1

PHILIPPINE BANK OF COMMERCE, now absorbed by

PHILIPPINE COMMERCIAL INTERNATIONAL BANK, ROGELIO
LACSON, DIGNA DE LEON, MARIA ANGELITA PASCUAL, et
al., petitioners,
vs.
THE COURT OF APPEALS, ROMMEL'S MARKETING CORP.,
represented by ROMEO LIPANA, its President & General
Manager, respondents
G.R. No. 97626 March 14, 1997
FACTS:
On May 5, 1975 to July 16, 1976, Romeo Lipana claims to have
entrusted RMC funds in the form of cash totaling P304, 979.74 to his
secretary, Irene Yabut, for the purpose of depositing said funds in the
current accounts of RMC with Philippine Bank of Commerce (PBC).
They were not credited to RMC's account but were instead deposited
to Yabut's husband, Bienvenido Cotas. Lipana never checked their
monthly statements of account reposing complete trust and
confidence on PBC.
Yabut's modus operandi was to furnish 2 copies of deposit slip
upon and both are always validated and stamped by the
teller Azucena Mabayad; original showed the name of her husband as
depositor and his current account number - retained by the bank;
duplicate copy was written the account number of her husband but
the name of the account holder was left blank; after validation, Yabut
would then fill up the name of RMC in the space left blank in
the duplicate copy and change the account number to RMC's account
number. This went on in a span of more than 1 year without private
respondent's knowledge. Upon discovery of the loss of its funds, RMC
demanded from PBC the return of its money.

ISSUES:
1. Whether applying the last clear chance, PBC's teller is negligent
for failing to avoid the injury by not exercising the
proper validation procedure.
2. Whether there was contributory negligence by RMC.

RULING:
1. Yes. Under the doctrine of "last clear chance" (also referred to, at
times as "supervening negligence" or as "discovered peril"), petitioner
bank was indeed the culpable party. This doctrine, in essence, states
that where both parties are negligent, but the negligent act of one is
appreciably later in time than that of the other, or when it is
impossible to determine whose fault or negligence should be
attributed to the incident, the one who had the last clear opportunity
to avoid the impending harm and failed to do so is chargeable with the
consequences thereof. Stated differently, the rule would also mean
that an antecedent negligence of a person does not preclude the
recovery of damages for the supervening negligence of, or bar a
defense against liability sought by another, if the latter, who had
the last fair chance, could have avoided the impending harm by the
exercise of due diligence. Here, assuming that private respondent
RMC was negligent in entrusting cash to a dishonest employee, thus
providing the latter with the opportunity to defraud the company, as
advanced by the petitioner, yet it cannot be denied that the petitioner
bank, thru its teller, had the last clear opportunity to avert the injury
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incurred by its client, simply by faithfully observing their self-imposed

validation procedure.

2. Yes. While it is true that had private respondent checked the

monthly statements of account sent by the petitioner bank to RMC,
the latter would have discovered the loss early on, such cannot be
used by the petitioners to escape liability. This omission on the part of
the private respondent does not change the fact that were it not for
the wanton and reckless negligence of the petitioners' employee in
validating the incomplete duplicate deposit slips presented by Ms.
Irene Yabut, the loss would not have occurred. Considering, however,
that the fraud was committed in a span of more than one (1) year
covering various deposits, common human experience dictates that
the same would not have been possible without any form of collusion
between Ms. Yabut and bank teller Mabayad. Ms. Mabayad was
negligent in the performance of her duties as bank teller nonetheless.
Thus, the petitioners are entitled to claim reimbursement from her for
whatever they shall be ordered to pay in this case.

PHILIPPINE LONG DISTANCE TELEPHONE CO.,

INC., petitioner,
vs.
COURT OF APPEALS and SPOUSES ANTONIO ESTEBAN and
GLORIA ESTEBAN, respondents
G.R. No. L-57079 September 29, 1989

FACTS:

Spouses Esteban were riding their jeep along the inside lane of
Lacson Street where they resided [at 25km/hr as Antonio Esteban
claimed; CA said jeep ran fast; if the jeep braked at that speed, the
spouses would not have been thrown against the windshield]. The jeep
abruptly swerved from the inside lane, then it ran over a mound of
earth and fell into an open trench, an excavation allegedly undertaken
by PLDT for the installation of its underground conduit system.
Antonio failed to notice the open trench which was left uncovered
because of the darkness and the lack of any warning light or signs.
The spouses were thrown against the windshield. Gloria Esteban
allegedly sustained injuries on her arms, legs and face, leaving a
permanent scar on her cheek, while Antonio suffered cut lips. The
jeeps windshield was also shattered.

PLDT denies liability, contending that the injuries sustained by

the spouses were due to their own negligence, and that it should be
the independent contractor L.R. Barte and Co. [Barte] who should be
held liable. PLDT filed a third-party complaint against Barte, alleging
that under the terms of their agreement, PLDT should not be
answerable for any accident or injuries arising from the negligence of
Barte or its employees. Barte claimed that it was not aware, nor was it
notified of the accident, and that it complied with its contract with
PLDT by installing the necessary and appropriate signs.

RTC ruled in favor of the spouses. CA reversed RTC and

dismissed the spouses complaint, saying that the spouses were
negligent. Later, it set aside its earlier decision and affirmed in toto
RTCs decision.
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ISSUE: Whether PLDT is liable for the injuries sustained by Spouses

Esteban.

RULING:
No. The negligence of Antonio was not only contributory to his
and his wifes injuries but goes to the very cause of the occurrence of
the accident, as one of its determining factors, and thereby precludes
their right to recover damages. The perils of the road were known to
the spouses. By exercising reasonable care and prudence, Antonio
could have avoided the injurious consequences of his act, even
assuming arguendo that there was some alleged negligence on the
part of PLDT.

The omission to perform a duty, such as the placing of warning

signs on the site of the excavation, constitutes the proximate cause
only when the doing of the said omitted act would have prevented the
injury. As a resident of Lacson Street, he passed on that street almost
every day and had knowledge of the presence and location of the
excavations there; hence, the presence of warning signs could not
have completely prevented the accident. Furthermore, Antonio had
the last clear chance to avoid the accident, notwithstanding the
negligence he imputes to PLDT.

A person claiming damages for the negligence of another has

the burden of proving the existence of such fault or negligence
causative thereof, otherwise, his action must fail. The facts
constitutive of negligence must be affirmatively established
by competent evidence. In this case, there was insufficient evidence to
prove any negligence on the part of PLDT. What were presented were
just the self-serving testimony of Antonio and the unverified
photograph of a portion of the scene of the accident. The absence of a
police report and the non-submission of a medical report from the
hospital where the spouses were allegedly treated have not even been
explained.
SERGIO AMONOY, petitioner, vs. Spouses JOSE GUTIERREZ
and ANGELA FORNILDA, respondents.
[G.R. No. 140420. February 15 , 2001]

Facts:

Amonoy was the counsel of the successors of the deceased Julio

Cantolos for the settlement of the latters estate. On January 1965, the
lots were adjudicated to Asuncion Pasamba and Alfonso Fornilda. On
January 20, 1965, Pasamba and Fornilda executed a deed of real
estate mortgage on the said two lots adjudicated to them, in favor of
Amonoy to secure the payment of his attorneys fees. But on August 6,
1969, after the taxes had been paid, the claims settled and the
properties adjudicated, the estate was declared closed
and terminated. When Pasamba and Fornilda passed away, Fornilda
was succeeded by the spouses Gutierrez. On January 21, 1970,
Amonoy filed for the closure of the two lots alleging the non-payment
of attorneys fees. The herein respondents denied the allegation, but
judgment was rendered in favor of Amonoy.
 4

Still for failure to pay attorneys fees, the lots were foreclosed.
Amonoy was able to buy the lots by auction where the house of the
spouses Gutierrez was situated. On Amonoys motion of April 24,
1986, orders were implemented for the demolition of structures in the
said lot, including herein respondents house. On September 27, 1985,
David Fornilda petitioned to the Supreme Court for a TRO for the
suspension of the demolition, which was granted, but the houses have
already been demolished. A complaint for damages was filed by
respondents, which was denied by RTC but granted by CA, thus this
case.

Issue:

Whether or not the CA erred in ruling that Amonoy was liable for
damages to respondents.

Ruling:

Petitioner invokes that it is well-settled that the maxim of damage

resulting from the legitimate exercise of a persons rights is a loss
without injury damnum absque injuria for which the law gives no
remedy, saying he is not liable for damages. The precept of Damnum
Absque Injuria has no application is this case. Petitioner did not heed
the TRO suspending the demolition of structures. Although the acts of
petitioner may have been legally justified at the outset, their
continuation after the issuance of the TRO amounted to an insidious
abuse of his right. Indubitably, his actions were tainted with bad faith.

Article 19, known to contain what is commonly referred to as

the principle of abuse of rights, sets certain standards which may be
observed not only in the exercise of ones rights but also in the
performance of ones duties. These standards are the following:
to act with justice; to give everyone his due; and to observe honesty
and good faith. This must be observed. Clearly then, the demolition of
respondents house by petitioner, despite his receipt of the TRO, was
not only an abuse but also an unlawful exercise of such right. The
petition is denied. The decision of CA is affirmed.

FGU INSURANCE CORPORATION, petitioner, vs. G.P.

SARMIENTO TRUCKING CORPORATION and LAMBERT M.
EROLES, respondents.
G.R. No. 141910. August 6, 2002.

Facts:

G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver

units of refrigerators aboard its truck. While traversing the road, it
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collided with an unidentified truck, causing it to fall into a deep canal,

resulting in damage to the cargoes.

FGU Insurance Corporation (FGU), an insurer of the shipment,

paid the value of the covered cargoes to Concepcion Industries, Inc.,
(CII). Being subrogee of CIIs rights & interests, FGU, in turn, sought
reimbursement from GPS. Since GPS failed to heed the claim, FGU
filed a complaint for damages & breach of contract of carriage against
GPS and the driver with the RTC. In its answer, respondents asserted
that GPS was only the exclusive hauler of CII since 1988, and it was
not so engaged in business as a common carrier. Respondents further
claimed that the cause of damage was purely accidental.

GPS filed a motion to dismiss the complaint by way of demurrer

to evidence on the ground that petitioner had failed to prove that it
was a common carrier. The RTC granted the motion to dismiss on
April 30, 1996. It subsequently dismissed the complaint holding that
GPS was not a common carrier defined under the law & existing
jurisprudence. The subsequent motion for reconsideration having
been denied, FGU interposed an appeal to the CA. The CA rejected
the FGUs appeal & ruled in favor of GPS. It also denied petitioners
motion for reconsideration. Hence, FGU filed this petition for review
on certiorari.

Issue:

WON the doctrine of Res ipsa loquitur is applicable in the

instant case.

Held:

Res ipsa loquitur holds a defendant liable where the thing which
caused the injury complained of is shown to be under the latters
management and the accident is such that, in the ordinary course of
things, cannot be expected to happen if those who have its
management or control use proper care. It affords reasonable
evidence, in the absence of explanation by the defendant that the
accident arose from want of care. It is not a rule of substantive law
and, as such, it does not create an independent ground of liability.
Instead, it is regarded as a mode of proof or a mere procedural
convenience since it furnishes a substitute for, and relieves the
plaintiff of, the burden of producing specific proof of negligence. The
maxim simply places on the defendant the burden of going forward
with the proof. Resort to the doctrine, however, may be allowed only
when (a) the event is of a kind which does not ordinarily occur in the
absence of negligence; (b) other responsible causes, including the
conduct of the plaintiff and third persons, are sufficiently eliminated
by the evidence and (c) the indicated negligence is within the scope of
the defendants duty to the plaintiff. Thus, it is not applicable when an
unexplained accident may be attributable to one of several causes, for
some of which the defendant could not be responsible. Petition
denied.
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PHILIPPINE RABBIT BUS LINES, INC. vs. THE HONORABLE

INTERMEDIATE APPELLATE COURT, ET AL.
G.R. Nos. 66102-04 August 30, 1990

Facts:

A jeep was carrying passengers when its right rear wheel

became detached, causing it to be unbalanced. The driver stepped on
the brake, which made the jeep turn around, encroaching on the
opposite lane. The passenger jeepney was bumped from behind by a
speeding truck with such violence that three of its passengers died
whereas two other passengers suffered injuries. The representatives
of the dead and of the injured passengers filed suits to recover
damages against the driver and the owners of the truck and also
against the driver and the owners of the jeepney.

The trial court rendered judgment absolving the driver and the
owners of the jeepney but required the driver and the owners of the
truck to compensate the victims. The Plaintiffs appealed insisting that
the driver and the owners of the jeepney should also be made liable.
The Intermediate appellate court (now Court of Appeals), relying
primarily on the doctrine of last clear chance, affirmed the trial
court's decision. The plaintiffs then filed a petition for review on
certiorari before the Court.

Issue:

WON the doctrine of last clear chance is applicable.

Held:

No. Citing the landmark case of Anuran, et al. v. Buo et. al.,
THE Supreme Court reiterated that "[t]he principle about "the last
clear" chance, would call for application in a suit between the owners
and drivers of the two colliding vehicles. It does not arise where a
passenger demands responsibility from the carrier to enforce its
contractual obligations. For it would be inequitable to exempt the
negligent driver of the jeepney and its owners on the ground that the
other driver was likewise guilty of negligence."

The Intermediate Appellate Court committed an error of law in

applying the doctrine of last clear chance as between the defendants,
since the case at bar is not a suit between the owners and drivers of
the colliding vehicles but a suit brought by the heirs of the deceased
passengers against both owners and drivers of the colliding vehicles.

In view of the foregoing, the Supreme Court modified the

questioned decision by making all the defendants solidarity liable.
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ROSITO Z. BACARRO, WILLIAM SEVILLA, and FELARIO

MONTEFALCON, petitioners, vs. GERUNDIO B. CASTAO, and
the COURT OF APPEALS, respondents.
G.R. No. L-34597, November 05, 1982

Facts:

A passenger jeepney driven by petitioner Montefalcon and

where private respondent was a passenger was sideswiped by a cargo
truck as both vehicles were approaching the Sumasap Bridge at
Oroquieta, Misamis Occidental. The jeepney fell into a ditch and
private respondent was thrown off, his right leg crushed by the weight
of the jeepney. He sued petitioners. It was undisputed that the cargo
truck blew its horn to overtake the jeepney; that the jeepney gave way
but did not reduce its speed; that for a distance of 20 meters, the
truck and the jeepney ran side by side; and that the jeepney was
sideswiped when the truck was in the process of overtaking the said
jeepney. The trial court rendered judgment in favor of private
respondent finding contributory negligence on the part of
the jeepney's driver and the proximate cause of the accident being the
negligence of the truck driver. The decision of the trial court was
affirmed on appeal to the Court of Appeals. Hence, this petition.

Issue:

WON the jeepney driver is guilty of contributory negligence.

Held:

There is contributory negligence on the part of jeepney driver

appellant Montefalcon for having raced with the overtaking cargo
truck to the bridge instead of slackening its speed. The fact is,
petitioner-driver Montefalcon did not slacken his speed but instead
continued to run the jeep at about forty (40) kilometers per hour even
at the time the overtaking cargo truck was running side by side for
about twenty (20) meters and at which time he even shouted to the
driver of the truck.
Thus, had Montefalcon slackened the speed of the jeep at the time the
truck was overtaking it, instead of running side by side with the cargo
truck, there would have been no contact and accident. He should have
foreseen that at the speed he was running, the vehicles were getting
nearer the bridge and as the road was getting narrower the truck
would be too close to the jeep and would eventually sideswipe it.
Otherwise stated, he should have slackened his jeep when he swerved
 8

it to the right to give way to the truck because the two vehicles could
not cross the bridge at the same time.

PHOENIX CONSTRUCTION, INC. and ARMANDO

U.CARBONEL, petitioners, vs. THE INTERMEDIATEAPPELLATE
COURT and LEONARDO DIONISIO, respondents.
G.R. No. L-65295, March 10, 1987

FACTS:

Sometime on November 1975, at about 1:30am, private

respondent Leonardo Dionisio was on his way home from a cocktails-
and-dinner meeting with his boss, the general manager of a marketing
corporation, where he had taken "a shot or two" of liquor. He had just
crossed an intersection and while driving down the street, his
headlights were turned off. When he switched on his headlights to
bright, he suddenly saw a Ford dump truck some 2 meters away
from his Volkswagen car. The dump truck belonged to petitioner
Phoenix, and was parked there by the company driver, co-petitioner
Carbonel. It was parked on the right hand side of the lane that
Dionisio was driving on, but it was parked facing the oncoming traffic.
It was parked askew so it was sticking out onto the street, partly
blocking the way of oncoming traffic. There were no lights nor were
there any early warning reflector devices set anywhere near the
truck, front or rear. Phoenix permitted Carbonel to take home the
truck, which was scheduled to be used the next morning. Dionisio,
upon seeing the truck, tried to avoid a collision by swerving to the
left, but it was too late. His car smashed into the truck. Dionisio
suffered physical injuries, including permanent facial scars, a
nervous breakdown and loss of two gold bridge dentures. Dionision
filed an action for damages against Carbonel and Phoenix. Petitioners
countered the claim by imputing the accident to respondents own
negligence in driving at a high speed without curfew pass and
headlights, and while intoxicated. It invoked the Last Clear Chance.
Accordingly, Dionisio had the Last Clear Chance of avoiding the
accident and so he, having failed to take the last clear chance, must
bear his own injuries alone.
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The trial court and the Court of Appeals ruled in favor of private
respondent.

ISSUE:

Whether the collision was brought by respondents own negligence.

RULING:

No. Dionisio is guilty of contributory negligence but the legal

and proximate cause of the collision was brought about by the way the
truck was parked. The legal and proximate cause of the accident was
the wrongful or negligent manner in which the dump truck was
parked. The collision of Dionisio's car with the dump truck was a
natural and foreseeable consequence of the truck driver's negligence.
The defendant cannot be relieved from liability by the fact that
the risk or a substantial and important part of the risk, to which the
defendant has subjected the plaintiff has indeed come to pass.
Foreseeable intervening forces are within the scope original risk, and
hence of the defendant's negligence. The courts are quite generally
agreed that intervening causes which fall fairly in this category will
not supersede the defendant's responsibility. Thus, a defendant who
blocks the sidewalk and forces the plaintiff to walk in a street where
the plaintiff will be exposed to the risks of heavy traffic becomes liable
when the plaintiff is run down by a car, even though the car is
negligently driven; and one who parks an automobile on the highway
without lights at night is not relieved of responsibility when another
negligently drives into it.
We hold that private respondent Dionisio's negligence was "only
contributory," that the "immediate and proximate cause" of the injury
remained the truck driver's "lack of due care" and that consequently
respondent Dionisio may recover damages though such damages are
subject to mitigation by the courts.

EMMA ADRIANO BUSTAMANTE, in her own behalf as

Guardian-Ad-Litem of minors: ROSSEL, GLORIA, YOLANDA,
ERIC SON and EDERIC, all surnamed BUSTAMANTE, Spouses
SALVADOR JOCSON and PATRIA BONE-JOCSON, Spouses JOSE
RAMOS and ENRIQUETA CEBU-RAMOS, Spouses NARCISO-
HIMAYA and ADORACION MARQUEZ-HIMAYA, and Spouses
JOSE BERSAMINA and MA. COMMEMORACION PEREA-
BUSTAMANTE, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, FEDERICO DEL PILAR
AND EDILBERTO MONTESIANO, respondents.
G.R. No. 89880, February 6, 1991

FACTS:

On April 20, 1983 a collision occurred between gravel and sand

truck Driven by defendant Montesiano and owned by Del Pilar and a
Mazda passenger Bus driven by Defendant Susulin, along the national
road at Kalibuyao Tanza, Cavite. The front left side portion of the body
 10

of the truck sideswiped the left sidewall of the passenger bus which
resulted to the death of five individuals. The passenger bus was
owned and operated by Magtibay and Serrado.several passengers of
the bus were thrown out and died as a result of the injuries they
sustained. The bus was registered in the name of Novelo but was
owned and/or operated as a passenger bus jointly by Magtibay and
Serrado. Before the collision, the cargo truck and the passenger bus
were approaching each other, coming from the opposite directions of
the highway. While the truck was still about 30 meters away, Susulin,
the bus driver, saw the front wheels of the vehicle wiggling. He also
observed that the truck was heading towards his lane. Not minding
this circumstance due to his belief that the driver of the truck was
merely joking, Susulin shifted from fourth to third gear in order to
give more power and speed to the bus, which was ascending the
inclined part of the road, in order to overtake or pass a Kubota hand
tractor being pushed by a person along the shoulder of the highway.
The Regional Trial Court ruled that the two drivers is liable are
solidarily liable for their negligence.
On appeal, the Court of Appeals decided that the bus driver had
the clear chance to avoid the collision and his reckless negligence in
proceeding to overtake the hand tractor was the proximate cause of
the collision. Plaintiffs -appellees filed a motion for reconsideration,
but was denied by the CA. Hence this petition for review on certiorari
seeking the reversal of the decision o the respondent Court of
appeals.

ISSUE:

Whether or not the Last Clear Chance Apply.

HELD:

No. Petition is granted. CA reversed. The doctrine of last clear

chance means that even though a person's own acts may have placed
him in a position of peril, and an injury results, the injured person is
entitled to recovery. Further, a person who has the last clear chance
or opportunity of avoiding an accident, notwithstanding the negligent
acts of his opponent or that of a third person imputed to the opponent
is considered in law solely responsible for the consequences of the
accident.
In the case at bar, the suit is not between the owners and drivers of
the colliding vehicles but a suit brought by the heirs of the deceased
passengers against both owners and drivers of the colliding vehicles.
Therefore, the court erred in absolving the owner and driver of the
cargo truck from liability.

VICENTE CALALAS, petitioner, vs. COURT OF APPEALS, ELIZA

JUJEURCHE SUNGA and FRANCISCO SALVA, respondents.
G.R. No. 122039 May 31, 2000

FACTS:

On the morning of August 23, 1989, private respondent Eliza

Jujeurche G. Sunga, then a college freshman major in Physical
Education at the Siliman University took a passenger jeepney owned
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and operated by petitioner Vicente Calalas. As the jeepney was filled

to capacity of about 24 passengers, Sunga was given by the conductor
an "extension seat," a wooden stool at the back of the door at the rear
end of the vehicle.
On the way to Poblacion Sibulan, Negros Occidental, the jeepney
stopped to let a passenger off. As she was seated at the rear of the
vehicle, Sunga gave way to the outgoing passenger. Just as she was
doing so, an Isuzu truck driven by Iglecerio Verena and owned by
Francisco Salva bumped the left rear portion of the jeepney. As a
result, Sunga was injured.
On October 9, 1989, Sunga filed a complaint for damages against
Calalas, alleging violation of the contract of carriage by the former in
failing to exercise the diligence required of him as a common carrier.
Calalas, on the other hand, filed a third-party complaint against
Francisco Salva, the owner of the Isuzu truck.
The Regional Trial Court of Dumaguete rendered judgment against
Salva holding that the driver of the Isuzu truck was responsible.
The Court of Appeals reversed the RTC, awarding damages instead to
Sunga as plaintiff in an action for breach of contract of carriage since
the cause of action was based on such and not quasi delict. Hence,
current petition for review on certiorari.

ISSUES:

(1)Whether the decision in the Civil Case No 3490 for quasi-delict

between Calalas on one hand and Salva and Verena on the other,
is res judicata to the issue in this case.
(2)Whether the ruling in Civil Case No 3490 that the negligence of
Verena was the proximate cause of the accident negates Calalas
liability.

HELD:

1. No. There is no basis for the contention that the ruling in Civil
Case No 3490,
finding Salva and his driver Verena liable for the damage to Calalas
jeepney, should be binding on Sunga. The latter was never a party to
the Civil Case. Nor are the issues in Civil Case No. 3490 and in the
present case the same. The issue in Civil Case No. 3490 was whether
Salva and his driver Verena were liable for quasi-delict for the damage
caused to petitioner's jeepney. On the other hand, the issue in this
case is whether petitioner is liable on his contract of carriage. The
first, quasi-delict, also known as culpa aquiliana or culpa extra
contractual, has as its source the negligence of the tortfeasor. The
second, breach of contract or culpa contractual, is premised upon the
negligence in the performance of a contractual obligation.
Consequently, in quasi-delict, the negligence or fault should be clearly
established because it is the basis of the action, whereas in breach of
contract, the action can be prosecuted merely by proving the
existence of the contract and the fact that the obligor, in this case the
common carrier, failed to transport his passenger safely to his
destination.
2. No. It is immaterial that the proximate cause of the collision
between the jeepney
 12

and the truck was the negligence of the truck driver. The doctrine of
proximate cause is applicable only in actions for quasi-delict, not in
actions involving breach of contract. The doctrine is a device for
imputing liability to a person where there is no relation between him
and another party. In such a case, the obligation is created by law
itself. But, where there is a pre-existing contractual relation between
the parties, it is the parties themselves who create the obligation, and
the function of the law is merely to regulate the relation thus created.
Insofar as contracts of carriage are concerned, some aspects
regulated by the Civil Code are those respecting the diligence
required of common carriers with regard to the safety of passengers
as well as the presumption of negligence in cases of death or injury to
passengers.

THE ILOCOS NORTE ELECTRIC COMPANY

vs.
HONORABLE COURT OF APPEALS, (First Division) LILIAN
JUAN LUIS, JANE JUAN YABES, VIRGINIA JUAN CID, GLORIA
JUAN CARAG, and PURISIMA JUAN

G.R. No. L-53401 November 6, 1989

FACTS:

In the evening of June 28 until the early morning of June 29,

1967, typhoon "Gening" buffeted the Province of Ilocos Norte,
bringing heavy rains and consequent flooding in its wake. Between
5:30 and 6:00 A.M. on June 29, 1967, after the typhoon had abated
and when the floodwaters were beginning to recede, the deceased
Isabel Lao Juan, fondly called Nana Belen, ventured out of the house
of her son-in-law, Antonio Yabes, on No. 19 Guerrero Street, Laoag
City, and proceeded northward towards the direction of the Five
Sisters Emporium, of which she was the owner and proprietress, to
look after the merchandise therein that might have been damaged.
Wading in waist-deep flood on Guerrero, the deceased was followed by
Aida Bulong and Linda Alonzo Estavillo. Aida and Linda walked side
by side at a distance of between 5 and 6 meters behind the deceased.
Suddenly, the deceased screamed "Ay" and quickly sank into the
water. The two girls attempted to help, but fear dissuaded them from
doing so because on the spot where the deceased sank they saw an
electric wire dangling from a post and moving in snake-like fashion in
the water. Upon their shouts for help, Ernesto dela Cruz came out of
the house of Antonio Yabes. Ernesto tried to go to the deceased, but at
four meters away from her he turned back shouting that the water
was grounded. When Antonio Yabes was informed by Ernesto that his
mother-in law had been electrocuted, he acted immediately. Yabes
passed by the City Hall of Laoag to request the police to ask the
people of Ilocos Norte Electric Company or INELCO to cut off the
electric current. Then the party waded to the house on Guerrero
Street. The floodwater was receding and the lights inside the house
were out indicating that the electric current had been cut off in
Guerrero. Yabes instructed his boys to fish for the body of the
deceased. The body was recovered about two meters from an electric
post.
 13

Meanwhile, on the same day the incident happen, Engr. Antonio

Juan of the National Power Corporation set out on an inspection trip
between 6:00 and 6:30 A.M., he saw grounded and disconnected
electric lines owned by such electric company but saw no INELCO
lineman. The INELCO Office at the Life theatre on Rizal Street
was still closed.

An action for damages was instituted by the heirs of the

deceased before the CFI of Ilocos Norte a year after the incident. At
the trial, petitioners witnesses testified in a general way about their
duties and the measures which defendant usually adopts to prevent
hazards to life and limb. From these testimonies, the lower court
found that the electric lines and other equipment of the electric
company were properly maintained by a well-trained team of lineman,
technicians and engineers working around the clock to insure that
these equipments were in excellent condition at all times. The
petitioner then, prays that the company be exonerated from liability
since typhoons and floods are fortuitous events and that the acts of
the private respondents falls within the sphere of the maxim of
"volenti non fit injuria"

ISSUE:

Can the petitioner-company, in this case, be exonerated from

liability on the contention that typhoons and floods are fortuitous
events?

RULING:

No. While it is true that typhoons and floods are considered Acts
of God for which no person may be held responsible, it was not said
eventuality which directly caused the victim's death. It was through
the intervention of petitioner's negligence that death took place. The
finding of the lower court was based on what the
defendant's(petitioner-company) employees were supposed to do, not
on what they actually did or failed to do on the date in question, and
not on the occasion of the emergency situation brought about by the
typhoon.
In times of calamities such as the one which occurred in Laoag
City on the night of June 28 until the early hours of June 29, 1967,
extraordinary diligence requires a supplier of electricity to be
in constant vigil to prevent or avoid any probable incident that might
imperil life or limb. The evidence does not show that defendant-
company did that. On the contrary, evidence discloses that there were
no men policing the area, nor even manning its office. Indeed, under
the circumstances of the case, petitioner was negligent in seeing to it
that no harm is done to the general public. Considering that
electricity is an agency, subtle and deadly, the measure of care
required of electric companies must be commensurate with or
proportionate to the danger. The duty of exercising this high degree of
diligence and care extends to every place where persons have a right
to be (Astudillo vs. Manila Electric, 55 Phil. 427). The negligence of
petitioner having been shown, it may not now absolve itself from
liability by arguing that the victim's death was solely due to a
fortuitous event. When an act of God combines or concurs with
 14

the negligence of the defendant to produce an injury, the

defendant is liable if the injury would not have resulted but for
his own negligent conduct or omission.

Likewise, the maxim "volenti non fit injuria" relied upon by

petitioner finds no application in the case at bar. It is imperative to
note the surrounding circumstances which impelled the deceased to
leave the comforts of a roof and brave the subsiding typhoon. As
testified by Linda Alonzo Estavillo and Aida Bulong, the deceased,
accompanied by the former two, were on their way to the latter's
grocery store "to see to it that the goods were not flooded." As such,
shall We punish her for exercising her right to protect her property
from the floods by imputing upon her the unfavorable presumption
that she assumed the risk of personal injury? Definitely not. For it has
been held that a person is excused from the force of the rule,
that when he voluntarily assents to a known danger he must
abide by the consequences, if an emergency is found to exist or
if the life or property of another is in peril, or when he seeks to
rescue his endangered property. Clearly, an emergency was at
hand as the deceased's property, a source of her livelihood, was faced
with an impending loss. Furthermore, the deceased, at the time the
fatal incident occurred, was at a place where she had a right to be
without regard to petitioner's consent as she was on her way to
protect her merchandise. Hence, private respondents, as heirs, may
not be barred from recovering damages as a result of the death
caused by petitioner's negligence.

AVELINO CASUPANAN and ROBERTO CAPITULO

vs.
MARIA LLAVORE LAROYA
G.R. No. 145391. August 26, 2002

FACTS:

Two vehicles, one driven by respondent Mario Llavore Laroya

(Laroya for brevity) and the other owned by petitioner Roberto
Capitulo (Capitulo for brevity) and driven by petitioner Avelino
 15

Casupanan (Casupanan for brevity), figured in an accident. As a

result, two cases were filed with the Municipal Circuit Trial Court
(MCTC for brevity) of Capas, Tarlac. Laroya filed a criminal case
against Casupanan for reckless imprudence resulting in damage to
property, docketed as Criminal Case No. 002-99. On the other hand,
Casupanan and Capitulo filed a civil case against Laroya for quasi-
delict, docketed as Civil Case No. 2089.
When the civil case was filed, the criminal case was then at its
preliminary investigation stage. Laroya, defendant in the civil case,
filed a motion to dismiss the civil case on the ground of forum-
shopping considering the pendency of the criminal case. The MCTC
granted the motion in the Order of March 26, 1999 and dismissed the
civil case.
On Motion for Reconsideration, Casupanan and Capitulo insisted
that the civil case is a separate civil action which can proceed
independently of the criminal case. The MCTC denied the motion for
reconsideration in the Order of May 7, 1999. Casupanan and Capitulo
filed a petition for certiorari under Rule 65 before the Regional Trial
Court (Capas RTC for brevity) of Capas, Tarlac, assailing the MCTCs
Order of dismissal but the Capas RTC dismissed the petition for
certiorari for lack of merit.

ISSUE:
Can an accused in a pending criminal case for reckless imprudence
can validly file, simultaneously and independently, a separate civil
action for quasi-delict against the private complainant in the criminal
case?

RULING:
Yes. The criminal case is based on culpa criminal punishable under
the Revised Penal Code while the civil case is based on culpa
aquiliana actionable under Articles 2176 and 2177 of the Civil Code.
Laroya filed the criminal case for reckless imprudence resulting in
damage to property based on the Revised Penal Code while
Casupanan and Capitulo filed the civil action for damages based on
Article 2176 of the Civil Code. Although these two actions arose from
the same act or omission, they have different causes of action. Article
2176 provides that whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the
damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter. Further, Art. 2177 reads
that responsibility for fault or negligence under the preceding article
is entirely separate and distinct from the civil liability arising from
negligence under the Penal Code. But the plaintiff cannot recover
damages twice for the same act or omission of the defendant. Any
aggrieved person can invoke these articles provided he proves, by
preponderance of evidence, that he has suffered damage because of
the fault or negligence of another. There is nothing in the law or
rules that state only the private complainant in a criminal case
may invoke these articles. Hence, either the private
 16

complainant or the accused can file a separate civil action

under these articles.

SCHMITZ TRANSPORT & BROKERAGE CORPORATION v.

TRANSPORT VENTURE, INC., INDUSTRIAL INSURANCE
COMPANY, LTD., et al.
G.R. No. 150255. April 22, 2005

FACTS:

SYTCO Pte Ltd. Singapore shipped from the port of Ilyichevsk,

Russia on board M/V Alexander Saveliev (a vessel of Russian
registry and owned by respondent Black Sea) 545 hot rolled steel
sheets. The vessel arrived at the port of Manila and the Philippine
Ports Authority (PPA) assigned it a place of berth at the outside
breakwater at the Manila South Harbor. Petitioner Schmitz Transport,
engaged to secure the requisite clearances, to receive the cargoes
from the shipside, and to deliver them to Little Giant Steelpipe
Corporations warehouse at Cainta, Rizal. It likewise engaged the
services of respondent Transport Venture Inc. (TVI) to send a barge
and tugboat at shipside.

The tugboat, after positioning the barge alongside the vessel,

left and returned to the port terminal. Later on, arrastre operator
commenced to unload 37 of the 545 coils from the vessel unto the
barge. By noon the next day, during which the weather condition had
become inclement due to an approaching storm, the unloading unto
the barge of the 37 coils was accomplished. However, there was no
tugboat that pulled the barge back to the pier. Eventually, because of
the strong waves, the crew of the barge abandoned it and transferred
to the vessel. The barge capsized, washing the 37 coils into the sea.
Earnest efforts on the part of both the consignee Little Giant and
Industrial Insurance to recover the lost cargoes proved futile.

Industrial Insurance later filed a complaint against Schmitz

Transport, TVI and Black Sea through its representative Inchcape (the
defendants) before the RTC of Manila, for the recovery of the amount
it paid to Little Giant plus adjustment fees, attorneys fees,
and litigation expenses. Industrial Insurance won and the Schmitz et
al.s motion for reconsideration is denied.

In effect, Schmitz now filed charges against TVI et al. It asserts

that in chartering the barge and tugboat of TVI, it was acting for its
principal, consignee Little Giant, hence, the transportation contract
was by and between Little Giant and TVI. The Court rendered a
decision holding Schmitz and TVI liable.

ISSUES:

1. Was the loss of the cargoes due to a fortuitous event,

independent of any act of negligence on the part of petitioner
Black Sea and TVI?
 17

2. Assuming that there is negligence, who is/are liable for such

loss?

HELD:

1. No. The failure of TVI to tow the barge back in the pier was the
proximate cause of the loss of the cargoes. Settled is the rule
that an act of God doctrine strictly requires that the act
must be occasioned solely by the violence of nature.
Human intervention is to be excluded from creating or
entering into the cause of the mischief. When the effect is
found to be in part the result of the participation of man,
whether due to his active intervention or neglect or
failure to act, the whole occurrence is then humanized
and removed from the rules applicable to the acts of God.
Had the barge been towed back promptly to the pier, the
deteriorating sea conditions notwithstanding, the loss could
have been avoided. But the barge was left floating in open sea
until big waves set in at 5:30 a.m., causing it to sink along with
the cargoes. The loss thus falls outside the act of God doctrine.
2. Schmitz and TVI are solidarily liable for the loss of the cargoes.
TVIs failure to promptly provide a tugboat did not only
increase the risk that might have been reasonably
anticipated during the shipside operation, but was the
proximate cause of the loss. A man of ordinary prudence
would not leave a heavily loaded barge floating for a
considerable number of hours, at such a precarious time, and in
the open sea, knowing that the barge does not have any power
of its own and is totally defenseless from the ravages of the sea.
That it was nighttime and, therefore, the members of the crew
of a tugboat would be charging overtime pay did not excuse TVI
from calling for one such tugboat. As for Schmitz, for it to be
relieved of liability, it should, following Article 1739 of the
Civil Code, prove that it exercised due diligence to prevent
or minimize the loss, before, during and after the
occurrence of the storm in order that it may be exempted
from liability for the loss of the goods. While Schmitz
sent checkers and a supervisor on board the vessel to counter-
check the operations of TVI, it failed to take all available and
reasonable precautions to avoid the loss. After noting that TVI
failed to arrange for the prompt towage of the barge despite the
deteriorating sea conditions, it should have summoned the same
or another tugboat to extend help, but it did not. As for Black
Sea, its duty as a common carrier extended only from the time
the goods were surrendered or unconditionally placed in its
possession and received for transportation until they were
delivered actually or constructively to consignee Little Giant.
Since Black Sea had constructively delivered the cargoes to
Little Giant, through Schmitz, it had discharged its duty. In fine,
no liability may thus attach to Black Sea.
 18

Samsung Construction Company Philippines, Inc. vs. Far East

Bank and Trust Company and CA
G.R. No. 129015, August 13, 2004

Facts:

Samsung Construction Company Philippines, Inc. (Samsung

Construction) had a deposit account with Far East Bank and Trust
Company (FEBTC). A certain Robert Gonzaga presented a check for
payment before the FEBTC branch in Makati. The check was payable
to Cash and drawn against Samsung Construction's current account in
the amount of P999,500.00. The bank teller then compared the
signature appearing on the check with the specimen signature of Jong
as contained in the specimen signature card with the bank. The teller
was satisfied that it was Jongs signature on the check. She then
asked Gonzaga to submit proof of his identity, which the latter did
through three identification cards. At the same time, she forwarded
the check to branch Senior Assistant Cashier Gemma Velez who
counter checked the signature on the check with the specimen. She
then forwarded the check to Shirley Syfu, another bank branch officer,
for approval. Syfu noticed that Jose Sempio III, the assistant
accountant of Samsung Construction, was also in the bank. Syfu
showed the check to Sempio, who verified Jongs signature and
vouched for the identity of Gonzaga. Syfu then authorized the bank's
encashment of the check to Gonzaga. The following day, accountant
Kyu examined the balance of the bank account of Samsung
 19

Construction and discovered that a check worth P999,500 had been

encashed. Aware that he had not prepared such check he reported the
matter to Jong, who learned of the encashment of the check, and
realized that his signature had been forged. Samsung Construction
sued FEBTC before the Regional Trial Court (RTC) for violation of
Section 23 of the Negotiable Instruments Law. The RTC gave more
weight to the NBI examiners findings, and found in favor of Samsung
Construction. On appeal, the Court of Appeals (CA) reversed the RTC
decision and absolved FEBTC from any liability. Hence, the present
petition.

Issues:

1. Whether or not the bank was negligent when it encashed the forged
check.

Ruling:

Yes, the bank is negligent in encashing the forged check. The

Court rules that while it is true that the bank complied with its
internal rules prior to paying out the questionable check, there are
several troubling circumstances that led the Court to believe that the
bank itself was remiss in its duty. The Supreme Court reiterates that
the highest degree of care and diligence is required of banks. Banks
are engaged in a business impressed with public interest, and it is
their duty to protect their many clients and depositors who transact
business with them. They have the obligation to treat their client's
account meticulously and with the highest degree of care, considering
the fiduciary nature of their relationship. The diligence required of
banks, therefore, is more than that of a good father of a family. Given
the circumstances, extraordinary diligence dictates that FEBTC
should have ascertained from Jong personally that the signature in the
questionable check was his.

LIBI VS IAC
G.R. No. 70890. September 18, 1992

FACTS:

Julie Ann Gotiong and Wendell Libi, both minors, are sweethearts
for more than two years until Julie (for brevity) broke up her
relationship with Wendell after she found him to be sadistic and
irresponsible. Wendell wanted reconciliation but Julie persisted in her
refusal. This prompted the former to resort to threats against her. One
 20

day Julie Ann and Wendell died from a single gunshot wound
each comingfrom the same
Smith and Wesson revolver licensed in the name of petitioner
Cresencio Libi, Wendells father.

As a result of the tragedy, the parents of Julie Ann filed Civil Case
against the parents of Wendell to recover damages arising from the
latters vicarious liability under Article 2180 of the Civil Code. After
trial, the court rendered judgment dismissing plaintiffs complaint for
insufficiency of the evidence. CA set aside the decision of the lower
court.

ISSUE:

1. Whether or not Wendells parents should be held liable for

damages.

RULING:

The civil liability of parents for quasi-delicts of their minor

children, is contemplated in Article 2180 of the Civil Code.
Accordingly, such parental liability is primary and not subsidiary, as
the last paragraph of Article 2180 provides that" (t)he responsibility
treated of in this article shall cease when the persons herein
mentioned prove that they observed all the diligence of a good father
of a family to prevent damages." In other words, the parents' liability
as being primary and not subsidiary and liability shall ceased if the
parents can prove that they observe all the diligence of a good father
to prevent damage.

However, defendants-appellees utterly failed to exercise all the

diligence of a good father of the family in preventing their minor son
from committing this crime by means of the gun which was freely
accessible to Wendell Libi for they have not regularly checked
whether said gun was still under lock, but learned that it was missing
from the safety deposit box only after the crime had been committed.
Wendell could have not gotten hold of the gun if the key was not left
negligently lying around.
 21

Valenzuela vs. CA
253 SCRA 303, February 7, 1996

Facts:

Plaintiff Valenzuela was driving at Marcos highway to her home, at

around 2:00 in the morning. She noticed something wrong with her
tires; she stopped at a lighted place where there were people, to
verify whether she had a flat tire and to solicit help if needed. Having
been told by the people present that her rear right tire was flat, she
parked along the sidewalk, and about 1-1/2 feet away, put on her
emergency lights, alighted from the car, and went to the rear to open
the trunk. She was standing at the left side of the rear of her car
pointing to the tools to a man who will help her fix the tire when she
was suddenly bumped by a car driven by defendant Richard Li and
registered in the name of defendant Alexander Commercial, Inc.
Because of the impact plaintiff was thrown against the windshield of
the car of the defendant, which was destroyed, and then fell to the
ground. She was confined in the hospital for twenty days and was
eventually fitted with an artificial leg.

Issues:

1. Whether or not Li was negligent.

2. Whether or not Valenzuela was guilty of contributory negligence.
3. Whether or not Alexander Commercial, Inc. as Li's employer should
be held liable.

Ruling:

1. Yes. Valenzuela's version of the incident was fully corroborated by

an uninterested witness. As between Li's "self-serving" asseverations
and the observations of a witness who did not even know the accident
victim personally and who immediately gave a statement of the
incident similar to his testimony to the investigator immediately after
the incident, the latter's testimony deserves greater weight.

2. No. Under the "emergency rule", an individual who suddenly finds

himself in a situation of danger and is required to act without much
time to consider the best means that may be adopted to avoid the
impending danger, is not guilty of negligence if he fails to undertake
what subsequently and upon reflection may appear to be a better
solution, unless the emergency was brought by his own negligence.
The emergency which led her to park her car on a sidewalk was not of
her own making, and it was evident that she had taken all reasonable
precautions.

3. Yes. Utilizing the bonus pater familias standard expressed in

Article 2180 of the Civil Code, we are of the opinion that Li's
employer, Alexander Commercial, Inc. is jointly and solidarily liable
for the damage caused by the accident. Based on the principle of
pater familias, the liability ultimately falls upon the employer for his
 22

failure to exercise the diligence of a good father of the family in the

selection and supervision of his employees.

MACARIO TAMARGO, CELSO TAMARGO and AURELIA

TAMARGO vs.HON. COURT OF APPEALS, THE HON. ARISTON
L. RUBIO, RTC Judge, Branch 20, Vigan, Ilocos Sur; VICTOR
BUNDOC; and CLARA BUNDOC

G.R. No. 85044 June 3, 1992

FACTS:

On October 20, 1982, Adelberto Bundoc, then a minor of 10

years of age, shot Jennifer Tamargo with an air rifle causing injuries
which resulted in her death. Accordingly, a civil complaint for
damages was filed with the Regional Trial Court by petitioner Macario
Tamargo, Jennifer's adopting parent, and petitioner spouses Celso and
Aurelia Tamargo, Jennifer's natural parents against respondent
spouses Victor and Clara Bundoc, Adelberto's natural parents with
whom he was living at the time of the tragic incident.

Prior to the incident, the spouses Sabas and Felisa Rapisura had
filed a petition to adopt the minor Adelberto Bundoc before the then
Court of First Instance of Ilocos Sur. This petition for adoption was
granted after Adelberto had shot and killed Jennifer. In their Answer,
respondent spouses Bundoc, Adelberto's natural parents, reciting the
result of the foregoing petition for adoption, claimed that not they, but
rather the adopting parents, namely the spouses Sabas and Felisa
Rapisura, were indispensable parties to the action since parental
authority had shifted to the adopting parents from the moment the
successful petition for adoption was filed. Petitioners in their Reply
contended that since Adelberto Bundoc was then actually living with
his natural parents, parental authority had not ceased nor been
relinquished by the mere filing and granting of a petition for adoption.
The trial court dismissed petitioners' complaint, ruling that
respondent natural parents of Adelberto indeed were not
indispensable parties to the action.

ISSUE:

Whether or not the effects of adoption, insofar as parental

authority is concerned may be given retroactive effect so as to make
the adopting parents the indispensable parties in a damage case filed
against their adopted child, for acts committed by the latter, when
actual custody was yet lodged with the biological parents?
 23

RULING:

No. The Court does not consider that retroactive effect may be
given to the decree of adoption so as to impose a liability upon the
adopting parents accruing at a time when adopting parents had no
actual or physical custody over the adopted child. Retroactive effect
may perhaps be given to the granting of the petition for adoption
where such is essential to permit the accrual of some benefit or
advantage in favor of the adopted child. In the instant case, however,
to hold that parental authority had been retroactively lodged in the
Rapisura spouses so as to burden them with liability for a tortious act
that they could not have foreseen and which they could not have
prevented (since they were at the time in the United States and had
no physical custody over the child Adelberto) would be unfair and
unconscionable. Such a result, moreover, would be inconsistent with
the philosophical and policy basis underlying the doctrine of vicarious
liability. Put a little differently, no presumption of parental dereliction
on the part of the adopting parents, the Rapisura spouses, could have
arisen since Adelberto was not in fact subject to their control at the
time the tort was committed.

JOSE AMADORA, ET. AL vs. HONORABLE COURT OF APPEALS

G. R. NO. L-47745 April 15, 1988

FACTS:

On April 13, 1972, while they were in the auditorium of their

school, the Colegio de San Jose-Recoletos, a classmate, Pablito Daffon,
fired a gun that mortally hit and killed the seventeen years old,
Alfredo Amadora. Daffon was convicted of homicide thru reckless
imprudence. Additionally, the herein petitioners, Amadora, as the
victim's parents, filed a civil action for damages under Article 2180 of
the Civil Code against the Colegio de San Jose-Recoletos, its rector
the high school principal, the dean of boys, and the physics teacher,
together with Daffon and two other students, through their respective
parents.

The complaint against the students was later dropped. After

trial, the Court of First Instance of Cebu held the remaining
defendants liable to the plaintiffs. On appeal to the respondent court,
the school averred that the students were not in the custody of the
school at the time of the incident as the semester had already ended.
The petitioners, contend that their son was in the school to show his
physics experiment as a prerequisite to his graduation; hence, he was
then under the custody of the private respondents. The Court of
Appeals ruled in favor of the school. It found that Article 2180 was not
applicable as the Colegio de San Jose-Recoletos was not a school of
arts and trades but an academic institution of learning.
 24

ISSUE:

Whether Colegio de San Jose-Recoletos, an academic school, is

liable under Article 2180 of the Civil Code for the tortuous act of
Daffon.

RULING:

No. Although the Supreme Court ruled that (1) ALL schools,
academic or not, may be held liable under the provision of Article
2180 which provides that: Lastly, teachers or heads of
establishments of arts and trades shall be liable for damages caused
by their pupils and students or apprentices so long as they remain in
their custody and that (2) such liability does not cease when the
school year ends or when the semester ends and the responsibility of
the school authorities over the student continues so long as it can be
shown that the student is in the school premises in pursuance of a
legitimate student objective, in the exercise of a legitimate student
right, and even in the enjoyment of a legitimate student right, and
even in the enjoyment of a legitimate student privilege, the Colegio de
San Jose-Recoletos cannot be held directly liable under the article
because only the teacher or the head of the school of arts and trades
is made responsible for the damage caused by the student or
apprentice. Neither can it be held to answer for the tort committed by
any of the other private respondents for none of them has been found
to have been charged with the custody of the offending student or has
been remiss in the discharge of his duties in connection with such
custody. In the case at bar, the Physics teacher in charge was not
properly named, and there was no sufficient evidence presented to
make the said teacher-in-charge liable. Thus, absent the direct
liability of the teachers because of the foregoing reason, the school
cannot be held subsidiarily liable too.

ST. FRANCIS HIGH SCHOOL vs. THE HONORABLE COURT OF

APPEALS

G.R. No. 82465 February 25, 1991

FACTS:

Ferdinand Castillo, a freshman student at the St. Francis High

School, wanted to join a school picnic at Talaan Beach, Sariaya,
Quezon. Ferdinand's parents, respondents spouses Dr. Romulo
Castillo and Lilia Cadiz Castillo, because of short notice, did not allow
their son to join but merely allowed him to bring food to the teachers
for the picnic, with the directive that he should go back home after
 25

doing so. However, because of persuasion of the teachers, Ferdinand

went on with them to the beach. During the picnic, one of the female
teachers was apparently drowning. Some of the students, including
Ferdinand, came to her rescue, but in the process, it was Ferdinand
himself who drowned and later on died.

Thereupon, respondent spouses filed a complaint in the

Regional Trial Court against the St. Francis High School, and the
teachers contending that the death of their son was due to the failure
of the petitioners to exercise the proper diligence of a good father of
the family in preventing their son's drowning. The trial court found
the teachers liable but dismissed the case against the school. The
Court of Appeals declared that the teachers failed to exercise the
diligence of a good father of the family to guard against the foreseen
harm. Also, the school and the principal Benjamin Illumin was
declared jointly and solidarily liable with the teachers for the death of
Ferdinand Castillo, under Article 2180 of the Civil Code of the
Philippines.

ISSUE:

Whether the school St. Francis High School, principal, teachers

were liable for the death of Ferdinand.

RULING:

No. Under Article 2180 of the Civil Code, before an employer

may be held liable for the negligence of his employee, the act or
omission which caused damage or prejudice must have occurred while
an employee was in the performance of his assigned tasks. In the case
at bar, the teachers/petitioners were not in the actual performance of
their assigned tasks. The incident happened not within the school
premises, not on a school day and most importantly while the teachers
and students were holding a purely private affair, a picnic which had
no permit from the school head or its principal, Benjamin Illumin
because this picnic is not a school sanctioned activity neither is it
considered as an extra-curricular activity. Also, mere knowledge by
petitioner/principal Illumin of the planning of the picnic by the
students and their teachers does not in any way or in any manner
show acquiescence or consent to the holding of the same. The
application therefore of Article 2180 has no basis in law and neither is
it supported by any jurisprudence.

Finally, no negligence could be attributable to the petitioners-

teachers to warrant the award of damages to the respondents-
spouses. The class adviser of the section where Ferdinand belonged
did her best and exercised diligence of a good father of a family to
prevent any untoward incident or damages to all the students who
joined the picnic.
 26

JARCO MARKETING CORPORATION V. CA

G.R. No. 129792, 21 December 1999

FACTS:

On May 9, 1983, Criselda and her 6 year old daughter Zhieneth

were at the second floor of Syvels Department Store, Makati City.
While Criselda was signing her credit card slip at the counter,
suddenly she felt a sudden gust of wind and heard a loud thud. As she
looked behind her, she saw Zhieneth's body pinned by the entire
structure of the store's gift-wrapping counter. Zhieneth was quickly
rushed to the Makati Medical Center where she was operated on.

The following day, Zhieneth lost her speech and can only
communicate through a magic slate. Unfortunately, she died 14 days
later because of the severity of her injuries. After the burial, Crisielda
demanded upon Jarco Marketing the reimbursement of the
hospitalization, medical bills and wake and funeral expenses which
they had incurred. But, they refused to pay hence, Crisielda filed for a
complaint for damages.

In Jacos counterclaim, they denied any liability. They claimed

that Criselda was negligent in exercising care and diligence over her
daughter by allowing her to freely roam around in a store filled with
glassware and appliances. Further, they contended that Zhieneth too,
was guilty of contributory negligence since she climbed the counter,
triggering its eventual collapse on her. Petitioners also emphasized
that the counter was made of sturdy wood with a strong support; it
never fell nor collapsed for the past fifteen years since its
construction.

ISSUE

Whether Jarco marketing was negligent or it was an accident

RULING

Yes, Jaco Marketing was negligent. What transpired was not an

unforeseen event in which would attach no fault on the part of the
defendant. Jaco Marketing failed to observe for the protection of the
interest of another person and show that degree of care, precaution
and vigilance. Under the circumstances thus described, it is
unthinkable for Zhieneth, a child of such tender age is incapable of
contributory negligence. In our jurisdiction, a person under nine
years of age is conclusively presumed to have acted without
 27

discernment, and is, on that account, exempt from criminal liability.

The same presumption and a like exemption from criminal liability
obtains in a case of a person over nine and under fifteen years of age,
unless it is shown that he has acted with discernment.

Further, even if we attribute contributory negligence to

Zhieneth and assume that she climbed over the counter, no injury
should have occurred if we accept petitioners' theory that the counter
was stable and sturdy.

PHIL. SCHOOL OF BUSINESS ADMINISTRATION V. CA

G.R. No. 84698, 4 February 1992

FACTS

Carlos Bautista is a third-year commerce student of Philippine

School of Business Administration. He was stabbed to death by
assailants who were not members of the schools academic community
while on the second floor premises of their school.

The parents of Carlos Bautista filed a civil action against the

school authorities alleging that the school is negligent, reckless and
with failure to take security precautions during and after the attack.
The case was elevated in the court of appeals, and the CA favored the
claim of the parents of Baustista.

ISSUE

Whether the appellate court was correct in deciding the case

based on Article 2180- in loco parentis

Whether the application of the law on quasi-delicts is proper when

there is a pre-existing contract

RULING

The SC did not agree with the premises of the CAs ruling.
Article 2180, in conjunction with Article 2176 of the Civil Code,
establishes the rule in in loco parentis. It had been stressed that the
law (Article 2180) plainly provides that the damage should have been
caused or inflicted by pupils or students of the educational institution
sought to be held liable for the acts of its pupils or students while in
custody.
 28

Hoewever, this material situation does not exist in the present case
for the assailants of Carlitos were not students of PSBA, for whose
acts the school could have been made liable.

As to whether PSBA is exculpated for liability, it does not

necessarily follows. It does not necessarily follow. When an academic
institution accepts students for enrollment, there is established a
contract between them, resulting in bilateral obligations which both
parties are bound to comply with.

Moreover, there is that built-in obligation to provide students with

an atmosphere that promotes or assists in attaining its primary
undertaking of imparting knowledge. The school must ensure that
adequate steps are taken to maintain the peace and order inside the
school. Because of the circumstances of the present case shows a
contractual relation between the school and Carlitos, the rule on
quasi-delict do not really govern but it does not relieve the school
from extra contractual liability to Carlitos. In the present case, there
is no finding that the contract between the school and Carlitos had
been breached thru the schools negligence in providing proper
security measures.

ST. MARYS ACADEMY V. CARPITANOS

G.R. No. 143363, 6 February 2002

FACTS

Herein petitioner, conducted an enrollment drive for the school

year 1995-1996 They visited schools from where prospective enrollees
were studying. Sherwin Carpitanos joined the campaign. Along with
the other high school students, they rode a Mitsubishi jeep owned by
Vivencio Villanueva on their way to Larayan Elementary School. Such
jeep was driven by James Daniel II, a 15 year old student of the same
school. It was alleged that he drove the jeep in a reckless manner
which resulted for it to turned turtle. Sherwin died due to this
accident.

ISSUE

Whether the petitioner should be held liable for the damages.

HELD:

The petitioner liable for the death of Sherwin under Article 218
and 219 of the Family Code where it was pointed that they were
negligent in allowing a minor to drive and not having a teacher
accompany the minor students in the jeep. However, for them to be
held liable, the act or omission to be considered negligent must be the
proximate cause of the injury caused thus, negligence needs to have a
 29

causal connection to the accident. It must be direct and natural

sequence of events, unbroken by any efficient intervening causes.

The parents of the victim failed to show such negligence on the

part of the petitioner. The spouses Villanueva admitted that the
immediate cause of the accident was not the reckless driving of James
but the detachment of the steering wheel guide of the jeep. Further,
there was no evidence that petitioner allowed the minor to drive the
jeep of Villanueva. The mechanical defect was an event over which
the school has no control hence they may not be held liable for the
death resulting from such accident.

The registered owner of any vehicle, even if not used for public
service, would primarily be responsible to the public or to 3 rd persons
for injuries caused while it is being driven on the road. It is not the
school, but the registered owner of the vehicle who shall be held
responsible for damages for the death of Sherwin. Case was
remanded to the trial court for determination of the liability of the
defendants excluding herein petitioner.

Castilex Industrial Corporation v. Vicente Vasquez, Jr.

G.R. No. 132266, December 21, 1999

Facts:

On 28 August 1988, at around 1:30 to 2:00 in the morning,

Romeo So Vasquez, was driving a motorcycle around Fuente Osmea
Rotunda. He was traveling counter-clockwise, but without any
protective helmet. He was also only carrying a Student's Permit to
Drive at that time. Upon the other hand, Benjamin Abad, manager of
Castilex Industrial Corporation, registered owner of a pick-up, drove
the said company car out of a parking lot. But instead of going around
the Osmea rotunda, he made a shortcut against the flow of the
traffic.

In the process, the motorcycle of Vasquez and the pick-up of

Abad collided with each other causing severe injuries to the former.
Abad stopped his vehicle and brought Vasquez to the Southern Islands
 30

Hospital and later to the Cebu Doctor's Hospital. On September 5,

1988, Vasquez died at the Cebu Doctor's Hospital. It was there that
Abad signed an acknowledgment of Responsible Party wherein he
agreed to pay whatever hospital bills, professional fees and other
incidental charges Vasquez may incur.

After the police authorities had conducted the investigation of

the accident, a Criminal Case was filed against Abad but which was
subsequently dismissed for failure to prosecute. The present action
for damages was commenced by Vicente Vasquez, Jr. and Luisa So
Vasquez, parents of the deceased Romeo So Vasquez, against Abad
and Castilex Industrial Corporation. In the same action, Cebu Doctor's
Hospital intervened to collect unpaid balance for the medical expense
given to Romeo So Vasquez.

Issue:

WON Castilex Industrial Corporation may be held vicariously

liable for the death of Romeo So Vasquez resulting from the negligent
operation by Abad of a company-issued vehicle.

Ruling:

NO. The mere fact that Abad was using a service vehicle at the
time of the injurious incident is not of itself sufficient to charge
petitioner with liability for the negligent operation of said vehicle
unless it appears that he was operating the vehicle within the course
or scope of his employment.

In the case at bar, Abad did some overtime work at the

petitioner's office. Thereafter, he went to Goldie's Restaurant which is
about seven kilometers away from petitioner's place of business. At
the Goldie's Restaurant, Abad took some snacks and had a chat with
friends. It was when Abad was leaving the restaurant that the incident
in question occurred.

To the mind of the Court, Abad was engaged in affairs of his own
or was carrying out a personal purpose not in line with his duties at
the time he figured in a vehicular accident. It was about 2:00 a.m.,
way beyond the normal working hours. Abad's working day had
ended; his overtime work had already been completed. Since there is
paucity of evidence that Abad was acting within the scope of the
functions entrusted to him, petitioner Castilex Industrial Corporation
had no duty to show that it exercised the diligence of a good father of
a family in providing Abad with a service vehicle. Thus, justice and
equity require that petitioner be relieved of vicarious liability for the
consequences of the negligence of Abad in driving its vehicle.

Petitioner Castilex Industrial Corporation is absolved of any

liability for the damages caused by its employee, Jose Benjamin Abad. 2/2
 31

Philippine Rabbit Bus Lines, Inc., et.al. V. Phil-American

Forwarders et.al.
G.R. No. L-25142, March 25, 1975

Facts:

On November 24, 1962, Fernando Pineda drove recklessly a

freight truck, owned by Phil-American Forwarders, Inc., along the
national highway at Sto. Tomas, Pampanga. The truck bumped the bus
driven by Pangalangan, which was owned by Philippine Rabbit Bus
 32

Lines, Inc. As a result of the bumping, Pangalangan suffered injuries

and the bus was damaged and could not be used for seventy-nine
days, thus depriving the company of earnings amounting to
P8,665.51. Balingit was the manager of Phil-American Forwarders,
Inc.
Among the defenses interposed by the defendants in their
answer was that Balingit was not Pineda's employer. Balingit moved
that the complaint against him be dismissed on the ground that the
bus company and the bus driver had no cause of action against him.

Issue:

Whether the terms "employers", "owners and managers of an

establishment or enterprise" used in Article 2180 of the Civil Code,
embrace the manager of a corporation owning a truck, the reckless
operation of which allegedly resulted in the vehicular accident from
which the damage arose.

Ruling:

NO. Those terms do not include the manager of a corporation.

Under Article 2180 the term "manager" is used in the sense of
"employer" and does not embrace a "manager" who may himself be
regarded as an employee or dependiente of his employer.

Under the allegations of the complaint, no tortious or quasi-

delictual liability can be fastened on Balingit as manager of Phil-
American Forwarders, Inc., in connection with the vehicular accident
because he himself may be regarded as an employee of his employer,
Phil-American Forwarders, Inc.
 33

Ernesto Martin v. Hon. Court of Appeals and Manila Electric

Company
G. R. No. 82248, January 30, 1992

Facts:

The private car of Ernesto Martin was being driven by Nestor

Martin when it crashed into a Meralco electric post. The car was
wrecked and the pole severely damaged. Thus, Meralco demanded
reparation from Ernesto Martin, but the demand was rejected. It
thereupon sued him for damages, alleging inter alia that he was liable
as the employer of Nestor Martin. The petitioner's main defense was
that Nestor Martin was not his employee.
The complaint for damages was filed by the private respondent
against Ernesto Martin only as alleged employer of Nestor Martin, the
driver of the car at the time of the accident. Nestor Martin was not
impleaded. The action was based on tort under Article 2180 of the
Civil Code.

The defendant moved to dismiss the complaint on the ground

that no evidence had been adduced to show that Nestor Martin was
his employee. The motion was denied. The RTC held in favor of the
plaintiff. The CA affirmed it in toto.

Issue:

WON Ernesto is liable for the damage caused by Nestor.

Ruling:

NO. Whether or not engaged in any business or industry, the

employer under Article 2180 is liable for the torts committed by his
employees within the scope of their assigned task. But it is necessary
first to establish the employment relationship.

In the case at bar, no evidence whatsoever was adduced by the

plaintiff to show that the defendant was the employer of Nestor
Martin at the time of the accident. The trial court merely presumed
the existence of the employer-employee relationship and held that the
petitioner had not refuted that presumption. It noted that although
the defendant alleged that he was not Nestor Martin's employer, "he
did not present any proof to substantiate his allegation.

The ownership of the car and the circumstances of the accident,

are not enough bases for the inference that the petitioner is the
employer of Nestor Martin.

As the employment relationship between Ernesto Martin and 4/1

Nestor Martin could not be presumed, it was necessary for the
plaintiff to establish it by evidence. Meralco had the burden of proof,
or the duty "to present evidence on the fact in issue necessary to
establish his claim" as required by Rule 131, Section 1 of the Revised
Rules of Court. Failure to do this is fatal to its action.
 34

It was enough for the defendant to deny the alleged employment

relationship, without more, for he was not under obligation to prove
this negative averment.

It is unnecessary to examine the question of the driver's alleged

negligence or the lack of diligence on the part of the petitioner in the
selection and supervision of his employee. These questions have not
arisen because the employment relationship has not been established.

HEIRS OF DIAZ-LEUS v MELVIDA

G.R. No. 77716-25; February 17, 1988

FACTS:

Accused Melvida and Rosas, being then the persons in charge of

Plymouth car and a Victory Liner bus, respectively, did then and there
wilfully, unlawfully and feloniously drive and operate their respective
motor vehicles in a negligent, careless and imprudent manner,
without due regard to traffic laws, rules and regulations and the
weather conditions, and without taking the necessary precaution to
avoid injuries to persons and damage to property, causing the said
Plymouth car driven by the said accused Melvida to swerve to its left,
cross the island, and move onto the lane for the opposite traffic, and
the said Victory Liner bus to hit and bump the said Plymouth car,
thereby inflicting on Diaz-Leus which directly caused her death. The
trial court found the accused Hernani Melvida guilty beyond
reasonable doubt of the offense charged (Reckless Imprudence
resulting in Double Homicide, Serious and Slight Physical Injuries and
Damage to Property. For failure to establish the guilt of accused Rosas
beyond reasonable doubt, he is hereby acquitted of the offense
charged. From said decision the legal heirs appealed to the CA only
with respect to the civil aspect.

ISSUE:

WON accused-appellee Rosas could still be held civilly liable

despite his acquittal in the criminal case.
RULING:

The findings of the Court of Appeals were a complete

exoneration of Rosas. Since petitioner's appeal on the civil aspect is
predicated upon Rosas' alleged negligence which has been found not
to exist, this Court must likewise uphold the Court of Appeals' ruling
that Rosas' acquittal in the criminal case carries with it the extinction
of his civil liability which bars herein petitioners from recovering
damages from Rosas. Since Rosas is absolved from any act of
negligence which in effect prevents further recovery of any damages,
the same is likewise true with respect to his employer victory Liner,
Inc. which at most would have been only subsidiarily liable.
Nor can the spouses Jesus Gali and Leonisa Gali as employers of
respondent Hernani Melvida be subsidiarily liable. Art. 103 of the
Revised Penal Code provides,
 35

The subsidiary liability established in the next preceding

article shall also apply to employers, teachers, persons
and corporations engaged in any kind of industry for
felonies committed by their servants, pupils, workmen,
apprentices, or employees in the discharge of their duties.
In order that employers may be held liable under the above-
quoted provision of law, the following requisites must exist.
(1) That an employee has committed a mime in the
discharge of his duties;
(2) that said employee is insolvent and has not satisfied
his civil liability; and
(3) that the employer is engaged in some kind of
industry. 6
The preceding requisites are not present in the case of the Gali
spouses. They are not engaged in any kind of industry. Industry has
been defined as any department or branch of art, occupation or
business, especially, one which employs much labor and capital and is
a distinct branch of trade, as the sugar industry. 7
Thus, the Gali spouses cannot be held subsidiarily liable. As We stated
in a previous case: "Where the defendant is admittedly a private
person who has no business or industry, and uses his automobile for
private purposes, he is not also subsidiarily liable to the plaintiff for
the damages to the latter's car caused by the reckless imprudence of
his insolvent driver." 8

DUAVIT v COURT OF APPEALS

GR No. 82318; May 18, 1989

FACTS:

The jeep being driven by defendant Sabiniano collided with

another jeep, which had then two passengers on it. As a result of the
collision the passengers of the other jeep suffered injury and the
automobile itself had to be repaired because of the extensive damage.
A case was filed against Sabiniano as driver and against Duavit as
owner of the jeep. Duavit admitted ownership of the jeep but denied
that Sabiniano was his employee. Sabiniano himself admitted that he
took Duavits jeep from the garage without consent or authority of the
owner. He testified further that Duavit even filed charges against him
for theft of the jeep, but which Duavit did not push through as the
parents of Sabiniano apologized to Duavit on his behalf. Trial Court
found Sabiniano negligent in driving the vehicle but absolved Duavit
on the ground that there was no employer-employee relationship
between them, and that former took the vehicle without
consent or authority of the latter. CA held the two of them jointly and
severally liable.

ISSUE:

WON the owner of a private vehicle which figured in an accident

can be held liable under Article 2180 of the CC when the said vehicle
 36

was neither driven by an employee of the owner nor taken with the
consent of the latter.

HELD:

NO.
In Duquillo v Bayot (1939), SC ruled that an owner of a vehicle
cannot be held liable for an accident involving a vehicle if the same
was driven without his consent or knowledge and by a person not
employed by him. This ruling is still relevant and applicable, and
hence, must be upheld.
CAs reliance on the cases of Erezo v Jepte and Vargas v
Langcay is misplaced and cannot be sustained. In Erezo v Jepte
case, defendant Jepte was held liable for the death of Erezo even if he
was not really the owner of the truck that killed the latter because
he represented himself as its owner to the Motor Vehicles Office and
had it registered under his name; he was thus estopped from later
on denying such representation. In Vargas, Vargas sold her jeepney to
a third person, but she did not surrender to the Motor Vehicles Office
the corresponding AC plates. So when the jeepney later on figured in
an accident, she was held liable by the court holding that the operator
of record continues to be the operator of vehicle incontemplation of
law, as regards the public and third persons.
The circumstances of the above cases are entirely different from
those in the present case. Herein petitioner does not deny ownership
of vehicle but denies having employed or authorized the
driver Sabiniano. The jeep was virtually stolen from the petitioners
garage.
Decision and resolution annulled and set aside.

BANAL v JUDGE TADEO and CLAUDIO

G.R. No. 78911-25; December 11, 1987

FACTS:

Fifteen separate informations for violation of BP 22 were filed

against respondent Claudio before the RTC of Quezon City. On
January 1987, the respondent court issued an order rejecting the
appearance of Atty. Nicolito L. Bustos as private prosecutor on the
ground that the charge is for the violation of BP 22 which does not
provide for any civil liability or indemnity and hence, "it is not a crime
against property but public order." The petitioner, through counsel
filed a motion for reconsideration of the order. Respondent Claudio
filed her opposition to the motion. In an order, the respondent court
 37

denied petitioner's MR. Hence, this petition questioning the orders of

the respondent Court.

ISSUE:

WON the respondent Court acted with grave abuse of discretion

or in excess of its jurisdiction in rejecting the appearance of a private
prosecutor.

RULING:

Article 20 of the New Civil Code provides:

Every person who, contrary to law, wilfully or negligently
causes damage to another, shall indemnify the latter for
the same.
Regardless, therefore, of whether or not a special law so provides,
indemnification of the offended party may be had on account of the
damage, loss or injury directly suffered as a consequence of the
wrongful act of another. The indemnity which a person is sentenced to
pay forms an integral part of the penalty imposed by law for the
commission of a crime (Quemel v. Court of Appeals citing Bagtas v.
Director of Prison). Every crime gives rise to a penal or criminal
action for the punishment of the guilty party, and also to civil action
for the restitution of the thing, repair of the damage, and
indemnification for the losses. (United States v. Bernardo). Indeed one
cannot disregard the private party in the case at bar who suffered the
offenses committed against her. Not only the State but the petitioner
too is entitled to relief as a member of the public which the law seeks
to protect. She was assured that the checks were good when she
parted with money, property or services. She suffered with the State
when the checks bounced.
Civil liability to the offended private party cannot thus be
denied, The payee of the check is entitled to receive the payment of
money for which the worthless check was issued. Having been caused
the damage, she is entitled to recompense.
The petitioner's intervention in the prosecution of Criminal
Cases 40909 to 40913 is justified not only for the protection of her
interests but also in the interest of the speedy and inexpensive
administration of justice mandated by the Constitution (Section 16,
Article III, Bill of Rights, Constitution of 1987).
WHEREFORE the petition is hereby GRANTED. The respondent
court is ordered to permit the intervention of a private prosecutor in
behalf of petitioner Charmina B. Banal, in the prosecution of the civil
aspect of the criminal cases.
 38

SPOUSES FRANCISCO M. HERNANDEZ and

ANICETA ABEL-HERNANDEZ and JUAN
GONZALES, petitioners, vs. SPOUSES LORENZO
DOLOR and MARGARITA DOLOR, FRED PANOPIO,
JOSEPH SANDOVAL, RENE CASTILLO, SPOUSES
FRANCISCO VALMOCINA and VIRGINIA
VALMOCINA, SPOUSES VICTOR PANOPIO and
MARTINA PANOPIO, and HON. COURT OF
APPEALS, respondents.
[G.R. No. 160286 July 30, 2004.]

Facts:

At about 3:00 p.m. of December 19, 1986, Lorenzo Menard "Boyet"

Dolor, Jr. was driving an owner-type jeepney with plate no. DEB 804
owned by her mother, Margarita, towards Anilao, Batangas. As he was
traversing the road at Barangay Anilao East, Mabini, Batangas, his
vehicle collided with a passenger jeepney bearing plate no. DEG 648,
driven by petitioner Juan Gonzales and owned by his co-petitioner
Francisco Hernandez, which was travelling towards Batangas City.
Boyet Dolor and his passenger, Oscar Valmocina, died as a result of
the collision. Fred Panopio, Rene Castillo and Joseph Sandoval, who
were also on board the owner-type jeep, which was totally wrecked,
suffered physical injuries. The collision also damaged the passenger
jeepney of Francisco Hernandez and caused physical injuries to its
passengers.

Consequently, respondents commenced an action for damages

against petitioners before the Regional Trial Court of Batangas City,
alleging that driver Juan Gonzales was guilty of negligence and lack of
care and that the Hernandez spouses were guilty of negligence in the
selection and supervision of their employees.

Petitioners countered that the proximate cause of the death and

injuries sustained by the passengers of both vehicles was the
recklessness of Boyet Dolor, the driver of the owner-type jeepney, who
was driving in a zigzagging manner under the influence of alcohol.
Petitioners also alleged that Gonzales was not the driver-employee of
the Hernandez spouses as the former only leased the passenger
jeepney on a daily basis. The Hernandez spouses further claimed that
even if an employer-employee relationship is found to exist between
them, they cannot be held liable because as employers they exercised
due care in the selection and supervision of their employee.

During the trial of the case, it was established that the drivers of
the two vehicles were duly licensed to drive and that the road where
the collision occurred was asphalted and in fairly good condition. The
owner-type jeep was travelling uphill while the passenger jeepney was
going downhill. It was further established that the owner-type jeep
was moderately moving and had just passed a road bend when its
passengers, private respondents Joseph Sandoval and Rene Castillo,
saw the passenger jeepney at a distance of three meters away. The
passenger jeepney was traveling fast when it bumped the owner type
jeep. Moreover, the evidence presented by respondents before the
trial court showed that petitioner Juan Gonzales obtained his
professional driver's license only on September 24, 1986, or three
 39

months before the accident. Prior to this, he was holder of a student

driver's permit issued on April 10, 1986.

Issue:

WON the Court of Appeals was correct when it pronounced the

Hernandez spouses as solidarily liable with Juan Gonzales, although it
is of record that they were not in the passenger jeepney driven by
latter when the accident occurred

Ruling:

Yes. Court held that an employer-employee relationship exists

between the Hernandez spouses and Julian Gonzales hence making
them solidarily liable. The court was not persuaded when the
Hernandez spouses argued that since they were not inside the
jeepney at the time of the collision, the provisions of Article 2180 of
the Civil Code, which does not provide for solidary liability between
employers and employees, should be applied.
 40

ERNESTO SYKI, petitioner, vs. SALVADOR

BEGASA, respondent.
[G.R. No. 149149. October 23, 2003]

Facts: Respondent Salvador Begasa and his three companions flagged

down a passenger jeepney driven by Joaquin Espina and owned by
Aurora Pisuena. While respondent was boarding the passenger
jeepney (his right foot already inside while his left foot still on the
boarding step of the passenger jeepney), a truck driven by Elizalde
Sablayan and owned by petitioner Ernesto Syki bumped the rear end
of the passenger jeepney. Respondent fell and fractured his left thigh
bone. Respondent filed a complaint for damages for breach of
common carriers contractual obligations and quasi-delict against
Aurora Pisuena, the owner of the passenger jeepney;, herein
petitioner Ernesto Syki, theowner of the truck;, and Elizalde Sablayan,
the driver of the truck. After hearing, the trial court dismissed the
complaint against Aurora Pisuena, the owner and operator of the
passenger jeepney, but ordered petitioner Ernesto Syki and his truck
driver, Elizalde Sablayan, to pay respondent Salvador Begasa, jointly
and severally

Issue: 1. Whether or not petitioner is liable for the act of his

employee.

2. Whether he exercised the diligence of a good father of a

family.

Held: In the present case, was respondent partly negligent and thus,
should not recover the full amount of the damages awarded by the
trial court? We rule in the negative. In sum, the sole and proximate
cause of the accident was the negligence of petitioners driver who, as
found by the lower courts, did not slow down even when he was
already approaching a busy intersection within the city proper. The
passenger jeepney had long stopped to pick up respondent and his
 41

three companions and, in fact, respondent was already partly inside

the jeepney, when petitioners driver bumped the rear end ofrear-
ended it. The impact was so strong such that respondent fell and
fractured his left thigh bone (femur), and suffered severely woundeds
in his left knee and leg. No doubt that respondentpetitioners driver
was reckless speeding.

Since the negligence of petitioners driver was the sole and proximate
cause of the accident, in the present case, petitioner is liable, under
Article 2180 of the Civil Code, to pay damages to respondent Begasa
for the injuries sustained by latterhim. Petition denied.

SCHMITZ TRANSPORT & BROKERAGE CORPORATION

vs. TRANSPORT VENTURE, INC., INDUSTRIAL INSURANCE
COMPANY, LTD., and BLACK SEA SHIPPING AND DODWELL
now INCHCAPE SHIPPING SERVICES
[G.R. No. 150255. April 22, 2005]

Facts: On September 25, 1991, SYTCO Pte Ltd. Singapore shipped

from the port of Ilyichevsk, Russia on board M/V Alexander Saveliev
545 hot rolled steel sheets in coil weighing 6,992,450 metric tons.
The cargoes, which were to be discharged at the port of Manila in
favor of the consignee, Little Giant Steel Pipe Corporation (Little
Giant), were insured against all risks with Industrial Insurance
Company Ltd. (Industrial Insurance) under Marine Policy No. M-91-
3747-TIS. The vessel arrived at the port of Manila and the Philippine
Ports Authority (PPA) assigned it a place of berth at the outside
breakwater at the Manila South Harbor.

Schmitz Transport, whose services the consignee engaged to secure

the requisite clearances, to receive the cargoes from the shipside, and
to deliver them to its (the consignees) warehouse at Cainta, Rizal, in
turn engaged the services of TVI to send a barge and tugboat at
 42

shipside. TVIs tugboat Lailani towed the barge Erika V to

shipside. The tugboat, after positioning the barge alongside the
vessel, left and returned to the port terminal. Arrastre operator
Ocean Terminal Services Inc. commenced to unload 37 of the 545
coils from the vessel unto the barge. By 12:30 a.m. of October 27,
1991 during which the weather condition had become inclement due
to an approaching storm, the unloading unto the barge of the 37 coils
was accomplished. No tugboat pulled the barge back to the pier,
however. At around 5:30 a.m. of October 27, 1991, due to strong
waves, the crew of the barge abandoned it and transferred to the
vessel. The barge pitched and rolled with the waves and eventually
capsized, washing the 37 coils into the sea.

Little Giant thus filed a formal claim against Industrial Insurance

which paid it the amount of P5,246,113.11. Little Giant thereupon
executed a subrogation receipt in favor of Industrial Insurance.
Industrial Insurance later filed a complaint against Schmitz Transport,
TVI, and Black Sea through its representative Inchcape (the
defendants) before the RTC of Manila, they faulted the defendants for
undertaking the unloading of the cargoes while typhoon signal No. 1
was raised. The RTC held all the defendants negligent. Defendants
Schmitz Transport and TVI filed a joint motion for reconsideration
assailing the finding that they are common carriers. RTC denied the
motion for reconsideration. CA affirmed the RTC decision in toto,
finding that all the defendants were common carriers Black Sea
and TVI for engaging in the transport of goods and cargoes over the
seas as a regular business and not as an isolated transaction, and
Schmitz Transport for entering into a contract with Little Giant to
transport the cargoes from ship to port for a fee.
Issue: If there was negligence, whether liability for the loss may
attach to Black Sea, petitioner and TVI.
Held: This Court holds then that petitioner and TVI are solidarily
liable for the loss of the cargoes. The following pronouncement of the
Supreme Court is instructive:

In the discharge of its commitment to ensure the safety of passengers,

a carrier may choose to hire its own employees or avail itself of the
services of an outsider or an independent firm to undertake the task.
In either case, the common carrier is not relieved of its
responsibilities under the contract of carriage.

The liability of the common carrier and an independent contractor

would be solidary (Art. 2194). A liability for tort may arise even under
a contract, where tort is that which breaches the contract. Stated
differently, when an act which constitutes a breach of contract would
have itself constituted the source of a quasi-delictual liability had no
contract existed between the parties, the contract can be said to have
been breached by tort, thereby allowing the rules on tort to apply.

As for Black Sea, its duty as a common carrier extended only from
the time the goods were surrendered or unconditionally placed in its
possession and received for transportation until they were delivered
actually or constructively to consignee Little Giant.
 43

SAMSUNG CONSTRUCTION COMPANY PHILIPPINES, INC.,

Petitioner, vs. FAR EAST BANK AND TRUST COMPANY AND
COURT OF APPEALS, Respondents.
2004-08-13 | G.R. No. 129015
 44

Facts:

Samsung Construction maintained a current account with

defendant Far East Bank and Trust Company(FEBTC). The sole
signatory to Samsung Construction's account was Jong Kyu Lee , its
Project Manager, while the checks remained in the custody of the
company's accountant, Kyu Yong Lee.

A certain Roberto Gonzaga presented to FEBTC a check payable to

cash and drawn against Samsung current account amounting to
P999,500.00. The bank teller Cleofe Justiani checked the balance and
ascertained that there were enough funds to cover the check. After
ascertaining the authenticity of the signature of Jong she then asked
Gonzaga to submit proof of his identity and the latter presented 3 ID
cards.

It was bank policy that two bank branch officers approve checks
exceeding P100,000.00 thus it was checked by Senior Assistant
Cashier Gemma Velez and Shirley Syfu.
Syfu then noticed that Jose Sempio III, the assistant accountant of
Samsung Construction, was also in the bank. Sempio was well-known
to Syfu and the other bank officers, he being the assistant accountant
of Samsung Construction. Syfu showed the check to Sempio, who
vouched that Jongs signature is genuine. Sempio said that the check
was for the purchase of equipment for Samsung Construction.
Satisfied, Syfu authorized the bank's encashment of the check to
Gonzaga.

The next day, Kyu, Samsungs Accountant examined the balance of

the bank account and discovered that an amount of P999,500.00 had
been encashed. Kyu perused the checkbook and found out that the
last page was missing. Kyu reported to Jong who proceeded to the
bank and found out that his signature was forged. He then filed a
criminal case against Sempio for qualified theft.

Samsung demanded that FEBTC credit said amount, it responded

that it was still conducting an investigation. During trial, both sides
presented their respected expert witness to testify that Jongs
signature was forged. Samsung presented Senior NBI Roda B. Flores
and testified that it was forged, FEBTC presented PNP Crime Lab
document examiner Rosario Perez and showed that it was genuine.

The RTC held that Jongs signature was forged and directed
FEBTC to pay back Samsung said amount. On appeal, CA revered and
absolved FEBTC of liability, concluding there was no forgery and
Samsung negligent.

Issue:

Whether or not FEBTC is negligent in ascertaining the

genuineness of Jongs signature in the check.

Ruling:

The court ruled that FEBTC is negligent. Even assuming that

FEBTC had a standing habit of dealing with Sempio, acting in behalf
 45

of Samsung Construction, the irregular circumstances attending the

presentment of the forged check should have put the bank on the
highest degree of alert. The Court emphasized the highest degree of
care and diligence is required of banks.

Banks are engaged in a business impressed with public interest,

and it is their duty to protect in return their many clients and
depositors who transact business with them. They have the obligation
to treat their client's account meticulously and with the highest
degree of care, considering the fiduciary nature of their relationship.
The diligence required of banks, therefore, is more than that of a good
father of a family.

Given the circumstances, extraordinary diligence dictates that

FEBTC should have ascertained from Jong personally that the
signature in the questionable check was his.
 46

SPOUSES CRISTINO and BRIGIDA CUSTODIO and SPOUSES

LITO and MARIA CRISTINA SANTOS, petitioners, vs. COURT
OF APPEALS, HEIRS OF PACIFICO C. MABASA and REGIONAL
TRIAL COURT OF PASIG, METRO MANILA, BRANCH 181,
respondents.
1996-02-09 | G.R. No. 116100

Facts:

Original plaintiff Pacifico Mabasa died during the pendency of this

case and was substituted by Ofelia Mabasa, his surviving spouse [and
children].

The plaintiff owns a parcel of land with a two-door apartment

erected thereon situated at Interior P. Burgos St., Palingon, Tipas,
Tagig, Metro Manila. Said property may be described to be
surrounded by other immovables pertaining to defendants herein.
Taking P. Burgos Street as the point of reference, on the left side,
going to plaintiff's property, the row of houses will be as follows: That
of defendants Custodio, then that of Lito and Maria Cristina Santos
and then that of Ofelia Mabasa. On the right side (is) that of
defendant Rosalina Morato and then a Septic Tank. As an access to P.
Burgos Street from plaintiff's property, there are two possible
passageways. The first passageway is approximately one meter wide
and is about 20 meters distant from Mabasa's residence to P. Burgos
Street. Such path is passing in between the previously mentioned row
of houses. The second passageway is about 3 meters in width and
length from plaintiff Mabasa's residence to P. Burgos Street; it is
about 26 meters. In passing thru said passageway, a less than a meter
wide path through the septic tank and with 5-6 meters in length, has
to be traversed.

Defendant Santoses constructed an adobe fence along their

property which is also along the first passageway making it narrower.
Defendant Morato constructed her adobe fence and even extended
said fence in such a way that the entire passageway was enclosed.
Tenants of said apartment vacated the area. Defendant Ma. Cristina
Santos testified that she constructed said fence because there was an
incident when her daughter was dragged by a bicycle pedalled by a
son of one of the tenants in said apartment along the first passageway.
She also mentioned some other inconveniences of having at the front
of her house a pathway such as when some of the tenants were drunk
and would bang their doors and windows. Some of their footwear
were even lost.
 47

The trial court ordered the defendants to give plaintiff permanent

egress and ingress to the public street and ordered plaintiff to pay
defendants P8,000.00 as indemnity for the permanent uses of the
streets.

Not satisfied, plaintiffs heirs, herein respondents, appealed and

raised that the trial court erred in not awarding damages in their
favor. The CA affirmed the decision with modifications ordering
defendants-appellees to pay plaintiffs-appellants the sum of Sixty Five
Thousand (P65,000) Pesos as Actual Damages, Thirty Thousand
(P30,000) Pesos as Moral Damages, and Ten Thousand (P10,000)
Pesos as Exemplary Damages. The rest of the appealed decision is
affirmed to all respects

Issue:

Whether or not the award of damages by the CA is in order.

Ruling:

The CA erred in awarding damages in favor of private

respondents. The award of damages has no substantial legal basis.
The CAs award of damages was based solely on the fact that the
original plaintiff, Pacifico Mabasa, incurred losses in the form of
unrealized rentals.

Injury is the illegal invasion of a legal right; damage is the loss,

hurt, or harm which results from the injury; and damages are the
recompense or compensation awarded for the damage suffered. Thus,
there can be damage without injury in those instances in which the
loss or harm was not the result of a violation of a legal duty. These
situations are often called damnum absque injuria.

In the case at bar, although there was damage, there was no

legal injury. Contrary to the claim of private respondents, petitioners
could not be said to have violated the principle of abuse of right. In
order that the principle of abuse of right provided in Article 21 of the
Civil Code can be applied, it is essential that the following requisites
concur: (1) The defendant should have acted in a manner that is
contrary to morals, good customs or public policy; (2) The acts should
be willful; and (3) There was damage or injury to the plaintiff.

The act of petitioners in constructing a fence within their lot is a

valid exercise of their right as owners, hence not contrary to morals,
good customs or public policy. The law recognizes in the owner the
right to enjoy and dispose of a thing, without other limitations than
those established by law. It is within the right of petitioners, as
owners, to enclose and fence their property
 48

MARITER MENDOZA, Petitioner, vs. ADRIANO CASUMPANG,

JENNIFER ADRIANE and JOHN ANDRE, all surnamed
CASUMPANG, Respondents.
2012-03-19 | G.R. No. 197987

Facts:

Josephine Casumpang underwent hysterectomy and

myomectomy that Dr. Mendoza performed on her at the Iloilo Doctors
Hospital. After her operation, Josephine experienced recurring fever,
nausea, and vomiting. Three months after the operation, she noticed
while taking a bath something protruding from her genital. She tried
calling Dr. Mendoza to report it but the latter was unavailable.
Josephine instead went to see another physician, Dr. Edna Jamandre-
Gumban, who extracted a foul smelling, partially expelled rolled gauze
from her cervix.

This prompted Josephine to file a damage suit against Dr.

Mendoza before the RTC of Iloilo. She died before the trial could end
thus her husband Adriano and their children Jennifer Adriane and
John Andre, substituted her in the case. She was a housewife and 40
years old when she died.
 49

The RTC found Dr. Mendoza guilty of neglect that caused

Josephines illness and eventual death and order to pay the plaintiffs
heirs actual damage of P50,000.00, moral damages of P200,000.00,
and attorneys fees P20,000.00 plus cost of suit.

The RTC reversed itself upon motion for reconsideration and

dismissed the complaint. The CA reinstated the RTCs original
decision and held that Dr. Mendoza committed a breach of her duty as
a physician when a gauze remained in the body of her patient after
surgery. The CA denied her motion for reconsideration.

Issue:

Whether or not Dr. Mendoza is negligent and committed breach of

her duty as a physician.

Ruling:

The court ruled that she is negligent. Dr. Mendoza claims that no
gauze or surgical material was left in Josephines body as evidenced
by the surgical sponge count in the hospital record. The court pointed
out that Josephine did not undergo any other surgical operation and it
is unlikely for her to inject a roll of gauze into her cervix. The court
held in Professional Services, Inc. vs. Agana:

An operation requiring the placing of sponges in the incision is

not complete until the sponges are properly removed, and it is settled
that the leaving of sponges or other foreign substances in the wound
after the incision has been closed is at least prima facie negligence by
the operating surgeon. To put it simply, such act is considered so
inconsistent with due care as to raise an inference of negligence.
There are even legions of authorities to the effect that such act is
negligence per se.

A surgical operation is the responsibility of the surgeon

performing it. He must personally ascertain that the counts of
instruments and materials used before the surgery and prior to
sewing the patient up have been correctly done.

To provide an example to the medical profession and to stress

the need for constant vigilance in attending to a patients health, the
award of exemplary damages in this case is in order. In view of
Josephines death resulting from petitioners negligence, civil
indemnity under Article 2206 of the Civil Code should be given to
respondents as heirs. The amount of P50,000.00 is fixed by prevailing
jurisprudence for this kind.

The Court also deems it just and equitable under Article 2208 of
the Civil Code to increase the award of attorneys fees from
P20,000.00 to P50,000.00.
 50

ACHEVARA VS. RAMOS

G.R. No. 175172, September 29, 2009

FACTS:
 51

In their Complaint, respondents alleged that Benigno Valdez

was driving a passenger jeep heading north on the national highway
in a reckless, careless, and negligent manner. He tried to overtake a
motorcycle, causing the passenger jeep to encroach on the opposite
lane and bump the oncoming vehicle driven by Arnulfo Ramos. The
injuries sustained by Arnulfo Ramos caused his death,
notwithstanding prompt medical assistance. Respondents alleged that
Crescencia Achevara failed to exercise due diligence in the selection
and supervision of Benigno Valdez as driver of the passenger jeep.
Respondents sought to recover actual damages for medical expenses
and funeral expenses, as well as moral and exemplary damages, lost
earnings, attorney's fees and litigation expenses. Alfredo Achevara
was impleaded as the husband of the operator and as the
administrator of the conjugal partnership properties of the Spouses
Achevara. In their Answer, petitioners denied respondents allegation
that Benigno Valdez overtook a motorcycle and bumped the vehicle
driven by Arnulfo Ramos. They alleged that Benigno Valdez was
driving southward at a moderate speed when he saw an owner-type
jeep coming from the south and heading north, running in a zigzag
manner, and encroaching on the west lane of the road. To avoid a
collision, Valdez drove the passenger jeep towards the shoulder of the
road, west of his lane, but the owner-type jeep continued to move
toward the western lane and bumped the left side of the passenger
jeep. Petitioners alleged that it was Arnulfo Ramos who was careless
and negligent in driving a motor vehicle, which he very well knew had
a mechanical defect. Hence, respondents had no cause of action
against petitioners.
The RTC ruled in favor of the petitioners applying the doctrine of last
clear chance which was then affirmed by the CA with modifications.
.
ISSUE:

Whether or not petitioners are liable to respondents for

damages incurred as a result of the vehicular accident.

RULING:

No. Foreseeability is the fundamental test of negligence. To be

negligent, a defendant must have acted or failed to act in such a way
that an ordinary reasonable man would have realized that certain
interests of certain persons were unreasonably subjected to a general
but definite class of risks. The acts of negligence of Arnulfo Ramos
and Benigno Valdez were contemporaneous when Ramos continued to
drive a wiggling vehicle on the highway despite knowledge of its
mechanical defect, while Valdez did not immediately veer to the
rightmost side of the road upon seeing the wiggling vehicle of Ramos
perhaps because it still kept to its lane and Valdez did not know the
extent of its mechanical defect. However, when the owner-type jeep
encroached on the lane of the passenger jeep, Valdez realized the
peril at hand and steered the passenger jeep toward the western
shoulder of the road to avoid a collision. It was at this point that it was
perceivable that Ramos must have lost control of his vehicle, and that
it was Valdez who had the last opportunity to avoid the collision by
swerving the passenger jeep towards the right shoulder of the road.
The doctrine of last clear chance applies to a situation where the
plaintiff was guilty of prior or antecedent negligence, but the
 52

defendant who had the last fair chance to avoid the impending harm
and failed to do so is made liable for all the consequences of the
accident, notwithstanding the prior negligence of the plaintiff.
However, the doctrine does not apply where the party charged is
required to act instantaneously, and the injury cannot be avoided by
the application of all means at hand after the peril is or should have
been discovered. The doctrine of last clear chance does not apply to
this case, because even if it can be said that it was Benigno Valdez
who had the last chance to avoid the mishap when the owner-type
jeep encroached on the western lane of the passenger jeep, Valdez no
longer had the opportunity to avoid the collision. In this case, both
Arnulfo Ramos and Benigno Valdez failed to exercise reasonable care
and caution that an ordinarily prudent man would have taken to
prevent the vehicular accident.
 53

FLORES VS. PINEDA,

G.R. No. 158996, November 14, 2008

FACTS:

Teresita Pineda consulted her town mate Dr. Fredelicto Flores

regarding her medical condition, complaining about general body
weakness, loss of appetite, frequent urination and thirst, and on-and-
off vaginal bleeding. After interviewing Teresita, Dr. Fredelicto
advised her to go to United Doctors Medical Center (UDMC) in
Quezon City for a general check-up the following week but the former
did not. As for her other symptoms, he suspected that Teresita might
be suffering from diabetes and told her to continue her medications.
When her conditions persisted, she went to UDMC where Dr.
Fredelictor check-up her and ordered her admission and further
indicate on call Dilation and Curettage (D&C) operation to be
performed by his wife, Dra. Felicisima Flores, an Ob-Gyne. Laboratory
tests were done on Teresita including internal vaginal examination,
however, only the blood sugar and CBC results came out prior to
operation which indicated of diabetes. D&C operations were still done
and thereafter, Dra. Felicisima advised her that she can go home and
continue to rest at home but Teresita opted otherwise. Two days after
the operation, her condition worsened prompting further test to be
done which resulted that Teresita have diabetes melitus type II.
Insulin was administered but it might have arrived late, she died.

ISSUE:

Whether or not spouses petitioners are liable for medical

negligence.

RULING:

Yes. A medical negligence case is a type of claim to redress a

wrong committed by a medical professional, that caused a bodily
harm to or the death of a patient. There are four elements involved in
a medical negligence case, namely: duty, breach, injury, and proximate
cause. Duty refers to the standard of behavior which imposes
restrictions on ones conduct. The standard in turn refers to the
amount of competence associated with the proper discharge of the
profession. A physician is expected to use at least the same level of
 54

case that any other reasonably competent doctor would use under the
same circumstances. Breach of duty occurs when the physician fails to
comply with those professional standards. If injury results to the
patient as a result of this breach, the physician is answerable for
negligence.
If a patient suffers from some disability that increases the magnitude
of risk to him, that disability must be taken into account as long as it
is or should have been known to the physician. Stress, whether
physical or emotional, is a factor that can aggravate diabetes; a D&C
operation is a form of physical stress. Dr. Mendoza explained how
surgical stress can aggravate the patients hyperglycemia: when
stress occurs, the diabetics body, especially the autonomic system,
reacts by secreting hormones which are counter-regulatory; she can
have prolonged hyperglycemia which, if unchecked, could lead to
death. Medical lecture further explains that if the blood sugar has
become very high, the patient becomes comatose (diabetic coma).
When this happens over several days, the body uses its own fats to
produce energy, and the result is high level of waste products in the
blood and urine. These findings lead us to the conclusion that the
decision to proceed with the D&C operation notwithstanding
Teresitas hyperglycemia and without adequately preparing her for
the procedure, was contrary to the standards observed by the medical
profession. Deviation from this standard amounted to a breach of duty
which resulted in the patients death. Due to this negligent conduct,
liability must attach to the petitioner spouses.

BANK OF AMERICA VS. PHILIPPINE RACING CLUB

G.R. No. 150228, July 30, 2009

FACTS:

Defendant PRC is a domestic corporation which maintains a

current account with petitioner Bank of America. Its authorized
signatories are the company President and Vice-President. By virtue
of a travel abroad for these officers, they pre-signed checks to
accommodate any expenses that may come up while they were abroad
for a business trip. The said pre-signed checks were left for
safekeeping by PRCs accounting officer. Unfortunately, the two (2) of
said checks came into the hands of one of its employees who managed
to encash it with petitioner bank. The said check was filled in with the
use of a check-writer, wherein in the blank for the 'Payee', the amount
in words was written, with the word 'Cash' written above it. Clearly
there was an irregularity with the filling up of the blank checks as
both showed similar infirmities and irregularities and yet, the
petitioner bank did not try to verify with the corporation and
proceeded to encash the checks. PRC filed an action for damages
against the bank. The lower court awarded actual and exemplary
damages. On appeal, the CA affirmed the lower court's decision and
held that the bank was negligent. Hence this appeal. Petitioner
contends that it was merely doing its obligation under the law and
 55

contract in encashing the checks, since the signatures in the checks

are genuine.

ISSUE:

Whether or not the petitioner can be held liable for negligence and
thus should pay damages to PRC.

RULING:

Both parties are held to be at fault but the bank has the last
clear chance to prevent the fraudulent encashment hence it is the one
foremost liable. There was no dispute that the signatures in the
checks are genuine but the presence of irregularities on the face of
the check should have alerted the bank to exercise caution before
encashing them. It is well-settled that banks are in the business
impressed with public interest that they are duty bound to protect
their clients and their deposits at all times. They must treat the
accounts of these clients with meticulousness and a highest degree of
care considering the fiduciary nature of their relationship. The
diligence required of banks are more than that of a good father of a
family.

In the case at bar, petitioner cannot evade responsibility for the loss
by attributing negligence on the part of respondent because, even if
we concur that the latter was indeed negligent in pre-signing blank
checks, the former had the last clear chance to avoid the loss. To
reiterate, petitioners own operations manager admitted that they
could have called up the client for verification or confirmation before
honoring the dubious checks. Verily, petitioner had the final
opportunity to avert the injury that befell the respondent. Failing to
make the necessary verification due to the volume of banking
transactions on that particular day is a flimsy and unacceptable
excuse, considering that the banking business is so impressed with
public interest where the trust and confidence of the public in general
is of paramount importance such that the appropriate standard of
diligence must be a high degree of diligence, if not the utmost
diligence. Petitioners negligence has been undoubtedly established
and, thus, pursuant to Art. 1170 of the NCC, it must suffer the
consequence of said negligence.

CORINTHIAN GARDENS ASSOCIATION, INC V. TANJANGCO

G.R. No 160795, 27 June 2008

Facts:

Spouses Reynaldo and Maria Luisa Tanjangco (the Tanjangcos)

own Lots 68 and 69 covered by Transfer Certificates of Title (TCT) No.
2422454 and 2829615 respectively, located at Corinthian Gardens
Subdivision, Quezon City, which is managed by petitioner Corinthian
Gardens Association, Inc. (Corinthian). On the other hand,
 56

respondents-spouses Frank and Teresita Cuaso (the Cuasos) own Lot

65 which is adjacent to the Tanjangcos lots.

Before the Cuasos constructed their house, it was surveyed by

De Dios Realty the surveyor as per recommendation of the petitioner
association. Later on, Corinthian Gardens Association approved the
plans made by the builder CB Paras Construction.

Corinthian conducted periodic ocular inspections in order to

determine compliance with the approved plans pursuant to the
Manual of Rules and Regulations of Corinthian (MRRC).
Unfortunately, after construction, the perimeter fence of the Cuasos
encroached upon Tanjancos lot.

The Cuasos ascribed negligence to C.B. Paraz for its failure to

ascertain the proper specifications of their house, and to Engr. De
Dios for his failure to undertake an accurate relocation survey,
thereby, exposing them to litigation. The Cuasos also faulted
Corinthian for approving their relocation survey and building plans
without verifying their accuracy and in making representations as to
Engr. De Dios' integrity and competence. The Cuasos alleged that had
Corinthian exercised diligence in performing its duty, they would not
have been involved in a boundary dispute with the Tanjangcos. Thus,
the Cuasos opined that Corinthian should also be held answerable for
any damages that they might incur as a result of such construction.

Issue:

Whether Corinthian was negligent under the circumstances and,

if so, other such negligence contributed to the injury suffered by the
Tanjangcos.

Held:

Corinthian is negligent. Its approval of the plan is tainted with

negligence.
Petitioner is found negligent. The MRRC provides that no new
constructions can be started without the approval of the petitioner
association. Thus, it is reasonable to assume that Corinthian, through
its representative, in the approval of building plans, and in the
conduct of periodic inspections of on-going construction projects
within the subdivision, is responsible in insuring compliance with the
approved plans, inclusive of the construction of perimeter walls.

Corinthians failure to prevent the encroachment of the Cuasos

perimeter wall into Tanjancos property-despite the inspection
conducted-constituted negligence and, at the very least, contributed
to the injury suffered by the Tanjangcos.
 57

LIGHT RAIL TRANSIT V. NAVIDAD

G.R. No. 145804. February 6, 2003

Facts:

Navidad was drunk when he entered the boarding platform of

the LRT. He got into an altercation with the SG Escartin. They had a
fistfight and Navidad fell onto the tracks and was killed when a train
came and ran over him.

The Heirs of Navidad filed a complaint for damages against

Escartin, the train driver who is Rodolfo Roman, the LRTA, the Metro
Transit Organization and Prudent Security Agency (Prudent). The trial
court found Prudent and Escartin jointly and severally liable for
damages to the heirs. The CA exonerated Prudent and instead held
the LRTA and the train driver Romero jointly and severally liable as
well as removing the award for compensatory damages and replacing
it with nominal damages.

The reasoning of the CA was that a contract of carriage already

existed between Navidad and LRTA by virtue of his having purchased
train tickets and the liability was caused by the mere fact of Navidad's
death after being hit by the train being managed by the LRTA and
operated by Roman. The CA also blamed LRTA for not having
presented expert evidence showing that the emergency brakes could
not have stopped the train on time.

Issues:

(1) Whether or not LRTA and/or Roman is liable for the death.
(2) Whether or not Escartin and/or Prudent are liable.
(3) Whether or not nominal damages may coexist with compensatory
damages.

Held:

(1) Yes. The foundation of LRTA's liability is the contract of carriage

and its obligation to indemnify the victim arising from the breach of
that contract by reason of its failure to exercise the high diligence
required of a common carrier.
(2) Fault was not established. Liability will be based on Tort under Art.
2176 of the New Civil Code.
(3) No. It is an established rule that nominal damages cannot co-exist
with compensatory damages.

A common carrier is required by these above statutory

provisions to use utmost diligence in carrying passengers with due
 58

regard for all circumstances. This obligation exists not only during the
course of the trip but for so long as the passengers are within its
premises where they ought to be in pursuance to then contract of
carriage.

Art. 1763 of the Civil Code, renders a common carrier liable for
death of or injury to passengers (a) through the negligence or willful
acts of its employees or (b) on account of willful acts or negligence of
other passengers or of strangers if the common carriers employees
through the exercise of due diligence could have prevented or stopped
the act or omission.

If Prudent is to be held liable, it would be for a tort under Art.

2176 in conjunction with Art. 2180. Once the fault of the employee
Escartin is established, the employer, Prudent, would be held liable on
the presumption that it did not exercise the diligence of a good father
of the family in the selection and supervision of its employees.

The award of nominal damages in addition to actual damages is

untenable. Nominal damages are adjudicated in order that a right of
the plaintiff, which has been violated or invaded by the defendant,
may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him. It is an
established rule that nominal damages cannot co-exist with
compensatory damages. The award was deleted.

OSCAR DEL CARMEN JR. V GERONIMO BACOY

GR No. 17738770 April 25, 2012

Facts:

Spouses Monsalud and their daughter died from being run over
by a jeepney driven by a certain Allan Maglasang. The jeepney was
owned by Oscar del Carmen Jr. Allan was declared guilty beyond
reasonable doubt in a criminal case while the father of the late Mrs.
Monsalud, Geronimo Bacoy, filed an independent civil action againt
the former in behalf of the minor children left by the Monsalud
spouses.

Del Carmen Jr. claimed he was a victim as well as Allan stole the
jeep and was not hired as a driver by the former; he was a conductor
and had been released from employment lately and it was the brother
of Allan, Rodrigo who was hired as a driver. Del Carmen Jr. filed a
carnapping case against Allan but was dismissed by the court for
insufficient evidence.

RTC held Del Carmen Jr. subsidiary liable and held the doctrine
of res ipsa loquitur. The CA adjudged Oscar Jr. liable to the heirs of
the victims based on the principle that the registered owner of a
vehicle is directly and primarily responsible for the injuries or death
of third parties caused by the operation of such vehicle. It disbelieved
Oscar Jr.s defense that the jeep was stolen not only because the
carnapping case filed against Allan and his companions was dismissed
 59

but also because, given the circumstances, Oscar Jr. is deemed to

have given Allan the implied permission to use the subject vehicle
because the brothers were assigned to said jeep. After a days work,
the jeepney would be parked beside the brothers house and not
returned to Del Carmens residence; the jeep could easily be started
even without the use of an ignition key; the said parking area was not
fenced or secured to prevent the unauthorized use of the vehicle
which can be started even without the ignition key

Issue:

W/N owner of vehicle is directly and primarily liable for injuries

caused by the operation of such

Held:

Del Carmen Jr. was held to be primarily liable and not merely
subsidiary liable.
Del Carmen Jr.s own evidence cast doubt that Allan stole the jeepney.
Given the dismissal of the carnapping case filed by del Carmen Jr.
against Allan, the former also admitted to such dismissal in the SC.
Under the doctrine of res ipsa loquitur , where the thing that caused
the injury complained of is shown to be under the management of the
defendant or his servants; and the accident, in the ordinary course of
things, would not happen if those who had management or control
used proper care, it affords reasonable evidence in the absence of a
sufficient, reasonable and logical explanation by defendant that the
accident arose from or was caused by the defendants want of care.
All three are present in the case at bar.

SPS. Alfredo Bontilao and Sherlina Bontilao Vs. Dr. Carlos

Gerona
GR No. 176675 September 15, 2010
Facts:

On December 28, 1991, respondent Dr. Carlos Gerona, an

orthopedic surgeon at the Vicente Gullas Memorial Hospital, treated
petitioners son, 8 y/o Allen Roy Bontilao, for a fractured right wrist.
Respondent administered a U-spint and immobilized Allens wrist
with a cast, then sent Allen home. On June 4, 1992, Alen re-fractured
the same wrist and was brought back to the hospital. The x-ray
examination showed a complete fractured and displacement bone,
with the fragments overlapping each other. Respondent performed a
closed reduction procedure, with Dr. Vicente Jabagat as the
anesthesiologist. Then he placed Allens arm in a plaster cast to
immobilize it. He allowed Allen to go home after the post reduction x-
ray showed that the bones were properly aligned, but advised Allens
mother, petitioner Sherlina Bontilao, to bring Allen back for re-
tightening of the cast not later than June 15, 1992. Allen was however,
only brought back after the said date. By then, because the cast had
not be re-tightened, a rotational deformity had developed in Allens
arm. The x-ray examination showed that the deformity was caused by
a re-displacement of the bone fragments, so it was agreed that an
open reduction surgery will be conducted on June 24, 1992 by the
respondent, again with Dr. Jabagat as the anesthesiologist. On the
 60

said date, Sherlina was allowed to observe the operation behind a

glass panel. Dr. Jabagat failed to intubate the patient after 5 attempts
so anesthesia was administered through a gas mask. Respondent
asked Dr. Jabagat if the operation should be postponed given the
failure to intubate, but Dr. Jabagat said that it was alright to proceed.
Respondent verified that Allen was breathing properly before
proceeding with the surgery. As respondent was about to finish the
suturing, Sherlina decided to go out of the operating room to make a
telephone call and wait for her son. Later, she was informed that her
son died on the operating table. The cause of death was asphyxia due
to the congestion and edema of the epiglottis. Hence, a criminal,
administrative and civil case was filed by the parents of Allen against
the doctors for the negligence that caused Allens death.

Issue:

Whether or not respondent is liable for medical negligence due

to the death of Allen.

Ruling:

No. The trial court erred in applying the doctrine of res ipsa
liquitor to pin liability on respondent for Allens death. Res ipsa
liquitor is a rebuttable presumption or influence that the defendant
was negligent. The presumption only arises upon proof that the
instrumentality causing injury was in the defendants exclusive
control, and that the accident was one which ordinarily does not
happen in the absence of negligence. It is a rule of evidence whereby
negligence of the alleged wrong does may be inferred from the mere
fact that the accident happened, provided that the character of the
accident and circumstances attending it lead reasonably to the belief
that in the absence of negligence it would not have occurred and that
the thing which caused injury is shown to have been under the
management and control of the alleged wrong doer.
Res ipsa liquitor is not a rigid or ordinary doctrine to be perfunctorily
used but a rule to be cautiously applied defending upon the
circumstances of each case. In malpractice case, the doctrine is
generally restricted to situations where a layman is able to say, as a
matter of common knowledge and observation, that the consequence
of professional care were not as such as would ordinarily have
followed if due care had been exercised.

Benjamin Salvosa and Baguio College Foundation Vs. The

Intermediate Appellate Court, Eduardo B. Castro, Diomedes B.
Castro, Virgina Castro and Rodolfo Castro
G.R. No. 70458 October 5, 1988

Facts:
 61

Baguio Colleges Foundation (BCF) is an academic institution.

However, it is also an institution of arts and trade because BCF has a
full-fledged technical-vocational department offering Communication,
Broadcast and Teletype Technician courses as well as Electronics
Serviceman and Automotive Mechanics courses.

Within the premises of the BCF is an ROTC Unit.

The Baguio Colleges Foundation ROTC Unit had Jimmy B. Abon as its
duly appointed armorer. As armorer of the ROTC Unit, Jimmy B. Abon
received his appointment from the AFP. Not being an employee of the
BCF, he also received his salary from the AFP, as well as orders from
Captain Roberto C. Ungos. Jimmy B. Abon was also a commerce
student of the BCF.

On 3 March 1977, at around 8:00 p.m., in the parking space of

BCF, Jimmy B. Abon shot Napoleon Castro a student of the University
of Baguio with an unlicensed firearm which the former took from the
armory of the ROTC Unit of the BCF. As a result, Napoleon Castro
died and Jimmy B. Abon was prosecuted for, and convicted of the
crime of Homicide.

Subsequently, the heirs of Napoleon Castro sued for damages,

impleading Jimmy B. Abon and the BCF .

Issue:

Whether or not petitioners can be held solidarity hable with

Jimmy B. Abon for damages under Article 2180 of the Civil Code, as a
consequence of the tortious act of Jimmy B. Abon

Ruling:

Under the paragraph of Art. 2180 of the Civil Code, teachers or

heads of establishments of arts and trades are liable for
damages caused by their pupils and students or apprentices, so long
as they remain in their custody. The rationale of such liability is that
so long as the student remains in the custody of a teacher, the latter
stands, to a certain extent, in loco parentis as to the student and is
called upon to exercise reasonable supervision over the conduct of the
student. Likewise, the phrase used in [Art. 2180 so long as (the
students) remain in their custody means the protective and
supervisory custody that the school and its heads
and teachers exercise over the pupils and students for as long as they
are at attendancein the school, including recess time. Jimmy B. Abon
cannot be considered to have been at attendance in the school, or in
the custody of BCF, when he shot Napoleon Castro. Logically,
therefore, petitioners cannot under Art. 2180 of the Civil Code be held
solidarity liable with Jimmy B. Abon for damages resulting from his
acts.
 62

Joseph Saludaga Vs. FEU and Edilberto C. De Jesus

G.R. No. 179337, April 30, 2008

Facts :

Petitioner Joseph Saludaga was a sophomore law student of

(FEU) when he was shot by Alejandro Rosete, one of the security
guards on duty at the school premises on August 18, 1996. Petitioner
was rushed to FEU Hospital due to the wound he sustained.
Meanwhile, Rosete was brought to the police station where he
explained that the shooting was accidental. He was eventually
released considering that no formal complaint was filed against him.
Saludaga thereafter filed with RTC Manila a complaint for
damages against respondents on the ground that they breached their
obligation to provide students with a safe and secure environment and
an atmosphere conducive to learning.

Respondents, in turn, filed a Third-Party Complaint against

Galaxy Dvpt and Mgt Corp. (Galaxy), the agency contracted by FEU to
provide security services within its premises and Mariano D. Imperial
(Imperial), Galaxy's President, to indemnify them for whatever would
be adjudged in favor of petitioner, if any; and to pay attorney's fees
and cost of the suit. On the other hand, Galaxy and Imperial filed a
Fourth-Party Complaint against AFP General Insurance.

On Nov.10, 2004, the trial court ruled in favor of

Saludaga .Respondents then appealed to the CA which ruled in its
favor, reversing the RTC decision, dismissing the complaint, and also
denying Saludagas subsequent Motion for reconsideration. Hence,
the instant petition.

Issue:
Whether or not respondent is liable under article 2180 of the
Civil Code?

Ruling

Incidentally, although the main cause of action in the instant

case is the breach of the school-student contract, petitioner, in the
alternative, also holds respondents vicariously liable under Article
2180 of the Civil Code. However, respondents cannot be held liable for
damages under Art. 2180 of the Civil Code because respondents are
not the employers of Rosete. The latter was employed by Galaxy. The
instructions issued by respondents' Security Consultant to Galaxy and
its security guards are ordinarily no more than requests commonly
envisaged in the contract for services entered into by a principal and
a security agency.
 63

HEIRS OF REPENDOR COMPLETO AND ELPIDIO ABIAD VS.

SGT. AMANDO C. ALBAYDA
G.R. NO. 172200, JULY 6, 2010. J. NACHURA

Facts:

On August 27, 1997, Respondent Albayda was on his way to the

office to report for duty as Master Sergeant of the Philippine Air
Force, riding a bicycle along the streets. The taxi driver Completo, the
petitioner, bumped and side swiped him, causing respondent Albayda
suffered from serious physical injuries. Albayda was brought to the
hospital and was confined twice therein from August 27, 1997 to
February 11, 1998 and February 23, 1998 until March 22, 1998,
respectively, due to fracture in his left knee which necessitated his
stay in the hospital for several months. Then after, he underwent
medical physiotherapy for more than a year. A barangay conciliation
was effected between the parties, but failed. Thus, this prompted
Albayda to file a complaint for physical injuries through reckless
imprudence against Completo. On the other hand, Completo filed a
counter-charge of damage to property through reckless imprudence
against Albayda. Albayda manifested his reservation to file a separate
civil action for damages against petitioners Completo and taxi
owner/operator Abiad in the MTC. The RTC rendered judgment in
favor of Albayda and against the driver and taxi owner/operator. They
are ordered to pay actual damages, moral damages and Attorneys
fee. Completo and Abiad filed an appeal, however, CA affirmed the
MTCs decision with modification on the award of damages.

Issue:

(1) Whether or not petitioner driver Completo liable for negligence

against Albayda.
(2)Whether or not taxi owner/operator Abiad is solidarily liable with
driver Completo for quasi-delict.
(3)Whether or not award of moral and temperate damages and
attorneys fee had basis.
 64

Ruling:

It was proven by a preponderance of evidence that Completo failed

to exercise reasonable diligence in driving the taxicab because he was
over-speeding at the time he hit the bicycle ridden by Albayda. Such
negligence was the sole and proximate cause of the serious physical
injuries sustained by Albayda. Completo did not slow down even when
he approached the intersection of 8th and 11th Streets of VAB. It was
also proven that Albayda had the right of way, considering that he
reached the intersection ahead of Completo. Further, considering the
fact that usually more diligence will be required of a motorist than a
bicyclist in discharging his duty of care to the other because of the
physical advantages the automobile has over the bicycle. Article 2176
of the Civil Code provides that whoever by act or omission causes
damage to another, there being fault or negligence, is obliged to pay
for the damage done. Such fault or negligence, if there is no
preexisting contractual relation between the parties, is called a quasi-
delict.

As to the liability of taxi owner/operator Abiad, the court declared

that when an when an injury is caused by the negligence of an
employee, a legal presumption instantly arises that the employer was
negligent. This presumption may be rebutted only by a clear showing
on the part of the employer that he exercised the diligence of a good
father of a family in the selection and supervision of his employee.
However, in this case, the protestation of Abiad to escape liability is
short of the diligence required under the law. Abiads evidence
consisted entirely of testimonial evidence, and the unsubstantiated
and self-serving testimony of Abiad was insufficient to overcome the
legal presumption that he was negligent in the selection and
supervision of his driver. He failed to prove the due diligence required
by law as employer, thus he is also primarily and directly liable with
the driver Completo against the respondent.

The CA deleted the award for actual damages because respondent

Albayda failed to present documentary evidence to establish with
certainty the amount he incurred during his hospitalization and
treatment. The court finds temperate damages reasonable to award
since pecuniary loss is apparently suffered however the amount
cannot be ascertained. Attorneys fee is hereby deleted for failure to
prove that petitioner acted in bad faith in refusing to satisfy
respondents just and valid claim.
 65

FILAMER CHRISTIAN INSTITUTE VS. HONORABLE COURT OF

APPEALS
G.R. NO. 75112, OCTOBER 16, 1990. J. FERNAN

Facts:

In the evening of October 20, 1977, private respondent Potenciano

Kapunan Sr., an octogenarian retired school teacher was struck by the
Pinoy jeep owned by petitioner Filamer and driven by Daniel
Funtecha, a working student of Filamer Christian Institute. As a
consequence, Kapunan suffered multiple injuries and was hospitalized
for 20 days. Funtecha, who only had a student drivers permit at that
time, was with Allan Masa, the authorized driver of the said vehicle.
Kapunan instituted a criminal case against Funtecha alone for serious
physical injuries through reckless imprudence. And manifested his
 66

right to file an independent civil action against Funtecha. The court

found Funtecha guilty as charged and on appeal, his conviction was
affirmed by the appellate court. Pursuant to his reservation, Kapunan,
filed a case for damages against Filamer and Funtecha, including Dr.
Agustin Masa, the director and president of Filamer; as well as Zenith
Insurance Corporation (Zenith for brevity) as third party- defendant.
However, Allan Masa, was not impleaded as co-defendant of the case.
The court found all of them guilty and hereby ordered jointly and
severally to pay the cost of the suit. Filamer and Zenith appealed the
decision of the lower court, but, the judgment of the lower court was
affirmed by the CA.

Issue:

Whether or not Filamer is liable to pay the damages for the tortious
act of Funtecha.

Ruling:

Accordingly, Filamer is directly and primarily answerable to the

injured party under Article 2180 of the Civil Code would have
prospered had if they proceeded against Allan Masa, the authorized
driver of the Pinoy jeep and undisputably an employee of petitioner.
Under the present set of circumstances, even if the trial court did find
Allan guilty of negligence, such conclusion would not be binding on
Allan. It must be recalled that Allan was never impleaded in the
complaint for damages and should be considered as a stranger as far
as the trial court's judgment is concerned. It is axiomatic that no man
shall be affected by a proceeding to which he is a stranger.

In addition, Funtecha, being a working student of the said school,

belongs to a special category wherein he cannot be considered as
Filamers employee. He was employed as a janitor, but at the time of
the wrongdoing, Funtecha was not acting within the scope of his
supposed job. Therefore, Funtecha should bear the full drunt of his
tortious negligence. Petitioner Filamer cannot be made liable for the
damages he had caused.

SPOUSES BENJAMIN AND SONIA MAMARIL VS. THE BOY

SCOUT OF THE PHILIPPINES, ET AL.
G.R. NO. 179382, JANUARY 14, 2013. J. PERLAS- BERNABE.
 67

Facts:

Spouses Mamaril are jeepney operators since 1971. They park

their 6 passenger jeepneys every night at the Boy Scout (BSP)
compound for a fee of P300.00 per month for each unit. The AIB
Security Agency, Inc (AIB) was the contracting agency responsible for
the security and protection of the compound and its properties. On
May 26, 1995 in the evening, all jeepneys were parked inside th BSP
compound. The following morning, one vehicle was missing and was
never recovered. The security guards namely, Gaddi and Pea, of AIB
who were incharged when the embezzlement was committed said that
a male person who looked familiar to them took the vehicle out of the
compound. The spouses filed a complaint for damages before the RTC
against BSP, AIB and security guards Pea and Gaddi for gross
negligence. The court rendered judgment in favor of the spouses
Mamaril and defendants were ordered to pay jointly and severally the
cost of the vehicle including the damages. On June 11, 2002, the RTC
modified its decision reducing the cost of the stolen vehicle. Only BSP
appealed before the CA. The CA affirmed the findings of the lower
court, but, absolving BSP from any liability. It also deleted the award
of moral and exemplary damages as well as the amount of the
accessories of the lost jeepney. Spouses filed a motion for
reconsideration thereof, however, the motion was denied.

Issue:

Whether or not the BSP is jointly and severally liable for gross
negligence along with AIB and security guards Pea and Gaddi.

Ruling:

No. Article 1311 of the Civil Code states that contracts take effect
only between the parties, their assigns and heirs, except in case
where the rights and obligations arising from the contract are not
transmissible by their nature, or by stipulation or by provision of law.
It is undisputed that Sps. Mamaril are not parties to the Guard
Service Contract between the BSP and AIB. Neither did the subject
agreement contain any stipulation pour autrui that a third party may
demand fulfillment of the either parties obligation, provided that the
requisites are complied with. However, in this case no stipulations
pour autrui was provided. Thus, under the principle of relativity of
contracts, they cannot validly claim any rights or favor under the said
agreement.

The court also declared that what was between BSP and spouses
Mamaril is a contract of lease. Article 1643 of the Civil Code held that
the act of parking a vehicle in a garage, upon payment of a fixed
amount, is a lease. As a lessor, Article 1664 of the same Code states
 68

that "the lessor is not obliged to answer for a mere act of trespass
which a third person may cause on the use of the thing leased; but the
lessee shall have a direct action against the intruder." Here, BSP was
not remiss in its obligation to provide Sps. Mamaril a suitable parking
space for their jeepneys as it even hired security guards to secure the
premises; hence, it should not be held liable for the loss suffered by
Sps. Mamaril. As to the contract of lease and its management, the
parking fee of P300.00 per month or P10.00 a day for each unit is too
minimal an amount to even create an inference that BSP undertook to
be an insurer of the safety of plaintiffs vehicles. The awards of moral
and exemplary damages and attorney's fees were properly disallowed
by the CA for lack of factual and legal bases.
 69

Professional Services Inc., Petitioner, vs. NATIVIDAD and

ENRIQUE AGANA, Respondents.
G.R. No. 127590
February 2, 2010

Facts:

Enrique Agana told his wife Natividad Agana to look for their
neighbour, Dr. Ampil, a surgeon staff member of Medical City General
Hospital, a prominent and known hospital, owned and operated by
Professional Services Incorporated (PSI). Natividad Agana underwent
medical surgery in said Hospital. The attendant doctors were Dr.
Ampil and Dr. Fuentes. Natividad suffered from injury due to two (2)
gauzes left inside her body during the operation. Despite the report of
the (2) two missing gauzes, PSI did not initiate an investigation.

This case consolidated three (3) other cases previously decided

and became final and executory. Hence, this case is limited only to the
second motion for reconsideration filed by the PSI in an attempt
absolve itself from liability.

Issue:

Whether or not PSI is liable for tort?

Held:

Yes. PSI is liable.

Firstly, under the principle of Ostensible Agency, according to the

Court, ample evidence that the hospital held out to the patient that
the doctor was its agent. Present are the two factors that determine
apparent authority: first, the hospital's implied manifestation to the
patient which led the latter to conclude that the doctor was the
hospital's agent; and second, the patients reliance upon the conduct
of the hospital and the doctor, consistent with ordinary care and
prudence the decision made by Enrique for [his wife] Natividad to
consult Dr. Ampil was significantly influenced by the impression that
Dr. Ampil was a staff member of Medical City General Hospital, and
that said hospital was well known and prominent. Enrique looked
upon Dr. Ampil not as independent of but as integrally related to
Medical City. The Supreme Court also held that the hospitals
 70

consent for hospital care - required to be signed prior to the

surgery - affirmed that the surgeon was of the hospital.

Secondly, under the principle of Corporate Negligence, which was

self-imposed liability because of the statements made by the PSI
which constituted judicial admission in its Motion for Reconsideration.
Its statements revealed that it had the power to review or cause the
review of what may have irregularly transpired within its walls
strictly for the purpose of determining whether some form of
negligence may have attended any procedure done inside its
premises, with the ultimate end of protecting its patients.

The Court also noted the hospital admitted the standards of its
corporate conduct under the circumstances of this case, specifically:
(a) that it had a corporate duty to Natividad even after her operation
to ensure her safety as a patient; (b) that its corporate duty was not
limited to having its nursing staff note or record the two missing
gauzes and (c) that its corporate duty extended to determining Dr.
Ampil's role in it, bringing the matter to his attention, and correcting
his negligence. The Court held that the case is not intended to set a
precedent and should not serve as a basis to hold hospitals liable for
every form of negligence of their doctors-consultants under any and
all circumstances.

ROGELIO NOGALES V. CAPITOL MEDICAL CENTER

G.R. No. 142625, 19 December 2006

Facts:
Pregnant with her fourth child, Corazon Nogales (Corazon), who
was then 37 years old, was under the exclusive prenatal care of Dr.
Oscar Estrada (Dr. Estrada) beginning on her fourth month of
pregnancy or as early as December 1975. Around midnight of 25 May
1976, Corazon started to experience mild labor pains prompting
Corazon and Rogelio Nogales (Spouses Nogales) to see Dr. Estrada at
his home. After examining Corazon, Dr. Estrada advised her
immediate admission to the Capitol Medical Center (CMC). t 6:13
a.m., Corazon started to experience convulsionsAt 6:22 a.m., Dr.
Estrada, assisted by Dr. Villaflor, applied low forceps to extract
Corazon's baby. In the process, a 1.0 x 2.5 cm. piece of cervical tissue
was allegedly torn.At 6:27 a.m., Corazon began to manifest moderate
vaginal bleeding which rapidly became profuse. Corazon died at 9:15
a.m. The cause of death was uhemorrhage, post partum.

Issue:

Whether or not CMC is vicariously liable for the negligence of Dr.

Estrada.

Ruling:

Private hospitals, hire, fire and exercise real control over their
attending and visiting uconsultantu staff. The basis for holding an
employer solidarily responsible for the negligence of its employee is
 71

found in Article 2180 of the Civil Code which considers a person

accountable not only for his own acts but also for those of others
based on the former's responsibility under a relationship of patria
potestas.

In general, a hospital is not liable for the negligence of an

independent contractor-physician. There is, however, an exception to
this principle. The hospital may be liable if the physician is the
uostensibleu agent of the hospital. This exception is also known as the
udoctrine of apparent authorityu.

For a hospital to be liable under the doctrine of apparent

authority, a plaintiff must show that:

1. the hospital, or its agent, acted in a manner that would lead a

reasonable person to conclude that the individual who was alleged to
be negligent was an employee or agent of the hospital;
2. where the acts of the agent create the appearance of
authority, the plaintiff must also prove that the hospital had
knowledge of and acquiesced in them; and
3. the plaintiff acted in reliance upon the conduct of the hospital
or its agent, consistent with ordinary care and prudence. In the
instant case, CMC impliedly held out Dr. Estrada as a member of its
medical staff. Through CMC's acts, CMC clothed Dr. Estrada with
apparent authority thereby leading the Spouses Nogales to believe
that Dr. Estrada was an employee or agent of CMC.

FILCAR TRANSPORT SERVICES V. ESPINAS

GR. No. 174156, 20 June 2012

Facts:

Espinas, while driving, was hit by another car. The other car
escaped from the scene of the incident, but Espinas was able to get its
plate number.

After verifying with the Land Transportation Office, Espinas

learned that the owner of the other car, with plate number UCF-545 is
Filcar.

After sending several letters to Filcar and to its President and

General Manager Carmen Flor,demanding payment for the damages
sustained by his car without response, Espinas filed a complaint for
damages against Filcar and Carmen Flor demanding the amount of
P97,910.00, representing actual damages sustained by his car. Filcar
 72

argued that while it is the registered owner of the car that hit and
bumped Espinas car, the car was assigned to its Corporate Secretary
Atty. Candido Flor, the husband of Carmen Flor. Filcar furtherstated
that when the incident happened, the car was being driven by Atty.
Flors personal driver,Timoteo Floresca.Filcar denied any liability to
Espinas and claimed that the incident was not due to its fault or
negligence since Floresca was not its employee but that of Atty. Flor.
Filcar and Carmen Flor.

Issue:

Whether Filcar, as registered owner of the motor vehicle which

figured in an accident, may be held liable for the damages caused to
Espinas.

Ruling:

Yes. Filcar, as registered owner, is deemed the employer of the

driver, Floresca, and is thus vicariouslyliable under Article 2-3 in
relation with Article 24/ ofthe Civil Code As a general rule, one is
only responsible for his own act or omission.Thus, a person will
generally beheld liable only for the torts committed by himselfand not
by another. The law, however, provides fore5ceptions that an employer
is made vicariously liable for the tort committed by his employee.
Article24/ ofthe Civil Code states6Article 24/. The obligation
imposed by Article 2-3 is demandable not only for one0s own acts
oromissions, but also for those ofpersons for whom one is responsible.
Employers shall be liable for the damages caused by their employees
and household helpers actingwithin the scope oftheir assigned tas7s,
even though the former are not engaged in any business orindustry.

Under Article 2176, in relation with Article 2180, ofthe Civil

Code, an action predicated on an employees act or omission may be
instituted against the employer who is held liable for the negligentact
or omission committed by his employee.It is well settled that in case
ofmotor vehicle mishaps, the registered owner ofthe motor vehicle
isconsidered as the employer ofthe tortfeasor'driver, and is made
primarily liable for the tort committedby the latter under Article 2176,
in relation with Article 2180, ofthe Civil Code.Filcar is not be
permitted to evade its liability for damages by conveniently passing on
the blame toanother party8 in this case, its Corporate Secretary, Atty.
Flor and his alleged driver, Floresca. WHEREFORE, the petition is
DENIED. The decision the Court of Appeals are AFFIRMED.
Costsagainst petitioner Filcar Transport Services.

CZARINA T. MALVAR VS. KRAFT FOODS PHILS., INC. AND/OR

BIENVENIDO BAUTISTA, KRAFT FOODS INTERNATIONAL
G.R. No. 183952. September 9, 2013
Facts:
 73

In 1988, Kraft Foods Phils., (KRAFT) hired Czarina Malvar as its

Corporate Planning Manager. She rose in the ranks and became the
Vice President for Finance in the Southeast Asia region of Kraft Foods
International, KFPIs mother company. In 1999, the chairman of the
board of KFPI and concurrently the VP and Area Director for SEA,
sent Malvar a memo directing her to explain why no administrative
sanctions should be imposed on her for possible breach of trust and
confidence and for willful violation of company rules and regulations.
She was places under preventive suspension and ultimately she was
served a notice of termination. Malvar, aggrieved, filed a complaint
for illegal suspension and illegal dismissal against KFPI and Bautista
in the NLRC. The Labor Arbiter found and declared her suspension
and dismissal illegal and ordered her reinstatement. The judegment
became final and executory however Malvars award was reduced.
Both parties appealed the computation of the NLRC. While pending
appeal, Malvar and the respondents entered into a compromise
agreement wherein Malvar would be paid 40 million pesos. Malvar
moved to withdraw the case in view of the compromise agreement .
But before the court could act on the motion to dismiss/withdraw, a
motion for intervention to protect the Attorney's rights was filed. It
appears that, to the intervenors surprise, Malvar unceremoniously
and without any justifiable reason terminated its legal service and
required it to withdraw from the case. The intervenor indicated that
Malvars precipitate action had baffled, shocked and even
embarrassed the intervenor, because it had done everything legally
possible to serve and protect her interest. It added that it could not
recall any instance of conflict or misunderstanding with her, for on the
contrary, she had even commended it for its dedication and devotion
to her case.

Issue:
Whether or not KRAFT is jointly and severally liable to pay the
intervenor Law firm?
Ruling:

The respondents would be liable if they were shown to have

connived with Malvar in the execution of the compromise agreement,
with the intention of depriving the intervenor of its attorneys fees.
Therefore they would be solidarily liable with her for the attorneys
fees as stipulated in the written agreement under the theory that they
unfairly and unjustly interfered with the intervenors professional
relationship with Malvar.

The respondents were complicit in Malvar's move to deprive the

Intervenor of its duly earned contingent fees. At this juncture, the
Court notes that the compromise agreement would have Malvar waive
even the substantial stock options already awarded by the NLRC's
decision, which ordered the respondents to pay to her, among others,
the value of the stock options and all other bonuses she was entitled
to or would have been entitled to had she not been illegally dismissed
from her employment. This ruling was affirmed by the CA. But the
waiver could not negate the Intervenor's right to 10% of the value of
the stock options she was legally entitled to under the decisions of the
NLRC and the CA, for that right was expressly stated in the written
agreement between her and the Intervenor. Thus, the Intervenor
should be declared entitled to recover full compensation in
 74

accordance with the written agreement because it did not assent to

the waiver of the stock options, and did not waive its right to that part
of its compensation.

The circumstances show that Malvar and the respondents needed

an escape from greater liability towards the intervenor, and from the
possible obstacle to their plan to settle to pay. Thereby, she and the
respondents became joint tort-feasors who acted adversely against
the interests of the Intervenor. Under Article 2194 of the Civil Code,
joint tort-feasors are solidarily liable for the resulting damage.

NATIONAL POWER CORPORATION V. COURT OF APPEALS

G.R. No. 119121. August 14, 1998.

Facts:

A convoy of four (4) dump trucks owned by the National Power

Corporation (NPC) left Marawi city bound for Iligan city.
Unfortunately, enroute to its destination, one of the trucks with plate
no. RFT-9-6-673 driven by a certain Gavino Ilumba figured in a head-
on-collision with a Toyota Tamaraw. The incident resulted in the death
of 3 persons riding in the Toyota Tamaraw, as well as physical injuries
to 17 other passengers. The heirs of the victims then filed a complaint
for damages against National Power Corporation (NPC) and PHESCO
Incorporated (PHESCO) before the then Court of First Instance of
Lanao del Norte, Marawi City. When defendant PHESCO filed its
answer to the complaint it contended that it was not the owner of the
dump truck which collided with the Toyota Tamaraw but NPC.
Moreover, it asserted that it was merely a contractor of NPC with the
main duty of supplying workers and technicians for the latters
projects. On the other hand, NPC denied any liability and countered
that the driver of the dump truck was the employee of PHESCO. Trial
court absolved NPC and ordered PHESCO, Inc. and Gavino Ilumba to
pay jointly and severally the plaintiffs thru the Dansalan College the
sum of P954,154.55 representing the actual or compensatory
damages incurred by the plaintiffs; and P50,000.00 representing
Attorneys fees. Dissatisfied, PHESCO appealed. CA reversed the trial
courts judgment. Chagrined by the sudden turnaround, NPC filed a
motion for reconsideration of said decision which was, however,
denied on February 9, 1995. Hence, this petition.

Issue:
Whether or not NPC is liable for the tort of driver Gavino Ilumba?
Ruling:
YES. In the case at bar, there is no doubt that PHESCO was
engaged in labor-only contracting vis-a-vis NPC and as such, it is
considered merely an agent of the latter. So, even if PHESCO hired
driver Gavino Ilumba, as PHESCO is admittedly a labor only
contractor of NPC, the statute itself establishes an employer-employee
relationship between the employer NPC and the employee (driver
Ilumba) of the labor only contractor (PHESCO).

Consequently, we hold PHESCO not liable for the tort of driver

Ilumba, as there was no employment relationship between PHESCO
and driver Ilumba. Under Article 2180 of the Civil Code, to hold the
 75

employer liable for torts committed by his employees within the scope
of their assigned task, there must exist an employer-employee
relationship.

Also, the position of NPC that even assuming that a labor only
contract exists between it and PHESCO, its liability will not extend to
third persons who are injured due to the tortious acts of the employee
of the labor-only contractor, stated otherwise, its liability shall only be
limited to violations of the Labor Code and not quasi-delicts is
misplaced. It bears stressing that the action was premised on the
recovery of damages as a result of quasi-delict against both NPC and
PHESCO, hence, it is the Civil Code and not the Labor Code which is
the applicable law in resolving this case.

An implementing rule on labor cannot be used by an employer as a

shield to avoid liability under the substantive provisions of the Civil
Code.

In this regard, NPC's liability is direct, primary and solidary with

PHESCO and the driver. Of course, NPC, if the judgment for damages
is satisfied by it, shall have recourse against PHESCO and the driver
who committed the negligence which gave rise to the action.

LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN vs.

MARJORIE NAVIDAD, HEIRS OF THE LATE NICANOR NAVIDAD
& PRUDENT SECURITY AGENCY. G.R. No. 145804. February 6,
2003.

Facts:

Navidad was drunk when he entered the boarding platform of the

LRT. He got into an altercation with the Security Guard Junelito
Escartin. They had a fistfight and Navidad fell onto the tracks and was
killed instantaneously upon being hit by a moving train operated by
Rodolfo Roman. The Heirs of Navidad filed a complaint for damages
against Escartin, the train driver (Roman), the LRTA, the Metro
Transit Organization and Prudent Security Agency (agency of security
guards) for the death of her husband. The trial court found Prudent
and Escartin jointly and severally liable for damages to the heirs. The
Court of Appeals however reversed the decision of the RTC by
exonerating Prudent and instead held the LRTA and the train driver
Romero jointly and severally liable as well as removing the award for
compensatory damages and replacing it with nominal damages.

The reasoning of the CA was that a contract of carriage already

existed between Navidad and LRTA by virtue of his having purchased
train tickets and the liability was caused by the mere fact of Navidad's
death after being hit by the train being managed by the LRTA and
operated by Roman. The CA also blamed LRTA for not having
presented expert evidence showing that the emergency brakes could
not have stopped the train on time.

Issues:

(1) Whether or not LRTA and/or Roman is liable for the death.

(2) Whether or not Escartin and/or Prudent are liable.

 76

(3) Whether or not nominal damages may coexist with

compensatory damages.

Ruling:

(1) Yes. The foundation of LRTA's liability is the contract of

carriage and its obligation to indemnify the victim arising from the
breach of that contract by reason of its failure to exercise the high
diligence required of a common carrier.

(2) Fault was not established. If Prudent is to be held liable, it

would be for a tort under Art. 2176 in conjunction with Art. 2180.
Once the fault of the employee Escartin is established, the employer,
Prudent, would be held liable on the presumption that it did not
exercise the diligence of a good father of the family in the selection
and supervision of its employees.

(3) No. It is an established rule that nominal damages cannot co-

exist with compensatory damages. The award of nominal damages in
addition to actual damages is untenable. Nominal damages are
adjudicated in order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying the plaintiff for
any loss suffered by him. It is an established rule that nominal
damages cannot co-exist with compensatory damages. The award was
deleted.

52. PHILIPPINE NATIONAL RAILWAYS CORPORATION vs

PURIFICACION VIZCARA
G.R. No. 190022, February 15, 2012

Facts:

On May 14, 2004, at about three oclock in the morning, Reynaldo

Vizcara was driving a passenger jeepney headed towards Bicol to
deliver onion crops, with companions, namely, Cresencio, Crispin,
Samuel, Dominador and Joel. While crossing the railroad track in
Tiaong, Quezon, a Philippine National Railways (PNR) train, then
being operated by respondent Japhet Estranas (Estranas), suddenly
turned up and rammed the passenger jeepney. The collision resulted
to the instantaneous death of Reynaldo, Cresencio, Crispin, and
Samuel. On the other hand, Dominador and Joel, sustained serious
physical injuries. The survivors of the mishap, Joel and Dominador,
together with the heirs of the deceased victims, filed an action for
damages against PNR, and the alternate driver of the train. The
petitioners claimed that they exercised due diligence in operating the
train and monitoring its roadworthiness. They asseverate that right
 77

before the collision, Estranas was driving the train at a moderate

speed. The Trial Court ruled in favor of the private respondents.
Unyielding, the petitioners appealed the RTC decision to the CA. The
CA affirmed the RTC decision with modification. Thus this petition.

Issues:

(1)Whether or not the proximate cause of the accident was the

negligence of the petitioners.
(2)Whether or not the doctrine of last clear chance finds no
application in the instant
case
(3)Whether or not there was contributory negligence on the part
of the respondents.

Ruling:

Yes, the petitioners negligence was the proximate cause of the

accident. Both courts ruled that the petitioners fell short of the
diligence expected of it, taking into consideration the nature of its
business, to forestall any untoward incident. In particular, the
petitioners failed to install safety railroad bars to prevent motorists
from crossing the tracks in order to give way to an approaching train.
Aside from the absence of a crossing bar, the Stop, Look and Listen
signage installed in the area was poorly maintained, hence,
inadequate to alert the public of the impending danger. A reliable
signaling device in good condition, not just a dilapidated Stop, Look
and Listen signage, is needed to give notice to the public. It is the
responsibility of the railroad company to use reasonable care to keep
the signal devices in working order. Failure to do so would be an
indication of negligence. Having established the fact of negligence on
the part of the petitioners, they were rightfully held liable for
damages.

The doctrine of last clear chance is not applicable. The doctrine of

last clear chance provides that where both parties are negligent but
the negligent act of one is appreciably later in point of time than that
of the other, or where it is impossible to determine whose fault or
negligence brought about the occurrence of the incident, the one who
had the last clear opportunity to avoid the impending harm but failed
to do so, is chargeable with the consequences arising therefrom.
Stated differently, the rule is that the antecedent negligence of a
person does not preclude recovery of damages caused by the
supervening negligence of the latter, who had the last fair chance to
prevent the impending harm by the exercise of due diligence. To
reiterate, the proximate cause of the collision was the petitioners
negligence in ensuring that motorists and pedestrians alike may safely
cross the railroad track. The unsuspecting driver and passengers of
the jeepney did not have any participation in the occurrence of the
unfortunate incident which befell them. Likewise, they did not exhibit
any overt act manifesting disregard for their own safety. Thus, absent
preceding negligence on the part of the respondents, the doctrine of
last clear chance cannot be applied.
 78

There was no contributory negligence on the part of the

respondents. Contributory negligence is a conduct on the part of the
injured party, contributing as a legal cause to the harm he has
suffered, which falls below the standard which he is required to
conform for his own protection. It is an act or omission amounting to
want of ordinary care on the part of the person injured which,
concurring with the defendants negligence, is the proximate cause of
the injury. Hence, we cannot see how the respondents could have
contributed to their injury when they were not even aware of the
forthcoming danger.
 79

BANK OF THE PHILIPPINE ISLANDS vs

LIFETIME MARKETING CORPORATION
G.R. No. 176434, June 25, 2008

Facts: Lifetime Marketing opened a current account with the BPI. In

this account, the sales agents of LMC would have to deposit their
collections or payments to the latter. As a result, LMC and BPI, made
a special arrangement that the formers agents will accomplish three
(3) copies of the deposit slips, the third copy to be retained and held
by the teller until LMCs authorized representatives, shall retrieve
them on the following banking day. Sometime in 1986, LMC availed of
the BPIs inter-branch banking network services, whereby the formers
agents could make deposit to any BPI branch in Metro Manila under
the same account. Under this system, BPIs bank tellers were no
longer obliged to retain the extra copy of the deposit slips instead,
they will rely on the machine-validated deposit slip, to be submitted
by LMCs agents. For its part, BPI would send to LMC a monthly bank
statement relating to the subject account. This practice was observed
and complied with by the parties. As a business practice, the
registered sales agents or the Lifetime Educational Consultants of
LMC, can get the books from the latter on consignment basis, then
they would go directly to their clients to sell. These agents or Lifetime
Educational Consultants would then pay to LMC, seven (7) days after
they pick up all the books to be sold. Since LMC have several agents
around the Philippines, it required to remit their payments through
BPI, where LMC maintained its current account. It has been LMCs
practice to require its agents to present a validated deposit slip and,
on that basis, LMC would issue to the latter an acknowledgement
receipt. Alice Laurel, is one of LMCs Educational Consultants or
agents, made check deposits with the BPI branches and, after the
check deposit slips were machine-validated, requested the teller to
reverse the transactions. Based on general banking practices,
however, the cancellation of deposit or payment transactions upon
request by any depositor or payor, requires that all copies of the
deposit slips must be retrieved or surrendered to the bank. This
practice, in effect, cancels the deposit or payment transaction, thus, it
leaves no evidence for any subsequent claim or misrepresentation
made by any innocent third person. Notwithstanding this, the verbal
requests of Alice Laurel and her husband to reverse the deposits even
after the deposit slips were already received and consummated were
accommodated by BPI tellers. Upon discovery of this fraud, LMC
made queries from the BPI branches involved. In reply to said queries,
BPI branch managers formally admitted that they cancelled, without
the permission of or due notice to LMC, the deposit transactions made
by Alice and her husband, and based only upon the latters verbal
request or representation.

Issues:

Whether or not BPI was negligent in handling LMCs account.

Ruling:
 80

Yes, because the reversal of the transactions in question was

unilaterally undertaken by BPIs tellers without following normal
banking procedure which requires them to ensure that all copies of
the deposit slips are surrendered by the depositor. The machine-
validated deposit slips do not show that the transactions have been
cancelled, leading LMC to rely on these slips and to consider Alice
Laurels account as already paid.

Negligence is the omission to do something which a reasonable

man, guided by those considerations which ordinarily regulate the
conduct of human affairs, would do, or the doing of something which a
prudent and reasonable man would not do. Negligence in this case
lies in the tellers disregard of the validation procedures in place and
BPIs utter failure to supervise its employees. Notably, BPIs managers
admitted in several correspondences with LMC that the deposit
transactions were cancelled without LMCs knowledge and consent
and based only upon the request of Alice Laurel and her husband. It is
well to reiterate that the degree of diligence required of banks is more
than that of a reasonable man or a good father of a family. In view of
the fiduciary nature of their relationship with their depositors, banks
are duty-bound to treat the accounts of their clients with the highest
degree of care. BPI cannot escape liability because of LMCs failure to
scrutinize the monthly statements sent to it by the bank. This omission
does not change the fact that were it not for the wanton and reckless
negligence of BPIs tellers in failing to require the surrender of the
machine-validated deposit slips before reversing the deposit
transactions, the loss would not have occurred. BPIs negligence is
undoubtedly the proximate cause of the loss. Proximate cause is that
cause which, in a natural and continuous sequence, unbroken by any
efficient intervening cause, produces the injury, and without which the
result would not have occurred.
 81

CRISTINA PENULLAR vs PHILIPPINE NATIONAL BANK

G.R. No. L-32762, January 27, 1983

Facts:

There was a land registration case between Cristina Penullar and

Florencio Felix for the declaration of absolute nullity of judicial
proceedings in a land registration case. Genoveva Miguel filed a civil
case against Praxedes Moya et al., predecessors of herein plaintiff
Cristina Penullar, for declaration of ownership over three (3) portions
of agricultural land. While the case was pending, the land was
mortgaged to PNB for a loan by the defendants of the case for
declaration of nullity of judicial proceedings. The CA in that case
declared the judicial proceedings void and all Certificates of Title
flowing from the proceedings null and void, but at the same time
declared the mortgage of PNB valid on the basis of being a mortgagor
in good faith. Penullar claimed that PNB was negligent in allowing the
void title to be mortgaged.

Issues:

Whether or not PNB was negligent in accepting the security of

Torrens Title wherein trial court annulled the titles issued pursuant to
the decision of the Land Registration Court.

Ruling:

No, there is no showing, that the Bank was made specifically

aware of the fact that the very property already covered by the free
patents were only adjudicated to and Torrens Titles issued in the
name of the heirs of Miguel, who were the parties that afterwards had
secured the mortgages from the Bank, not only this, the declaration of
 82

nullity of the titles of the heirs of Genoveva Miguel due to the fact that
there had already been free patents issued in the name of plaintiff's
predecessors Moya and Sison came in only much later and in fact as
of the time when these mortgages were accepted by the Bank, there
was as yet no decision declaring the titles of the mortgagors null and
void; stated otherwise there can be no denying the fact that the Bank
was made to rely and had the right to rely upon regular certificates of
title first presented to it by the mortgagors.

The Philippine National Bank relied on the torrens titles of the

mortgagors which had been regularly issued. The torrens titles were
the result of regular land registration proceedings duly registered
with the Register of Deeds. There was nothing in the torrens titles
which would excite suspicion that the same were fraudulently
processed by the mortgagors. Applying, therefore, the principles
enunciated in the aforecited cases, the respondent Bank was not duty
bound to further investigate the validity and or invalidity of the
torrens title.

The court might as well invoke the principle that where one of two
innocent parties must have to suffer due to the act of a third person,
he whose negligence had caused the damage should be made to bear
the loss; in the present case if the heirs of Genoveva Miguel, that is to
say herein plaintiff had only been diligent, and had appealed from the
decision in the registration case, no certificate of Title would have
been issued just like that in the name of the heirs of Genoveva Miguel
and no mortgage could have been constituted by them in favor of
Bank but as it is, said successors of Praxedes Moya and Josefa Sison
failed to do that; instead they let the decision in the registration case
gain the status of finality; allowed without prior protest, the certificate
of title to be issued; did not even as early as possible, annotate an
adverse claim on the titles; and they filed this case only several
months afterwards, it was their negligence that permitted said
adjudicatees in the said registration case to apply for and secure
mortgages from the Bank.

OSMUNDO S. CANLAS and ANGELINA CANLAS, petitioner,

vs. COURT OF APPEALS, ASIAN SAVINGS BANK, MAXIMO C.
CONTRERAS and VICENTE MAOSCA, respondents.
[G.R. No. 112160. February 28, 2000]

Facts:

Canlas and Maosca agreed to invest together in a business. Canlas

sold parcels of land to Moasca for P 850thousand pesos, P500
thousand payable within a week, whilst the balance of P 350thousand
pesos shall be Canlas investment in the business. Maosca issued two
(2) post-dated checks for the P500thousand: one for P40 thousand and
one for P460 thousand. But the check for the larger amount was
insufficiently funded. More so, Maosca was able to mortgage the
entire parcels of land to Asian Development Bank with the aid of two
impostors who pretended to be Mr and Mrs Canlas. The mortgage
 83

being unpaid, ASB extrajudicially foreclosed the lands mortgaged.

Canlas wrote a letter to the bank informing them of the fraud. ASB
still proceeded with the foreclosure. Consequently, on February 3,
1983 the herein petitioners instituted the present case for annulment
of deed of real estate mortgage with prayer for the issuance of a writ
of preliminary injunction; and on May 23, 1983, the trial court issued
an Order restraining the respondent sheriff from issuing the
corresponding Certificate of Sheriffs Sale.[8]For failure to file his
answer, despite several motions for extension of time for the filing
thereof, Vicente Maosca was declared in default. [9]On June 1, 1989,
the lower court a quo (RTC) came out with a decision annulling
subject deed of mortgage and disposing/ Maosca to pay ASBs cross-
claim for P350k. From this decision, ASB appealed to CA. CA reversed
RTC. Canlas elevated the case to the SC by Rule 45 (Petition for
review on Certiorari)

Issue: Whether Asian Development Bank is guilty of negligence in not

verifying the identity of the impostors who pretended to be the
spouses Canlas?

SC Ruling: yes. Petition is meritorious.The degree of diligence

required of banks is more than that of a good father of a family; [12] in
keeping with their responsibility to exercise the necessary care and
prudence in dealing even on a register or titled property. The business
of a bank is affected with public interest, holding in trust the money of
the depositors, which bank deposits the bank should guard against
loss due to negligence or bad faith, by reason of which the bank would
be denied the protective mantle of the land registration law, accorded
only to purchases or mortgagees for value and in good faith. [13]In the
case under consideration, from the evidence on hand it can be
gleaned unerringly that respondent bank did not observe the requisite
diligence in ascertaining or verifying the real identity of the couple
who introduced themselves as the spouses Osmundo Canlas and
Angelina Canlas. It is worthy to note that not even a single
identification card was exhibited by the said impostors to show their
true identity and yet, the bank acted on their representations simply
on the basis of the residence certificates bearing signatures which
tended to match the signatures affixed on a previous deed of
mortgage to a certain Atty. Magno, covering the same parcels of land
in question.

HEDY GAN y YU, petitioner,

vs.
 84

THE HONORABLE COURT OF APPEALS and the PEOPLE OF

THE PHILIPPINES, respondents.
G.R. No. L-44264 September 19, 1988

Facts:

Gan was driving her car one day, when, in order to avoid two
incoming vehicle encroaching her side of the road, one trying to
overtake the other, she swerved her car to the right, pinning an old
man trying to cross the street, pinning his body to a jeep, causing the
jeep to move forward and causing damage to other vehicles. Gan was
found guilty by the RTC of homicide thru reckless imprudence. On
appeal, the CA found her guilty with homicide thru simple
imprudence, and pursuant to paragraph 2, Article 365 of the Revised
Penal Code, she was sentenced to the indeterminate penalty of 3
months and 11 days of arresto mayor and to indemnify the heirs of
Isidro Casino in the sum of P12,000 without any subsidiary
imprisonment in case of insolvency, and to pay the costs.

Issue:

Was Gan negligent?

SC Ruling:

No. A corollary rule is what is known in the law as the emergency

rule. "Under that rule, one who suddenly finds himself in a place of
danger, and is required to act without time to consider the best means
that may be adopted to avoid the impending danger, is not guilty of
negligence, if he fails to adopt what subsequently and upon reflection
may appear to have been a better method, unless the emergency in
which he finds himself is brought about by his own negligence." 6

The course of action suggested by the appellate court (that Gan

should have stopped her vehicle) would seem reasonable were it not
for the fact that such suggestion did not take into account the amount
of time afforded petitioner to react to the situation she was in. For it is
undeniable that the suggested course of action presupposes sufficient
time for appellant to analyze the situation confronting her and to
ponder on which of the different courses of action would result in the
least possible harm to herself and to others.

Also, the respondent court itself pronounced that the petitioner was
driving her car within the legal limits. We therefore rule that the
"emergency rule" enunciated above applies with full force to the case
at bar and consequently absolve petitioner from any criminal
negligence in connection with the incident under consideration.

We further set aside the award of damages to the heirs of the victim,
who by executing a release of the claim due them, had effectively and
clearly waived their right thereto.

WHEREFORE, judgment is hereby rendered acquitting petitioner

HEDY GAN y YU of the crime of Homicide thru Simple Imprudence.
She is no longer liable for the P12,000.00 civil indemnity awarded by
the appellate court to the heirs of the victim.
 85

GEORGE MCKEE and ARACELI KOH MCKEE, petitioners,

vs.
INTERMEDIATE APPELLATE COURT, JAIME TAYAG and
ROSALINDA MANALO, respondents.
G.R. No. L-68103 July 16, 1992
CARMEN DAYRIT KOH, LETICIA KOH, JULIETA KOH
TUQUERO, ARACELI KOH MCKEE, ANTONIO KOH and
ELIZABETH KOH TURLA, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, JAIME TAYAG and
ROSALINDA MANALO, respondents.
G.R. No. L-68102 July 16, 1992

Facts:

The car driven by the relatives of the petitioner were crossing a

bridge, when some kids tried to dart to cross the road, unsure
whether to cross or not. The car blew its horn, swerved to the left side
of the road, switched on its head light to try to warn the driver of the
truck and tried to return to its lane. But the truck did not slow down.
As a result, before the car could return to its side, it got hit by the
truck, leading to the death of the driver, his daughter and the baby
sitter [in the front passenger seat], and injury to the rest of the
passengers. Witnesses saw the truck stopped only after colliding with
the car. There were skid marks under the truck, but there were no
skid marks behind the truck.) RTC found Galang liable. CA affirmed
RTC. Galang went to the SC via Appeal by Certiorari under Rule 45.

Issue:

Was Galang negligent?

SC Ruling:

Yes. Galang was negligent. If ever the car driver was guilty of
some negligence, it was excused by Emergency Rule and the
doctrine of the Last clear chance. Galang was driving at 40miles per
hour (38 kilometers per hour) when the allowable speed limit when
crossing a bridge is only 30 kilometers per hour. Galang alleged that
there was mistake in interpretation, but regularity of performance of
duty by the officers getting his testimony is presumed.

Galangs employer is also liable under Article 2180 in relation to

Article 2176 of the Civil Code. The employer could have raised the
defense of good father of the family in due selection and supervision
of employees, but they did not offer this defense.
 86

For the inattentiveness or reckless imprudence of Galang, the law

presumes negligence on the part of the defendants in the selection of
their driver or in the supervision over him. Appellees did not allege
such defense of having exercised the duties of a good father of a
family in the selection and supervision of their employees in their
answers. They did not even adduce evidence that they did in fact have
methods of selection and programs of supervision. The inattentiveness
or negligence of Galang was the proximate cause of the mishap. If
Galang's attention was on the highway, he would have sighted the car
earlier or at a very safe distance than (sic) 10 meters. He proceeded
to cross the bridge, and tried to stop when a collision was already
inevitable, because at the time that he entered the bridge his
attention was not riveted to the road in front of him.

ORIX METRO LEASING AND FINANCE CORPORATION vs.

MANGALINAO
G.R. No. 174089. JANUARY 25, 2012

FACTS:

This is a case of multiple-vehicle collision in North Luzon Expressway

(NLEX) resulting in the death of all the passengers in one vehicle, including
the Mangalinao spouses and a sibling of the surviving orphaned minor heirs.

An action for damages based on quasi delict was filed by the minor children
of the Mangalinao spouses through their legal guardian against the
registered owners and drivers of the two 10-wheeler trucks that collided
with their parents Nissan Pathfinder. The children imputed recklessness,
negligence, and imprudence on the truck drivers for the deaths of their
sister and parents; while they hold Sonny and Orix equally liable for failing
to exercise the diligence of a good father of a family in the selection and
supervision of their respective drivers.

ISSUE:

Whether or not the defendants are jointly and severally liable.

RULING:

The finding of negligence of petitioners as found by the lower courts

is binding. Negligence and proximate cause are factual issues. Settled is the
rule that this Court is not a trier of facts, and the concurrence of the findings
of fact of the courts below are conclusive.

Orix as the operator on record of the Fuso Truck is liable to the heirs
of the victims of the mishap. Orix cannot point fingers at the alleged real
owner to exculpate itself from vicarious liability under Article 2180 of the
Civil Code. Regardless of whoever Orix claims to be the actual owner of the
Fuso by reason of a contract of sale, it is nevertheless primarily liable for the
damages or injury the truck registered under it have caused. Besides, the
registered owners have a right to be indemnified by the real or actual owner
of the amount that they may be required to pay as damage for the injury
caused to the plaintiff, which Orix rightfully acknowledged by filing a third-
party complaint against the owner of the Fuso, Manuel. Moral damages, it
 87

must be stressed, are not intended to enrich plaintiff at the expense of the
defendant. They are awarded to enable the injured party to obtain means,
diversions, or amusements that will serve to alleviate the moral suffering
he/she had undergone due to the other partys culpable action and must,
perforce, be proportional to the suffering inflicted.

SANITARY STEAM LAUNDRY, INC., vs. THE COURT OF APPEALS

G.R. No. 119092. DECEMBER 10, 1998

Facts:

This case involves a collision between a Mercedes Benz panel truck of

petitioner Sanitary Steam Laundry and a Cimarron which caused the death
of three persons and the injuries of several others. The accident took place
at the Aguinaldo Highway in Imus, Cavite on August 31, 1980. The
passengers of the Cimarron were mostly employees of the Project
Management Consultants, Inc. (PMCI). The Cimarron was owned by
Salvador Salenga. Driving the vehicle was Rolando Hernandez. It appears
that at about 8:00 p.m., as it was traveling along Aguinaldo Highway in
Imus, Cavite on its way back to Manila, the Cimarron was hit on its front
portion by petitioners panel truck which was traveling in the opposite
direction. The driver, Herman Hernandez, claimed that a jeepney in front of
him suddenly stopped. He said he stepped on the brakes to avoid hitting the
jeepney and that this caused his vehicle to swerve to the left and encroach
on a portion of the opposite lane. As a result, his panel truck collided with
the Cimarron on the north-bound lane. The driver of the Cimarron, Rolando
Hernandez, and two of his passengers, namely, Jason Bernabe and Dalmacio
Salunoy, died. Several of the other passengers of the Cimarron were injured
and taken to various hospitals.

Issue:

Whether the driver of the Cimarron was guilty of contributory

negligence and, therefore, the liability of the petitioner should be mitigated,
if not totally extinguished.
 88

Ruling:

No. It has not been shown how the alleged negligence of the
Cimarron driver contributed to the collision between the vehicles. Indeed,
petitioner has the burden of showing a causal connection between the injury
received and the violation of the Land Transportation and Traffic Code. He
must show that the violation of the statute was the proximate or legal cause
of the injury or that it substantially contributed thereto. Negligence,
consisting in whole or in part, of violation of law, like any other negligence,
is without legal consequence unless it is a contributing cause of the injury.
Petitioner says that driving an overloaded vehicle with only one functioning
headlight during nighttime certainly increases the risk of accident, that
because the Cimarron had only one headlight, there was decreased
visibility, and that the fact that the vehicle was overloaded and its front seat
overcrowded decreased [its] maneuverability. However, mere allegations
such as these are not sufficient to discharge its burden of proving clearly
that such alleged negligence was the contributing cause of the injury.

AMADOR CORPUZ AND ROMEO GONZALES vs. EDISON LUGUE AND

CATHERINE BALUYOT
G.R. No. 137772. JULY 29, 2005

Facts:

On 14 September 1984, at around 7:15 in the morning, while an

Isuzu KC-20 passenger jeep (KC-20), then being driven by Jimmy Basilio,
was traversing the right side of the Roman Highway in Barangay Pias,
Orion, Bataan, it collided with a tanker truck driven by Gerardo Lim,
which was then moving from the right shoulder of the highway. As a
consequence of the accident, passengers of the KC-20, including
respondent Lugue, suffered physical injuries. Respondent Lugue then
filed an action for damages arising from the vehicular incident before the
Balanga, Bataan RTC, Branch 2, against herein petitioners Amador
Corpuz and Romeo Gonzales, owner and driver of the minibus,
respectively, and Oscar Jaring and Gerardo Lim, owner and driver of the
tanker truck, respectively. Therein defendants filed a third-party
complaint against Ricardo Santiago and Jimmy Basilio, owner/operator
and driver of the KC-20, respectively.

Issue:
 89

Whether or not the appellate court erred in holding them liable for
damages based on the findings of facts adduced by the trial court.

Ruling:

It is clear that the proximate cause of the injuries suffered by

respondent Lugue was the collision between the KC-20 and the tanker
truck. As correctly pointed out by the lower court, proximate legal cause
is that acting first and producing the injury either immediately or by
setting other events in motion, all constituting a natural and continuous
chain of events, each having a close causal connection with its immediate
predecessor, the final event in the chain immediately effecting the injury
as a natural and probable result of the cause which first acted, under
such circumstances that the person responsible for the first event should,
as an ordinarily prudent and intelligent person, have reasonable ground
to expect at the moment of his act or default that an injury to some
person might probably result therefrom. Certainly, even assuming that
petitioner Gonzales had a few seconds before actual collision, he no
longer had any opportunity to avoid it. Petitioner Gonzales cannot be
deemed negligent for failing to prevent the collision even after applying
all means available to him within the few instants when he had
discovered the impending peril.

LAMBERT S. RAMOS VS C.O.L

REALTY CORPORATION
G. R. No. 184905

Facts:

Petitioner Ramos is the employer of Rodel Ilustrisimo. While

Rodel was driving the Ford Expedition of petitioner an accident
ensued, wherein it bumped with a Corrolla Altis driven by Aquilino
Larin and owned by Respondent COL Realty. Due to the impact of the
vehicular mishap, the passenger of the sedan was injured.
 90

A case was filed against Ramos making him solidarily liable

with his driver. Ramos in his opposition argued that he cannot be
held solidarily liable since it is Aquilnio's negligence that is the
proximate cause of the accident. He further argued that when the
accident happened, Aquilino violated an MMDA order, i.e. prohibiting
the crossing is the place where the accident happened.

Issue:

Whether Ramos may be held liable since the proximate cause of

the accident is his employee's negligence.

Ruling:

No. Aquinos violation of the MMDA prohibition against crossing

Katipunan Avenue Rajah Matanda Street was the proximate cause of
the accident. Proximate cause is defined as that cause, which, in
natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury, and without which the result
would not have occurred.

If Aquilino heeded the MMDA prohibition against crossing

Katipunan Avenue from Rajah Matanda, the accident would not have
happened. This specific untoward event is exactly what the MMDA
prohibition was intended for. Thus, a prudent and intelligent person
who resides within the vicinity where the accident occurred, Aquilino
had reasonable ground to expect that the accident would be a natural
and probable result if he crossed Katipunan Avenue since such
crossing is considered dangerous on account of the busy nature of the
thoroughfare and the ongoing construction of the Katipunan-Boni
Avenue underpass. It was manifest error for the Court of Appeals to
have overlooked the principle embodied in Article 2179 of the Civil
Code, that when the plaintiffs own negligence was the immediate and
proximate cause of his injury, he cannot recover damages.

As to the alleged Rodel's contributory negligence, the court

finds it unnecessary to delve into it, since it cannot overcome or
defeat Aquilinos recklessness which is the immediate and proximate
cause of the accident. Rodels contributory negligence has relevance
only in the event that Ramos seeks to recover from respondent
whatever damages or injuries he may have suffered as a result; it will
have the effect of mitigating the award of damages in his favor.

ELIAS S. CIPRIANO and/or E.S CIPRIANO ENTERPRISES

VS THE COURT OF APPEALS and MACLIN ENTERPRISES
G.R. NO. 107968

Facts:
 91

E.S. Cipriano Enterprises, owned by petitioner Cipriano, is

engaged in the rustproofing of vehicles, under the style
Motobilkote. The private respondent, through an employee brought
his car to the petitioners shop. However, a fire broke out at the
Lambat restaurant,t which the petitioner also owned, adjoining his
Mobilkote rustproofing shop. The fire destroyed both the shop and
the restaurant, including private respondents car.

MACLIN sent a letter to petitioner, demanding reimbursement

for the value of the car. In reply, petitioner denied liability on the
ground that the fire was a fortuitous event (Art. 1174 and 1262, NCC),
prompting private respondent to bring this suit for the value of its
vehicle and for damages. Private respondent argued that petitioner
was liable for the loss of the car even if it was caused by a fortuitous
event. It contended that the nature of petitioners business required
him to assume the risk because under P.D. No. 1572, petitioner was
required to insure his property as well as those of his customers.

RTC ruled in favor of MACLIN stating that the failure of

defendant to comply with P.D. No. 1572 is in effect a manifest act of
negligence which renders defendant liable for the loss of the car even
if the same was caused by fire, and that rustproffing is definitely
covered by P.D. No. 1572. Since petitioner did not register his
business and insure it, he must bear the cost of loss of his customers.
CA affirmed the RTCs decision.

Issue:

Whether petitioners failure to abide by PD 1572 constitutes

negligence

Ruling:

Yes. The Court held that a violation of a statutory duty is

negligence per se. It ruled that where the very injury which was
intended to be prevented by the ordinance has happened, non-
compliance with the ordinance was not only a negligent act but also
the proximate cause.

Indeed, the existence of a contract between petitioner and

private respondent does not bar a finding of negligence under the
principles of quasi-delict. Petitioners negligence is the source of his
obligation. He is not being held liable for breach of his contractual
obligation due to negligence but for his negligence in not complying
with a duty imposed on him by law. It is therefore immaterial that the
loss occasioned to private respondent was due to a fortuitous event,
since it was petitioners negligence in not insuring against the risk
which was the proximate cause of the loss.
 92

PHILIPPINE NATIONAL BANK VS SPS CHEAH CHEE

CHONG and OFELIA CAMACHO CHEAH G.R NO. 170865;
SPS CHEAH CHEE CHONG VS PNB G.R NO 17092

Facts:

Adelina Guarins friend, Filipina Tuazon, approached her to ask

if she could have her check cleared and encashed for a service fee of
2.5%. In turn, Adelina approached Ofelia Cheah and agreed to
accommodate Filipinas request since she has a joint dollar savings
account with her husband, Cheah Chee Chong with PNB Buendia
Branch.
The parties went to PNB Loans Department wherein they met
Garin, PNBs Division Chief, who informed about the 15- day clearing
period. On Nov. 4, 1992 Ofelia deposited the said check. PNB sent the
check for clearing through Philadelphia National Banck which had
temporarily credited the same to PNBs account as of Nov.6, 1992. On
the same day, Garin, PNBs Division Chief, informed Ofelia that the
check has already been cleared and the same was credited to the
account of Sps Cheah. He further allowed the withdrawal of the
amount on Nov 17-18, 1992. Filipina Tuazon, thereafter, received the
proceeds.
However, the Cable Division of PNB Head Office received a
message from Philadelphia informing PNB for the return of the check
for insufficiency of funds. Upon demand by PNB Buendia to return the
money withrdrawn, Ofelia contacted Filipina to get the money back
but the same has been given to several people who asked for the
checks encashment.
PNB filed a complaint against the spouses and froze their peso
and dollar deposits. RTC ruled in favor of the PNB and held the
spouses Cheah guilty of contributory negligence. The CA declared
both parties equally negligent and should suffer and shoulder the loss.

Issue:

Whether both parties are equally negligent, hence, should suffer

the loss.

Held:

Yes. PNBs act of releasing the proceeds of the check prior to the
lapse of the 15-day clearing was the proximate cause. The disregard
of its own banking policy amounts to gross negligence. It bears
stressing that the diligence required is more than that of a good
father of a family. The highest degree of diligence is expected. PNB
failed to do its duty in exercising extraordinary diligence and
reasonable business practice.
The Spouses Cheah is guilty of contributory negligence and hence
should suffer the loss. Contributory negligence is conduct on the part
of the injured party; contributing as a legal cause to the harm he has
suffered which falls below the standard to which he is required to
 93

conform for its protection. The fact that the check was cleared only
eight banking days, contrary to what Garin had informed them, they
should have verified the hastiness of the transaction considering that
they are the ones would be put at risk and not the accommodated
party.
Hence, the Court concurs with the findings of the CA that PNB and
spouses Cheah are equally negligent and should suffer the loss.

PHILTRANCO SERVICE ENTERPRISES, INC. VS FELIX PARAS

AND INLANDTRAILWAYS, INC., AND HON. COURT OF APPEALS
G.R. No. 161909, April 25, 2012

Facts:

Respondent Felix Paras is one of the passengers injured from

an accident met by the bus operated by Inland Trail ways and a bus
operated by petitioner Philtranco Service. Felix went through number
operations and was unable to obtain sufficient financial assistance
from Inland for the costs of his operations, hospitalization, doctors
fees and other miscellaneous expenses, thus, on 31 July 1989; Paras
filed a complaint for damages based on breach of contract of carriage
against Inland. On 02 March 1990, upon leave of court, Inland filed a
third-party complaint against Philtranco and Apolinar Miralles. In this
third-party complaint, inland, sought for exoneration of its liabilities
to Paras, asserting that the latters cause of action should be directed
against Philtranco considering that the accident was caused by
Miralles lack of care, negligence and reckless imprudence. The RTC
then rendered a decision declaring Philtranco and Apolinar liable for
moral and actual damages. The said award of damages was also
affirmed by the CA. Ultimately, Philtranco questions the validity of
awarding moral damages on the ground that the basis of such award
is based on a breach of contract of carriage, which is not one of the
enumeration provided by the Civil Code.

Issue:

Whether or not the award of damages is proper.

Ruling:

Yes. Section 16, Rule 6 of the Revised Rules of Court defines a

third party complaint as a claim that a defending party may, with
leave of court, file against a person not a party to the action, called
 94

the third party defendant, for contribution, indemnification,

subrogation, or any other relief, in respect of his opponents claim.

Under this Rule, a person not a party to an action may be

impleaded by the defendant either (a) on an allegation of liability to
the latter; (b) on the ground of direct liability to the plaintiff-; or, (c)
both (a) and (b). The situation in (a) is covered by the phrase "for
contribution, indemnity or subrogation;" while (b) and (c) are
subsumed under the catch all "or any other relief, in respect of his
opponents claim."

The case at bar is one in which the third party defendants are
brought into the action as directly liable to the plaintiffs upon the
allegation that the primary and immediate cause as shown by the
police investigation of said vehicular collision between the above-
mentioned three vehicles was the recklessness and negligence and
lack of imprudence of the third-party defendant Virgilio Esguerra y
Ledesma then driver of the passenger bus. The effects are that
"plaintiff and third party are at issue as to their rights respecting the
claim and the third party is bound by the adjudication as between him
and plaintiff. It is not indispensable in the premises that the defendant
be first adjudged liable to plaintiff before the third-party defendant
may be held liable to the plaintiff, as precisely, the theory of defendant
is that it is the third party defendant, and not he, who is directly liable
to plaintiff. The situation contemplated by appellants would properly
pertain to situation (a) above wherein the third party defendant is
being sued for contribution, indemnity or subrogation, or simply
stated, for a defendant's "remedy over".

MERCURY DRUG CORPORATION VS SEBASTIAN M. BAKING

G.R. No. 156037 May 28, 2007

Facts:
Sebastian M. Baking, respondent, went to the clinic of Dr. Cesar
Sy for a medical check-up. On the following day, after undergoing an
ECG, blood, and hematology examinations and urinalysis, Dr. Sy found
that respondents blood sugar and triglyceride were above normal
levels. Dr. Sy then gave respondent two medical prescriptions,
Diamicron for his blood sugar and Benalize tablets for his triglyceride.
Respondent then proceeded to petitioner Mercury Drug Corporation
(Alabang Branch) to buy the prescribed medicines. However, the
saleslady misread the prescription for Diamicron as a prescription for
Dormicum. Thus, what was sold to respondent was Dormicum, a
potent sleeping tablet. Unaware that what was given to him was the
wrong medicine, respondent took one pill of Dormicum on three
consecutive days.
On November 8 or on the third day he took the medicine,
respondent figured in a vehicular accident. The car he was driving
 95

collided with the car of one Josie Peralta. Respondent fell asleep while
driving. He could not remember anything about the collision nor felt
its impact. Suspecting that the tablet he took may have a bearing on
his physical and mental state at the time of the collision, respondent
returned to Dr. Sys clinic. Upon being shown the medicine, Dr. Sy was
shocked to find that what was sold to respondent was Dormicum,
instead of the prescribed Diamicron. Thus, on April 14, 1994,
respondent filed with the Regional Trial Court (RTC) a complaint for
damages against petitioner. After hearing, the trial court rendered its
Decision dated March 18, 1997 in favor of respondent. On appeal, the
Court of Appeals, in its Decision, affirmed in toto the RTC judgment.
Petitioner filed a motion for reconsideration but it was denied, hence,
this petition.

Issues:

Whether petitioner was negligent, and if so, whether such

negligence was the proximate cause of respondents accident.

Ruling:
Article 2176 of the New Civil Code provides: Art. 2176. Whoever
by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict and is governed by the provisions of
this Chapter. To sustain a claim based on the above provision, the
following requisites must concur: (a) damage suffered by the plaintiff;
(b) fault or negligence of the defendant; and, (c) connection of cause
and effect between the fault or negligence of the defendant and the
damage incurred by the plaintiff.

There is no dispute that respondent suffered damages. It is

generally recognized that the drugstore business is imbued with
public interest. Inasmuch as the matter of negligence is a question of
fact, we defer to the findings of the trial court affirmed by the Court of
Appeals. Obviously, petitioners employee was grossly negligent in
selling to respondent Dormicum, instead of the prescribed Diamicron.
Considering that a fatal mistake could be a matter of life and death for
a buying patient, the said employee should have been very cautious in
dispensing medicines. She should have verified whether the medicine
she gave respondent was indeed the one prescribed by his physician.
The care required must be commensurate with the danger involved,
and the skill employed must correspond with the superior knowledge
of the business which the law demands. Petitioner contends that the
proximate cause of the accident was respondents negligence in
driving his car.

NATIONAL POWER CORPORATION VS HEIRS OF NOBLE

CASIONAN
G.R. No. 165969 November 27, 2008
 96

Facts:

In the 1970s, NPC installed high-tension electrical transmission

lines of 69 kilovolts traversing the trail leading to Sangilo, Itogon.
Eventually, some lines sagged, thereby reducing their distance from
the ground to only about 8-10 ft. This posed as a threat to passersby
who were exposed to the danger of electrocution. Nineteen-year-old
Noble Casionan worked as a pocket miner. In 1995, Noble and his co-
pocket miner Melchor Jimenez were at Dalicno. Noble walked ahead
as they passed through the trail underneath the NPC high-tension
lines on their way to their work place. As Noble was going uphill and
turning left on a curve, the tip of the bamboo pole that he was
carrying touched one of the dangling high-tension wires. Melchor
narrated that he heard a buzzing sound for only about a second or
two, then he saw Noble fall to the ground. Melchor rushed to him and
shook him, but Noble was already dead.

A post-mortem examination by the municipal health officer

determined the cause of death to be cardiac arrest, secondary to
ventricular fibulation, secondary to electrocution. Nobles parents
filed a claim for damages against NPC. NPC denied being negligent in
maintaining the safety of the lines, averring that signs were installed
but they were stolen by children, and that excavations were made to
increase the clearance from the ground but some poles sank due to
pocket mining in the area. NPC witnesses testified that the cause of
death could not have been electrocution since Noble did not suffer
extensive burns. NPC argued that if Noble did die by electrocution, it
was due to his own negligence.

RTC decided in favor of Nobles parents. RTC observed that NPC

witnesses were biased because all but one were employees of NPC,
and they were not actually present at the time of the accident. RTC
found NPC negligent since the company has not acted upon the
requests and demands made by the community leaders since 1991. CA
affirmed RTC with modificationaward of moral damages was reduced
from 100k to 50k, and award of attorney fees was disallowed since the
reason for the award was not expressly stated in the decision.

Issue:

WON there was contributory negligence on the part of Noble.

Ruling:

NO; hence, NPC is not entitled to a mitigation of its liability.

Negligence is the failure to observe, for the protection of the interest
of another, that degree of care, precaution, and vigilance which the
circumstances justly demand, whereby such other person suffers
injury. Contributory negligence is conduct on the part of the injured
party, contributing as a legal cause to the harm he has suffered, which
falls below the standard which he is required to conform for his own
 97

protection. There is contributory negligence when the partys act

showed lack of ordinary care and foresight that such act could cause
him harm or put his life in danger. It is an act or omission amounting
to want of ordinary care on the part of the person injured which,
concurring with the defendants negligence, is the proximate cause of
the injury.

The underlying precept is that a plaintiff who is partly

responsible for his own injury should not be entitled to recover
damages in full but must bear the consequences of his own
negligence. NCC 2179 provides that liability will be mitigated in
consideration of the injured partys contributory negligence. Damages
awarded to Nobles unearned income of 720k; exemplary damages of
50k, since there is gross negligence and moral damages of 50k.
 98

Allied Banking Corporation v. Bank of the Philippine Islands

G.R. No. 188363, February 27, 2013

Facts:

On October 10, 2002, a check in the amount of P1,000,000.00

payable to "Mateo Mgt. Group International" (MMGI) was presented
for deposit and accepted at petitioner's (Allied Bank) Kawit Branch.
The check, post-dated "Oct. 9, 2003", was drawn against the account
of Marciano Silva, Jr. (Silva) with respondent BPI Bel-Air Branch.
Upon receipt, petitioner sent the check for clearing to respondent
through the Philippine Clearing House Corporation (PCHC). The
check was cleared by respondent and petitioner credited the account
of MMGI with P1,000,000.00. On October 22, 2002, MMGIs account
was closed and all the funds therein were withdrawn. A month later,
Silva discovered the debit of P1,000,000.00 from his account. In
response to Silvas complaint, respondent credited his account with
the aforesaid sum. Petitioner filed a complaint before the Arbitration
Committee, asserting that respondent should solely bear the entire
face value of the check due to its negligence in failing to return the
check to petitioner within the 24-hour reglamentary period as
provided in Section 20.1of the Clearing House Rules and Regulations
(CHRR) 2000. In its Answer with Counterclaims, respondent charged
petitioner with gross negligence for accepting the post-dated check in
the first place. It contended that petitioners admitted negligence was
the sole and proximate cause of the loss.

Issue:

Does the Doctrine of Last Clear Chance apply in this case?

Ruling:

YES. In this case, the evidence clearly shows that the proximate
cause of the unwarranted encashment of the subject check was the
negligence of respondent who cleared a post-dated check sent to it
thru the PCHC clearing facility without observing its own verification
procedure. As correctly found by the PCHC and upheld by the RTC, if
only respondent exercised ordinary care in the clearing process, it
could have easily noticed the glaring defect upon seeing the date
written on the face of the check "Oct. 9, 2003". Respondent could
have then promptly returned the check and with the check thus
 99

dishonored, petitioner would have not credited the amount thereof to

the payees account. Thus, notwithstanding the antecedent negligence
of the petitioner in accepting the post-dated check for deposit, it can
seek reimbursement from respondent the amount credited to the
payees account covering the check.

PNR v. Ethel Bunty

G.R. No. 169891, November 2, 2006

Facts:

Ethel Bruntys late daughter, Rhonda Brunty, an American

citizen, visited Philippines sometime in January 1980 and prior to her
departure, she and her Filipino host Juan Manuel M.Garcia, traveled
to Baguio City aboard a Mercedes Benz sedan with plate number FU
799,driven by Rodolfo L. Mercelita. It was about 12:00 midnight,
January 25, 1980. By then, PNR Train No. T-71, driven by Alfonso
Reyes, was on its way to Tutuban, Metro Manila4 as it had left the La
Union station at 11:00 p.m., January 24, 1980.By 2:00 a.m., Rhonda,
Garcia and Mercelita were already approaching the railroad crossing
at Barangay Rizal, Moncada, Tarlac. Mercelita, driving at
approximately 70 km/hr, drove past a vehicle, unaware of the railroad
track up ahead and that they were about to collide with PNR Train
No. T-71. Mercelita was instantly killed when the Mercedes Benz
smashed into the train; the two other passengers suffered serious
physical injuries. A James Harrow brought Rhonda to the Central
Luzon Doctors Hospital in Tarlac, where she was pronounced dead
after ten minutes from arrival. Garcia, who had suffered severe head
injuries, was brought via ambulance to the same hospital. He was
transferred to the Manila Doctors Hospital, and later to the Makati
Medical Center for further treatment.

Ethel Brunty sent a demand letter to PNR to ask indemnity for

the death of her daughter, but PNR did not respond. As a result, she
and Garcia filed a complaint in the RTC Manila (later tried by Br. 20,
 100

Manila RTC). They alleged that it was PNRs failure to provide

necessary equipment at the railroad crossing in Brgy. Rizal, Moncada.
Tarlac which was proximate and direct cause of Garcias injuries
and the death of Rhonda. Meanwhile, contrary to Brunty
and Garcias allegations, PNR stated that it was not negligent in
selection and supervision of its employees(using the diligence of a
good father doctrine) and it was Mercelitas negligence which was the
immediate and proximate of the accident. It also stated that it had the
right of way, and has no legal duty to put a bar or red light signal at
the crossing. Moreover, it had adequate, visible, and clear warning
signs strategically posted on the sides of the road before the railroad
crossing.

The RTC ruled in favor of Brunty and was affirmed by the Court
of Appeals. Hence, PNR appealed to the Supreme Court.

Issue:

Who was guilty of negligence between the parties involved

which resulted in the unfortunate accident?

Ruling:

PNR was guilty of negligence. The Supreme Court affirmed with

modifications the findings of the Manila RTC and Court of Appeals. It
held that PNR was indeed negligent by not providing adequate,
visible, clear warnings and safety equipment: (1) absence of flagbars
or safety railroad bars; (2) inadequacy of the installed warning
signals; and (3) lack of proper lighting within the area. Actual
damages were however not awarded to respondents Brunty and
Garcia, as they failed to produce evidence for such.

Marcelo Macalinao, Et Al., v. Eddie Medecielo Ong

G.R. No. 146635 December 14, 2005

Facts:

Sometime in April 1992, Sebastian instructed Macalinao, Ong

and 2 other truck helpers to deliver a heavy piece of machinery to
Sebastians manufacturing plant in Angat, Bulacan. While delivering,
the Genetrons Isuzu Elf truck driven by Ong bumped the front
portion of a private jeepney. Both vehicles incurred severe damages
while the passengers sustained physical injuries as a consequence of
the collision. Macalinao was brought to Sta. Maria District Hospital
for first aid treatment then to Philippine Orthopedic Center then to
Capitol Medical Center and lastly, to Philippine General Hospital due
to financial considerations. His body was paralyzed and immobilized
from the neck down. He filed against Ong and Sebastian. A criminal
 101

case for reckless imprudence resulting to serious physical injuries

was instituted but was not ensued. In November 7 1992: Macalinao
died and was substituted by his parents. The RTC ruled that Ong was
negligent and Sebastian failed to exercise the diligence of a good
father of a family in the selection and supervision of Ong thus
ordering them jointly liable to pay actual, moral, and exemplary
damages as well as civil indemnity for Macalinaos death. On appeal,
the CA however reversed the RTCs decision for lack of evidence.

Issue:

Whether Ong may be held liable under the doctrine of Res Ipsa
Loquitur

Ruling:

YES. The photographs clearly shows that the road where the
mishap occurred is marked by a line at the center separating the right
from the left lane. Since respondents failed to refute the contents of
the police blotter, the statement therein that the Isuzu truck hit the
private jeepney and not the other way around is deemed established.
While not constituting direct proof of Ongs negligence, the foregoing
pieces of evidence justify the application of res ipsa loquitur, a Latin
phrase which literally means the thing or the transaction speaks for
itself.

Res ipsa loquitur recognizes that parties may establish prima facie
negligence without direct proof, thus, it allows the principle to
substitute for specific proof of negligence permits the plaintiff to
present along with proof of the accident, enough of the attending
circumstances to invoke the doctrine, create an inference or
presumption of negligence and thereby place on the defendant the
burden of proving that there was no negligence on his part based on
the theory that defendant in charge of the instrumentality which
causes the injury either knows the cause of the accident or has the
best opportunity of ascertaining it while the plaintiff has no such
knowledge, and is therefore compelled to allege negligence in general
terms and rely upon the proof of the happening of the accident in
order to establish negligence can be invoked only when under the
circumstances, direct evidence is absent and not readily available
grounded upon the fact that the chief evidence of the true cause,
whether culpable or innocent, is practically accessible to the
defendant but inaccessible to the injured person.

RAMOS VS CA 321 SCRA 584

Facts:
 102

Erlinda Ramos underwent a surgical procedure to remove stone

from her gall bladder (cholecystectomy). They hired Dr. Hosaka, a
surgeon, to conduct the surgery at the De Los Santos Medical Center
(DLSMC). Hosaka assured them that he would find a good
anesthesiologist. But the operation did not go as planned, Dr. Hosaka
arrived 3 hours late for the operation, Dra. Gutierrez, the
anesthesiologist botched the administration of the anesthesia
causing Erlinda to go into a coma and suffer brain damage. The
botched operation was witnessed by Herminda Cruz, sister in law of
Erlinda and Dean of College of Nursing of Capitol Medical Center.

The family of Ramos (petitioners) sued the hospital, the surgeon

and the anesthesiologist for damages. The petitioners showed expert
testimony showing that Erlinda's condition was caused by the
anesthesiologist in not exercising reasonable care in intubating
Erlinda. Eyewitnesses heard the anesthesiologist saying Ang hirap ma-
intubate nito, mali yata ang pagkakapasok. O lumalaki ang tiyan.

Diagnostic tests prior to surgery showed that Erlinda was robust

and fit to undergo surgery.

The RTC held that the anesthesiologist ommitted to exercise due

care in intubating the patient, the surgeon was remiss in his obligation
to provide a good anesthesiologist and for arriving 3 hours late and
the hospital is liable for the negligence of the doctors and for not
cancelling the operation after the surgeon failed to arrive on time. The
surgeon, anesthesiologist and the DLSMC were all held jointly and
severally liable for damages to petitioners. The CA reversed the
decision of the Trial Court.

Issues:

Whether or not the private respondents were negligent and thereby

caused the comatose condition of Ramos.

Ruling:

Yes, private respondents were all negligent and are solidarily liable
for the damages. Private respondents were not able to disprove the
presumption of negligence on their part in the care of Erlinda and their
negligence was the proximate cause of her condition. One need not be
an anesthesiologist in order to tell whether or not the intubation was a
success. The Supreme Court also found that the anesthesiologist only
saw Erlinda for the first time on the day of the operation which
indicates unfamiliarity with the patient and which is an act of
negligence and irresponsibility.

The head surgeon, Dr. Hosaka was also negligent. He failed to

exercise the proper authority as the captain of the ship in
determining if the anesthesiologist observed the proper protocols. Also,
because he was late, he did not have time to confer with the
anesthesiologist regarding the anesthesia delivery.

The hospital failed to adduce evidence showing that it exercised the

diligence of a good father of the family in hiring and supervision of its
 103

doctors (Art. 2180). The hospital was negligent since they are the one
in control of the hiring and firing of their consultants. While these
consultants are not employees, hospitals still exert significant controls
on the selection and termination of doctors who work there which is
one of the hallmarks of an employer-employee reationship. Thus, the
hospital was allocated a share in the liability.
 104

JARCIA JR VS PEOPLE 666 SCRA 336

Facts:

Private complainant Belinda Santiago lodged a complaint with the

National Bureau of Investigation against the petitioners, Dr. Emmanuel
Jarcia, Jr. and Dr. Marilou Bastan, for their alleged neglect of
professional duty which caused her son, Roy Alfonso Santiago, to suffer
serious physical injuries.

Upon investigation, the NBI found that Roy Jr. was hit by a taxicab;
that he was rushed to the Manila Doctors Hospital for an emergency
medical treatment; that an X-ray of the victims ankle was ordered;
that the X-ray result showed no fracture as read by Dr. Jarcia; that Dr.
Bastan entered the emergency room and, after conducting her own
examination of the victim, informed Mrs. Santiago that since it was
only the ankle that was hit, there was no need to examine the upper
leg. despite Mrs. Santiago's protest the doctors did not examine the
upper portion of the leg of Roy. that eleven (11) days later, Roy Jr.
developed fever, swelling of the right leg and misalignment of the right
foot; that Mrs. Santiago brought him back to the hospital; and that the
X-ray revealed a right mid-tibial fracture and a linear hairline fracture
in the shaft of the bone.

After trial and applying the doctrine of res ipsa loquitor the RTC
found petitioners to be guilty of simple negligence. The decision was
affirmed in toto by the CA.

Issues:

Whether of not the petitioner physicians are negligent, hence liable

for damages.

Held:

Petitioners were negligent in their obligation. It was proven that a

thorough examination was not performed on Roy Jr since as residents
on duty at the emergency room, Dr. Jarcia and Dr. Bastan were
expected to know the medical protocol in treating leg fractures and in
attending to victims of car accidents.

Thus, simple negligence is resent if: that there is lack of precaution

on the part of the offender, and that the damage impending to be
caused is not immediate or the danger is not clearly manifest.

Dr. Jarcia and Dr. Bastan, explained the court, cannot pass on the
liability to the taxi driver who hit the victim. It may be true that the
actual, direct, immediate, and proximate cause of the injury of Roy Jr.
was the vehicular accident when he was hit by a taxi. The petitioners,
however, cannot simply invoke such fact alone to excuse themselves
from any liability. If this would be so, doctors would have a ready
defense should they fail to do their job in attending to victims of hit-
and-run, maltreatment, and other crimes of violence in which the
actual, direct, immediate, and proximate cause of the injury is
indubitably the act of the perpetrator/s.
 105

In failing to perform an extensive medical examination to

determine the extent of Roy Jr.s injuries, Dr. Jarcia and Dr. Bastan were
remiss of their duties as members of the medical profession. Assuming
for the sake of argument that they did not have the capacity to make
such thorough evaluation at that stage, they should have referred the
patient to another doctor with sufficient training and experience
instead of assuring him and his mother that everything was all right.

Petitioners were absolved in the criminal charge for the reason that
a reasonable doubt existed but the are liable for damages. There is no
direct evidence proving that it was their negligence that caused the
suffering of Roy.
 106

BONTILAO VS GERONA 630 SCRA 561

Facts:

On December 28, 1991, respondent Dr. Carlos Gerona, an

orthopedic surgeon at the Vicente Gullas Memorial Hospital, treated
petitioners son, 8 y/o Allen Roy Bontilao, for a fractured right wrist.
Respondent administered a U-spint and immobilized Allens wrist
with a cast, then sent Allen home. On June 4, 1992, Alen re-fractured
the same wrist and was brought back to the hospital. The x-ray
examination showed a complete fractured and displacement bone,
with the fragments overlapping each other. Respondent performed a
closed reduction procedure, with Dr. Vicente Jabagat as the
anesthesiologist. Then he placed Allens arm in a plaster cast to
immobilize it. He allowed Allen to go home after the post reduction x-
ray showed that the bones were properly aligned, but advised Allens
mother, petitioner Sherlina Bontilao, to bring Allen back for re-
tightening of the cast not later than June 15, 1992. Allen was however,
only brought back after the said date. By then, because the cast had
not be re-tightened, a rotational deformity had developed in Allens
arm. The x-ray examination showed that the deformity was caused by
a re-displacement of the bone fragments, so it was agreed that an
open reduction surgery will be conducted on June 24, 1992 by the
respondent, again with Dr. Jabagat as the anesthesiologist. On the said
date, Sherlina was allowed to observe the operation behind a glass
panel. Dr. Jabagat failed to intubate the patient after 5 attempts so
anesthesia was administered through a gas mask. Respondent asked
Dr. Jabagat if the operation should be postponed given the failure to
intubate, but Dr. Jabagat said that it was alright to proceed.
Respondent verified that Allen was breathing properly before
proceeding with the surgery. As respondent was about to finish the
suturing, Sherlina decided to go out of the operating room to make a
telephone call and wait for her son. Later, she was informed that her
son died on the operating table. The cause of death was asphyxia due
to the congestion and edema of the epiglottis. Hence, a criminal,
administrative and civil case was filed by the parents of Allen against
the doctors for the negligence that caused Allens death.

Issue:

Whether or not respondent is liable for medical negligence due to

the death of Allen.

Ruling:

No. The trial court erred in applying the doctrine of res ipsa liquitor
to pin liability on respondent for Allens death. Res ipsa liquitor is a
rebuttable presumption or influence that the defendant was negligent.
 107

The presumption only arises upon proof that the instrumentality

causing injury was in the defendants exclusive control, and that the
accident was one which ordinarily does not happen in the absence of
negligence. It is a rule of evidence whereby negligence of the alleged
wrong does may be inferred from the mere fact that the accident
happened, provided that the character of the accident and
circumstances attending it lead reasonably to the belief that in the
absence of negligence it would not have occurred and that the thing
which caused injury is shown to have been under the management and
control of the alleged wrong doer.

Res ipsa liquitor is not a rigid or ordinary doctrine to be

perfunctorily used but a rule to be cautiously applied defending upon
the circumstances of each case. In malpractice case, the doctrine is
generally restricted to situations where a layman is able to say, as a
matter of common knowledge and observation, that the consequence
of professional care were not as such as would ordinarily have followed
if due care had been exercised.

Moreover, we note that in the instant case, the instrument which

caused the injury or damage was not even within respondents
exclusive control and management as Dr. Jabagat was exclusively in
control and management of the anesthesia and endotracheal tube. The
doctrine of res ipsa liquitor allows the mere existence of an injury to
justify a presumption of negligence or the part of the person who
controls the instrument causing the injury, provided that the following
requisites concur:

The accident is of a kind which ordinarily does not occur in the

absence of someones negligence;

It is caused by an instrumentality within the exclusive control of the

defendant or co-defendants;

The possibility of contributing conduct which would make the

plaintiff responsible is eliminated.
 108

73
 109

74
 110

75
 111

NATIONAL POWER CORPORATION,

Petitioner, vs. HEIRS OF MACABANGKIT SANGKAY, namely:
CEBU, BATOWA-AN, SAYANA, NASSER, MANTA, EDGAR, PUTRI
, MONGKOY*, and AMIR, all surnamed MACABANGKIT,
Respondents.
G.R. No. 165828 August 24, 2011

Facts:

NPC undertook the Agus River Hydroelectric Power Plant

Project in the 1970s to generate electricity for Mindanao. The project
included the construction of several underground tunnels to be used
in diverting the water flow from the Agus River to the hydroelectric
plants.

The respondents Heirs of Macabangkit, as the owners of land

with an area of 221,573 square meters situated in Ditucalan, Iligan
City, sued NPC in the RTC for the recovery of damages and of the
property, with the alternative prayer for the payment of just
compensation. They alleged that the underground tunnel had been
constructed without their knowledge and consent.

In its answer with counterclaim, NPC countered that the Heirs

of Macabangkit had no right to compensation under section 3(f) of
Republic Act No. 6395, under which a mere legal easement on their
land was established; that their cause of action, should they be
entitled to compensation, already prescribed due to the tunnel having
been constructed in 1979.

Issue:
 112

Whether the Heirs of Macabangkits right to claim just

compensation had prescribed under section 3(i) of Republic Act No.
6395, or, alternatively, under Article 620 and Article 646 of the Civil
Code.

Ruling:

No. Five-year prescriptive period under Section 3(i) of Republic

Act No. 6395 does not apply to claims for just compensation.

The court ruled that the prescriptive period provided under

Section 3(i) of Republic Act No. 6395 is applicable only to an action
for damages, and does not extend to an action to recover just
compensation like this case. Consequently, NPC cannot thereby bar
the right of the Heirs of Macabangkit to recover just compensation for
their land.

The action to recover just compensation from the State or its

expropriating agency differs from the action for damages. The former,
also known as inverse condemnation, has the objective to recover the
value of property taken in fact by the governmental defendant, even
though no formal exercise of the power of eminent domain has been
attempted by the taking agency. Just compensation is the full and fair
equivalent of the property taken from its owner by the expropriator.
The measure is not the takers gain, but the owners loss. The
word just is used to intensify the meaning of the
word compensation in order to convey the idea that the equivalent to
be rendered for the property to be taken shall be real, substantial,
full, and ample. On the other hand, the latter action seeks to vindicate
a legal wrong through damages, which may be actual, moral, nominal,
temperate, liquidated, or exemplary. When a right is exercised in a
manner not conformable with the norms enshrined in Article 19 and
like provisions on human relations in the Civil Code, and the exercise
results to the damage of another, a legal wrong is committed and the
wrongdoer is held responsible.

SOLID HOMES, INC., petitioner, vs. SPOUSES ANCHETA K.

TAN and CORAZON DE JESUS TAN, respondents.
G.R. Nos. 145156-57 July 29, 2005

Facts:
Petitioner Solid Homes, Inc., sold to the spouses Joe Uy and
Myrna Uy a subdivision lot which thereafter was registered in the
name of the Uys. The spouses Uy sold the same lot to herein
respondents. From then on, respondents visited their property a
number of times, only to find out the sad state of development thereat.
In short, there has been no development at all.
The respondents, in a letter dated December 18, 1995,
demanded petitioner to provide the needed utility systems and clear
the area of squatters and other obstructions and to enable them to
start the construction of their house thereon and to allow other lot
owners in the area a full access to and peaceful possession of their
respective lots.
 113

Having received no reply from petitioner, respondents filed with

the Field Office of the Housing and Land Use Regulatory Board
(HLURB), NCR a complaint for specific performance and damages
which the Housing and Land Use Arbiter, in a decision rendered
judgment in favor of the respondents by directing petitioner to
perform its obligation to provide subdivision facilities in the subject
premises and to rid the premises of squatters and to pay
complainants.
Dissatisfied, petitioner went on appeal to the HLURB Board of
Commissioners, which, in a decision affirmed that of the Arbiter. The
petitioner then elevated the case to the Office of the President (O.P.),
which also affirmed with modification the appealed decision of the
HLURB Board of Commissioners.
Respondents filed a motion for partial reconsideration of the
aforementioned decision, praying for the deletion of that portion
thereof giving petitioner the option of merely paying them
the purchase price with interest. Respondents argued that it would
be more in accord with equity and fair play if they will be paid the fair
market value of the lot in question and not merely its purchase price.
Issue:
Whether or not in the event respondents opt to rescind the
contract, should petitioner pay them merely the price they paid for
the lot plus interest or the current market value thereof.
Ruling:
No. The court held that a literal application of any part of
a statute is to be rejected if it will operate unjustly, lead to
absurd results, or contradict the evident meaning of the statute
taken as a whole. Statutes should receive a sensible
construction, such as will give effect to the legislative intention
and so as to avoid an unjust or an absurd conclusion.
Indeed, there would be unjust enrichment if respondents Solid
Homes, Inc. & Purita Soliven are made to pay only the purchase price
plus interest. It is definite that the value of the subject property
already escalated after almost two decades from the time the
petitioner paid for it. Equity and justice dictate that the injured party
should be paid the market value of the lot, otherwise, respondents
Solid Homes, Inc. & Purita Soliven would enrich themselves at the
expense of herein lot owners when they sell the same lot at the
present market value. Surely, such a situation should not be
countenanced for to do so would be contrary to reason and therefore,
unconscionable. Over time, courts have recognized with almost
pedantic adherence that what is inconvenient or contrary to reason is
not allowed in law.

BANCO FILIPINO SAVINGS AND MORTGAGE BANK, vs. THE

HON. COURT OF APPEALS, and CALVIN & ELSA ARCILLA,
G.R. No. 129227. May 30, 2000

Facts:
 114

Elsa Arcilla and her husband, Calvin Arcilla secured on three

occasions, loans from the Banco Filipino Savings and Mortgage bank
in the amount of Php.107,946.00 as evidenced by the Promissory
Note executed by the spouses in favor of the said bank. To secure
payment of said loans, the spouses executed Real Estate Mortgages
in favor of the appellants (Banco Filipino) over their parcels of land.
The appellee spouses failed to pay their monthly amortization to
appellant. On September 2, 1985 the appellees filed a complaint for
Annulment of the Loan Contracts, Foreclosure Sale with Prohibitory
and Injunction which was granted by the RTC. Petitioners appealed
to the Court of Appeals, but the CA affirmed the decision of the RTC.

Issue:

Whether or not the CA erred when it held that the cause of

action of the private respondents accrued on October 30, 1978 and
the filing of their complaint for annulment of their contracts in 1085
was not yet barred by the prescription

Ruling:

The court held that the petition is unmeritorious. Petitioners

claim that the action of the private respondents have prescribed is
bereft of merit. Under Article 1150 of the Civil Code, the time for
prescription of all kinds of action where there is no special provision
which ordains otherwise shall be counted from the day they may be
brought. Thus the period of prescription of any cause of action is
reckoned only from the date of the cause of action accrued. The
period should not be made to retroact to the date of the execution of
the contract, but from the date they received the statement of account
showing the increased rate of interest, for it was only from the
moment that they discovered the petitioners unilateral increase
thereof.
 115

LAFARGE CEMENT PHILIPPINES, INC vs CONTINENTAL

CEMENT CORPORATION (CCC)
G.R. No. 155173, November 23, 2004
Facts:

On August 11, 1998, a letter of intent was executed by both

parties, Lafarge and CCC. Lafarge agreed to purchase the cement
business of CCC. On October 21, 1998, they entered into a Sale and
Purchase Agreement (SPA). The petitioners, at the time of such
transactions were aware of the pending case of CCC with the
Supreme Court entitled Asset Privatization Trust (APT) v. Court of
Appeals and Continental Cement Corporation. In anticipation of the
liability that the High Tribunal might adjudge against CCC, the
parties, under Clause 2 (c) of the SPA, allegedly agreed to retain from
the purchase price a portion of the contract price in the amount of
P117,020,846.84 -- the equivalent of US$2,799,140. This amount was
to be deposited in an interest-bearing account in the First National
City Bank of New York (Citibank) for payment to APT. However,
petitioners allegedly refused to apply the sum to the payment to APT,
after the finality of the judgment in the case of CCC. Fearful that
nonpayment to APT would result in the foreclosure, of several
properties, CCC filed before the RTC a Complaint with Application
for Preliminary Attachment" against petitioners. The Complaint
prayed, that petitioners be directed to pay the "APT Retained Amount"
referred to in Clause 2 (c) of the SPA. Petitioners moved to dismiss the
Complaint on the ground that it violated the prohibition on forum-
shopping. Respondent CCC had allegedly made the same claim it was
raising in another action, which involved the same parties and which
was filed earlier before the International Chamber of Commerce. After
the trial court denied the Motion to Dismiss in its November 14, 2000
Order, petitioners elevated the matter before the Court of Appeals.

In the meantime, to avoid being in default and without prejudice

to the outcome of their appeal, petitioners filed their Answer and
Compulsory Counterclaims ad Cautelam before the trial court. In their
Answer, they denied the allegations in the Complaint. They prayed --
by way of compulsory counterclaims against Respondent CCC, its
majority stockholder and president Gregory T. Lim, and its corporate
secretary Anthony A. Mariano -- for the sums of (a) P2,700,000 each
as actual damages, (b) P100,000,000 each as exemplary damages, (c)
P100,000,000 each as moral damages, and (d) P5,000,000 each as
attorney's fees plus costs of suit.

Petitioners alleged that CCC, through Lim and Mariano, had

filed the "baseless" Complaint and procured the Writ of Attachment in
bad faith. Relying on this Court's pronouncement in Sapugayv. CA,
petitioners prayed that both Lim and Mariano be held "jointly and
solidarily" liable with Respondent CCC. On behalf of Lim and Mariano
who had yet to file any responsive pleading, CCC moved to dismiss
petitioners' compulsory counterclaims on grounds that essentially
constituted the very issues for resolution in the instant Petition.

RTC ruled that the counterclaims of the petitioners against Lim

and Mariano were not compulsory, that the ruling in Sapugay was not
 116

applicable and that the petitioners answer with counterclaims

violated the procedural rules on joinder of actions.

Issue:

Whether or not the petitioners answer with counterclaims

violated the procedural rules on joinder of actions.

Held:

The procedural rules on joinder of actions were not violated. In

joining Lim and Mariano in the compulsory counterclaim, petitioners
are being consistent with the solidary nature of the liability alleged
therein. The procedural rules are founded on practicality and
convenience.They are meant to discourage duplicity and multiplicity
of suits.
JOSEPH SALUDAGA vs. FEU and EDILBERTO C. DE JESUS
(President of FEU)
G.R. No. 179337, April 30, 2008

FACTS:

Joseph Saludaga was a sophomore law student of (FEU) when

he was shot by Alejandro Rosete, one of the security guards on duty at
the school premises on August 18, 1996. Saludaga was rushed to FEU
Hospital due to the wound he sustained. Meanwhile, Rosete was
brought to the police station where he explained that the shooting
was accidental and eventually released for no formal complaint was
filed against him.

Saludaga thereafter filed with RTC Manila a complaint for

damages against respondents on the ground that they breached their
obligation to provide students with a safe and secure environment and
an atmosphere conducive to learning.

Respondents, in turn, filed a Third-Party Complaint against

Galaxy Development and Management Corp. (Galaxy), the agency
contracted by FEU to provide security services within its premises
and Mariano D. Imperial (Imperial), Galaxy's President, to indemnify
them for whatever would be adjudged in favor of petitioner, if any;
and to pay attorney's fees and cost of the suit

ISSUE:

Whether Respondents can be vicariously liable under Article

2180 of the Civil Code.

RULING:

The Court agree with the findings of the Court of Appeals that
respondents cannot be held liable for damages under Art. 2180 of the
Civil Code because respondents are not the employers of Rosete. The
latter was employed by Galaxy. The instructions issued by
 117

respondents' Security Consultant to Galaxy and its security guards are

ordinarily no more than requests commonly envisaged in the contract
for services entered into by a principal and a security agency. They
cannot be construed as the element of control as to treat respondents
as the employers of Rosete. It is settled in our jurisdiction that where
the security agency, as here, recruits, hires and assigns the work of its
watchmen or security guards, the agency is the employer of such
guards or watchmen. Liability for illegal or harmful acts committed by
the security guards attaches to the employer agency, and not to the
clients or customers of such agency. As a general rule, a client or
customer of a security agency has no hand in selecting who among
the pool of security guards or watchmen employed by the agency shall
be assigned to it; the duty to observe the diligence of a good father of
a family in the selection of the guards cannot, in the ordinary course
of events, be demanded from the client whose premises or property
are protected by the security guards.The fact that a client company
may give instructions or directions to the security guards assigned to
it, does not, by itself, render the client responsible as an employer of
the security guards concerned and liable for their wrongful acts or
omissions.

81
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82
 119

CHILD LEARNING CENTER VS. TAGORIO

G.R. NO. 150920 NOVEMBER 25, 2005

Facts:

The complaint alleged that during the school year 1990-1991, Timothy
was a Grade IV student at Marymount School, an academic institution
operated and maintained by Child Learning Center, Inc. (CLC). In the
afternoon of March 5, 1991, between 1 and 2 p.m., Timothy entered the boys
comfort room at the third floor of the Marymount building to answer the call
of nature. He, however, found himself locked inside and unable to get out.
Timothy started to panic and so he banged and kicked the door and yelled
several times for help. When no help arrived he decided to open the window
to call for help. In the process of opening the window, Timothy went right
through and fell down three stories. Timothy was hospitalized and given
medical treatment for serious multiple physical injuries.

An action under Article 2176 of the Civil Code was filed by respondents
against the CLC, the members of its Board of Directors, namely Spouses
Edgardo and Sylvia Limon, Alfonso Cruz, Carmelo Narciso and Luningning
 120

Salvador, and the Administrative Officer of Marymount School, Ricardo

Pilao. In its defense, CLC maintained that there was nothing defective about
the locking mechanism of the door and that the fall of Timothy was not due
to its fault or negligence. CLC further maintained that it had exercised the
due care and diligence of a good father of a family to ensure the safety, well-
being and convenience of its students.

Issue:

Whether or not Child Learning Center is liable for torts and

consequently, of damages?

Ruling:

Yes. In this tort case, respondents contend that CLC failed to provide
precautionary measures to avoid harm and injury to its students in two
instances: (1) failure to fix a defective door knob despite having been
notified of the problem; and (2) failure to install safety grills on the window
where Timothy fell from. The trial court found that the lock was defective on
March 5, 1991. The door knob was defective. After the incident of March 5,
1991, said door knob was taken off the door of the toilet where Timothy was
in. The architect who testified during the trial declared that although there
were standard specifications for door knobs for comfort room[s], and he
designed them according to that requirement, he did not investigate
whether the door knob specified in his plans during the construction [was]
actually put in place. This is so because he did not verify whether the door
knob he specified w[as] actually put in place at the particular comfort room
where Timothy was barred from getting outside.

The fact, however, that Timothy fell out through the window shows
that the door could not be opened from the inside. That sufficiently points to
the fact that something was wrong with the door, if not the door knob, under
the principle of res ipsa loquitor. The doctrine of res ipsa loquitor applies
where (1) the accident was of such character as to warrant an inference that
it would not have happened except for the defendants negligence; (2) the
accident must have been caused by an agency or instrumentality within the
exclusive management or control of the person charged with the negligence
complained of; and (3) the accident must not have been due to any voluntary
action or contribution on the part of the person injured. Petitioners are
clearly answerable for failure to see to it that the doors of their school toilets
are at all times in working condition. The fact that a student had to go
through the window, instead of the door, shows that something was wrong
with the door.

Petitioners argument that CLC exercised the due diligence of a good

father of a family in the selection and supervision of its employees is not
decisive. Due diligence in the selection and supervision of employees is
applicable where the employer is being held responsible for the acts or
omissions of others under Article 2180 of the Civil Code. In this case, CLCs
liability is under Article 2176 of the Civil Code, premised on the fact of its
own negligence in not ensuring that all its doors are properly maintained.
 121

HEIRS OF REDENTOR COMPLETO VS. ALBAYDA JR. 6

24 SCRA 97

Facts:
 122

Albayda is a Master Sergeant of the PH Air Force, and Completo was

the taxi driver of a Toyota Corolla which was owned by Abiad. Albayda was
riding a bike on his way to the office, when Completos taxi bumped and
sideswept him, causing serious physical injuries. He [Albayda] was brought
to the PH Air Force General Hospital, but he was transferred to the AFP
Medical Center because he sustained a fracture and there was no orthopedic
doctor available in the first hospital. He was confined from 27 Aug 1997 to
11 Feb 1998, and again in 23 Feb to 22 Mar 1998 [approx. 7 months].

Conciliation before the barangay failed, so Albayda filed a complaint

for physical injuries through reckless imprudence against Completo before
the Office of the City Prosecutor of Pasay. Completo filed a counter-charge of
damage to property through reckless imprudence against Albayda. The
Office of the City Prosecutor recommended the filing of an information for
Albaydas complaint, and Completos complaint [against Albayda] was
dismissed. Albayda manifested his reservation to file a separate civil action
for damages against Completo and Abiad. Albayda alleged that Completos
negligence is the proximate cause of the incident. He demanded the
following damages and their respective amounts: Actual damages 276,550;
Moral damages 600,000; Exemplary damages 200,000; Attorneys fees
25,000 + 1,000 per court appearance.

On the other hand, Completo alleged that he was carefully driving the
taxicab when he heard a strange sound from the taxicabs rear right side. He
found Albayda lying on the road, holding his left leg, so he brought Albayda
to PH Air Force General Hospital. Completo asserted that he was an
experienced driver, and that he already reduced his speed to 20km even
before reaching the intersection. In contrast, Albayda rode his bicycle at
high speed, causing him to lose control of the bicycle. Completo said that
Albayda had no cause of action.

Several people testified for each side, but here are some notes on the
testimony of the owner of the taxi driver, Abiad. Abiad said that aside from
being a soldier, he also held franchises of taxicabs and passenger jeepneys,
and being a taxicab operator, he would wake up early to personally check
the taxicabs. When Completo applied as a taxicab driver, Abiad required him
to show his bio-data, NBI clearance, and drivers license. Completo never
figured in a vehicular accident since he was employed and according to
Abiad, he [Completo] was a good driver and good man.

RTC rendered judgment in favor of Albayda, and the defendants are

ordered to pay actual [46k] and moral [400k] damages, and attorneys fees
[25k]. Upon appeal at the CA, the court affirmed RTCs decision with
modifications [no more actual damages; awarded temperate damages [40k];
moral damages only 200k; Completo and Abiad are solidarily liable to pay
Albayda; added legal interest].

Issues:

1. Whether the CA erred in finding that Completo was the one

who caused the collision.
2. Whether Abiad failed to prove that he observed the diligence
of a good father of the family; and
Ruling:
 123

1. No. It is a rule in negligence suits that the plaintiff has the

burden of proving by a preponderance of evidence the motorists
breach in his duty of care owed to the plaintiff, that the motorist
was negligent in failing to exercise the diligence required to
avoid injury to the plaintiff, and that such negligence was the
proximate cause of the injury suffered. Article 2176 of the Civil
Code provides that whoever by act or omission causes damage
to another, there being fault or negligence, is obliged to pay for
the damage done. Such fault or negligence, if there is no
preexisting contractual relation between the parties, is called a
quasi-delict. In this regard, the question of the motorist's
negligence is a question of fact.It was proven by a
preponderance of evidence that Completo failed to exercise
reasonable diligence in driving the taxicab because he was over-
speeding at the time he hit the bicycle ridden by Albayda. Such
negligence was the sole and proximate cause of the serious
physical injuries sustained by Albayda. Completo did not slow
down even when he approached the intersection of 8 th and 11th
Streets of VAB. It was also proven that Albayda had the right of
way, considering that he reached the intersection ahead of
Completo.

2. Yes. In the selection of prospective employees, employers are

required to examine them as to their qualifications, experience,
and service records. On the other hand, with respect to the
supervision of employees, employers should formulate standard
operating procedures, monitor their implementation, and
impose disciplinary measures for breaches thereof. To establish
these factors in a trial involving the issue of vicarious liability,
employers must submit concrete proof, including documentary
evidence. Abiad testified that before he hired Completo, he
required the latter to show his bio-data, NBI clearance, and
drivers license. Abiad likewise stressed that Completo was
never involved in a vehicular accident prior to the instant case,
and that, as operator of the taxicab, he would wake up early to
personally check the condition of the vehicle before it is used.
The protestation of Abiad to escape liability is short of the
diligence required under the law. Abiads evidence consisted
entirely of testimonial evidence, and the unsubstantiated and
self-serving testimony of Abiad was insufficient to overcome the
legal presumption that he was negligent in the selection and
supervision of his drive.
 124

ALLIED BANKING CORP. VS. LIM SIO WAN

G.R. No. 133179 MARCH 27, 2008

Facts:

On November 14, 1983, respondent Lim Sio Wan deposited

with petitioner Allied Banking Corporation (Allied) at its Quintin
Paredes Branch in Manila a money market placement of PhP
1,152,597.35 for a term of 31 days to mature on December 15, 1983.

On December 5, 1983, a person claiming to be Lim Sio Wan

called up Cristina So, an officer of Allied, and instructed the latter to
pre-terminate Lim Sio Wans money market placement, to issue a
managers check representing the proceeds of the placement, and to
give the check to one Deborah Dee Santos who would pick up the
check. Later, Santos arrived at the bank and signed the application
form for a managers check to be issued.

The bank issued Managers Check No. 035669 for PhP

1,158,648.49, representing the proceeds of Lim Sio Wans money
market placement in the name of Lim Sio Wan, as payee. The
managers check was deposited in the account of Filipinas Cement
Corporation (FCC) at respondent Metropolitan Bank and Trust Co.
(Metrobank), with the forged signature of Lim Sio Wan as indorser. To
clear the check and in compliance with the requirements of the
Philippine Clearing House Corporation (PCHC) Rules and Regulations,
Metrobank stamped a guaranty on the check.

The check was sent to Allied through the PCHC. Upon the
presentment of the check, Allied funded the check even without
checking the authenticity of Lim Sio Wans purported indorsement.
Thus, the amount on the face of the check was credited to the account
of FCC.

Lim Sio Wan deposited with Allied a second money market

placement, upon the maturity date of the first money market
placement, Lim Sio Wan went to Allied to withdraw it. She was then
 125

informed that the placement had been pre-terminated upon her

instructions. Allied refused to pay Lim Sio Wan, claiming that the
latter had authorized the pre-termination of the placement and its
subsequent release to Santos.

Issue:

Whether or not Allied negligence was the proximate cause of

the loss of Lim Sio Wans money market placement.

Ruling:

The court ruled that Allied is liable to Lim Sio Wan.

Fundamental and familiar is the doctrine that the relationship
between a bank and a client is one of debtor-creditor. Since there was
no effective payment of Lim Sio Wans money market placement, the
bank still has an obligation to pay her at six percent (6%) interest
from March 16, 1984 until the payment thereof.

We cannot, however, say outright that Allied is solely liable to

Lim Sio Wan. Allied avers that even if it had not issued the check
payment, the money represented by the check would still be lost
because of Metrobanks negligence in indorsing the check without
verifying the genuineness of the indorsement thereon. The trial court
correctly found Allied negligent in issuing the managers check and in
transmitting it to Santos without even a written authorization. In fact,
Allied did not even ask for the certificate evidencing the money
market placement or call up Lim Sio Wan at her residence or office to
confirm her instructions. Both actions could have prevented the whole
fraudulent transaction from unfolding. Allieds negligence must be
considered as the proximate cause of the resulting loss.

Santos could be the architect of the entire controversy.

Unfortunately, since summons had not been served on Santos, the
courts have not acquired jurisdiction over her.
 126

SPS. BUENAVENTURA VS. APOSTOL

G.R. No. 163609 NOVEMBER 27, 2008

Facts:
On February 5, 1989, Mayor Miguel of Koronadal, South
Cotabato was on board the Isuzu pick-up truck driven by Fidel
Lozano, an employee of the Municipality of Koronadal. The pick-up
truck was registered under the name of Rodrigo Apostol, but it was
then in the possession of Ernesto Simbulan. Lozano borrowed the
pick-up truck from Simbulan to bring Miguel to Buayan Airport at
General Santos City to catch his Manila flight. The pick-up truck
accidentally hit Marvin C. Jayme, a minor, who was then crossing the
National Highway in South Cotabato. The intensity of the collision
sent Marvin some 50 meters away from the point of impact, a clear
indication that Lozano was driving at a very high speed at the time of
the accident. Marvin sustained severe head injuries. Despite medical
attention, Marvin expired six (6) days after the accident.

Issues:
 127

1. May a municipal mayor be held solidarily liable for the

negligent acts of the driver assigned to him

2. May an LGU be held liable for the tortuous act of a

government employee.

Ruling:

1. It is uncontested that Lozano was employed as a driver by

the municipality. That he was subsequently assigned to Mayor Miguel
during the time of the accident is of no moment. The Municipality of
Koronadal remains to be Lozanos employer notwithstanding Lozanos
assignment to Mayor Miguel. Even assuming arguendo that Mayor
Miguel had authority to give instructions or directions to Lozano, he
still cannot be held liable. In Benson v. Sorrell, the New England
Supreme Court ruled that mere giving of directions to the driver does
not establish that the passenger has control over the vehicle. Neither
does it render one the employer of the driver. Mayor Miguel was
neither Lozanos employer nor the vehicles registered owner. There
existed no causal relationship between him and Lozano or the vehicle
used that will make him accountable for Marvins death. Mayor
Miguel was a mere passenger at the time of the accident.

2. The municipality may not be sued because it is an agency of

the State engaged in governmental functions and, hence, immune
from suit. This immunity is illustrated in Municipality of San
Fernando, La Union v. Firme, where the Court held that municipal
corporations are suable because their charters grant them the
competence to sue and be sued. Nevertheless, they are generally not
liable for torts committed by them in the discharge of governmental
functions and can only be held answerable only if it can be shown that
they were acting in proprietary capacity. In permitting such entities to
be sued, the State merely gives the claimant the right to show that the
defendant was not acting in governmental capacity when the injury
was committed or that the case comes under the
exceptions recognized by law. Failing this, the claimant cannot
recover.
Liability attaches to the registered owner, the negligent driver and his
direct employer. Settled is the rule that the registered owner of a
vehicle is jointly and severally liable with the driver for damages
incurred by passengers and third persons as a consequence of injuries
or death sustained in the operation of said vehicles. Regardless of who
the actual owner of the vehicle is, the operator of record continues to
be the operator of the vehicle as regards the public and third persons,
and as such is directly and primarily responsible for the consequences
incident to its operation.

ALMIREZ VS. INFINITE LOOP TECHNOLOGY CORPORATION

G.R. No. 162401 JANUARY 31, 2006
 128

Facts:

Petitioner Corazon Almirez was hired by respondent Infinite

Loop Technology Corporation (Infinite Loop) to be a Refinery Senior
Process Design Engineer for a specific project starting October 18,
1999 with a guaranty of 12 continuous months of service or until a
mutually agreed date. However, Almirez was later on suspended.
Hence, she filed an action before the National Labor Relations
Commission (NLRC) against Infinite Loop and its General
Manager/President/co-petitioner Edwin R. Rabino on the ground of
breach of contract of employment.

Both the Labor Arbiter and the NLRC ruled that there is an
existing employer-employee relationship between Almirez and Infinite
Loop since the latter exercises control over the means and methods
used by Almirez in the performance of her duties.

The Court of Appeals ruled that there was no existing employer-

employee relationship between the parties since Almirez was hired to
render her professional service only for a specific project.

Issue:

Whether or not there is employee-employer relationship

between Almirez and Infinite Loop.

Ruling:

To ascertain the existence of an employer-employee

relationship, jurisprudence has invariably applied the four-fold test, to
wit: (1) the manner of selection and engagement; (2) the payment of
wages; (3) the presence or absence of the power of dismissal; and (4)
the presence or absence of the power of control. Of these four, the last
one, the so called "control test" is commonly regarded as the most
crucial and determinative indicator of the presence or absence of an
employer-employee relationship.

Under the control test, an employer-employee relationship

exists where the person for whom the services are performed reserves
the right to control not only the end achieved, but also the manner
and means to be used in reaching that end.

From the earlier-quoted scope of Almirez professional

services, there is no showing of a power of control over petitioner. The
services to be performed by her specified what she needed to achieve
but not on how she was to go about it.

Contrary to the finding of the Labor Arbiter, as affirmed by the

NLRC, the "Scope of [Almirez] Professional Services" does not "show
that the companys management team exercises control over the
means and methods in the performance of her duties as Refinery
Process Design Engineer." Having hired Almirez professional services
on account of her "expertise and qualifications" as Almirez herself
proffers in her Position Paper, the company naturally expected to be
updated regularly of her "work progress," if any, on the project for
which she was specifically hired.

As for the designation of the payments to Almirez as "salaries,"

it is not determinative of the existence of an employer-employee
 129

relationship. "Salary" is a general term defined as "a remuneration for

services given." It is the above-quoted contract of engagement of
services-letter dated September 30, 1999, together with its
attachments, which is the law between the parties. Even Almirez
concedes rendering service "based on the contract," which, as
reflected earlier, is bereft of a showing of power of control, the most
crucial and determinative indicator of the presence of an employer-
employee relationship.

ARNULFO C. ACEVEDO, Petitioner, vs. ADVANSTAR COMPANY

INC. (ACI)
and/or FELIPE LOI, TONY JALAPADAN, Respondents
November 11, 2005 G.R. No. 157656

Facts:

ACI was engaged in the distribution and sale of various brands of

liquor and alcoholic spirits. Felipe Loi was employed as its manager
and Jalapadan was one of the ACIs hired salesmen. Under the
Agreement for the Sale of Merchandise between Jalapadan and ACI,
among others, the former shall be provided with a 6-wheeler truck to
facilitate the sale and delivery of products to customers and outlets
and was authorized to employ and discharge a driver and other
assistants as he deemed necessary, who would be considered his
employees, and that he alone would be liable for their compensation
and actual expenses, including meals while on duty. On August 5,
1997, Jalapadan hired Arnulfo Acebedo as driver.

In the course of business, Jalapadan and Acebedo had several

misunderstandings until in October 10, 1998 Acebedo signed a letter,
using his thumb mark, informing Jalapadan that he is resigning
effective that date. On October 26, 1998, Acevedo filed a complaint
against Jalapadan, ACI and its general manager, Felipe Loi, for illegal
dismissal and for the recovery of back wages and other monetary
benefits.

Issue:

Whether or not Jalapadan, and not ACI and Loi, was the employer
of Acebedo.

Ruling:

No, because there has been an employer-employee relationship

between respondent ACI and complainant Arnulfo Acevedo, with
respondent Tony Jalapadan as agent of the respondent corporation
arising from their relationship of labor-only contracting. The
agreement between the respondents cannot prevail over Articles 106
and 107 of the Labor Code of the Philippines.

The principal employer becomes solidarily liable with the labor-only

contractor for all the rightful claims of the employees. The labor-only
contractor is considered merely as an agent of the employer, the
employer having been made, by law, responsible to the employees of
 130

the labor-only contractor as if such employees had been directly

employed by it.

CAYAO-LASAM, petitioners vs SPOUSES RAMOLETE,

respondents
GR No. 159132 December 18, 2002

Facts:

On July 28, 1994, respondent Editha Ramolete, who was 3 months

pregnant, was brought to Lorma Medical Center (LMC) in San
Fernando, La Union due to vaginal bleeding. Upon advise of petitioner
related via telephone, Editha was admitted to the LMC on the same
day.

A pelvic sonogram was then conducted on Editha revealing the

fetus weak cardiac pulsation. The following day, the pelvic sonogram
showed that aside from the fetus weak cardiac pulsation, no fetal
movement was also appreciated. Due to persistent and profuse
vaginal bleeding, petitioner advised her to undergo a D&C procedure.
She was discharged the following day.

On September 16, 1994, Editha was once gain brought at the

LMC, as she was suffering from vomiting and severe abdominal pains.
Editha was attended by Drs. Dela Cruz, Mayo and Komiya. Dr. Mayo
allegedly informed Editha that there was a dead fetus in the latters
womb, after Editha went laparectomy, she was found to have massive
intra abdominal hemorrhage and ruptured uterus. Thus, she had to go
hysterectomy and as a result no more chance to bear a child.

Issue:

Whether or not petitioner is liable for medical malpractice.

Ruling:
 131

No. Medical malpractice is a particular form of negligence which

consists in the failure of a physician or a surgeon to apply in his
practice of medicine that degree of care and skill which is ordinarily
employed by the profession generally under similar conditions and in
like surrounding circumstances. In order to successfully pursue such
a claim, a patient must either prove that the physician or surgeon
failed to do something which a reasonably prudent physician or
surgeon would have done, or that the physician or surgeon performed
something which a reasonably prudent physician or surgeon would
not have done, and that such failure or action caused injury to the
patient.

There are four elements involved in medical negligence cases:

duty, breach, injury, and proximate cause.

The breach of the professional duties of skill and care, or their

improper performance by a physician surgeon, whereby the patient is
injured in body or in health, constitutes actionable malpractice.
Further, in as much as the causes of the injuries involved in
malpractice actions are determinable only in the light of scientific
knowledge, it has been recognized that expert testimony is usually
necessary to suspect the conclusion as to causation.

However, in this case, it was undisputedly established that Editha

did not return for follow-up evaluation, in defiance of the petitioners
advice. This is, as found out, is the proximate cause of the injury she
sustained.

DR. PEDRO DENNIS CERENO, and DR. SANTOS

ZAFE, Petitioners,
vs. COURT OF APPEALS, SPOUSES DIOGENES S. OLAVERE and
FE R. SERRANO, Respondents
G.R. No. 167366, September 26, 2012

Facts:

At 9:15 in the evening, Raymond S. Olavere, a victim of a stabbing

incident was rushed to the Bicol Regional Medical Center. The
emergency room resident physician, recommended that the patient
undergo "emergency exploratory laparotomy." During that time, the
hospital surgeons, were busy operating on gunshot victim Maluly-on
with the only anaesthesiologist Dr. Tatad on duty assisting them. Just
before the operation on Maluluy-on was finished, another emergency
case involving Lilia Aguila, a woman who was giving birth to triplets,
was brought to the operating room. Because they were heavily
occupied, the doctors decided to defer the operation on Raymond.
They however examined Raymond and they found that the latters
blood pressure was normal and "nothing in him was significant."
 132

At 12:15 am, the operation on Raymong started. But while the

operation was on-going, Raymond suffered a cardiac arrest and he
was pronounced dead at 2:30 A.M with his death certificate indicating
"hypovolemic shock" as the immediate cause of death.

Issue:
Whether Dr. Cereno and Dr. Zafe are guilty of gross negligence
in the performance of their duties.

Ruling:

No, the petitioners are not guilty of gross negligence.The type of

lawsuit which has been called medical malpractice or medical
negligence, is that type of claim which the complainant must prove:
(1) that the health care provider, either by his act or omission, had
been negligent, and (2) that such act or omission proximately caused
the injury complained of. The best approach to prove these is through
the opinions of expert witnesses belonging in the same general line of
practice as defendant surgeon. The deference of courts to the expert
opinion of qualified physicians stems from the formers realization
that the latter possess unusual technical skills which laymen in most
instances are incapable of intelligently evaluating, hence, the
indispensability of expert testimonies.

In the case at bar, there were no expert witnesses presented to testify

norwas there any testimony offered, except that of Dr. Tatads, on
which it may be inferred that petitioners failed to exercise the
standard of care, diligence, learning and skill expected from
practitioners of their profession. Dr. Tatad is not an expert witness in
this case as her expertise is in the administration of anesthesia and
not in the determination of whether surgery ought or not ought to be
performed.

In medical negligence cases, it is established that the complainant has

the burden of establishing breach of duty on the part of the doctors or
surgeons. It must be proven that such breach of duty has a causal
connection to the death of the patient.Aside from their failure to prove
negligence on the part of the petitioners, they also failed to prove that
it was petitioners fault that caused the injury.

NOGALES vs. CAPITOL MEDICAL CENTER

G.R. No. 142625/December 19, 2006
511 SCRA 204

Facts:

Corazon Nogales (Corazon) was pregnant with her fourth child.

She was under the exclusive prenatal care of Dr. Oscar Estrada. On
 133

her last trimester of pregnancy, she had leg edema and an increase in
blood pressure. Her condition was a dangerous complication of
pregnancy. When she experienced mild labor pains, Dr. Estrada
advised her immediate admission to Capitol Medical Center (CMC).
Upon Corazon's admission at the CMC, Rogelio Nogales ("Rogelio")
executed and signed the "Consent on Admission and Agreement" and
"Admission Agreement." Corazon was then brought to the labor room
of the CMC. She had incidents of medical complication and was given
treatment by the doctors in CMC. Despite several measures
administered, Corazon died. The cause of death was hemorrhage, post
partum.

Petitioners filed a complaint for damages against CMC, Dr.

Estrada, and the rest of CMC medical staff for the death of Corazon.
In their defense, CMC pointed out that Dr. Estrada was a consultant to
be considered as an independent-contractor, and that no employer-
employee relationship existed between the former and the latter.

After more than 11 years of trial, the court rendered judgment

finding Dr. Estrada solely liable for damages. Petitioners appealed the
trial courts decision. Petitioners claimed that aside from Dr. Estrada,
the remaining respondents should be held equally liable for
negligence. Petitioners stressed that the subject matter of the petition
was the liability of CMC for the negligence of Dr. Estrada.

Issue:

Whether CMC is vicariously liable for the negligence of Dr.

Estrada.

Ruling:

Yes. In general, a hospital is not liable for the negligence of an

independent contractor-physician. There is, however an exception to
this principle. The hospital may be liable if the physician is the
ostensible agent of the hospital. This exception is also known as the
doctrine of apparent authority. For a hospital to be liable under the
doctrine of apparent authority, a plaintiff must show that 1.) the
hospital, or its agent, acted in a manner that would lead a reasonable
person to conclude that the individual who was alleged to be
negligent was an employee or agent of the hospital; 2.) Where the acts
of the agent create the appearance of authority, the plaintiff must also
prove that the hospital had knowledge of and acquired in them; and
3.) the plaintiff acted in reliance upon the conduct of the hospital or
its agent, consistent with ordinary care and prudence. In the instant
case, CMC impliedly held out Dr. Estrada as a member of its medical
staff. Through CMC's acts, CMC clothed Dr. Estrada with apparent
authority thereby leading the Spouses Nogales to believe that Dr.
Estrada was an employee or agent of CMC.
 134

PROFESSIONAL SERVICES INC. v. AGANA

G.R. No. 126297, 31 January 2007

Facts:

On April 1984, Natividad Agana was rushed to the Medical City

General Hospital (Medical City Hospital) because of difficulty of bowel
movement and bloody anal discharge. Dr. Miguel Ampil diagnosed her
to be suffering from "cancer of the sigmoid". The doctor performed
an anterior resection surgery on Natividad and found that the
malignancy in her sigmoid area had spread on her left ovary,
necessitating the removal of certain portions of it. Dr. Ampil obtained
the consent of Natividads husband, Enrique Agana, to permit Dr. Juan
Fuentes, to perform hysterectomy on her. Dr. Fuentes had completed
the hysterectomy and thenafter left after he presented to Dr. Ampil his
work being done. Dr. Ampil took over and completed the operation
and closed the incision. The attending nurses had "announced to Dr.
Ampil that two (2) "sponge count lacking but he continued the
closure. The attending nurses entered the incident in the Record of
Operations.

Natividad was released with a hospital bill amounted to

P60,000.00 inclusive of the doctors fee. A few days late, Natividad
complained of excruciating pain in her anal region and consulted both
Dr. Ampil and Dr. Fuentes. Both doctors told her that the pain was the
natural consequence of the surgery. Dr. Ampil then recommended that
she consult an oncologist to examine the cancerous nodes which were
not removed during the operation.

Natividad and her husband, went to the United States to seek

further treatment and was told she was free of cancer after four (4)
months. She was advised to return to the Philippines.

In August 31, 1984, Natividad flew back to the Philippines, still

suffering from pains. Two weeks thereafter, her daughter found a
piece of gauze protruding from her vagina. Dr. Ampil was
informed about it and he preceded to her house where he managed to
extract by hand a piece of gauze measuring 1.5 inches in width. He
then assured her that the pains would soon vanish. She suffered
intense pains hence prompted her admission to the Polymedic General
Hospital.

Dr. Ramon Gutierrez detected the presence of another foreign

object in her vagina -- a foul-smelling gauze measuring 1.5 inches
in width which badly infected her vaginal vault and forced the stool to
excrete through the vagina. In October 1984, Natividad underwent
another surgery to remedy the damage.

On Nov. 12, 1984, Natividad and her husband filed with the RTC,
Branch 96, Quezon City a complaint for damages against the
Professional Services, Inc. (PSI), owner of the Medical City Hospital,
Dr. Ampil, and Dr. Fuentes, docketed as Civil Case No. Q-43322. They
 135

alleged that the latter are liable for negligence for leaving two pieces
of gauze inside Natividads body and malpractice for concealing their
acts of negligence.

On February 16, 1986 Natividad died.

On March 1993, the RTC rendered its Decision in favor of the

Aganas, finding PSI, Dr. Ampil and Dr. Fuentes liable for negligence
and malpractice. The defendants PSI, Dr. Miguel Ampil and Dr. Juan
Fuentes to pay to the plaintiffs, jointly and severally for actual
damages (US $ 19,900 at the rate of P21.60-US$1.00, as
reimbursement of actual expenses incurred in the United States of
America); travel taxes; cost of hospitalization at Polymedic Hospital
(P45,802.50); ) moral damages (P2,000,000.00); attorneys fees
(P250,000.00); legal interest and the cost of suits. Dr. Ampil and Dr.
Fuentes are liable for exemplary damages and the interest thereon
(P300,000.00).

Aggrieved, PSI, Dr. Fuentes and Dr. Ampil interposed an appeal to

the Court of Appeals.

Issue:

Whether the CA erred in holding Dr. Ampil liable for negligence

and malpractice.

Ruling:

YES.The glaring truth is that all the major circumstances, taken

together, directly point to Dr. Ampil as the negligent party: (1) it is
not disputed that the surgeons used gauzes as sponges to control the
bleeding of the patient during the surgical operation. (2) immediately
after the operation, the nurses who assisted in the surgery noted in
their report that two sponge count was lacking; that such anomaly
was announced to surgeon and that a search was done but to no
avail prompting Dr. Ampil to continue for closure. (3) after the
operation, two gauzes were extracted from the same spot of the body
of Mrs. Agana where the surgery was performed.

Dr. Ampil did not inform Natividad about the missing two pieces of
gauze. Worse, he even misled her that the pain she was experiencing
was the ordinary consequence of her operation. Had he been more
candid, Natividad could have taken the immediate and appropriate
medical remedy to remove the gauzes from her body. What was
initially an act of negligence by Dr. Ampil has ripened into a deliberate
wrongful act of deceiving his patient.

This is a clear case of medical malpractice or more appropriately,

medical negligence. The elements are duty, breach, injury and
proximate causation. Dr, Ampil, as the lead surgeon, had the duty to
remove all foreign objects, such as gauzes, from Natividads body
before closure of the incision. When he failed to do so, it was his duty
to inform Natividad about it. Dr. Ampil breached both duties. Such
breach caused injury to Natividad, necessitating her further
examination by American doctors and another surgery. That Dr.
Ampils negligence is the proximate cause of Natividads injury could
 136

be traced from his act of closing the incision despite the information
given by the attending nurses that two pieces of gauze were still
missing. That they were later on extracted from Natividads vagina
established the causal link between Dr. Ampils negligence and the
injury. And what further aggravated such injury was his deliberate
concealment of the missing gauzes from the knowledge of Natividad
and her family.

PROFESSIONAL SERVICES INC. v. AGANA

G.R. No. 126467, 11 February 2008

Facts:

The case emanated on April 1984, when Natividad Agana was

hospitalized and operated by Dr. Ampil and Dr. Fuentes at the Medical
City General Hospital for her "cancer of the sigmoid". After the
operations, circumstances pointed out two (2) sponge count
lacking. Insurmountable cost of hospital bills were incurred and
intense pains still felt even when the two sponges were later
removed from the vagina of Natividad.

The Aganas filed a complaint for damages against PSI, Dr. Migule
Ampil and Dr. Fuentes at the RTC, Branch 96, Quezon City. The RTC
ruled in favor of the Aganas and ordered the defendants to pay jointly
and severally the plaintiff. The defendants interposed an appeal to
the Court of Appeal (CA). On April 1993, the Aganas filed with the
RTC a motion for a Partial Execution of its Decision. The Court
granted the motion. The sheriff levied upon certain properties of Dr.
Ampil and sold them for P451,275.00 and delivered the amount to the
Aganas.

Following their receipt of the money, the Aganas entered into an

agreement with PSI and Dr. Fuentes to indefinitely suspend any
further execution of the RTC Decision. However, not long thereafter,
 137

the Aganas again filed a motion for an alias writ of execution against
the properties of PSI and Dr. Fuentes.

On September 21, 1993, the RTC granted the motion and issued
the corresponding writ. Dr. Fuentes filed with the Court of Appeals a
petition for certiorari and prohibition, with prayer for preliminary
injunction, docketed as CA-G.R. SP No. 32198. On Oct. 29, 1993, the
CA issued a Resolution granting Dr. Fuentes prayer for injunctive
relief.

On September 6, 1996, the Court of Appeals rendered its Decision

jointly disposing of CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198.
The case against defendant-appellant Dr. Juan Fuentes was
DISMISSED.

The Aganas maintained that the Court of Appeals erred in finding

that Dr. Fuentes is not guilty of negligence or medical malpractice,
invoking the doctrine of res ipsa loquitur. They contend that the
pieces of gauze are prima facie proofs that the operating surgeons
have been negligent.

Issue:

Whether the CA erred in absolving Dr. Fuentes of any liability.

Ruling:

NO. Literally, res ipsa loquitur means "the thing speaks for
itself." The requisites for the applicability of the doctrine of res
ipsa loquitur are: (1) the occurrence of an injury; (2) the thing which
caused the injury was under the control and management of the
defendant; (3) the occurrence was such that in the ordinary course of
things, would not have happened if those who had control or
management used proper care; and (4) the absence of explanation by
the defendant.

The element of "control and management of the thing which

caused the injury" to be wanting. It was duly established that Dr.
Ampil was the lead surgeon during the operation of Natividad. He
requested the assistance of Dr. Fuentes only to perform hysterectomy
when he (Dr. Ampil) found that the malignancy in her sigmoid area
had spread to her left ovary. Dr. Fuentes performed the surgery and
thereafter reported and showed his work to Dr. Ampil. The latter
examined it and finding everything to be in order, allowed Dr. Fuentes
to leave the operating room. Dr. Ampil then resumed operating on
Natividad. He was about to finish the procedure when the attending
nurses informed him that two pieces of gauze were missing. A
"diligent search" was conducted, but the misplaced gauzes were not
found. Dr. Ampil then directed that the incision be closed. During this
entire period, Dr. Fuentes was no longer in the operating room and
had, in fact, left the hospital.

Under the "Captain of the Ship" rule, the operating surgeon is the
person in complete charge of the surgery room and all personnel
connected with the operation. Their duty is to obey his orders. Dr.
Ampil was the lead surgeon thus he was the "Captain of the Ship." It
 138

was this act of ordering the closure of the incision notwithstanding

that two pieces of gauze remained unaccounted for, that caused injury
to Natividads body. Clearly, the control and management of the thing
which caused the injury was in the hands of Dr. Ampil, not Dr.
Fuentes.

Res ipsa loquitur is not a rule of substantive law, hence, does not
per se create or constitute an independent or separate ground of
liability, being a mere evidentiary rule.c In other words, mere
invocation and application of the doctrine does not dispense with the
requirement of proof of negligence. Here, the negligence was proven
to have been committed by Dr. Ampil and not by Dr. Fuentes.

DR. RUBU LI vs. SPS. SOLIMAN

G.R. No. 165279/ June 7, 2011
651 SCRA 32

Facts:
 139

Angelica Soliman, the daughter of Sps. Soliman underwent a

biopsy of the mass located in her lower extremity at the St. Lukes
Medical Center (SLMC).Results showed that Angelica was suffering
from a highly malignant cancer of the bone. Angelicas right leg was
amputated in order to remove the tumor. To eliminate any remaining
cancer cells, chemotherapy was administered by herein petitioner Dr.
Rubi Li, a medical oncologist.

Angelica was admitted to SLMC. However, she died 11 days after

the administration of the first cycle of the chemotherapy regimen.
Respondents filed a damage suit against Dr. Li and other doctors and
against SLMC, charging them with negligence and disregard of
Angelicas safety, health and welfare by their careless administration
of the chemotherapy drugs, their failure to observe the essential
precautions in detecting early the symptoms of fatal blood platelet
decrease and stopping early on the chemotherapy, which bleeding led
to hypovolemic shock that caused Angelicas untimely demise.

Petitioner denied having been negligent in administering the

chemotherapy drugs to Angelica and asserted that she had fully
explained to respondents the effects of chemotherapy. On her
supposed non-disclosure of all possible side effects of chemotherapy,
including death, petitioner argues that it was foolhardy to imagine her
to be all-knowing. While the theoretical side effects of chemotherapy
were explained by her to the respondents, as these should be known
to a competent doctor, petitioner cannot possibly predict how a
particular patients body constitution would respond to the treatment.
These are obviously dependent on too many known, unknown and
immeasurable variables, thus requiring that Angelica be closely
monitored during the treatment. Petitioner asserts that she did
everything within her professional competence to attend to the
medical needs of Angelica.

Issue:

Whether the petitioner can be held liable for failure to fully

disclose serious side effects to the parents of the child patient who
died while undergoing chemotherapy, despite the absence of finding
that petitioner was negligent in administering the said treatment.

Ruling:

No. There are four essential elements a plaintiff must prove in a

malpractice action based upon the doctrine of informed consent: "(1)
the physician had a duty to disclose material risks; (2) he failed to
disclose or inadequately disclosed those risks; (3) as a direct and
proximate result of the failure to disclose, the patient consented to
treatment she otherwise would not have consented to; and (4) plaintiff
was injured by the proposed treatment." The gravamen in an informed
consent case requires the plaintiff to "point to significant undisclosed
information relating to the treatment which would have altered her
decision to undergo it.

In this case, there was adequate disclosure of material risks

inherent in the chemotherapy procedure performed with the consent
 140

of Angelicas parents. On the other hand, the suing parents failed to

establish the existence of the risks or side-effects Dr. Li should have
disclosed to them in the use of chemotherapy in the treatment of
osteosarcoma. The doctor presented as witness does not qualify as
expert testimony to establish the standard of care in obtaining
consent for chemotherapy treatment. In the absence of expert
testimony in this regard, the Court felt hesitant in defining the scope
of mandatory disclosure in cases of malpractice based on lack of
informed consent. Thus, the Court has no factual basis to declare that
the chemotherapy administered by the petitioner proximately caused
Angelicas death.
DR. EDUARDO AQUINO VS HEIRS OF RAYMUNDA CALAYAG
G.R. No. 158461

Facts
When his wife Raymunda wento into labor pains and began bleeding,
respondent Rodrigo Calayag brought her to St. Michaelss Clinic. After
initial examination, the doctor told Rodrigo that Raymunda had to have
caesarean section for her baby but this had to be done at the beteer-
equipped Sacred Heart Hospital (SHH), owned and operated by petitioner
Dr. Alberto Reyes (Dr. Reyes). SHH admitted on the same day. To prepare
her, the attending anesthesiologist, petitioner Dr. Eduardo Aquino injected
with a preliminary Hipnotic and he administered an anesthesia on her
spine. A few minutes later, Dr. Unite delivered a stillborn eight-month-old
baby. A few minutes later the operating team noticed that Raymunda had
become cyanotic and her blood darkened for lack of oxygen and suddenly
her vital signs gone. Fortunately, she was restored. It was found out that
suffered a cardiac arrest during the operation which explained her comatose
states and was advised to move her to a better-equipped hospital.
Raymunda was moved to Medical Center Manila where Dr. Libarnes, a
neurologist, found her in a vegetative state having suffered from an anoxic
injury due to cardio-respiratory arrest. Her condition worsen and she never
regained consciousness, prompting her MCM doctors to advise Rodrigo to
take her home since they could do no more to improve her condition. MCM
discharged her and she died 15 days later. Rodrigo filed, together with his
seven children, a complaint damages for Dr. Unite, Dr. Aquino and Dr. Reyes
claiming that Dr. Unite and Dr. Aquino failed to exercise the diligence
required for operating Raymunda while Dr. Reyes, as Rodrigo averred, was
negligent in supervising the work of the two doctors.

Issues
Whether or not Dr. Unite (the surgeon) and Dr. Aquino (the
anesthesiologist) acted negligently in handling Raymundas operation,
resulting in her death; and
Whether or not Dr. Reyes is liable, as hospital owner, for the
negligence of Dr. Unite and Dr. Aquino.

Rulings

Yes, Dr. Unite and Dr. Aquino are liable. The cause of action against
the doctors in these cases is commonly known as medical malpractice and to
successfully mount a medical malpractice action, the plaintiff should
establish four basic things: (1) duty; (2) breach; (3) injury; and (4) proximate
causation. The evidence should show that the physician or surgeon, either
failed to do something which a reasonably prudent physician or surgeon
would have done, or that he or she did something that a reasonably prudent
physician or surgeon would not have done; and that the failure or action
caused injury to the patient. To prove the doctors negligence, Rodrigo
presented Dr. Libarnes who explained that it was the lack of oxygen in the
brain that caused Raymundas vegetative state and it could be traced to the
 141

anesthetic accident that resulted when Dr. Aquino placed her under
anesthesia. Furthermore, Dr. Libarnes blamed the doctors who operated on
Raymunda for not properly keeping track of her vital sign during the
caesarean procedure resulting in their failure to promptly address the
cyanosis when it set in. The damage coud have been averted had the
attending doctors promptly detected the situation and resuscitated her on
time.

No, Dr. Reyes is not liable as a hospital owner. The doctrine of

apparent authority would not apply to make Dr. Reyes liable. Two factors
must be present under this doctrine: 1) the hospital acted in a manner which
would lead a reasonable person to believe that the person claimed to be
negligent was its agent or employee; and 2) the patient relied on such belief.
In this case, there is no evidence that the hospital acted in a way that made
Raymunda and her husband believe that the two doctors were in the
hospitals employ. There appears no concrete proof to show that Dr. Unite
and Dr. Aquino were under the hospitals payroll. Indeed, Dr. Aquino
appeared to be a government physician connected with the Integrated
Provincial Health Office of Bulacan while Dr. Unite appeared to be a self-
employed doctor. No evidence has been presented that Raymunda suffered
her fate because of defective hospital facilities or poor staff support to the
surgeons.

PETER PAUL PATRICK LUCAS VS DR. PROSPERO MA. C .

TUANO
G.R. NO. 178763

Facts:

Herein petitioner, Peter Lucas, first consulted respondent, Dr.

Tuao, on a complaint of soreness and redness on his right eye. The
respondent, after a series of examinations, found that the former was
suffering from conjunctivitis or sore eyes and prescribed the use of
the Spersacet-C. However, after the petitioners condition seemed to
have worsened, he sought for the respondents second finding
wherein the latter said that his condition had progressed to Epidemic
Kerato Conjunctivitis (EKC), a viral infection. The respondent then
prescribed the use of Maxitrol, a steroid-based eye drop. The
petitioners condition worsened overtime, yet he obediently complied
with all the prescriptions and orders of the respondent.

Four months later and after the petitioner suffered from

significant swelling of his right eyeball, headaches, nausea and
blindness on this right eye, he sought for the opinion of another
doctor, Dr. Aquino. Dr. Aquino found that the petitioner had been
suffering from glaucoma and needed to undergo laser surgery, lest he
might suffer from total blindness. After reading the literature on the
use of the medicine Maxitrol, Fatima, one of the petitioners herein
and Peter Lucas wife, read that one of the adverse effects of
prolonged use of steroid-based eye drops could possibly be
glaucoma. Claiming to have steroid-induced glaucoma and blaming
 142

Dr. Tuano for the same, Peter, Fatima, and their two children
instituted a civil case for damages against herein respondent for
medical malpractice.

Issue:

Whether or not Dr. Tuano failed to exercise due diligence in

the performance of his duty and may be held liable.

Ruling:

No, petitioers failed to prove by preponderance of evidence that

Dr. Tuano was negligent in his treatment of Peters condition. In
medical negligence cases, also called medical malpractice suits, there
exist a physician-patient relationship between the doctor and the
victim. But just like any other proceeding for damages, four essential
(4) elements i.e., (1) duty; (2) breach; (3) injury; and (4) proximate
causation, must be established by the plaintiff/s. All the four (4)
elements must co-exist in order to find the physician negligent and,
thus, liable for damages.

As the physician has the duty to use at least the same level of
care as that of any other reasonably competent physician would use in
the treatment of his patient, said standard level of care, skill and
diligence must likewise be proven by expert medical testimony,
because the standard of care in a medical malpractice case is a matter
peculiarly within the knowledge of experts in the field. The same is
outside the ken of the average layperson. There is breach of duty of
care, skill and diligence, or the improper performance of such duty, by
the attending physician when the patient is injured in body or in
health [and this] constitutes the actionable malpractice. Hence, proof
of breach of duty on the part of the attending physician is insufficient.
Rather, the negligence of the physician must be the proximate cause
of the injury.

FILCAR TRANSPORT SERVICES VS JOSE A. ESPINAS

G.R. NO. 174156

Facts:

On November 22, 1998, respondent Espinas was driving his car in

Manila when another car suddnenly and bumped his car. The other
car escaped from the scene of the incident, but Espinas was able to
get its plate number. After verifying with the LTO, Espinas learned
that the owner of the other car is Filcar. Espenias sent several letters
to Filcar and to its President and General Manager. On May 31, 2001,
Espinas filed a complaint for damages against Filcar and Carmen Flor
 143

before the Metropolitan Trial Court of Manila and demand that they
pay actual damages sustained by his car.

Filcar argued that while it is the registered owner of the car that
hit and bumped Espinas car, the car was assigned to its Corporate
Secretary and further stated that when the incident happened, the car
was being driven by Atty. Flors personal driver, Timoteo Floresca.
Filcar denied any liability to Espinas and claimed that the incident
was not due to its fault or negligence since Floresca was not its
employee but that of Atty. Flor. Filcar and Flor both said that they
always exercised the due diligence required of a good father of a
family in leasing and assigning their vehicles to third parties.

Issue:

Whether or not Filcar, a registered owner of the motor

vehicle, may be held liable for the damages caused to Espinas.

Ruling:

Yes. Filcar, as registered owner, is deemed the employer of the

driver Floresca, and is thus vicariously liable under Article 2176 in
relation with Article 2180 of the Civil Code which provides that an
action predicated on an employees act or omission may be instituted
against the employer who is held liable for the negligent act or
omission committed by his employee. It is well settled that in case of
motor vehicle mishaps, the registered owner of the motor vehicle is
considered as the employer of the tortfeasor-driver, and is made
primarily liable for the tort committed by the latter. In Equitable
Leasing Corp vs Suyom the registered owner of the motor vehicle is
the employer of the negligent driver and the actual employer is
considered merely as an agent of such owner.

Thus, it is clear that for the purpose of holding the registered

owner of the motor vehicle primarily and directly liable for damages
under Article 2176, in relation with Article 2180 of the Civil Code, the
existence of an employer- employee relationship is not required. It is
sufficient to establish that Filcar is the registered owner of the motor
vehicle causing damage in order that it may be held vicariously liable
under Article 2180 of the Civil Code. The main aim of motor vehicle
registration is to identify the owner so that if any accident happens, or
that any damage or injury is caused by the vehicle on the public
highways, responsibility therefor can be fixed on a definite individual,
the registered owner.
 144

PCIB v CA PHILIPPINE COMMERCIAL INTERNATIONAL BANK

(formerly INSULAR BANK OF ASIA AND AMERICA), petitioner,
vs. COURT OF APPEALS and FORD PHILIPPINES, INC. and
CITIBANK, N.A., respondents.
G.R. No. 121413. January 29, 2001

Facts:
Ford Philippines drew and issued Citibank Check. No. SN 04867
on October 19, 1977, Citibank Check No. SN 10597 on July 19, 1978
and Citibank Check No. SN-16508 on April 20, 1979, all in favor of the
Commissioner of Internal Revenue (CIR) for payment of its
percentage taxes. The checks were crossed and deposited with the
IBAA, now PCIB, BIR's authorized collecting bank. The first check was
cleared containing an indorsement that "all prior indorsements and/or
lack of indorsements guaranteed." The same, however, was replaced
with two (2) IBAA's managers' checks based on a call and letter
request made by Godofredo Rivera, Ford's General Ledger
Accountant, on an alleged error in the computation of the tax due
without IBAA verifying the authority of Rivera. These manager's
checks were later deposited in another bank and misappropriated by
the syndicate. The last two checks were cleared by the Citibank but
failed to discover that the clearing stamps do not bear any initials.
The proceeds of the checks were also illegally diverted or switched by
officers of PCIB members of the syndicate, who eventually
encashed them. Ford, which was compelled to pay anew the
percentage taxes, sued in two actions for collection against the two
banks on January 20, 1983, barely six years from the date the first
check was returned to the drawer. The direct perpetrators of the
crime are now fugitives from justice. The decision of the lower courts
are the following:

1st case:
(1) Trial Court: Citibank and IBAA were jointly and severally liable for
the checks (2) CA: only IBAA (PCIB) solely liable for the amount of the
first check
2nd case:
(1) Trial Court: absolved PCIB from liability and held that only the
Citibank is liable for the checks issued by Ford
(2) Court of Appeals: held both banks liable for negligence in the
selection and supervision of their employees resulting in the
erroneous encashment of the checks.

Issue:
1. Whether the petitioner Ford had the right to recover from the
collecting bank (PCIBank) and the drawee bank (Citibank) the value of
the checks intended as payment to the Commissioner of Internal
Revenue?

2. Whether Ford has cause of action already prescribed?

 145

Ruling:

A. Citibank Check No. SN-04867

FORD
Ford, is guilty of the "imputed contributory negligence" that would
defeat its claim for reimbursement, bearing in mind that its
employees, Godofredo Rivera and Alexis Marindo, were among the
members of the syndicate.
although the employees of Ford initiated the transactions attributable
to an organized syndicate, in our view, their actions were not the
proximate cause of encashing the checks payable to the CIR. The
degree of Ford's negligence, if any, could not be characterized as the
proximate cause of the injury to the parties.

IBAA/PCIB
As agent of the BIR (the payee of the check), defendant IBAA
should receive instructions only from its principal BIR and not from
any other person especially so when that person is not known to the
defendant. It is very imprudent on the part of the defendant IBAA to
just rely on the alleged telephone call of one (Godofredo Rivera and in
his signature to the authenticity of such signature considering that
the plaintiff is not a client of the defendant IBAA." The crossing of the
check with the phrase "Payee's Account Only," is a warning that the
check should be deposited only in the account of the CIR. Thus, it is
the duty of the collecting bank PCIBank to ascertain that the check be
deposited in payee's account only. Therefore, it is the collecting bank
(PCIBank) which is bound to scrutinize the check and to know its
depositors before it could make the clearing indorsement "all prior
indorsements and/or lack of indorsement guaranteed". PCIBank is
liable in the amount corresponding to the proceeds of Citibank Check
No. SN-04867.

Citibank
None
B. Citibank Check Numbers SN-10597 and 16508

PCIBank
Section 5 31 of Central Bank Circular No. 580, Series of 1977
provides that any theft affecting items in transit for clearing, shall be
for the account of sending bank, which in this case is PCIBank.

Citibank
Citibank is negligent in the performance of its duties. Citibank
failed to establish that its payment of Ford's checks were made in due
course and legally in order. In its defense, Citibank claims the
genuineness and due execution of said checks, considering that
Citibank (1) has no knowledge of any infirmity in the issuance of the
checks in question (2) coupled by the fact that said checks were
sufficiently funded and (3) the endorsement of the Payee or lack
 146

thereof was guaranteed by PCIBank (formerly IBAA), thus, it has the

obligation to honor and pay the same. As the drawee bank breached
its contractual obligation with Ford and such degree of culpability
contributed to the damage caused to the latter. It failed to perform
what was incumbent upon it, which is to ensure that the amount of
the checks should be paid only to its designated payee.

Invoking the doctrine of comparative negligence, we are of the

view that both PCIBank and Citibank failed in their respective
obligations and both were negligent in the selection and supervision
of their employees resulting in the encashment of Citibank Check Nos.
SN 10597 and 16508. Thus, we are constrained to hold them equally
liable for the loss of the proceeds of said checks issued by Ford in
favor of the CIR. Time and again, we have stressed that banking
business is so impressed with public interest where the trust and
confidence of the public in general is of paramount importance such
that the appropriate standard of diligence must be very high, if not
the highest, degree of diligence. A bank's liability as obligor is not
merely vicarious but primary, wherein the defense of exercise of due
diligence in the selection and supervision of its employees is of no
moment. Banks handle daily transactions involving millions of pesos.
By the very nature of their work the degree of responsibility, care and
trustworthiness expected of their employees and officials is far
greater than those of ordinary clerks and employees. Banks are
expected to exercise the highest degree of diligence in the selection
and supervision of their employees.
The relationship between a holder of a commercial paper and the
bank to which it is sent for collection is that of a principal and an
agent and the diversion of the amount of the check is justified only by
proof of authority from the drawer; that in crossed checks, the
collecting bank is bound to scrutinize the check and know its
depositors before clearing indorsement; that as a general rule, banks
are liable for wrongful or tortuous acts of its agents within the scope
and in the course of their employment; that failure of the drawee bank
to seasonably discover irregularity in the checks constitutes
negligence and renders the bank liable for loss of proceeds of the
checks; that an action upon a check prescribes in ten (10) years; and
that the contributory negligence of the drawer shall reduce the
damages he may recover against the collecting bank.

Since a master may be held for his servant's wrongful act, the law
imputes to the master the act of the servant, and if that act is
negligent or wrongful and proximately results in injury to a third
person, the negligence or wrongful conduct is the negligence or
wrongful conduct of the master, for which he is liable. The general
rule is that if the master is injured by the negligence of a third person
and by the concurring contributory negligence of his own servant or
 147

agent, the latter's negligence is imputed to his superior and will

defeat the superior's action against the third person, assuming, of
course that the contributory negligence was the proximate cause of
the injury of which complaint is made.

As a general rule, however, a banking corporation is liable for the

wrongful or tortuous acts and declarations of its officers or agents
within the course and scope of their employment. A bank will be held
liable for the negligence of its officers or agents when acting within
the course and scope of their employment. It may be liable for the
tortuous acts of its officers even as regards that species of tort of
which malice is an essential element. A bank holding out its officers
and agents as worthy of confidence will not be permitted to profit by
the frauds these officers or agents were enabled to perpetrate in the
apparent course of their employment; nor will it be permitted to shirk
its responsibility for such frauds, even though no benefit may accrue
to the bank therefrom. For the general rule is that a bank is liable for
the fraudulent acts or representations of an officer or agent acting
within the course and apparent scope of his employment or authority.
And if an officer or employee of a bank, in his official capacity,
receives money to satisfy an evidence of indebtedness lodged with his
bank for collection, the bank is liable for his misappropriation of such
sum.

CONTRIBUTORY NEGLIGENCE OF PLAINTIFF SHALL REDUCE

DAMAGES HE MAY RECOVER.

The court also find that Ford is not completely blameless in its
failure to detect the fraud. Failure on the part of the depositor to
examine its passbook, statements of account, and cancelled checks
and to give notice within a reasonable time (or as required by statute)
of any discrepancy which it may in the exercise of due care and
diligence find therein, serves to mitigate the banks' liability by
reducing the award of interest from twelve percent (12%) to six
percent (6%) per annum. As provided in Article 1172 of the Civil Code
of the Philippines, responsibility arising from negligence in the
performance of every kind of obligation is also demandable, but such
liability may be regulated by the courts, according to the
circumstances. In quasi-delicts, the contributory negligence of the
plaintiff shall reduce the damages that he may recover.

MANILA ELECTRIC COMPANY (MERALCO) vs.

ATTY. PABLITO M. CASTILLO, doing business under the trade
name and style of PERMANENT LIGHT MANUFACTURING
ENTERPRISES and GUIA S. CASTILLO,
G.R. No. 182976 January 14, 2013
 148

Facts:
Respondents Pablito M. Castillo and Guia S. Castillo are spouses
engaged a business under the name and style of Permanent Light
Manufacturing Enterprises (Permanent Light).
After conducting an inspection of Permanent Lights electric meter,
the petitioner Manila Electric Company (Meralco) concluded that the
meter was tampered with and electric supply to Permanent Light was
immediately disconnected, without notice to respondents, for one day.
However, respondents used generators soon after the power went out
to keep the operations of Permanent Light on track. Subsequently,
Meralco assured respondents in a letter that Permanent Lights meter
has been tested and was found to be in order. In the same letter,
petitioner informed respondents that said meter was replaced anew
after it sustained a crack during testing. However, respondents
requested for a replacement meter. According to them, the meters
installed by Meralco ran faster than the one it confiscated following
the disconnection. Subsequently, Meralco installed a new electric
meter at the premises of Permanent Light.

Issues:
1. Whether or not the respondents are entitled to claim damages
for petitioners act of disconnecting electricity to Permanent Light.

2. Whether or not the respondents are entitled to actual damages

for the supposed overbilling by petitioner Meralco of their electric
consumption from the time the new electric meter was installed.

Ruling:
First Issue:
In Quisumbing v. Manila Electric Company, the Court treated the
immediate disconnection of electricity without notice as a form of
deprivation of property without due process of law, which entitles the
subscriber aggrieved to moral damages. In addition to moral
damages, exemplary damages are imposed by way of example or
correction for the public good. In this case, to serve as an example -
that before disconnection of electric supply can be effected by a
public utility, the requisites of law must be complied with the Court
sustained the award of exemplary damages to respondents.

Second Issue:
Actual or compensatory damages cannot be presumed, but must
be duly proved with a reasonable degree of certainty. The award is
dependent upon competent proof of the damage suffered and the
actual amount thereof. The award must be based on the evidence
presented, not on the personal knowledge of the court; and certainly
not on flimsy, remote, speculative and unsubstantial proof.
Nonetheless, in the absence of competent proof on the amount of
actual damages suffered, a party is entitled to temperate damages.
Temperate or moderate damages, which are more than nominal but
less than compensatory damages, may be recovered when the court
finds that some pecuniary loss has been suffered but its amount
cannot, from the nature of the case, be proved with certainty. The
amount thereof is usually left to the discretion of the courts but the
same should be reasonable.
 149

In this case, the Court is convinced that respondents sustained

damages from the abnormal increase in Permanent Lights electric
bills after petitioner replaced the latters meter. However, respondents
failed to establish the exact amount thereof by competent evidence.
Thus, temperate damages is awarded.

Petition is DENIED. The decision of CA is affirmed

 150

UNIVERSAL AQUARIUS, INC. and CONCHITA TAN versus Q.C.

HUMAN RESOURCES MANAGEMENT CORPORATION
G.R. NO. 155990, September 12, 2007

Facts:

Universal Aquarius, Inc. (Universal) is engaged in the manufacture

and distribution of chemical products in Metro Manila.While Q.C.
Human Resources Management Corporation (Resources) is engaged
in supplying manpower to various establishments. It supplied
Universal with about seventy-four (74) temporary workers to assist
Universal in the operation of its chemical plant in Antipolo City. The
national president of the labor organization called Obrero Pilipino
(Universal Aquarius Chapter) sent a Notice of Strike to Universal.
Resources informed the Regional Office of the Department of Labor
and Employment that the officers and members of Obrero Pilipino are
its employees and not employees of Universal. Capocyon and 36 other
union officers and members of Obrero Pilipino, picketed, barricaded
and obstructed the entry and exit of Universal's Antipolo City
chemical plant and intercepted Universal's delivery trucks thereby
disrupting its business operations.Universal then filed a Complaint
against the strikers and Resources for breach of contract and
damages suffered due to the disruption of their respective business
operations. Universal forged an Agreement with Obrero Pilipino.
Thus, the strike which affected the business operations of Universal
and Marman ended. Universal and Tan then filed a Notice of Dismissal
as against the strikers Resources filed a Motion to Dismiss. But the
RTC denied the Motion to Dismiss. Latter then filed a Motion for
Reconsideration but it was still denied by the RTC.And later filed a
petition for certiorari and prohibition with the CA. The CA rendered a
Decision which set aside the Orders of the RTC and dismissed the
complaint for lack of cause of action.The petitioner filed a Motion for
Reconsideration but it was denied by the CA in its Resolution.

Issue:

Whether the Universal can claimed damages for breach of

contract?

Ruling:

Court is convinced that the Complaint sufficiently states a cause of

action against Resources. The Complaint alleged that Universal had a
contract of employment of temporary workers with Resources; and
that Resources violated said contract by supplying it with unfit,
maladjusted individuals who staged a strike and disrupted its business
operations. Given these hypothetically admitted facts, the RTC, in the
exercise of its original and exclusive jurisdiction, could have rendered
judgment over the dispute.
 151

Keppel Cebu Shipyard vs. Pioneer Insurance

601 SCRA 96; 681 SCRA 44

Facts:

WG & A JEBSENS SHIPMANAGEMENT, Owner/Operator of M/V

"SUPERFERRY 3" and KEPPEL CEBUSHIPYARD, INC. (KCSI) entered
into an agreement that the Dry docking and Repair of the above-
named vessel ordered by the Owners Authorized Representative shall be
carried out under the Keppel Cebu Shipyard Standard. Conditions of
Contract for Ship repair, guidelines and regulations on safety and
security issued by Keppel Cebu Shipyard. In the course of its repair, M/V "
Superferry 3"was gutted by fire claiming that the extent of the damage was
pervasive, WG&A declared the vessel damage as a "total constructive
loss" and, hence, filed an insurance claim with Pioneer. Pioneer paid
the insurance claim of WG&A, which in turn, executed a Loss and
Subrogation Receipt in favor of Pioneer. Pioneer tried to collect from
KCSI, but the latter denied any responsibility for the loss of
the subject vessel. As KCSI continuously refused to pay despite
repeated demands, Pioneer, filed a Request for Arbitration before the
Construction Industry Arbitration Commission CIAC seeking for
payment of U.S.$ 8,472,581.78 plus interest, among others. The CIAC
rendered its decision declaring both WG&A and KCSI guilty
of negligence, the CIAC ordered KCSI to pay Pioneer the amount of
P25,000,000.00, with interest at 6% per annum. Both Keppel and Pioneer
appealed to the CA. The cases were consolidated in the CA. the CA
rendered a decision dismissing petitioners claims in its entirety.
Keppel was declared as equally negligent.

Issue:

To whom may negligence over the fire that broke out on board
M/V "Superferry 3" be imputed?

Ruling:
 152

As to the issue of negligence, undeniably, the immediate cause of

the fire was the hot work done by Angelino Sevillejo on the
accommodation area of the vessel, specifically on Deck A. As
established before the CIAC. Pioneer contends that KCSI should be
held liable because Sevillejo was its employee who, at the time the fire
broke out, was doing his assigned task, and that KCSI was solely
responsible for all the hot works done on board the vessel. Court ruled
in favor of Pioneer. At the time of the fire, Sevillejo was an employee of KCSI
and was subject to the latters direct control and supervision. There was a
lapse in KCSIs supervision of Sevillejos work at the time the fire
broke out. KCSI failed to exercise the necessary degree of caution
and foresight called for by the circumstances.

SERRA VS MUMAR 668 SCRA 335

Facts:

At around 6:30 in the evening of 3 April 2000, there was a

vehicular accident along the National Highway in Barangay Apopong,
General Santos City, which resulted in the death of
Armando Mumar (Mumar), husband of
respondent Nelfa T. Mumar (respondent).

Based on the evidence presented before the Regional Trial

Court (RTC) of General Santos City, one Armando Tenerife (Tenerife)
was driving his Toyota Corolla sedan on the National Highway
heading in the direction of Polomolok, South Cotabato. Tenerife
noticed the van owned by petitioner Paulita Edith Serra (petitioner)
coming from the opposite direction, which was trying to overtake a
passenger jeep, and in the process encroached on his lane. The left
side of the sedan was hit by the van, causing the sedan to swerve to
the left and end up on the other side of the road. The van collided
head on with the motorcycle, which was about 12 meters behind the
sedan on the outer lane, causing injuries to Mumar, which eventually
led to his death.

On the other hand, petitioner denied that her van was

overtaking the jeepney at the time of the incident. She claimed that
 153

the left tire of Tenerifes sedan burst, causing it to sideswipe her van.
Consequently, the left front tire of the van also burst and the vans
driver, Marciano de Castro (de Castro), lost control of the vehicle. The
van swerved to the left towards Mumars motorcycle. The impact
resulted in the death of Mumar.

Subsequently, respondent filed a complaint against petitioner

for Damages by Reason of Reckless Imprudence resulting to Homicide
and Attachment before the General Santos City RTC. RTC ruled
against Serra finding her liable for damages by reason of
reckless imprudence, and she is hereby ordered to pay for damages.
CA denied the appeal and affirmed with modification the RTCs ruling.

Issue:

Whether or not both the lower court and the Court of Appeals
committed reversible error in holding Editha Serra as liable for
damages and in not appreciating that she was not negligent in the
selection and supervision of the driver of the van, Marciano de Castro

Ruling:

Under Article 2180 of the Civil Code, employers are liable for the
damages caused by their employees acting within the scope of their
assigned tasks. Whenever an employees negligence causes damage or
injury to another, there instantly arises a presumption that the
employer failed to exercise the due diligence of a good father of the
family in the selection or supervision of its employees. The liability of
the employer is direct or immediate. It is not conditioned upon prior
recourse against the negligent employee and a prior showing of
insolvency of such employee. Moreover, under Article 2184 of the Civil
Code, if the causative factor was the drivers negligence, the owner of
the vehicle who was present is likewise held liable if he could have
prevented the mishap by the exercise of due diligence.Petitioner failed
to show that she exercised the level of diligence required in
supervising her driver in order to prevent the accident. She admitted
that de Castro had only been her driver for one year and she had no
knowledge of his driving experience or record of previous accidents.
She also admitted that it was de Castro who maintained the vehicle
and would even remind her to pay the installment of the car.
Petitioner also admitted that, at the time of the accident, she did not
know what was happening and only knew they bumped into another
vehicle when the driver shouted. She then closed her eyes and a
moment later felt something heavy fall on the roof of the car. When
the vehicle stopped, petitioner left the scene purportedly to ask help
from her brother, leaving the other passengers to come to the aid of
her injured driver.
 154

PLEYTO VS LUMBOY 432 SCRA 329

Facts:

On May 16, 1995, Pleyto tried to overtake Esguerras tricycle

but hit it instead. Pleyto then swerved into the left opposite lane.
Coming down the lane, a car driven by Arnulfo Asuncion with his
passengers, Rhino, Ricardo Lomboy and her daughter Carmela
 155

Lomboy. The bus driven by Pleyto smashed head-on the car driven by
Asuncion, killing Arnulfo and Ricardo instantly. Carmela and Rhino
suffered injuries, but only Carmela required hospitalization. On
November 29, 1995, Maria and Carmela Lomboy filed an action for
damages against PRBL and its driver, Pleyto, with the RTC of Dagupan
City. The Lomboys prayed that they be indemnified for the untimely
death of Ricardo Lomboy, his lost earnings, the medical and
hospitalization expenses of Carmela, and moral damages. RTC
rendered in favor of the plaintiffs and against the defendants ordering
the defendants to pay solidarily Maria and Carmela. The RTC also
found Pleyto negligent and lacking in precaution. The CA affirmed the
decision of the trial court, with modification in award for actual
damages from P59,000.00 to P39,550.00 for funeral and religious
services and for medical expenses of Carmela Lomboy from
P52,000.00 to P27,000.00; and the award for loss of earning capacity
is accordingly corrected from P1,642,521.00 to P1,152,000.00
Issue:

Whether or not the CA erred in pegging the monthly living

expenses at 50% of gross earnings; and Whether or not documentary
evidence is indispensable to a claim for loss of earning capacity

Ruling:

In considering the earning capacity of the victim as an element of

damages, the net earnings, which is computed by deducting necessary
expenses from the gross earnings, and not the gross earnings, is to be
utilized in the computation. Note that in the present case, both the
Court of Appeals and the trial court used net earnings, not gross
earnings in computing loss of earning capacity. The amount of net
earnings was arrived at after deducting the necessary expenses
(pegged at 50% of gross income) from the gross annual income. This
computation is in accord with settled jurisprudence, including the
Villa Rey case. Petitioners claim that no substantial proof was
presented to prove Ricardo Lomboys gross income lacks merit.
Failure to present documentary evidence to support a claim for loss of
earning capacity of the deceased need not be fatal to its cause.
Testimonial evidence suffices to establish a basis for which the court
can make a fair and reasonable estimate of the loss of earning
capacity. Hence, the testimony of respondent Maria Lomboy, Ricardos
widow, that her husband was earning a monthly income of P8,000 is
sufficient to establish a basis for an estimate of damages for loss of
earning capacity .It is well-settled in jurisprudence that the factors
that should be taken into account in determining the compensable
amount of lost earnings are: (1) the number of years for which the
victim would otherwise have lived; and (2) the rate of loss sustained
by the heirs of the deceased. No reversible error may be attributed to
the court a quo in fixing the loss of earning capacity at said amount
.Court likewise sustain the reduction of the award of actual damages
from P59,550 for funeral and burial expenses of Ricardo and P52,000
for medical expenses of Carmela Lomboy to P39,550 and P27,000,
respectively, as only these latter amounts were duly supported by
 156

receipts. To justify an award of actual damages, there must be

competent proof of the actual amount of loss, credence can be given
only to claims which are duly supported by receipts.

However, while the award of P50,000 as moral damages to

Carmela Lomboy is sustained, the award for moral damages of
P500,000 to the heirs of Ricardo Lomboy should be reduced for being
excessive. Under Article 2206 of the Civil Code, the spouse, legitimate
children and illegitimate descendants and ascendants of the deceased
may demand moral damages for mental anguish by reason of the
death of the deceased. However, we must stress that moral damages,
though incapable of pecuniary estimation, are in the category of an
award designed to compensate the claimant for actual injury and are
not meant to enrich complainant at the expense of defendant. Moral
damages are awarded to enable the injured party to obtain means,
diversions or amusements that will serve to alleviate the moral
suffering he/she has undergone, by reason of the defendants culpable
action. Its award is aimed at restoration, as much as possible, of the
spiritual status quo ante; thus it must be proportionate to the
suffering inflicted. Under the circumstances of this case, an award of
P100,000 to the heirs of Ricardo Lomboy would be justified and in
keeping with the purpose of the law and jurisprudence in allowing
moral damages. The indemnification award of P50,000 is
also sustained.
 157

104
 158

Simon Q. Aonuevo, Jr. and Vicente N. Estrella, petitioners, vs.

The Honorable Court Of Appeals, Rodrigo B. Almazan, Giovanni
G. Gumalo, Office Of The Ombudsman & Customs
Commissioner Titus Villanueva, respondents
[G.R. No. 152998. September 23, 2003]

Facts:

Sgt. Rodrigo Almazan and Giovanni Gumalo, both of the Office

of the Resident Ombudsman for Manila International Airport
Authority-Ninoy Aquino International Airport/Duty Free Phils., Inc.
filed a complaint against Simon Aonuevo, Jr., Acting Examiner,
Vicente Estrella, Customs Operations Officer I, Nora Linda Cosme,
Customs Operations Officer V, and Ricardo Concha, Acting Principal
Customs Appraiser, all of the Bureau of Customs, NAIA, Pasay City for
violation of Section 7(d) of Republic Act No. 6713.

The respondents alleged that the petitioners while assigned at

the NAIA customs lanes numbers 9 and 10, received money handed
directly or inserted in the passport of arriving passengers of the
Northwest Airlines flight from Detroit, USA, and the Canadian Airlines
flight. They further alleged that Cosme and Concha received their
share of the money collected by the petitioners. The Resident
Ombudsman Team was able to record on video a segment of the
incident using the surveillance camera of the Emergency Operations
Center of the NAIA.

The Ombudsman placed the four officials under preventive

suspension for six (6) months without pay, [2] considering that the
evidence against them was strong.

Cosme pointed out that there was nothing in the video footage
which would implicate her for any act of solicitation or acceptance of
any money, whether directly or indirectly, while in the course of the
performance of her duties. In the same way, Concha asserted that it
was grossly malicious for the complainants to infer that, just because
 159

he was caught by the camera passing by the place where petitioners

were standing, he received money from them.

The Ombudsman held that respondents Aonuevo, Jr. and

Estrella were guilty as charged and Cosme as not guilty.

Petitioners then filed a special civil action for certiorari before

the Court of Appeals ascribing grave abuse of discretion to the
Ombudsman in rendering the assailed Decision. However, the Court of
Appeals dismissed the case for failure to comply with the
requirements of the Rules of Civil Procedure.

Issues:

WON the CA correctly dismissed the petition on mere technical

grounds.

Ruling:

When technicality deserts its function of being an aid to justice,

the courts are justified in exempting from its operations a particular
case. Procedural rules are intended to insure the orderly conduct of
litigation, because of the higher objective they seek, which is to
protect the parties substantive rights.

In the case at bar, although the petition filed before the Court of
Appeals was not accompanied by an affidavit of service, petitioners
were able to confirm that indeed copies of the petition were served on
the respondents as shown in the registry receipts attached opposite
their names. They attached the certified true copies of the Decision
and Order of the Ombudsman when they filed their Motion for
Reconsideration of the Resolution dismissing their petition.

However, petitioners availed of a wrong mode of appeal when

they filed a special civil action for certiorari under Rule 65 of the
Rules on Civil Procedure. Appeals from decisions of the Office of the
Ombudsman in administrative disciplinary cases should be taken to
the Court of Appeals under Rule 43 of the 1997 Rules of Civil
Procedure. Neither did the petitioners sufficiently establish the
existence of any fact or reason to justify its resort to the extraordinary
remedy of certiorari.

This notwithstanding, we now resolve the substantive issue.

This Court is not a trier of facts. Findings of fact by the Office of

the Ombudsman when supported by substantial evidence are
conclusive, as in the case at bar. Substantial evidence, which is more
than a mere scintilla but is such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion, suffices to
hold one administratively liable. The substantial evidence rule in
administrative proceedings merely requires such relevant evidence as
a reasonable mind might accept as adequate to support a conclusion.
 160

Clearly, therefore, petitioners are guilty of violation of Section

7(d) of Republic Act No. 6713, otherwise known as the Code of
Conduct and Ethical Standards for Public officials and Employees.

Alfredo Mallari, Sr. and Alfredo Mallari, Jr., petitioners vs.

Court of Appeals and Bulletin Publishing Corporation,
respondents
[G.R. No. 128607. January 31, 2000]

Facts:

At about 5:00 o'clock in the morning, the passenger jeepney

driven by petitioner Alfredo Mallari Jr. and owned by his co-petitioner
Alfredo Mallari Sr. collided with the delivery van of respondent
Bulletin Publishing Corp. (BULLETIN, for brevity) along the National
Highway in Barangay San Pablo, Dinalupihan, Bataan. Petitioner
Mallari Jr. testified that he went to the left lane of the highway and
overtook a Fiera which had stopped on the right lane. Before he
passed by the Fiera, he saw the van of respondent BULLETIN coming
from the opposite direction. It was driven by one Felix Angeles. The
sketch of the accident showed that the collision occurred after Mallari
Jr. overtook the Fiera while negotiating a curve in the highway. The
 161

points of collision were the left rear portion of the passenger jeepney
and the left front side of the delivery van of BULLETIN. The two (2)
right wheels of the delivery van were on the right shoulder of the road
and pieces of debris from the accident were found scattered along the
shoulder of the road up to a certain portion of the lane travelled by
the passenger jeepney. The impact caused the jeepney to turn around
and fall on its left side resulting in injuries to its passengers one of
whom was Israel Reyes who eventually died due to the gravity of his
injuries.

Claudia G. Reyes, the widow of Israel M. Reyes, filed a

complaint for damages with the Regional Trial Court of Olongapo City
against Alfredo Mallari Sr. and Alfredo Mallari Jr., and also against
BULLETIN, its driver Felix Angeles, and the N.V. Netherlands
Insurance Company. The complaint alleged that the collision which
resulted in the death of Israel Reyes was caused by the fault and
negligence of both drivers of the passenger jeepney and the Bulletin
Isuzu delivery van. The complaint also prayed that the defendants be
ordered jointly and severally to pay the plaintiff.

The trial court found that the proximate cause of the collision
was the negligence of Felix Angeles, driver of the Bulletin delivery
van, considering the fact that the left front portion of the delivery
truck driven by Felix Angeles hit and bumped the left rear portion of
the passenger jeepney driven by Alfredo Mallari Jr. Hence, the trial
court ordered BULLETIN and Felix Angeles to pay jointly and
severally Claudia G. Reyes, widow of the deceased victim.

On appeal the Court of Appeals modified the decision of the trial

court and found no negligence on the part of Angeles and
consequently of his employer, respondent BULLETIN. Instead, the
appellate court ruled that the collision was caused by the sole
negligence of petitioner Alfredo Mallari Jr. who admitted that
immediately before the collision and after he rounded a curve on the
highway, he overtook a Fiera which had stopped on his lane and that
he had seen the van driven by Angeles before overtaking the Fiera.
The Court of Appeals ordered petitioners Mallari Jr. and Mallari Sr. to
compensate Claudia G. Reyes.

Issue:

WON petitioners are correctly held jointly and severally liable to

Claudia G. Reyes.

Ruling:

The Court of Appeals correctly found, based on the sketch and

spots report of the police authorities which were not disputed by
petitioners, that the collision occurred immediately after petitioner
Mallari Jr. overtook a vehicle in front of it while traversing a curve on
the highway. This act of overtaking was in clear violation of Sec. 41,
 162

pars. (a) and (b), of RA 4136 as amended, otherwise known as The

Land Transportation and Traffic Code.

The rule is settled that a driver abandoning his proper lane for
the purpose of overtaking another vehicle in an ordinary situation has
the duty to see to it that the road is clear and not to proceed if he
cannot do so in safety. When a motor vehicle is approaching or
rounding a curve, there is special necessity for keeping to the right
side of the road and the driver does not have the right to drive on the
left hand side relying upon having time to turn to the right if a car
approaching from the opposite direction comes into view.

In the instant case, by his own admission, petitioner Mallari Jr.

already saw that the BULLETIN delivery van was coming from the
opposite direction and failing to consider the speed thereof since it
was still dark at 5:00 o'clock in the morning mindlessly occupied the
left lane and overtook two (2) vehicles in front of it at a curve in the
highway. Clearly, the proximate cause of the collision resulting in the
death of Israel Reyes, a passenger of the jeepney, was the sole
negligence of the driver of the passenger jeepney, petitioner Alfredo
Mallari Jr., who recklessly operated and drove his jeepney in a lane
where overtaking was not allowed by traffic rules. Under Art. 2185 of
the Civil Code, unless there is proof to the contrary, it is presumed
that a person driving a motor vehicle has been negligent if at the time
of the mishap he was violating a traffic regulation. As found by the
appellate court, petitioners failed to present satisfactory evidence to
overcome this legal presumption.

The negligence and recklessness of the driver of the passenger

jeepney is binding against petitioner Mallari Sr., who admittedly was
the owner of the passenger jeepney engaged as a common carrier,
considering the fact that in an action based on contract of carriage,
the court need not make an express finding of fault or negligence on
the part of the carrier in order to hold it responsible for the payment
of damages sought by the passenger. Under Art. 1755 of the Civil
Code, a common carrier is bound to carry the passengers safely as far
as human care and foresight can provide using the utmost diligence of
very cautious persons with due regard for all the circumstances.
 163

ALFREDO P. PACIS and CLEOPATRA D. PACIS vs. JEROME

JOVANNE MORALES,
[G.R. No. 169467. February 25, 2010]

Facts:
Petitioners filed with the trial court a civil case for damages against
respondent Morales. Petitioners are the parents of Alfred Pacis, a 17-year
old student who died in a shooting incident inside the Top Gun Firearms and
Ammunitions Store in Baguio City. Morales is the owner of the gun store.

On the fateful day, Alfred was in the gun store, with

Matibag and Herbolario as sales agents and caretakers of the
store while owner Morales was in Manila. The gun which killed
Alfred is a gun owned by a store customer which was left with
Morales for repairs, which he placed inside a drawer. Since
Morales would be going to Manila, he left the keys to the store
with the caretakers. It appears that the caretakers took the gun
from the drawer and placed it on top of a table. Attracted by the
sight of the gun, the young Alfred got hold of the same. Matibag
asked Alfred to return the gun. The latter followed and handed
the gun to Matibag. It went off, the bullet hitting the young Alfred
in the head.
A criminal case for homicide was filed against Matibag.
Matibag, however, was acquitted of the charge against him
because of the exempting circumstance of accident under Art.
12, par. 4 of the RPC.
By agreement of the parties, the evidence adduced in the
criminal case for homicide against Matibag was reproduced and
adopted by them as part of their evidence in the instant case.
The trial court rendered its decision in favor of petitioners,
ordering the defendant to pay plaintiffs indemnity for the death of
Alfred, actual damages for the hospitalization and burial,
expenses incurred by the plaintiffs, compensatory damages, and
moral damages. Respondent appealed to the CA, which reversed
the trial courts Decision and absolved respondent from civil
liability under Article 2180 of the Civil Code. Motion of
reconsideration is denied, hence this petition.

Issue:

Whether or not Morales is civilly liable?

Ruling:
 164

Yes. Morales is civilly liable. Clearly, Morales did not exercise

the degree of care and diligence required of a good father of a
family, much less the bullet which killed Alfred was fired from a
gun brought in by a customer of the gun store for repair.

This case for damages arouse out of the accidental shooting of

Alfred. Under Article 1161 of the Civil Code petitioners may
enforce their claim for damages based on the civil liability arising
from the crime under Article 100 of the RPC or they may opt to
file an independent civil action for damages under the Civil Code.

In this case, instead of enforcing their claim for damages in the

homicide case filed against Matibag, petitioners opted to file an
independent civil action for damages against respondent whom
they alleged was Matibags employer. Petitioners based their
claim for damages under Articles 2176 and 2180 of the Civil
Code.

He was clearly negligent when he accepted the gun for repair

and placed it inside the drawer without ensuring first that it was
not loaded. For failing to insure that the gun was not loaded,
Morales himself was negligent.
Under PNP Circular No. 9, entitled the Policy on Firearms
and Ammunition Dealership/Repair, a person who is in the
business of purchasing and selling of firearms and ammunition
must maintain basic security and safety requirements of a gun
dealer, otherwise his License to Operate Dealership will be
suspended or cancelled.

As a gun store owner, Morales is presumed to be

knowledgeable about firearms safety and should have known
never to keep a loaded weapon in his store to avoid unreasonable
risk of harm or injury to others. Morales has the duty to ensure
that all the guns in his store are not loaded. Firearms should be
stored unloaded and separate from ammunition when the
firearms are not needed for ready access defensive use.

In the first place, the defective gun should have been stored
in a vault. Before accepting the defective gun for repair, Morales
should have made sure that it was not loaded to prevent any
untoward accident. Indeed, Morales should never accept a
firearm from another person, until the cylinder or action is open
and he has personally checked that the weapon is completely
unloaded.
 165

Jose V. Lagon, petitioner vs. Honorable Court of Appeals

and Menandro V. Lapuz, respondents
[G.R. No. 119107. March 18, 2005]

Facts:

Petitioner Jose Lagon purchased from the estate of Bai Tonina

Sepi, through an intestate court, two parcels of land located at
Tacurong, Sultan Kudarat. A few months after the sale, private
respondent Menandro Lapuz filed a complaint for torts and damages
against petitioner before the Regional Trial Court (RTC) of Sultan
Kudarat.

In the complaint, private respondent, as then plaintiff, claimed

that he entered into a contract of lease with the late Bai Tonina Sepi
Mengelen Guiabar over three parcels of land in Sultan Kudarat,
Maguindanao beginning 1964. One of the provisions agreed upon was
for private respondent to put up commercial buildings which would, in
turn, be leased to new tenants. The rentals to be paid by those tenants
would answer for the rent private respondent was obligated to pay Bai
Tonina Sepi for the lease of the land. In 1974, the lease contract
ended but since the construction of the commercial buildings had yet
to be completed, the lease contract was allegedly renewed.

When Bai Tonina Sepi died, private respondent started remitting

his rent to the court-appointed administrator of her estate. But when
the administrator advised him to stop collecting rentals from the
tenants of the buildings he constructed, he discovered that petitioner,
 166

representing himself as the new owner of the property, had been

collecting rentals from the tenants. He thus filed a complaint against
the latter, accusing petitioner of inducing the heirs of Bai Tonina Sepi
to sell the property to him, thereby violating his leasehold rights over
it.

In his answer to the complaint, petitioner denied that he

induced the heirs of Bai Tonina to sell the property to him, contending
that the heirs were in dire need of money to pay off the obligations of
the deceased. He also denied interfering with private respondents
leasehold rights as there was no lease contract covering the property
when he purchased it; that his personal investigation and inquiry
revealed no claims or encumbrances on the subject lots.

Petitioner claimed that before he bought the property, he went to

Atty. Benjamin Fajardo, the lawyer who allegedly notarized the lease
contract between private respondent and Bai Tonina Sepi, to verify if
the parties indeed renewed the lease contract after it expired in 1974.
Petitioner averred that Atty. Fajardo showed him four copies of the
lease renewal but these were all unsigned. To refute the existence of a
lease contract, petitioner presented in court a certification from the
Office of the Clerk of Court confirming that no record of any lease
contract notarized by Atty. Fajardo had been entered into their files.
Petitioner added that he only learned of the alleged lease contract
when he was informed that private respondent was collecting rent from
the tenants of the building.

Finding the complaint for tortuous interference to be

unwarranted, petitioner filed his counterclaim and prayed for the
payment of actual and moral damages.

Accordingly, judgment is hereby rendered in favor of the

plaintiff.

The petitioner then filed a petition for review before the

Supreme Court.

Issue:

WON the purchase by petitioner of the subject property, during the

supposed existence of private respondents lease contract with the late
Bai Tonina Sepi, constituted tortuous interference for which petitioner
should be held liable for damages.

Ruling:

The Court, in the case of So Ping Bun vs. Court of Appeals , laid
down the elements of tortuous interference with contractual relations:
(a) existence of a valid contract; (b) knowledge on the part of the third
person of the existence of the contract and (c) interference of the
third person without legal justification or excuse.
 167

As regards the first element, the existence of a valid contract

must be duly established. To prove this, private respondent presented
in court a notarized copy of the purported lease renewal.While the
contract appeared as duly notarized, the notarization thereof,
however, only proved its due execution and delivery but not the
veracity of its contents. Nonetheless, after undergoing the rigid
scrutiny of petitioners counsel and after the trial court declared it to
be valid and subsisting, the notarized copy of the lease contract
presented in court appeared to be incontestable proof that private
respondent and the late Bai Tonina Sepi actually renewed their lease
contract. Settled is the rule that until overcome by clear, strong and
convincing evidence, a notarized document continues to be prima
facie evidence of the facts that gave rise to its execution and delivery.

The second element, on the other hand, requires that there be

knowledge on the part of the interferer that the contract exists.
Knowledge of the subsistence of the contract is an essential element
to state a cause of action for tortuous interference. A defendant in
such a case cannot be made liable for interfering with a contract he is
unaware of. While it is not necessary to prove actual knowledge, he
must nonetheless be aware of the facts which, if followed by a
reasonable inquiry, will lead to a complete disclosure of the
contractual relations and rights of the parties in the contract. In this
case, petitioner claims that he had no knowledge of the lease
contract. His sellers (the heirs of Bai Tonina Sepi) likewise allegedly
did not inform him of any existing lease contract.

After a careful perusal of the records, we find the contention of

petitioner meritorious. He conducted his own personal investigation
and inquiry, and unearthed no suspicious circumstance that would
have made a cautious man probe deeper and watch out for any
conflicting claim over the property. An examination of the entire
propertys title bore no indication of the leasehold interest of private
respondent. Even the registry of property had no record of the same.

In sum, we rule that, inasmuch as not all three elements to hold

petitioner liable for tortuous interference are present, petitioner
cannot be made to answer for private respondents losses. This case is
one of damnun absque injuria or damage without injury. Injury is the
legal invasion of a legal right while damage is the hurt, loss or harm
which results from the injury.
168
 169

PROFESSIONAL SERVICES INC. V. AGANA

G.R. No. 126297, 31 January 2007

FACTS:

As presented previously.

ISSUE: Whether or not PSI is liable for the negligence of Dr.

Ampil

RULING:

YES.
The hospital vicarious liability is anchored upon the theories of
respondeat superior, apparent authority, ostensible authority,
or agency by estoppel. The statute governing liability for negligent
acts is Article 2176 of the Civil Code, which reads: Art. 2176.
Whoever by act or omission causes damage to another, there being
 170

fault or negligence, is obliged to pay for the damage done. Such fault
or negligence, if there is no pre-existing contractual relation between
the parties, is called a quasi-delict and is governed by the provisions
of this Chapter.

A derivative of this provision is Article 2180, the rule governing

vicarious liability under the doctrine of respondeat superior, thus:
ART. 2180. The obligation imposed by Article 2176 is demandable not
only for ones own acts or omissions, but also for those of persons for
whom one is responsible.

Apparent authority, or what is sometimes referred to as the

"holding out" theory, or doctrine of ostensible agency or agency
by estoppel, imposes liability, not as the result of the reality of a
contractual relationship, but rather because of the actions of a
principal or an employer in somehow misleading the public into
believing that the relationship or the authority exists. The concept is
essentially one of an agency by implication or estoppel of Article
1869 of the Civil Code which reads: ART. 1869. Agency may be
express, or implied from the acts of the principal, from his silence or
lack of action, or his failure to repudiate the agency, knowing that
another person is acting on his behalf without authority.

By accrediting Dr. Ampil and Dr. Fuentes and publicly advertising

their qualifications in the hospital directory, the hospital created the
impression that they were its agents, authorized to perform medical
or surgical services for its patients. As expected, these patients,
Natividad being one of them, accepted the services on the reasonable
belief that such were being rendered by the hospital or its employees,
agents, or servants.

PSI has the duty to exercise reasonable care to protect from harm all
patients admitted into its facility for medical treatment. It is liable for
the negligent acts of health practitioners, absent facts to support
tfyhe application of respondeat superior or apparent authority

PSI is directly liable for such breach of duty doctrine of corporate

negligence or corporate responsibility. Not only did PSI breach
its duties to oversee or supervise all persons who practice medicine
within its walls, it also failed to take an active step in fixing the
negligence committed. This renders PSI, not only vicariously liable
for the negligence of Dr. Ampil under Article 2180 of the Civil
Code, but also directly liable for its own negligence under
Article 2176.

The Court CONFIRMED the rulings of the Court of Appeals that a

hospital has the duty of supervising the competence of the
doctors on its staff. No reason to exempt hospitals from the
universal rule of respondeat superior.
 171

PROFESSIONAL SERVICES INC. v. AGANA

G.R. No. 127590, February 2, 2010

FACTS:

Previous facts presented.

PSI was impleaded by Enrique Agana and Natividad Agana (later
substituted by her heirs), in a complaint for damages as owner,
operator and manager of the hospital. On petition for review, this
Court, in its January 31, 2007 decision, affirmed the CA decision. PSI
filed a motion for reconsideration but the Court denied it in a
resolution dated February 11, 2008.

The PSI filed a second motion for reconsideration urging referral

thereof to the Court en banc and seeking modification of the decision
dated January 31, 2007 and resolution dated February 11, 2008 which
affirmed its vicarious and direct liability for damages to respondents
Enrique Agana and the heirs of Natividad Agana (Aganas).

ISSUE: Whether or not PSI may be held liable for the negligence
of physicians-
consultants allowed to practice in its premises

RULING:

YES.
The Court holds that PSI is liable to the Aganas, not under the
principle of respondeat superior for lack of evidence of an
employment relationship with Dr. Ampil but under the principle
of ostensible agency for the negligence of Dr. Ampil and, pro
hac vice, under the principle of corporate negligence for its failure to
perform its duties as a hospital.

To determine the existence of an employer-employee relationship

between hospital and doctor, the Court employs the "control test".
PSI exercised control over respondents based on the undisputed fact
that in the emergency room, the operating room, or any department
or ward for that matter, respondents' work is monitored through its
nursing supervisors, charge nurses and orderlies. Without the
approval or consent of PSI or its medical director, no operations can
be undertaken in those areas. For control test to apply, it is not
essential for the employer to actually supervise the performance of
duties of the employee, it being enough that it has the right to wield
the power. Thus PSI is vicariously liable under Article 2176 in relation
to Article 1431 and Article 1869 of the Civil Code or the principle of
apparent authority.

PSI is vicariously liable for the negligence of Dr. Ampil as its

ostensible agent. It assumed a duty to "tread on" the "captain of the
ship" role of any doctor rendering services within its premises for
purpose of ensuring the safety of the patients availing themselves of
its services and facilities. Thus, PSI could not simply wave off the
problem and nonchalantly delegate to Dr. Ampil the duty to review
what transpired during the operation.
 172

The wretchedness in this case could have been avoided had PSI
simply done what was logical: heed the report of a guaze count
discrepancy, initiate a review of what went wrong and take corrective
measures to ensure the safety of Nativad. PSI committed corporate
negligence by its inaction. As hospital corporation, it gave rise to a
direct liability to the Aganas distinct from that of Dr. Ampil.

PSIs hospital liability based on ostensible agency and corporate

negligence applies only to this case, pro hac vice (for or on this
occasion only) liable for every form of negligence of their doctors-
consultants under any and all circumstances.

The Court DENIED the motion of reconsideration. It ORDERED pro

hac vice to pay Natividad s heirs the total amount of P15 million,
subject to 12% p.a. interest from the finality of this resolution to full
satisfaction. No further pleadings by any party shall be entertained in
this case.
 173

MAMARIL VS. BOYS SCOUTS OF THE PHILIPPINES (BSP), et. Al.

688 SCRA 437

 174

Facts:

PUJ operators Sps. Mamaril would park their 6 passenger jeepneys

every night at BSPs compound in Malate, Manila for a fee of P300.00 per
month for each unit. One day, one of the vehicles was missing and was never
recovered. According to the security guards Pea and Gaddi of AIB Security
Agency with whom BSP had contracted for its security and protection, a
male person who looked familiar to them took the subject vehicle out of the
compound. Sps. Mamaril prayed that Pea and Gaddi, together with AIB and
BSP, be held liable for: (a) the value of the subject vehicle; (b) amount
representing daily loss of income/boundary reckoned from the day the
vehicle was lost; (c) exemplary damages; (d) moral damages; (e) attorney's
fees; and (f) cost of suit.

BSP denied any liability contending that not only did Sps. Mamaril
directly deal with AIB with respect to the manner by which the parked
vehicles would be handled, but the parking ticket itself expressly stated that
the "Management shall not be responsible for loss of vehicle or any of its
accessories or article left therein." It also claimed that Sps. Mamaril
erroneously relied on the Guard Service Contract. Apart from not being
parties thereto, its provisions cover only the protection of BSP's properties,
its officers, and employees.

Issue:

Whether BSP should be held liable for the loss of their vehicle based
on the Guard Service Contract and the parking ticket it issued.

Ruling:

No. The petition is without merit. In this case, it is undisputed that the
proximate cause of the loss of Sps. Mamarils vehicle was the negligent act
of security guards Pea and Gaddi in allowing an unidentified person to
drive out the subject vehicle. Proximate cause has been defined as that
cause, which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury or loss, and without which the result
would not have occurred. Moreover, Pea and Gaddi failed to refute Sps.
Mamarils contention that they readily admitted being at fault during the
investigation that ensued. On the other hand, the records are bereft of any
finding of negligence on the part of BSP. Hence, no reversible error was
committed by the CA in absolving it from any liability for the loss of the
subject vehicle based on fault or negligence.

Neither will the vicarious liability of an employer under Article 2180

of the Civil Code apply in this case. It is uncontested that Pea and Gaddi
were assigned as security guards by AIB to BSP pursuant to the Guard
Service Contract. Clearly, therefore, no employer-employee relationship
existed between BSP and the security guards assigned in its premises.
Consequently, the latters negligence cannot be imputed against BSP but
should be attributed to AIB, the true employer of Pea and Gaddi.

In the case of Soliman, Jr. v. Tuazon, the Court enunciated thus:

 175

It is settled that where the security agency, as here, recruits,

hires and assigns the work of its watchmen or security guards,
the agency is the employer of such guards and watchmen.
Liability for illegal or harmful acts committed by the security
guards attaches to the employer agency, and not to the clients
or customers of such agency. As a general rule, a client or
customer of a security agency has no hand in selecting who
among the pool of security guards or watchmen employed by
the agency shall be assigned to it; the duty to observe the
diligence of a good father of a family in the selection of the
guards cannot, in the ordinary course of events, be demanded
from the client whose premises or property are protected by
the security guards. The fact that a client company may give
instructions or directions to the security guards assigned to it,
does not, by itself, render the client responsible as an employer
of the security guards concerned and liable for their wrongful
acts or omissions. Those instructions or directions are
ordinarily no more than requests commonly envisaged in the
contract for services entered into with the security agency.