but it was returned unsatisfied. Legaspi Village. ESMERALDO PEGARIDO the full award of P19." Changing the expression. L-34959. 106 Paseo de Roxas. 1987. by virtue of the powers vested in me by law.588.623. and Roberto Alegarbes filed a complaint with the Department of Labor and Employment. S-jcj The factual antecedents are undisputed: Supr-eme In September 1984. 1991 issued by the National Labor Relations Commission in RAB-VII-0711-84 on the alleged ground that it committed a grave abuse of discretion amounting to lack of jurisdiction in upholding the Alias Writ of Execution issued by the Labor Arbiter which deviated from the dispositive portion of the Decision dated March 10. VIRGINIA BACUS. Industrial Management Development Corporation (INIMACO). Manila respectively.00. 101723. Makati Metro Manila and at Philippine National Bank. A guarantor or surety does not incur liability unless the principal debtor is held liable.800. in front of La Curacha Restaurant. the total award of P82. Should you fail to collect the said sum in cash. All other claims are hereby Dismiss (sic) for lack of merit. judgment is hereby entered. Escolta. ESMERALDO PEGARIDO. but the nature of the Surety's undertaking is such that it does not incur liability unless and until the principal debtor is held liable. Gerardo Sicat.31) to be deposited with this Commission within ten (10) days from receipt of this Decision for appropriate disposition. 1987.dependent on that of the principal debtor" that the Surety "is considered in law as being the same party as the debtor in relation to whatever is adjudged."0[1] SECOND DIVISION [G. ordering respondents Filipinas Carbon and Mining Corp. NATIONAL LABOR RELATIONS COMMISSION. "SO ORDERED. DECISION BUENA. You are to return this writ sixty (6) (sic) days from your receipt hereof."[2] On September 3. Sc-jj In a Decision dated March 10. and/or to Filipinas Carbon and Mining corporation and Gerardo Sicat at 4th Floor Universal RE-Bldg. Roberto Nemenzo the total sum of P29. On August 26. you are hereby commanded to proceed to the premises of respondents Antonio Gonzales/Industrial Management Development Corporation (INIMACO) situated at Barangay Lahug. Tumamak held that: "RESPONSIVE. when their liability should merely be joint. ESMERALDO PEGARIDO. respondents. The nature and extent of the liabilities of a guarantor or a surety is determined by the clauses in the contract of suretyship(see PCIB v. or the liabilities of the two defendants herein "are so interwoven and dependent as to be inseparable. the Labor Arbiter issued an Alias Writ of Execution which ordered thus: Ed-pm-is "NOW THEREFORE. and ROBERTO ALEGARBES. thereby holding that the liability of the six respondents in the case below is solidary despite the absence of the word "solidary" in the dispositive portion of the Decision. Antonio Gonzales. Lo Kuan Chin. SOCORRO MAHINAY. Regional Arbitration Branch No.31) and thereafter turn over said amount to complainants ENRIQUE SULIT. (Fourth Division) Cebu City. Philippines. Gino Niere. if the defendants are held liable. is different from the debtor. and ENRIQUE SULIT.60 and DARIO GO the total award of P6. (INIMACO). 1987. March 18. Chiu Chin Gin. Esmeraldo Pegarido. 1987. Socorro Mahinay. "10 March 1987. SO ORDERED. CA. ROBERTO NEMENZO. No. Jjs-c ACCORDINGLY. Gerardo Sicat. private respondent Enrique Sulit. Tita Bacusmo. however.: This is a petition for certiorari assailing the Resolution dated September 4.599. Virginia Bacus. GINO NIERE. It does not mean. "SO ORDERED.588. Antonio Gonzales/Industrial Management Development Corp.00. Labor Arbiter Bonifacio B."[3] alleging among others that the alias writ of execution altered and changed the tenor of the decision by changing the liability of therein respondents from joint to solidary. 1988. 1987. the petition is GRANTED. petitioner. J. 2000] INDUSTRIAL MANAGEMENT INTERNATIONAL DEVELOPMENT CORP. Dariogo. It is in this sense that a surety. and collect the aggregate award of ONE HUNDRED THIRTY-EIGHT THOUSAND FIVE HUNDRED EIGHTY-EIGHT PESOS AND THIRTY ONE CENTAVOS (P138. touching the obligation of the latter". 159 SCRA 24). together with your corresponding report. "Cebu City. Cebu City. DARIO GO.

responsive to the foregoing respondent INIMACO’s Motions are hereby DENIED.198. under the contract of suretyship executed by the parties.can no longer be allowed in this case because the judgment has already become final and executory. ‘to waive any error. 1989. In Oriental Commercial Co. the Labor Arbiter denied the motion ruling thus: "WHEREFORE. The Sheriff of this Office is order (sic) to accept INIMACO’s tender payment (sic) of the sum of P23. 1989. A solidary or joint and several obligation is one in which each debtor is liable for the entire obligation. the correction -. By sheer technicality and unfounded assertions. Gerardo Sicat. "SO ORDERED. Inasmuch as respondents herein never controverted the claims of the complainants below. and the same cannot be executed otherwise. and Lo Kuan Chin. in line with the powers granted to the Commission under Article 218 (c) of the Labor code. Chiu Chin Gin. in an order dated September 14. [10] Well-entrenched is the rule that solidary obligation cannot lightly be inferred. Industrial Management Development Corporation (petitioner INIMACO). declared the obligation to be merely joint. What is important is that the Commission has ruled that the Writ of Execution issued by the Labor Arbiter in this case is proper. for the full and final satisfaction of the monetary award granted in the instant case. is solidary or not. considering the nature of labor proceedings there was. 1987. alleging that the respondent NLRC committed grave abuse of discretion in affirming the Order of the Labor Arbiter dated August 15.Sce-dp On October 2. the Labor Arbiter denied the motion. petitioner appealed[4] the Labor Arbiter’s Order dated September 14." The respondent NLRC dismissed the appeal in a Decision [5] dated August 31. Mis-oedp "WHEREFORE. there is no reason why complainants’ prayer should not be granted. when it is not provided in a judgment that the defendants are liable to pay jointly and severally a certain sum of money. Further. the Court finds that petitioner INIMACO’s liability is not solidary but merely joint and that the respondent NLRC acted with grave abuse of discretion in upholding the Labor Arbiter’s Alias Writ of Execution and subsequent Orders to the effect that petitioner’s liability is solidary." However. thus their liability should merely be joint. Dissatisfied with the foregoing.05. as partial satisfaction of the judgment and to proceed with the enforcement of the Alias Writ of Execution of the levied properties. an ambiguity in said dispositive portion which was subsequently clarified by the Labor Arbiter and the Commission in the incidents which were initiated by INIMACO itself. there is no doubt in our mind that the respondents herein are called upon to pay. and each creditor is entitled to demand the whole obligation. Considering the factual circumstances in this case. Abeto and Mabanag[13] this Court held: "It is of no consequence that. none of them may be compelled to satisfy in full said judgment. [15] Once a decision or order becomes final and executory. this appeal is DISMISSED and the Order appealed from is hereby AFFIRMED. Scc-alr It is an elementary principle of procedure that the resolution of the court in a given issue as embodied in the dispositive part of a decision or order is the controlling factor as to settlement of rights of the parties. 1987. It is not really correct to say that said Writ of Execution varied the terms of the judgment. 1989. which declared the liability of petitioner to be solidary. the word "solidary" does not appear. At most. 1987. Calrs-pped Upon careful examination of the pleadings filed by the parties.[12] In the dispositive portion of the Labor Arbiter. The final judgment. [11] There is a solidary liability only when the obligation expressly so states. when the law so provides or when the nature of the obligation so requires. the pertinent portions of which read: "In matters affecting labor rights and labor justice. in view of all the foregoing. 1987 to the respondent NLRC. now issued by this Office. petitioner filed the instant case. It is not in keeping with the established rules of practice and procedure to allow this attempt of INIMACO to delay the final disposition of this case. [9] In a joint obligation each obligor answers only for a part of the whole liability and to each obligee belongs only a part of the correlative rights. Antonio Gonzales. The said fallo expressly states the following respondents therein as liable. namely: Filipinas Carbon and Mining Corporation.and Mining Corporation. jointly and severally. We hold that the Writ of Execution be given due course in all respects. Moreover. it is removed from the power or jurisdiction of the .05 Representing One Sixth Pro Rata Share of Respondent INIMACO As Full and Final Satisfaction of Judgment As to Said Respondent. In an Order[7] dated August 15. INIMACO would now reopen the issue which was already resolved against it.which is substantial -. we have always adopted the liberal approach which favors the exercise of labor rights and which is beneficial to labor as a means to give full meaning and import to the constitutional mandate to afford protection to labor. which superseded the action for the enforcement of said contract."[6] The private respondents opposed the motion. defect or irregularity whether in substance or in form’ in a proceeding before Us. et al. the obligation contracted by the sureties was joint and several in character. Mis-edp "With double costs against appellant. 1991 which held that: "The arguments of respondent on the finality of the dispositive portion of the decision in this case is beside the point.198. vs. Nor can it be inferred therefrom that the liability of the six (6) respondents in the case below is solidary. petitioner filed a "Motion To Compel Sheriff To Accept Payment Of P23. it is already a well-settled doctrine in this jurisdiction that." [14] Granting that the Labor Arbiter has committed a mistake in failing to indicate in the dispositive portion that the liability of respondents therein is solidary." Ed-p On July 31. 1988." Ed-psc Petitioner appealed the above Order of the Labor Arbiter but this was again dismissed by the respondent NLRC in its Resolution[8] dated September 4. The only issue in this petition is whether petitioner’s liability pursuant to the Decision of the Labor Arbiter dated March 10. the claims of the complainants as was the latters’ prayers.

.00 11. thus. 7. (INIMACO) and/or Filipinas Carbon and Mining Corp.. Bataan...00 P970.324. stressing that no employer-employee relationship existed between it and the security guards..597. 16-Dec. GLEN ESTIPULAR. ALFREDO SIENES.[1] dated December 29.. ROLLY ANDRADA. “contrary to the mandatory and prohibitive laws because the right to proper compensation and benefits provided under the existing labor laws cannot be waived nor compromised. 13 th month pay and attorney’s fees.) 2 Jan. LUIS REGONDOLA. judgment is hereby rendered ordering the respondents as follows: 1. 00-09-005440-96-A. NESTOR FERER.50 31/94 (3.. Likewise challenged in the instant petition is the resolution[4] of the Court of Appeals. No. considered joint and petitioner’s payment which has been accepted considered as full satisfaction of its liability. ROMULO MACALINAO.090 x 9 = 31. the Labor Arbiter decided NLRC NCR Case No. 16/93Mar.. HONORARIO HORTECIO. petitioner prayed that it be dismissed for lack of merit. the private respondents herein. The liability of the respondents in RAB-VII0711-84 pursuant to the Decision of the Labor Arbiter dated March 10. as culled from records. 1-Dec. vs. AUGUSTO QUINTO. in NLRC NCR Case No.. it religiously complied with the terms of the security contract with Longest Force.5 mos. including the entire proceedings held for that purpose. holding petitioner jointly and severally liable with Longest Force Investigation and Security Agency. Mariveles Shipyard Corp. which affirmed the Labor Arbiter’s decision. 00-09-005440-96-A.623. Inc. [5] Longest Force. For its part.00 31/94 (9 mos... 1Apr. conformably with the foregoing. Thus.00 31/94 (9 mos.00 5. rendering a 12 hours duty per shift for the said period.70 29/95 (3.485 x 2 = P 5. MATURAN ROSAURO.410. SAMSON CANAS. However. ARFE BERAMO. promptly paying its bills and the contract rates of the latter. It further pointed out that it would be the height of injustice to make it liable again for monetary claims which it had already paid. 1993 to April 30. 15/93 P5. 7.[16] It thereby becomes immutable and unalterable and any amendment or alteration which substantially affects a final and executory judgment is null and void for lack of jurisdiction. 16/93-Mar. On May 22. 00-09-005440-96-A. 1Dec. RICKY CUESTA..485.00 15/93 (2 mos.) Apr.” The petitioner denied any liability on account of the alleged illegal dismissal. 6.court which rendered it to further alter or amend it.R.R.40 based on the PADPAO rates of pay covering the period from October 16.: For review on certiorari is the Resolution.) TOTAL UNDERPAYMENTS . On September 2.. as it is hereby.630. It was.000 1. ALFREDO ASCARRAGA. HON. terminated the employment of the security guards it had deployed at petitioner’s shipyard.000 P 485. before the Labor Arbiter.810 1. Pursuant to their agreement. to wit: WHEREFORE. denying petitioner’s motion for reconsideration. Ca-lrsc WHEREFORE. 1987 should be. Inc. premium pay for holiday and rest day..5 mos. private respondents filed a case for illegal dismissal." which makes the liability solidary. NELBERT PINEDA. Sppedsc SO ORDERED. therefore. 1998. ADOLAR ALBERT. due to a defective certificate of non-forum shopping and non-submission of the required documents to accompany said petition. The facts. SECOND DIVISION [G. 1991 of the respondent National Labor Relations is hereby declared NULL and VOID.respondents.) 2 Apr. and Mariveles Shipyard Corporation jointly and severally liable to pay the money claims of complainants representing underpayment of wages and overtime pay in the total amount of P2. DECISION QUISUMBING.97 mos. FRANCISCO LENOGON.630 x 3. 1995.. the proceedings held for the purpose of amending or altering the dispositive portion of the said decision are null and void for lack of jurisdiction. hence the same became final and executory. petitioner Mariveles Shipyard Corporation engaged the services of Longest Force Investigation and Security Agency. ERNESTO MAGNO.20 . NOEL ALBADBAD. (hereinafter. DANILO CRISOSTOMO. BONIFACIO TRINIDAD. 1999. [17] An order of execution which varies the tenor of the judgment or exceeds the terms thereof is a nullity. Also.280.P63.00 5. it found the services being rendered by the assigned guards unsatisfactory and inadequate.. HONESTO CABANILLAS. at the petitioner’s shipyard in Mariveles. FRANCISCO COMPUESTO. duty) RECEIVED PERIOD DIFFERENTIALS Oct.025 but passed on the liability to petitioner alleging that the service fee paid by the latter to it was way below the PNPSOSIA and PADPAO rate. in turn. COURT OF APPEALS. underpayment of wages pursuant to the PNPSOSIA-PADPAO rates. 7. JESUS RIPARIP. the case sought the guards’ reinstatement with full backwages and without loss of seniority rights. removed from the jurisdiction of the Labor Arbiter or the NLRC to further alter or amend it.[18] None of the parties in the case before the Labor Arbiter appealed the Decision dated March 10. ISABELITO CORTEZ.70 OVERTIME: Oct. 1999. causing it to terminate its contract with Longest Force on April 1995. Docketed as NLRC NCR Case No.00 (2 mos. 2003] MARIVELES SHIPYARD CORP.602. Longest Force filed a cross-claim [6] against the petitioner.00 5.00 5.. It likewise admitted its liability as to the non-payment of the alleged wage differential in the total amount ofP2.810 1.792.618.) Dec.705. 1987. dated April 22. Longest Force deployed its security guards. 144134. for the underpayment of wages and overtime pay due to the private respondents. P5. 1-Apr.. the petition is hereby GRANTED. 6. SP No. [3] dated May 22.. Inc. “Longest Force”) to render security services at its premises... November 11. LARRY ROGOLA. 1993 up to April 29. According to petitioner.) Jan. it was now estopped from questioning said agreement on the ground that it had made a bad deal. 1995 broken down as follows: UNDERPAYMENT OF WAGES: PERIOD MONTHLY COVERED PADPAO ACTUAL UNDERPAYMENT RATES SALARY FOR THE Wage (8 hrs. 55416..905. petitioner. the Alias Writ of Execution is null and void because it varied the tenor of the judgment in that it sought to enforce the final judgment against "Antonio Gonzales/Industrial Management Development Corp. are as follows: Sometime on October 1993.) 2 Dec. service incentive leave pay. had filed a special civil action for certiorari with the Court of Appeals to nullify the resolution[2] of the National Labor Relations Commission (NLRC). Longest Force admitted that it employed private respondents and assigned them as security guards at the premises of petitioner from October 16. DECLARING respondents Longest Force Investigation & Security Agency. dated July 12. J. 1998. 7. 2000. of the Court of Appeals in CAG.00 31/94 (3. non-payment of overtime pay.00 5. ROGELIO PINTUAN.485.5 = 11. MANUELIT GATALAN. against the other five (5) respondents in the said case.00 P5.) 2 TOTAL OVERTIME.520. without prejudice to the enforcement of the award.331. 1996. The Resolution dated September 4.700. which dismissed outright the petition for certiorari of Mariveles Shipyard Corp. and Gerardo Sicat.97 mos.090. ORESCA AGAPITO.P23..70 29/95 (3.. against both Longest Force and petitioner..220 x 3. FEBIEN ISIP. Anent the cross-claim filed by Longest Force against it.. Petitioner averred that Longest Force had benefited from the contract.97 = 14.220.630. AMPING CASTILLO and ELWIN REVILLA. 16-Dec.

Samson Canas (the same) 87.90 25.00 1/1 – 4/29/95 = 3.684.116. Ernesto Magno (the same) 87.90 13.684.684. The verification and certification on non-forum shopping is signed not by duly authorized officer of petitioner corporation. Luis Regondula (the same) P 87.00 12/16/93 – 3/31/94=3.90 3. The Court of Appeals. Honario Hortecio (the same) 87.684.90 27. The petition is unaccompanied by copies of relevant and pertinent documents.684.40 GRAND TOTAL P3. 25.116. Andrada Ricky (the same) 87.40 Arfe Beramo (same) 126. 3.40 6. Romulo Macalinao (the same) 87.40 11.40 10.Sub-Total of Underpayments and Overtime……………… P87.90 19.40 3.927.90 GRAND TOTAL P 2. The petitioner then filed a special civil action for certiorari assailing the NLRC judgment for having been rendered with grave abuse of discretion with the Court of Appeals.116. DISMISSING all other claims for lack of legal basis.116.485.700.40 Alfredo Azcarraga (same) 126.684.90 21.684.90 6.40[8] 2. docketed as CA-G. Nelbert Pineda (the same) 87.40 9.684.IN DISMISSING THE PETITION AND DENYING THE MOTION FOR RECONSIDERATION DESPITE THE FACT THAT PETITIONER SUBSTANTIALLY COMPLIED WITH THE REQUIREMENTS OF SECTION 1.220. Larry Rogola (the same) 87.90 26. Castillo Amping (the same) 87.630.116. 30. Ricky Cuesta (the same) 87.40 Bonifacio Trinidad (same) 126.90 4. Petitioner moved for reconsideration.40 Cabanillas Honesto (same) 126. particularly the motion for reconsideration filed before the NLRC (Section 1.90 11.00 x 3.116. …WHEN IT FAILED TO RULE THAT ONLY “LONGEST FORCE” SHOULD BE SOLELY AND ULTIMATELY LIABLE IN THE INSTANT CASE. but this was denied by the NLRC.97 mos.IN AFFIRMING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION THAT “LONGEST FORCE” AND PETITIONER ARE JOINTLY AND SEVERALLY LIABLE FOR PAYMENT OF WAGES AND OVERTIME PAY DESPITE THE CLEAR SHOWING THAT PETITIONER HAVE ALREADY PAID THE SECURITY SERVICES THAT WAS RENDERED BY PRIVATE RESPONDENTS. ….663.90 22.684. P 7.00 x 3.40 4. Augosto Quinto (the same) 87.684.00 x 9 mos.40 Febien Isip (same) 126. The appellate court denied the motion. Rule 65.684. 14. Nestor Ferrer (same) 126. SP No. 1997 Rules of Civil Procedure). affirmed in toto the decision of the Labor Arbiter. Cabanillas Honesto (the same) 87.684.684.684.062. 29.40 Isabelito Cortes (same) 126.205. Manolito Catalan (the same) 87.[11] Petitioner appealed the foregoing to the NLRC in NLRC NCR Case No. 27.684. this present petition before us. ORDERING said Longest Force Investigation & Security Agency.40 Honario Hortecio (same) 126. Rogelio Pintuan (same) 126.40 Augosto Quinto (same) 126.40[9] 4. The labor tribunal.090.116. In any event.116. Danilo Crisostomo (same) 126.40 Maturan Rosauro (same) 126.90 8. Noel Alibadbad (the same) 87. 23. Nestor Ferrer (the same) 87.90 10.684. Noel Alibadbad (same) 126. SO ORDERED. to pay attorney’s fees equivalent to ten (10%) percent of the total award recovered representing backwages in the amount of P392.90 2. = P 10. however.116.216.40 Castillo Amping (same) 126. 18.90 15.[13] We find the issues for our resolution to be: (1) Was it error for the Court of Appeals to sustain its order of dismissal of petitioner’s special civil action for certiorari.684.116. Jesus Riparip (the same) 87. Febien Isip (the same) 87.116.90 23. Hence.684.90 17.90 9.5 mos. Oresca Agapito (the same) 87. …. Danilo Crisostomo (the same) 87.40 Revilla Elwin (same) 126. to reinstate all the herein complainants to their former or equivalent positions without loss of seniority rights and privileges with full backwages which as computed as of the date of this decision are as follows: Backwages: 10/16 – 12/15/93 =2 mos. 16. 2.40[7] 1.90 12. ORDERING respondent Longest Force Investigation & Security Agency. 15. Arfe Beramo (the same) 87. 00-09-005440-96-A.684.00 4/1 – 12/31/94 = 9 mos. Ricky Cuesta (same) 126.116.721.40 Alfredo Sienes (same) 126.90 14.40 Adolar Albert (same) 126. Inc. Isabelito Cortes (the same) 87.90 20.116.684.684. 21.116.970.684. 55416. 22. 4.40 TOTAL P 126.684. however. Revilla Elwin (the same) 87. 13. Luis Regondula (same) P 126. Rogelio Pintuan (the same) 87.40 Glen Estipular (same) 126. 20.90 31.116. 26. Francisco Compuesto (the same) 87. Rule 65. Manolito Catalan (same) 126. Petitioner submits that THE COURT OF APPEALS GRAVELY ERRED: 1. DECLARING both respondents liable to pay complainants attorney’s fees equivalent to ten (10%) percent of the total award recovered or the sum ofP270. Alfredo Sienes (the same) 87.R.40 7. 17.684. Oresca Agapito (same) 126.90 1. Francisco Lenogon (same) 126.810.116.116.116. Adolar Albert (the same) 87.116. Bonifacio Trinidad (the same) 87.90 7.40 12.116.[10] 5.116.IN RULING THAT PETITIONER WAS NOT DENIED DUE PROCESS OF LAW. P 7. Maturan Rosauro (the same) 87. Romulo Macalinao (same) 126.684.40 Ernesto Magno (same) 126.116.90 30. but by counsel (Section 1.116.684.[12] The petitioner then moved for reconsideration of the order of dismissal. Andrada Rolly (same) 126. = 23.684.40 8. P 5. 3.116.40 Francisco Compuesto (same) 126.684. 1997 Rules of Civil Procedure).64.40 Jesus Riparip (same) 126.90 18. …. 28.116.40 Nelbert Pineda (same) 126. 2. Alfredo Azcarraga (the same) 87.97 mos. Inc. denied due course to the petition and dismissed it outright for the following reasons: 1.116. = 28.684. = 63. it found no grave abuse of discretion on the part of the NLRC to grant the writ of certiorari. 1997 RULES OF CIVIL PROCEDURE.00 x 2 mos.116.684. Larry Rogola (same) 126.116. RULE 65. 31.90 5. notwithstanding subsequent compliance with the requirements under the Rules of Court by the petitioner? (2) Did the appellate court err in not holding that petitioner was denied due process of law by the NLRC? and (3) Did the appellate court grievously err in . Glen Estipular (the same) 87.90 2.90 29.34. Francisco Lenogon (the same) 87.5 mos.684.116.684.90 24. pointing out that under prevailing case law subsequent compliance with formal requirements for filing a petition as prescribed by the Rules.40 5. does not ipso factowarrant a reconsideration.90 16.116.40 Samson Canas (same) 126. 19. 24.623. P 6.

– The provisions of the immediately preceding Article shall likewise apply to any person.40.[21] Thus. and (2) the petition was not accompanied by a copy of motion for reconsideration filed before the NLRC. the physical act of signing may be performed. per amendment in Resolution No. respectively. The amounts payable to . Well settled is the rule that the essence of due process is simply an opportunity to be heard. CONTRACTOR OR SUBCONTRACTOR – Whenever an employer enters into a contract with another person for the performance of the former’s work.40 andP392. in the event the Labor Arbiter determines that no formal hearing would be conducted or that such hearing was not necessary. 107. Petitioner’s plea for liberality. not only was the originally appended certification signed by counsel. the Resolution of the Court of Appeals in CA-G. Rosanna Ignacio. This is mandated by the Labor Code to ensure compliance with its provisions. on behalf of the corporate entity. In assailing the appellate court’s ruling. Stipulations in violation thereof are considered null. Labor standards are enacted by the legislature to alleviate the plight of workers whose wages barely meet the spiraling costs of their basic needs. suffice it to state that such involves a determination and evaluation of facts which cannot be done in a petition for review. Thus. Utter disregard of the rules cannot justly be rationalized by harking on the policy of liberal construction. Lastly. NLRC. only questions of law may be reviewed. SP No. on this point. its Personnel Manager who signed the verification and certification of non-forum shopping attached thereto. task. NLRC. We find that such opportunity more than satisfies the requirement of due process in labor cases. On the third issue. a dismissal was proper under Section 3. 55416 is AFFIRMED with MODIFICATION. when petitioner contracted for security services with Longest Force as the security agency that hired private respondents to work as guards for the shipyard corporation. we discovered certain errors that happened in the addition of the amount of individual backwages that resulted in the erroneous total amount of backwages and attorney’s fees.927. Upon review of the award of backwages and attorney’s fees. It is settled that the requirement in the Rules that the certification of non-forum shopping should be executed and signed by the plaintiff or the principal means that counsel cannot sign said certification unless clothed with special authority to do so. cannot be granted by the Court for reasons herein elucidated. Following Article 106. stating the reasons therefor. The security agency is held liable by virtue of its status as direct employer. Well established is the rule that in an appeal via certiorari. …[22] Petitioner’s contention. However. 5(b) Rule V (now Section 11. still petitioner utterly failed to show that Ms. Inc. the matter of reimbursement between petitioner and Longest Force in accordance with Eagle Security Agency Inc. Anent the second issue. petitioner was given ample opportunity to present its side in several hearings conducted before the Labor Arbiter and in the position papers and other supporting documents that it had submitted. instead of P3. including payment of statutory minimum wage.926.[19] In the case of natural persons. Also.610.40 and P392. Hence. SP No. contracts with an independent contractor for the performance of any work.684. It submits that the certification signed by its counsel and attached to its petition filed with the Court of Appeals is substantial compliance with the requirement.[23] Not all cases require a trial-type hearing. Petitioner adds that the Arbiter did not observe the mandatory language of the then Sec. not being an employer.R. an opportunity to explain one’s side or an opportunity to seek a reconsideration of the action or ruling complained of. or. Inc. It did not err in dismissing the petition for non-compliance with the requirements governing the certification of non-forum shopping. shall be paid in accordance with the provisions of this Code. INDIRECT EMPLOYER. the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract. petitioner became an indirect employer of private respondents pursuant to Article 107 abovecited. a joint verification and certification of non-forum shopping duly signed by its Personnel Manager [16] and a copy of the Motion for Reconsideration[17]filed before the NLRC were attached therein.64.[32] One final point. 01-02. As an employer. pursuant to Articles 106. Moreover. they shall be considered as direct employers.[31] On the issue of the propriety of the award of overtime pay despite the alleged lack of proof thereof. [14] Rule 65 of the Rules of Court. when the agency as contractor failed to pay the guards. partnership. while the corporation is deemed the indirect employer of the guards for the purpose of paying their wages in the event of failure of the agency to pay them. The requirement of due process in labor cases before a Labor Arbiter is satisfied when the parties are given the opportunity to submit their position papers to which they are supposed to attach all the supporting documents or documentary evidence that would prove their respective claims. that is. if any. he shall issue an Order to that effect and shall inform the parties. 106. thus violating Section 1. It cannot be gainsaid that obedience to the requirements of procedural rule is needed if we are to expect fair results therefrom. Similarly. the Rule requires the parties themselves to sign the certificate of non-forum shopping.[24] In any event.40 instead of P126. NLRC. a certification signed by counsel alone is defective and constitutes a valid cause for dismissal of the petition. petitioner prays that we take a liberal stance to promote the ends of justice. Petitioner and Longest Force are held liable jointly and severally for underpayment of wages and overtime pay of the security guards. This statutory scheme gives the workers the ample protection consonant with labor and social justice provisions of the 1987 Constitution. in the same manner and extent that he is liable to employees directly employed by him. no error could be validly attributed to respondent Court of Appeals. cannot personally do the task themselves. but in its motion for reconsideration. the petitioner appeals to our sense of compassion and kind consideration. every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code.[29] As held in Del Rosario & Sons Logging Enterprises. only by specifically authorized individuals for the simple reason that corporations. 55416 observed that: (1) the verification and certification of non-forum shopping was not signed by any duly authorized officer of petitioner but merely by petitioner’s counsel. v. petitioner calls our attention to the fact that when it filed its motion for reconsideration before the Court of Appeals. Thus. the private respondents herein. however. petitioner claims that the Court of Appeals failed to render a decision that finally disposed of the case because it did not specifically rule on the immediate recourse of private respondents. the Court of Appeals in dismissing CA-G. petitioner argues that it should not be held jointly and severally liable with Longest Force for underpayment of wages and overtime pay because it had been religiously and promptly paying the bills for the security services sent by Longest Force and that these are in accordance with the statutory minimum wage. as applied to administrative proceedings. Series of 2002) of the NLRC New Rules of Procedure which provided that: If the Labor Arbiter finds no necessity of further hearing after the parties have submitted their position papers and supporting documents. [20] In this case.216.648. These errors ought to be properly rectified now.[15] Rule 46 of the Rules. as artificial persons. we must emphasize that the solidary liability of petitioner with that of Longest Force does not preclude the application of the Civil Code provision on the right of reimbursement from his co-debtor by the one who paid. [30] the joint and several liability imposed on petitioner is without prejudice to a claim for reimbursement by petitioner against the security agency for such amounts as petitioner may have to pay to complainants. The security agency may not seek exculpation by claiming that the principal’s payments to it were inadequate for the guards’ lawful compensation. xxx ART. petitioner contends that it should not be held liable for overtime pay as private respondents failed to present proof that overtime work was actually performed. In this case. Hence. v. Thus. while the correct sum of total backwages awarded and attorney’s fees should be P3.finding petitioner jointly and severally liable with Longest Force for the payment of wage differentials and overtime pay owing to the private respondents? On the first issue. 107 and 109 of the Labor Code which provide as follows: ART. – The provisions of existing laws to the contrary notwithstanding.[28] However. association or corporation which.721.[25] and Philippine Fisheries Development Authority v. employers cannot hide behind their contracts in order to evade their (or their contractors’ or subcontractors’) liability for noncompliance with the statutory minimum wage. the security agency is charged with knowledge of labor laws. the employees of the contractor and of the latter’s subcontractor. in our view. without prejudice to petitioner’s right of reimbursement from Longest Force Investigation and Security Agency.[26] Petitioner’s liability is joint and several with that of Longest Force. the correct sum of individual backwages should be P126. 109. WHEREFORE. In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code. job or project. Labor laws are considered written in every contract. petitioner avers that there was denial of due process of law when the Labor Arbiter failed to have the case tried on the merits.R. lacks sufficient basis. SOLIDARY LIABILITY. For purposes of determining the extent of their civil liability under this Chapter.100. in the case of the corporations. was duly authorized for this purpose. as found by the NLRC.[18] The reason for this is that the plaintiff or principal knows better than anyone else whether a petition has previously been filed involving the same case or substantially the same issues.04. [27] Petitioner cannot evade its liability by claiming that it had religiously paid the compensation of guards as stipulated under the contract with the security agency. and the adequacy of the compensation that it demands for contractual services is its principal concern and not any other’s. legislated wage increases are deemed amendments to the contract. ART. the corporation as principal becomes jointly and severally liable for the guards’ wages.

1993 of the Regional Trial Court. The gross negligence of its driver raised the presumption that CDCP was negligent either in the selection or in the supervision of its employees which it failed to rebut thus making it and its driver liable to respondents. 6th and 7th ribs. Thus. are ordered to pay plaintiff-appellants Rebecca Estrella and Rachel Fletcher the amount of Twenty Thousand (P20. this petition raising the following issues: I WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING RESPONDENTS BLTB AND/OR ITS DRIVER WILFREDO DATINGUINOO SOLELY LIABLE FOR THE DAMAGES SUSTAINED BY HEREIN RESPONDENTS FLETCHER AND ESTRELLA. (3) that BLTB allowed its bus to operate knowing that it lacked proper maintenance thus exposing its passengers to grave danger. ATTORNEY'S FEES AND LEGAL INTEREST TO RESPONDENTS FLETCHER AND ESTRELLA. FLETCHER.R. – Dismissing the crossclaim. SO ORDERED. and lifelong social humiliation.254. the assailed decision dated October 7. The Court of Appeals also awarded attorney's fees equivalent to 30% of the total amount recovered based on the retainer agreement of the parties. respondents.. Jr. moral shock. On the counterclaim of Construction and Development Corporation of the Philippines (now PNCC) – Dismissing the counterclaim. FIRST DIVISION G.8 The trial court held that BLTB. besmirched reputation and wounded feelings. finding Batangas Laguna Tayabas Bus Co. in Civil Case No.43 as actual damages and to pay the sum of P10. they never reached their destination because their bus was rammed from behind by a tractor-truck of CDCP in the South Expressway. fright and mental anguish.. petitioner. and Wilfredo Datinguinoo – Dismissing the counterclaim. as a common carrier. both tibial4 Thereafter.04..000. RACHEL E. respondents filed a Complaint5 for damages against CDCP. Jr. The interest of six (6) percent per annum on the actual damages of P79. observe honesty and good faith which entitles them to claim for exemplary damage. left lower leg Fracture. shall pay the plaintiffs the amount of Fifty Thousand (P50.354.000.9 Regarding CDCP. Costs against petitioner.00) Pesos to plaintiff Rachel Fletcher and Twenty Five Thousand (P25. the carrier is presumed to have been at fault or has acted negligently.000. In favor of the plaintiffs and against the defendants BLTB.254.43 should commence to run from the time the judicial demand was made or from the filing of the complaint on February 4. The antecedent facts are as follows: On December 29. give respondents their due. and WILFREDO DATINGUINOO. 46896. On the crossclaim against Construction and Development Corporation of the Philippines (now PNCC) and Espiridion Payunan. and Wilfredo Datinguinoo before the Regional Trial Court of Manila. Branch 13. 1978. (6) that defendants failed to act with justice. and (7) that they are entitled to a reasonable amount of attorney's fees and litigation expenses. (5) that they suffered physical discomfort. ESTRELLA. it affirmed the ruling of the trial court that the claim of CDCP against Phoenix had already prescribed.. with a due regard for all the circumstances. 147791 September 8. (Phoenix). 2006 CONSTRUCTION DEVELOPMENT CORPORATION OF THE PHILIPPINES. which affirmed with modification the February 9. Defendants-appellants Construction and Development Corporation of the Philippines (now PNCC) and Espiridion Payunan. Rachel E. respectively. On the crossclaim against BLTB – Dismissing the crossclaim. They regained consciousness only when rescuers created a hole in the bus and extricated their legs from under the seats. respondents moved that the decision be reconsidered but was denied. Fracture.100. 5. judgment is rendered: In the Complaint – 1. 1993. On the Third Party Complaint by Construction and Development Corporation of the Philippines against Philippine Phoenix Surety and Insurance. Respondents elevated the case 11 to the Court of Appeals which affirmed the decision of the trial court but modified the amount of damages. 1993 Decision2 of the Regional Trial Court of Manila. respectively. 2.7 On February 9. Accordingly. PHILIPPINE PHOENIX SURETY & INSURANCE INC. In addition.40 andP392.000. Jr. SO ORDERED. It must carry the passengers safely as far as human care and foresight provide.00 for Estrella and P300. Inc. vs. by way of total backwages and attorney’s fees are hereby set at P3. II WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN AWARDING EXCESSIVE OR UNFOUNDED DAMAGES. respondents Rebecca G. . defendant Construction and Development Corporation of the Philippines and defendant Espiridion Payunan. Estrella and her granddaughter. Jr. using the utmost diligence of very cautious persons. (2) that BLTB and CDCP did not exercise the diligence of a good father of a family in the selection and supervision of their employees. 3. the 6% interest per annum should commence to run from the time the judicial demand was made or from the filing of the complaint and not from the date of judgment. J.: This petition for review assails the March 29. chin Contusions with abrasions. Branch 13. left tibia mid 3rd Lacerated wound. a BLTB bus bound for Pasay City. and Datinguinoo.00 as attorney's fees or a total of P89.R.00) Pesos to plaintiff Rebecca Estrella. Wilfredo Datinguinoo. R-82-2137. The appellate court also held that respondents are entitled to exemplary and moral damages. the dispositive portion of which provides: WHEREFORE. states: WHEREFORE. Thirty (30) percent of the total amount recovered is hereby awarded as attorney's fees. herein private respondents. Hence.43. Evidence showed that CDCP's driver was reckless and driving very fast at the time of the incident. (4) that they suffered actual damages amounting to P250. right leg posterior aspect popliteal area and antero-lateral aspect mid lower leg with severance of muscles. Partial amputation BK left leg with severance of gastro-soleus and antero-lateral compartment of lower leg.REBECCA G. Espiridion Payunan. the dispositive portion of which. SO ORDERED. 10 Unsatisfied with the award of damages and attorney's fees by the trial court.00 for Fletcher.926. Jr. where a passenger dies or is injured. On the counterclaim of BLTB Co. were negligent and did not obey traffic laws. No. 1980. 2.000. They alleged (1) that Payunan. Finally. who were the drivers of CDCP and BLTB buses. YNARES-SANTIAGO. boarded in San Pablo City. BLTB's inability to carry respondents to their destination gave rise to an action for breach of contract of carriage while its failure to rebut the presumption of negligence made it liable to respondents for the breach. BATANGAS LAGUNA TAYABAS BUS CO. Manila is hereby AFFIRMED with the following MODIFICATION: 1. III WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING RESPONDENT PHOENIX LIABLE UNDER ITS INSURANCE POLICY ON THE GROUND OF PRESCRIPTION.000. Branch 13. the trial court rendered a decision finding CDCP and BLTB and their employees liable for damages. The strong impact pushed forward their seats and pinned their knees to the seats in front of them. ordering said defendants. Fletcher. open comminuted. BLTB.12 The Court of Appeals held that the actual or compensatory damage sought by respondents for the injuries they sustained in the form of hospital bills were already liquidated and were ascertained. right3 Medical Certificate of Rachel Fletcher Extensive lacerated wounds. Construction and Development Corporation of the Philippines (now PNCC) and Espiridion Payunan. Jr.000. 7. Incorporated – Dismissing the Third Party Complaint. 6. However.complaining security guards. CDCP filed its Answer6 which was later amended to include a third-party complaint against Philippine Phoenix Surety and Insurance. 2001 Decision1 of the Court of Appeals in CA-G. 3.00) each as exemplary damages and P80. 4. CV No. (BLTB) and Construction Development Corporation of the Philippines (CDCP) liable for damages. jointly and severally to pay the plaintiffs the sum of P79. was bound to observe extraordinary diligence in the vigilance over the safety of its passengers.00 by way of moral damages to Rachel Fletcher.610. the trial court found that the tractor-truck it owned bumped the BLTB bus from behind. serious anxiety. They were brought to the Makati Medical Center where the doctors diagnosed their injuries to be as follows: Medical Certificate of Rebecca Estrella Fracture.

Thus. While exemplary damages cannot be recovered as a matter of right. was also found negligent in the selection and supervision of its employees.17we reiterated that joint tort feasors are jointly and severally liable for the tort which they commit.The issues for resolution are as follows: (1) whether BLTB and its driver Wilfredo Datinguinoo are solely liable for the damages sustained by respondents.27 that: There are two commonly accepted concepts of attorney's fees.000.000. In Anuran v. x x x It may be stated as a general rule that joint tort feasors are all the persons who command. to the same extent and in the same manner as if they had performed the wrongful act themselves.25 In this case. except among themselves. Jr.000. 56 Phil. The case filed by respondents against petitioner is an action for culpa aquiliana or quasi-delict under Article 2176 of the Civil Code. The liability for the negligent conduct of the subordinate is direct and primary. Jr. an attorney's fee is the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter. As early as 1913.16(Emphasis supplied) In a "joint" obligation. Court of Appeals. and is payable not to the lawyer but to the client. (2) whether the damages. As regards paragraph 2 of the trial court's decision. instigate. cooperate in. and legal interest awarded by the Court of Appeals are excessive. (3) whether CDCP can recover under its insurance policy from Phoenix. We held. in a "solidary" or "joint and several" obligation. thus: Nor should it make any difference that the liability of petitioner [bus owner] springs from contract while that of respondents [owner and driver of other vehicle] arises from quasi-delict. In Del Rosario v. Continental Cement Corporation.000. that the others who participated in the wrongful act are not joined with him as defendants. the so-called ordinary and extraordinary. the operator of the other vehicle and the driver of the vehicle were jointly and severally held liable to the injured passenger or the latter's heirs. attorney's fees and legal interest awarded by the CA are excessive and unfounded.20 Moreover. but is also jointly liable with his tort feasors. They fail to recognize the universal doctrine that each joint tort feasor is not only individually liable for the tort in which he participates. Regarding attorney's fees.00 to respondent Estrella. v. There can be but satisfaction. hence.18 we held that: x x x The difficulty in the contention of the appellants is that they fail to recognize that the basis of the present action is tort. promote. the bus company. thus: The same rule of liability was applied in situations where the negligence of the driver of the bus on which plaintiff was riding concurred with the negligence of a third party who was the driver of another vehicle. petitioner's driver was driving recklessly at the time its truck rammed the BLTB bus. temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded. Court of Appeals. National Labor Relations Commission. Court of Appeals. In its ordinary concept. such as those authorized in Article 2208. Intermediate Appellate Court. who has direct and primary liability for the negligent conduct of its subordinates. thus justifying the holding that the carrier and the driver were jointly and severally liable because their separate and distinct acts concurred to produce the same injury. we held in Traders Royal Bank Employees Union-Independent v.14 In the instant case. aid or abet the commission of a tort.00 each. advise. of course satisfies any claim which might exist against the others. It is well-settled in Fabre. Exemplary Damages are imposed not to enrich one party or impoverish another but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions. Court of Appeals. the cause of action based on culpa aquiliana in the civil suit they filed against it was valid. v.After all. by way of example or correction for the public good. nor is it any excuse for him that his participation in the tort was insignificant as compared to that of the others. Respondents. although plaintiff must show that he is entitled to moral. the drivers as well as the owners of the two vehicles are jointly and severally liable for damages. The damages can not be apportioned among them. Petitioner. In the body of the trial court's decision. And this is true even though they are charged jointly and severally. Batangas Laguna Tayabas Bus Co. In its extraordinary concept. Exemplary damages may be awarded in addition to moral and compensatory damages.00. much less on that of breach of contract alone. 23 The Court of Appeals correctly awarded respondents exemplary damages in the amount of P20. or who approve of it after it is done. attorney's fees. There may be an action arising out of one incident where questions of fact are common to all. exemplary damages may be granted if the defendant acted with gross negligence. 2229 of the Civil Code also provides that such damages may be imposed. The trial court and the Court of Appeals found petitioner solidarily liable with BLTB for the actual damages suffered by respondents because of the injuries they sustained. it was clearly stated that petitioner and its driver Payunan. for the purpose of each paying an aliquot part. x x x Of course the court during trial may find that some of the alleged tort feasors are liable and that others are not liable. the award should nonetheless be commensurate to the suffering inflicted. was driving recklessly because of the skid marks as shown in the sketch of the police investigator.22 While moral damages are not intended to enrich the plaintiff at the expense of the defendant. 24 Article 2231 of the Civil Code also states that in quasi-delicts. The release of one of the joint tort feasors by agreement generally operates to discharge all. Gutierrez. The basis of this is any of the cases provided by law where such award can be made. x x x Joint tort feasors are jointly and severally liable for the tort which they commit.000. we already ruled in Gutierrez vs. The persons injured may sue all of them or any number less than all. Citing Worcester v. In Lafarge Cement v.13 In this regard.15 that the owner of the other vehicle which collided with a common carrier is solidarily liable to the injured passenger of the same. it was properly joined as a party. its driver.28 (Emphasis supplied) . it was permitted for them to allege alternative causes of action and join as many parties as may be liable on such causes of action so long as private respondent and her co-plaintiffs do not recover twice for the same injury. The petition lacks merit. Article 2180 provides that the obligation imposed by Article 2176 is demandable for the acts or omissions of those persons for whom one is responsible. countenance.. unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof. x x x xxxx As in the case of BLTB.00 to respondent Fletcher and P25. Buño.21 The award of moral damages in favor of Fletcher and Estrella in the amount of P80. Moral damages may be recovered in quasi-delicts causing physical injuries. Jr. private respondents in this case and her co-plaintiffs did not stake out their claim against the carrier and the driver exclusively on one theory. The basis of this allocation of liability was explained in Viluan v. by one of the joint tort feasors. They cannot insist upon an apportionment. Each is liable for the whole damages caused by all. but is subject to the defense of due diligence in the selection and supervision of the employee. then it should no longer be held liable to pay the amounts stated in paragraph 2 of the same decision.26 we held. The courts may release some for lack of evidence while condemning others of the alleged tort feasors.19 Petitioner's claim that paragraph 2 of the dispositive portion of the trial court's decision is ambiguous and arbitrary and also entitles respondents to recover twice is without basis. and Metro Manila Transit Corporation v. x x x Joint tort feasors are not liable pro rata.00 must be reduced since prevailing jurisprudence fixed the same at P50. petitioner claims that it is ambiguous and arbitrary because the dispositive portion did not state the basis and nature of such award. Petitioner claims that the liability for actual damages and attorney's fees is based on culpa contractual. Civil Code. thus: ART. that in case of injury to a passenger due to the negligence of the driver of the bus on which he was riding and of the driver of another vehicle. It was established that Payunan. an action based on quasi-delict may be instituted against the employer for an employee's act or omission. They are jointly and severally liable for the whole amount. It is no defense for one sued alone. only BLTB should be held liable. are jointly and solidarily liable for moral damages in the amount of P50. They are each liable as principals. Consequently. and all together are jointly liable for the whole damage. Petitioner contends that since it was made solidarily liable with BLTB for actual damages and attorney's fees in paragraph 1 of the trial court's decision. Jr. x x x A payment in full for the damage done. the trial court found that petitioner failed to prove that it exercised the diligence of a good father of a family in the selection and supervision of Payunan. Petitioner next claims that the damages. encourage. argue that petitioner is also at fault. there could be no double recovery because the award in paragraph 2 is for moral damages while the award in paragraph 1 is for actual damages and attorney's fees. The basis of this compensation is the fact of his employment by and his agreement with the client. thus causing an accident. thus. the relationship between the active and the passive subjects is so close that each of them must comply with or demand the fulfillment of the whole obligation. an attorney's fee is an indemnity for damages ordered by the court to be paid by the losing party in a litigation. What is clear from the cases is the intent of the plaintiff there to recover from both the carrier and the driver. 177. they need not be proved. if done for their benefit. each obligor answers only for a part of the whole liability. on the other hand. Ocampo.

law. They employed Clemente Alfaro (Alfaro) as driver of the van. shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. however. a loan or forbearance of money. with the Commissioner or Courts within one year from denial of the claim. as amended. assessed and determined by the court and only upon presentation of proof thereon. Branch 260. to wit – 1. the van picked Aaron up around 6:00 a. His liability may include indemnity for loss of earning capacity even if the deceased passenger may only be an unemployed high school student at the time of the accident. this interim period being deemed to be by then an equivalent to a forbearance of credit. whether the case falls under paragraph 1 or paragraph 2.No interest. the narrow path was marked by piles of construction materials and parked passenger jeepneys. v. He is bound to observe extraordinary diligence in the conduct of his business. vs. 46896 dated March 29. The total amount adjudged shall earn interest at the rate of 6% per annum from the date of judgment of the trial court until finality of this judgment. its claim has already prescribed. SO ORDERED. Petitioners. delicts or quasi-delicts is breached. the Court of Appeals correctly awarded attorney's fees and other expenses of litigation as they may be recovered as actual or compensatory damages when exemplary damages are awarded.29 Regarding the imposition of legal interest at the rate of 6% from the time of the filing of the complaint.m.000. i. When the judgment of the court awarding a sum of money becomes final and executory. contracts. and that they were already running late because of the heavy vehicular traffic on the South Superhighway. 3. Makati City. i. The Case By petition for review on certiorari. 1980 when the complaint was filed. the claimant's right of action shall prescribe.m. Antecedents The Pereñas were engaged in the business of transporting students from their respective residences in Parañaque City to Don Bosco in Pasong Tamo. quasi-contracts. as on previous school days. and it consists in the payment of a sum of money. CV No. leaving the railroad crossing open to traversing motorists.In the instant case. the instant petition is DENIED. with six students on either side. without any unnecessary delay. Inc. which provides: Any person having any claim upon the policy issued pursuant to this chapter shall. the interest due should be that which may have been stipulated in writing. G.00 each for Rachel Fletcher and Rebecca Estrella.SPOUSES TERESITA PHILIPPINE NICOLAS and L. Branch 13. In fact. or watchmen. Furthermore. otherwise. and the others in the rear. 1993 when the trial court rendered judgment and not on February 4. when the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's valid. the interest due shall itself earn legal interest from the time it is judicially demanded. In their business. and in any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered. from the Zarates’ residence. Aaron took his place on the left side of the van near the rear door. and the COURT OF APPEALS Respondents. the same shall earn interest at the rate of 12% per annum until its satisfaction. in Parañaque City that had decreed them jointly and severally liable with Philippine National Railways (PNR). then a high school student of Don Bosco Technical Institute (Don Bosco).)34 The law is clear and leaves no room for interpretation. 2. is AFFIRMED with the MODIFICATIONS that petitioner is held jointly and severally liable to pay (1) actual damages in the amount of P79. the Zarates contracted the Pereñas to transport Aaron to and from Don Bosco.43. In June 1996. we held inEastern Shipping Lines. the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. the Pereñas used a KIA Ceres Van (van) with Plate No. the legal interest of 6% shall begin to run on February 9. . the claim shall be deemed waived. the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). which had the capacity to transport 14 students at a time. This is because at the time of the filing of the complaint. their codefendant.. shall be 12% per annum from such finality until its satisfaction. 1999 by the Regional Trial Court (RTC).: The operator of a. 157917 August 29. or other responsible persons manning the crossing. is breached.e. the court a quo correctly ruled that defendant-appellant CDCP's claim against Phoenix already prescribed pursuant to Section 384 of P. ultimately carried all the 14 student riders on their way to Don Bosco. to Spouses Nicolas and Teresita Zarate (Zarates) for the death of their 15-year old son. The Decision of the Court of Appeals in CA-G. extent and duration of the injuries sustained as certified by a duly licensed physician. and the railroad crossing in the narrow path had no railroad warning signs. 1996. and (4) thirty percent (30%) of the total amount recovered as attorney's fees. On August 22. the amount of the damages to which plaintiffs may be entitled remains unliquidated and unknown.R. Accordingly.33 From the time the judgment becomes final and executory.R. Anent the last issue of whether petitioner can recover under its insurance policy from Phoenix.32 (Emphasis supplied) Accordingly. where the demand is established with reasonable certainty.000. which modified the Decision of the Regional Trial Court of Manila. Since petitioner never made any claim within six months from the date of the accident. When an obligation. From the time this Decision becomes final and executory and the judgment amount remains unsatisfied.m. ZARATE. WHEREFORE. In the absence of stipulation. the bamboo barandilla was up. R-82-2137. (3) exemplary damages in the amount of P20. Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made. the rate of interest shall be 12% per annum to be computed from default. until it is definitely ascertained. above. 2001. the interest rate shall be 12% until its satisfaction. and back.. two of whom would be seated in the front beside the driver. Court of Appeals. we affirm the findings of both the trial court and the Court of Appeals. present to the insurance company concerned a written notice of claim setting forth the nature. with its air-conditioning unit turned on and the stereo playing loudly. the rate of legal interest. thus: As regards the liability of Phoenix. (2) moral damages in the amount of P50. 612. Considering that the students were due at Don Bosco by 7:15 a. J.e. Spouses Teodoro and Nanette Perefia (Perefias) appeal the adverse decision promulgated on November 13. BP 874.31 subject to the following rules. Alfaro took the van to an alternate route at about 6:45 a. i.00 each for Rebecca Estrella and Rachel Fletcher. The van.D. Zarate (Aaron). in Civil Case No. in any case. just and demandable claim. 1169. No. When the obligation is breached..354. by which the Court of Appeals (CA) affirmed with modification the decision rendered on December 3. an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. (As amended by PD 1814.. from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. not constituting a loan or forbearance of money.e. Action or suit for recovery of damage due to loss or injury must be brought in proper cases. the contravenor can be held liable for payment of interest in the concept of actual and compensatory damages. Notice of claim must be filed within six months from date of the accident. otherwise. A written notice of claim must be filed within six months from the date of the accident. school bus service is a common carrier in the eyes of the law. be on the amount finally adjudged. NATIONAL RAILWAYS. 2002. BERSAMIN. 2012 SPOUSES TEODORO1 and NANETTE PERENA. The actual base for the computation of legal interest shall. regardless of its source. At the time. Aaron John L.30 that when an obligation. by traversing the narrow path underneath the Magallanes Interchange that was then commonly used by Makati-bound vehicles as a short cut into Makati. PYA 896. He is presumed to be negligent when death occurs to a passenger.

Alano applied the ordinary brakes of the train. in allowing or tolerating the motoring public to cross. the minor son of spouses Zarate died in connection with a vehicular/train collision which occurred while Aaron was riding the contracted carrier Kia Ceres van of spouses Pereña. Devastated by the early and unexpected death of Aaron. (2) Whether or not the defendant spouses Pereña being the employer of defendant Alfaro are liable for any negligence which may be attributed to defendant Alfaro. the Zarates commenced this action for damages against Alfaro. The train blew its horn to warn motorists of its approach. His view of the oncoming train was blocked because he overtook the passenger bus on its left side. liable for negligence constituting the proximate cause of the vehicular collision. and the impact threw nine of the 12 students in the rear. there were no appropriate and safety warning signs and railings at the site commonly used for railroad crossing. operated by Jhonny Alano (Alano). the subject site of the vehicular/train collision was a railroad crossing used by motorists for crossing the railroad tracks. viz: A. including Aaron. but the van driven by Alfaro did not. PNR and Alano.M. Alano fled the scene on board the train. Aaron. (4) Whether or not defendant spouses Pereña are liable for breach of the contract of carriage with plaintiff-spouses in failing to provide adequate and safe transportation for the latter's son. (3) Whether or not defendant Philippine National Railways being the operator of the railroad system is liable for negligence in failing to provide adequate safety warning signs and railings in the area commonly used by motorists for railroad crossings. was in the vicinity of the Magallanes Interchange travelling northbound. (8) Whether or not defendant PNR was grossly negligent in operating the commuter train involved in the accident. out of the van. The passenger bus successfully crossed the railroad tracks. which resulted in the death of plaintiff spouses' son. and attorney's fees. within the vicinity of the Magallanes Interchange in Makati City. The Pereñas and PNR filed their respective answers. and (12) The site of the vehicular/train collision was within the vicinity or less than 100 meters from the Magallanes station of PNR.At about the time the van was to traverse the railroad crossing. PNR Commuter No. . moral damages. Philippines. He applied the emergency brakes only when he saw that a collision was imminent. ISSUES (1) Whether or not defendant-driver of the van is. which dragged his body and severed his head. (5) Whether or not defendants spouses are liable for actual. in the performance of his functions. closely tailing a large passenger bus. Metro Manila. and its failure to install safety devices or equipment at the site of the accident for the protection of the public. B. (9) PNR received the demand letter of the spouses Zarate. instantaneously killing him. (7) Whether or not defendant-spouses are civilly liable for the accidental death of Aaron John Zarate. At the pre-trial. Aaron landed in the path of the train. (6) At the material time. (5) During the said time of the vehicular/train collision. which van collided with the train of PNR. As the train neared the railroad crossing. FACTS: (1) That spouses Zarate were the legitimate parents of Aaron John L. (11) The eventual closure of the railroad crossing alleged by PNR was an internal arrangement between the former and its project contractor. 302 (train). (3) During the effectivity of the contract of carriage and in the implementation thereof. (2) Spouses Zarate engaged the services of spouses Pereña for the adequate and safe transportation carriage of the former spouses' son from their residence in Parañaque to his school at the Don Bosco Technical Institute in Makati City. Zarate. then driven and operated by the latter's employee/authorized driver Clemente Alfaro. 1996. but Alfaro could not be served with summons. the parties stipulated on the facts and issues. The train hit the rear end of the van. at around 6:45 A. constituting the proximate cause of the vehicular collision which resulted in the death of the plaintiff spouses' son. When the train was about 50 meters away from the passenger bus and the van. with crossclaims against each other. (10) Whether or not defendant PNR should pay plaintiffs directly and fully on the amounts claimed by the latter in their Complaint by reason of its gross negligence. Alfaro drove the van eastward across the railroad tracks. (10) PNR refused to acknowledge any liability for the vehicular/train collision. of August 22. (9) Whether or not defendant PNR should be made to reimburse defendant spouses for any and whatever amount the latter may be held answerable or which they may be ordered to pay in favor of plaintiffs by reason of the action. countless number of Makati bound public utility and private vehicles used on a daily basis the site of the collision as an alternative route and short-cut to Makati. (4) At the time of the vehicular/train collision. the Pereñas. (6) Whether or not defendants spouses Teodorico and Nanette Pereña observed the diligence of employers and school bus operators. and did not wait for the police investigator to arrive. (8) The site commonly used for railroad crossing by motorists was not in fact intended by the railroad operator for railroad crossing at the time of the vehicular collision. exemplary damages. (7) The train driver or operator left the scene of the incident on board the commuter train involved without waiting for the police investigator.

2002. moral and exemplary damages and attorney's fees. 1999. but that against PNR was based on quasi-delict under Article 2176. Ruling of the RTC 1. For its part. 2. CV No.00. affirming the findings of the RTC. (2) Actual damages in the amount of Php100.500. In their defense.00.3 years upon reckoning his life expectancy from age of 21 (the age when he would have graduated from college and started working for his own livelihood) instead of 15 years (his age when he died).Php50.000.000.age at the time of death) = life expectancy the CA determined the life expectancy of Aaron to be 39. In finding the defendant-appellant Philippine National Railways jointly and severally liable together with defendant-appellants spouses Teodorico and Nanette Pereña and defendant-appellant Clemente Alfaro to pay plaintiffs-appellees for the death of Aaron Zarate and damages. On June 29. but based on the established circumstances. judgment is hereby rendered in favor of the plaintiff and against the defendants ordering them to jointly and severally pay the plaintiffs as follows: The trial court erred in awarding excessive damages and attorney’s fees. SO ORDERED. Moral Damages is reduced to P 2.109. WHEREFORE. and deleted the attorney’s fees because the RTC did not state the factual and legal bases. but limited the moral damages to P 2. 2/3 x (80 .00. PNR tended to show that the proximate cause of the collision had been the reckless crossing of the van whose driver had not first stopped.000.3 disposing: The trial court erred in dismissing the cross-claim of the appellants Pereñas against the Philippine National Railways and in not holding the latter and its train driver primarily responsible for the incident. and that the damages awarded to the Zarates were not excessive. Laguna Tayabas Bus Company and Manila Railroad Company.00. taking cognizance of the ruling in Cariaga v.000.000. 4 reiterating that the cooperative gross negligence of the Pereñas and PNR had caused the collision that led to the death of Aaron. the assailed Decision of the Regional Trial Court. (3) For the loss of earning capacity.000. to wit:6 WHEREFORE. moral and exemplary damages and attorney’s fees with the other defendants. by making sure that Alfaro had been issued a driver’s license and had not been involved in any vehicular accident prior to the collision. Civil Code. and The trial court erred in awarding damages in the form of deceased’s loss of earning capacity in the absence of sufficient basis for such an award. On November 13. (1) (for) the death of Aaron.00.000.76. the RTC denied the Pereñas’ motion for reconsideration.00. supporting the case of defendants-appellants Philippine National Railways.(11) Whether or not defendant PNR is liable to defendants spouses for actual. In giving full faith and merit to the oral testimonies of plaintiffs-appellees witnesses despite overwhelming documentary evidence on record. premises considered. the Pereñas adduced evidence to show that they had exercised the diligence of a good father of the family in the selection and supervision of Alfaro. Applying the formula adopted in the American Expectancy Table of Mortality:– (7) Cost of suit. looked and listened. Branch 260 of Parañaque City is AFFIRMED with the modification that the award of Actual Damages is reduced to P59. (6) Attorney’s fees in the amount of Php200.R. that their own son had taken the van daily. the CA promulgated its decision.00/day to compute .00.-G. and the award for Attorney’s Fees is Deleted. to wit:5 The Court a quo erred in: The Zarates’ claim against the Pereñas was upon breach of the contract of carriage for the safe transport of Aaron. premises considered.A.00.000. it used the prevailing minimum wage of P 280.7 wherein the Court gave the heirs of Cariaga a sum representing the loss of the deceased’s earning capacity despite Cariaga being only a medical student at the time of the fatal incident. The CA’s Ruling Both the Pereñas and PNR appealed (C. 2000. (5) Exemplary damages in the amount of Php1. On December 3. and that the narrow path traversed by the van had not been intended to be a railroad crossing for motorists. and that Teodoro Pereña had sometimes accompanied Alfaro in the van’s trips transporting the students to school. the RTC rendered its decision. The CA upheld the award for the loss of Aaron’s earning capacity.500.071.2 PNR assigned the following errors. 68916). The Pereñas ascribed the following errors to the RTC. (4) Moral damages in the amount of Php4. namely: The trial court erred in finding defendants-appellants jointly and severally liable for actual.000. Considering that the nature of his work and his salary at the time of Aaron’s death were unknown. SO ORDERED.Php2.502.

street railway. The RTC found the Pereñas and the PNR negligent.30. 13 and other special laws relating to transportation. Due to Aaron’s computed net income turning out to be higher than the amount claimed by the Zarates. authorizing the exercise of the jurisdiction of the public utility commission.The diligence required of a private carrier is only ordinary.664. It is not enough that the general prosperity of the public is promoted. water. only P 2. or without holding himself or itself out to the public as ready to act for all who may desire his or its services. from which his estimated expenses in the sum of P 2. according to Section 13. ferries and water craft. We concur with the CA. with general or limited clientèle.189. Public use is not synonymous with public interest. but is open to the indefinite public. in general. and done for the general business purposes. The lower court erred in affirming the trial court’s decision awarding damages for loss of earning capacity of a minor who was only a high school student at the time of his death in the absence of sufficient basis for such an award.30 was deducted to finally arrive at P 2. A carrier is a person or corporation who undertakes to transport or convey goods or persons from one place to another.00 as net income. that is. If the use is merely optional with the owners.3 years. freight or carrier service of any class. a common carrier is a person. and is presumed to be at fault or to have acted negligently in case of the loss of the effects of passengers. with or without fixed route and whatever may be its classification. a right which the law compels the owner to give to the general public. the CA denied the Pereñas’ motion for reconsideration. express service.10 A private carrier is one who. The essential feature of the public use is not confined to privileged individuals. either for freight or passenger. and has not distinguished a carrier offering his services to the general public. Nonetheless. that they even had their own son travel to and from school on a daily basis. paragraph (b) of the Public Service Act. was granted.716.9primarily because he only caters to some specific or privileged individuals. the exact nature of the operation of a school bus service has not been finally settled. . The lower court erred when it upheld the trial court’s decision holding the petitioners jointly and severally liable to pay damages with Philippine National Railways and dismissing their cross-claim against the latter.65. the Public Service Act. III. not the ordinary diligence of a good father of a family. It is this indefinite or unrestricted quality that gives it its public character. 2003.11The provisions on ordinary contracts of the Civil Code govern the contract of private carriage. Public service. or air. engaged in the transportation of passengers or freight or both. pontines. Court of Appeals.15viz: "Public use" is the same as "use by the public". the Pereñas list the following as the errors committed by the CA. corporation. and that their standard of care was extraordinary diligence. firm or association engaged in the business of carrying or transporting passengers or goods or both. Were the Pereñas and PNR jointly and severally liable for damages? The Zarates brought this action for recovery of damages against both the Pereñas and the PNR. for compensation.12Contracts of common carriage are governed by the provisions on common carriers of the Civil Code. to wit: I. the Pereñas’ defense was that they exercised the diligence of a good father of the family in the selection and supervision of Alfaro. The lower court erred in not reducing further the amount of damages awarded. the amount expressly prayed for by them.351. from one offering his services only to a narrow segment of the general population. or steamship line. marine repair shop. This is the occasion to lay the matter to rest. Although in this jurisdiction the operator of a school bus service has been usually regarded as a private carrier. manage. for hire or compensation.500. whether permanent or occasional. A common carrier is required to observe extraordinary diligence. and that Teodoro Pereña himself sometimes accompanied Alfaro in transporting the passengers to and from school.Aaron’s gross annual salary to be P 110. railroad. steamboat. assuming petitioners are liable at all. the van driver. basing their claim against the Pereñas on breach of contract of carriage and against the PNR on quasi-delict.16 the Court noted that Article 1732 of the Civil Code avoided any distinction between a person or an enterprise offering transportation on a regular or an isolated basis. by land. The CA affirmed the findings. it is not a public use. operate.164. shipyard. 1. We find no adequate cause to differ from the conclusions of the lower courts that the Pereñas operated as a common carrier. the diligence of a good father of the family. The carrier is classified either as a private/special carrier or as a common/public carrier. or both. or the death or injuries to passengers. offering such services to the public.00. his gross income would aggregate to P 4. The RTC gave scant consideration to such defense by regarding such defense as inappropriate in an action for breach of contract of carriage. and his operation is neither open to the indefinite public nor for public use. In De Guzman v.161. without making the activity a vocation. undertakes. subway motor vehicle. In determining whether a use is public. we must look not only to the character of the business to be done. but also to the proposed mode of doing it. includes: x x x every person that now or hereafter may own. On April 4. or control in the Philippines. Multiplying this annual salary by Aaron’s life expectancy of 39. which supplements the law on common carriers found in the Civil Code. the general community or population.8 Issues In this appeal. In contrast.109.14 In relation to common carriers. any common carrier. by seeing to it that Alfaro had a driver’s license and that he had not been involved in any vehicular accident prior to the fatal collision with the train. traction railway. The true criterion by which to judge the character of the use is whether the public may enjoy it by right or only by permission. by special agreement in a particular instance only. the concept of a common carrier embodied in Article 1732 of the Civil Code coincides neatly with the notion of public service under the Public Service Act. Tan Piaco. gratuitously or for hire. There must be. or the public benefit is merely incidental.071. To start with. to transport goods or persons from one place to another either gratuitously or for hire. that is. II. inclusive of the thirteenth month pay. Ruling The petition has no merit. the Court defined public use in the following terms in United States v.

according to all the circumstances of each case. irrigation system.18 custom brokers and warehousemen.32 or as Judge Cooley defines it. and vigilance which the circumstances justly demand. The loudness most probably reduced his ability to hear the warning horns of the oncoming train to allow him to correctly appreciate the lurking dangers on the railroad tracks.17 Given the breadth of the aforequoted characterization of a common carrier. leading him to miscalculate his chances of beating the bus in their race. or negligent in the man of ordinary intelligence and prudence and determines liability by that. and are not supposed to be. omniscient of the future. Until they did so in a credible manner. 30 which. The Pereñas were liable for the death of Aaron despite the fact that their driver might have acted beyond the scope of his authority or even in violation of the orders of the common carrier. (b) undertaking to carry passengers over established roads by the method by which the business was conducted. guided by those considerations which ordinarily regulate the conduct of human affairs. he sought to overtake a passenger bus on the left side as both vehicles traversed the railroad tracks. As earlier stated. and (c) transporting students for a fee. the records showed their driver’s actual negligence. Despite catering to a limited clientèle. by virtue of which he was immediately presumed to be negligent.34 thuswise: 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 person would have used in the same situation? If not."22 Article 1755 of the Civil Code specifies that the common carrier should "carry the passengers safely as far as human care and foresight can provide.27 In this connection. being a presumption of law.’" 33 The test by which to determine the existence of negligence in a particular case has been aptly stated in the leading case of Picart v. Given the nature of the business and for reasons of public policy. 24 And. the individual or the entity rendering such service is a private. The common carrier’s standard of care and vigilance as to the safety of the passengers is defined by law. the bus avoided a collision with the train but the van got slammed at its rear. the common carrier is bound "to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them. posting of notices. the Court has considered as common carriers pipeline operators. he did not slow down or go to a full stop before traversing the railroad tracks despite knowing that his slackening of speed and going to a full stop were in observance of the right of way at railroad tracks as defined by the traffic laws and regulations. On the contrary. not just as a casual occupation. Abstract speculation cannot here be of much value but this much can be profitably said: Reasonable men govern their conduct by the circumstances which are before them or known to them. The existence of negligence in a given case is not determined by reference to the personal judgment of the actor in the situation before him. x x x. whether by stipulation. water supply and power petroleum. the Pereñas. Although that point had been used by motorists as a shortcut into the Makati plant. were already presumed to be negligent at the time of the accident because death had occurred to their passenger.23 No device. As a result. ‘(t)he failure to observe for the protection of the interests of another person." To successfully fend off liability in an action upon the death or injury to a passenger. then he is guilty of negligence. Their defense of having observed the diligence of a good father of a family in the selection and supervision of their driver was not legally sufficient. the legal presumption that he or it was at fault or acted negligently would stand. In so doing. the true test for a common carrier is not the quantity or extent of the business actually transacted. that degree of care. causing the fatality. acting as a common carrier. not a common. and of getting clear of the train. There was a showing. may dispense with or lessen the responsibility of the common carrier as defined under Article 1755 of the Civil Code. he lost his view of the train that was then coming from the opposite side of the passenger bus. Could a prudent man. They are not. 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 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. an examination of the records shows that the evidence fully supported the findings of the CA. their liability as a common carrier did not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employee. carrier. If the undertaking is a single transaction. with a due regard for all the circumstances. wire or wireless broadcasting stations and other similar public services. there is no question that the Pereñas as the operators of a school bus service were: (a) engaged in transporting passengers generally as a business. in the case under . gas. they stood to be held legally responsible for the death of Aaron and thus to be held liable for all the natural consequences of such death. that their driver traversed the railroad tracks at a point at which the PNR did not permit motorists going into the Makati area to cross the railroad tracks. the Pereñas operated as a common carrier because they held themselves out as a ready transportation indiscriminately to the students of a particular school living within or near where they operated the service and for a fee. laid the burden of evidence on their shoulders to establish that they had not been negligent. Also. According to Article 1759 of the Civil Code. according to Layugan v. or the number and character of the conveyances used in the activity. statements on tickets. electric light. with his familiarity with that shortcut. as advertised and held out to the general public. Hence they can be expected to take care only when there is something before them to suggest or warn of danger. wire or wireless communications systems. canal. but whether the undertaking is a part of the activity engaged in by the carrier that he has held out to the general public as his business or occupation. to begin with. 21 Applying these considerations to the case before us. heat and power. Intermediate Appellate Court. There is no question that the Pereñas did not overturn the presumption of their negligence by credible evidence. their driver was fully aware of the risks to his passengers but he still disregarded the risks. sewerage system. not by any secret intention or mental reservation it may entertain or assert when charged with the duties and obligations that the law imposes.19 and barge operators20 even if they had limited clientèle. whereby such other person suffers injury.28 He thereby violated a specific traffic regulation on right of way. Smith. Compounding his lack of care was that loud music was playing inside the air-conditioned van at the time of the accident. otherwise. Lastly. The question must be determined by the character of the business actually carried on by the carrier. not a part of the general business or occupation engaged in. using the utmost diligence of very cautious persons. precaution.25 The presumption of negligence. blameworthy. The law considers what would be reckless. or otherwise. This was the reason why the RTC treated this defense of the Pereñas as inappropriate in this action for breach of contract of carriage. the Pereñas have not presented any compelling defense or reason by which the Court might now reverse the CA’s findings on their liability. As all the foregoing indicate. that fact alone did not excuse their driver into taking that route. would do.31 is "the omission to do something which a reasonable man. or the doing of something which a prudent and reasonable man would not do. secondly. On the other hand. the common carrier must prove his or its observance of that extraordinary diligence.26 It was the law no less that required them to prove their observance of extraordinary diligence in seeing to the safe and secure carriage of the passengers to their destination.29 The omissions of care on the part of the van driver constituted negligence.

Intermediate Appellate Court was traversing the dedicated railroad crossing when it was hit by the train. Teehankee.36 Although the basis of the right to relief of the Zarates (i. according to the Court. Jr. and other permanent safety barriers to prevent vehicles or pedestrians from crossing there. to 5 p. Also. the computation of Aaron’s earning capacity was premised on him being a lowly minimum wage earner despite his being then enrolled at a prestigious high school like Don Bosco in Makati.. that he was for all intents and purposes only a high school graduate. the records are replete with the showing of negligence on the part of both the Pereñas and the PNR. but the Pereñas’ school van traversed the railroad tracks at a point not intended for that purpose. We reject the Pereñas’ submission. or in the alternative. case shows that the situation there of Jussi Leino was not akin to that of Aaron here.. The CA and the RTC were not speculating that Aaron would be some highly-paid professional.m. 35 where the Court held the PNR solely liable for the damages caused to a passenger bus and its passengers when its train hit the rear end of the bus that was then traversing the railroad crossing. Was the indemnity for loss of Aaron’s earning capacity proper? The RTC awarded indemnity for loss of Aaron’s earning capacity. But the circumstances of that case and this one share no similarities. secondly. Intermediate Appellate Court. the country’s leading educational institution in agriculture. That meant. had no earning capacity at the time of his death. the fact that Aaron was then without a history of earnings should not be taken against his parents and in favor of the defendants whose negligence not only cost Aaron his life and his right to work and earn money.37 where the Court deleted the indemnity for victim Jussi Leino’s loss of earning capacity as a pilot for being speculative due to his having graduated from high school at the International School in Manila only two years before the shooting. for that matter. Stated in these terms.39 This favorable treatment of the Zarates’ claim is not unprecedented.consideration. the Pereñas and the PNR were joint tortfeasors. the proper criterion for determining the existence of negligence in a given case is this: Conduct is said to be negligent when a prudent man in the position of the tortfeasor would have foreseen that an effect harmful to another was sufficiently probable to warrant his foregoing the conduct or guarding against its consequences. As to the PNR. it was the owner of the bus who proved the exercise of extraordinary diligence by preponderant evidence. because compensation of this nature is awarded not for loss of time or earnings but for loss of the deceased’s power or ability to earn money. Another distinction is that the passenger bus in Philippine National Railways v. Moreover. while only a high school student. a fact that would have likely ensured his success in his later years in life and at work. the RTC rightly found the PNR also guilty of negligence despite the school van of the Pereñas traversing the railroad tracks at a point not dedicated by the PNR as a railroad crossing for pedestrians and motorists. and was at the time of the shooting only enrolled in the first semester at the Manila Aero Club to pursue his ambition to become a professional pilot. Were the amounts of damages excessive? .40 fourth-year medical student Edgardo Carriaga’s earning capacity. Jr. it was the duty of the actor to take precautions to guard against that harm. and that he could have possibly earned a modest income as a medical practitioner. no evidence of contributory negligence was adduced against the owner of the bus. or a lawyer). And.00 to P 15. the RTC’s computation of Aaron’s life expectancy rate was not reckoned from his age of 15 years at the time of his death. Reasonable foresight of harm. we emphatically hold in favor of the indemnification for Aaron’s loss of earning capacity despite him having been unemployed. Intermediate Appellate Court. 3. quasi-delict under Article 2176. Both lower courts took into consideration that Aaron. although he survived the accident but his injuries rendered him permanently incapacitated. a careful perusal of the Teehankee. The basis for the computation of Aaron’s earning capacity was not what he would have become or what he would have wanted to be if not for his untimely death. his age when he would have graduated from college.e. signal lights. was computed to be that of the physician that he dreamed to become. Unrelenting. Verily. Sanchez. Yet.. but the minimum wage in effect at the time of his death. Civil Code). whether jointly. We find the considerations taken into account by the lower courts to be reasonable and fully warranted. Instead.41 the Court opined that murder and rape victim Eileen Sarmienta and murder victim Allan Gomez could have easily landed good-paying jobs had they graduated in due time. and questions of fact and of law were common as to the Zarates.00 upon their graduation. and that their jobs would probably pay them high monthly salaries from P 10. the Pereñas’ driver was entirely negligent when he traversed the railroad tracks at a point not allowed for a motorist’s crossing despite being fully aware of the grave harm to be thereby caused to his passengers. In Cariaga v.000. the CA modified the amount. At any rate."38Accordingly. followed by the ignoring of the suggestion born of this prevision. like a pilot (or. severally. Although agreeing with the RTC on the liability. because the PNR did not ensure the safety of others through the placing of crossbars. and when he disregarded the foresight of harm to his passengers by overtaking the bus on the left side as to leave himself blind to the approach of the oncoming train that he knew was on the opposite side of the bus. (Emphasis supplied) Pursuant to the Picart v. warning signs. and shall in every case be assessed and awarded by the court "unless the deceased on account of permanent physical disability not caused by the defendant. Also. the lower courts correctly held both the Pereñas and the PNR "jointly and severally" liable for damages arising from the death of Aaron. but on 21 years. but also deprived his parents of their right to his presence and his services as well.1âwphi1 They cited People v. National Railways v. In Philippine National Railways v. Their earning capacities were computed at rates higher than the minimum wage at the time of their deaths due to their being already senior agriculture students of the University of the Philippines in Los Baños. Instead. foresee harm as a result of the course actually pursued? If so. Laguna Tayabas Bus Company and Manila Railroad Company. The RTC observed that the fact that a crossing guard had been assigned to man that point from 7 a. had been enrolled in one of the reputable schools in the Philippines and that he had been a normal and able-bodied child prior to his death. in People v. Smith test of negligence. was a good indicium that the PNR was aware of the risks to others as well as the need to control the vehicular and other traffic there. the Pereñas cite Phil. They had been impleaded in the same complaint as defendants against whom the Zarates had the right to relief. a physician.e. in respect to or arising out of the accident. they nonetheless could be held jointly and severally liable by virtue of their respective negligence combining to cause the death of Aaron. The Court considered his scholastic record sufficient to justify the assumption that he could have finished the medical course and would have passed the medical board examinations in due time. 2. an engineer. First of all. the Pereñas submit that the indemnity for loss of earning capacity was speculative and unfounded.000. is always necessary before negligence can be held to exist. breach of contract of carriage) against the Pereñas was distinct from the basis of the Zarates’ right to relief against the PNR (i.m. Our law itself states that the loss of the earning capacity of the deceased shall be the liability of the guilty party in favor of the heirs of the deceased.

we should not reduce the amount if only to render effective the desired example for the public good. WHEREFORE.500. we DENY the petition for review on certiorari. reducing the amount as excessive might prove to be an injustice. Anent the P 1.00 were really just and reasonable under the established circumstances of this case because they were intended by the law to assuage the Zarates’ deep mental anguish over their son’s unexpected and violent death. The plea is unwarranted. Only by an award of exemplary damages in that amount would suffice to instill in them and others similarly situated like them the ever-present need for greater and constant vigilance in the conduct of a business imbued with public interest. As a common carrier.500.000. and ORDER the petitioners to pay the costs of suit. and their moral shock over the senseless accident. given the passage of a long time from when their mental anguish was inflicted on them on August 22. diversions or amusements that would alleviate their suffering for the loss of their child. At any rate. the Pereñas needed to be vigorously reminded to observe their duty to exercise extraordinary diligence to prevent a similarly senseless accident from happening again.00 and P 1.00 on the ground that such amounts were excessive.The Pereñas plead for the reduction of the moral and exemplary damages awarded to the Zarates in the respective amounts of P 2. 2002.00 allowed as exemplary damages.000.000. considering that it would help the Zarates obtain the means. . AFFIRM the decision promulgated on November 13. SO ORDERED. The moral damages of P 2. 1996.000. That amount would not be too much.000.000.