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#102 JOAQUINITA P. CAPILI v. SPS. DOMINADOR CARDAÑA and ROSALITA CARDAÑA

(Karl)

Facts:
Jasmin Cardaña (Jasmin), 12 years old and was then in grade 6, was walking along the perimeter
fence of the San Roque Elementary School when a branch of a caimito tree located within the
school premises fell on her, causing her instantaneous death. Thus, her parents – Dominador
and Rosalita Cardaña (Cardañas) – filed a case for damages before the RTC-Leyte against
petitioner, who was the principal of the San Roque Elementary School. The Cardañas alleged in
their complaint that even as early as 1992, a resident of the barangay, Eufronio Lerios, reported
on the possible danger the tree posed to passersby. The Cardañas averred that petitioner’s gross
negligence and lack of foresight caused the death of their daughter. Petitioner denied the
accusation and said that at that time Lerios had only offered to buy the tree. She also denied
knowing that the tree was dead and rotting. To prove her point, she presented witnesses who
attested that she had brought up the offer of Lerios to the other teachers and assigned Remedios
Palaña to negotiate the sale. The RTC dismissed the complaint for failure of the Cardañas to
establish negligence on the part of the petitioner. The CA reversed the RTC ruling, holding that
petitioner was liable for negligence resulting to the death of Jasmin. Accordingly, petitioner was
ordered to pay the Cardañas some P125k for the life of Jasmin (50k), for burial expenses (15k),
moral damages (50k), and for attorney’s fees and litigation expenses (10k). MR was denied.
Petitioner went to the SC.

Petitioner asserts that she was not negligent about the disposal of the tree since she had
assigned her next-in-rank, Palaña, to see to its disposal; that despite her physical inspection of
the school grounds, she did not observe any indication that the tree was already rotten nor did
any of her 15 teachers inform her that the tree was already rotten; and that moral damages
should not be granted against her since there was no fraud nor bad faith on her part.
Respondents insist that petitioner knew that the tree was dead and rotting; yet, she did not
exercise reasonable care and caution which an ordinary prudent person would have done in the
same situation.

Issues:
WON the petitioner is negligent and liable for the death of Jasmin.

Ruling:
Yes, she is. A negligent act is an inadvertent act; it may be merely carelessly done from a
lack of ordinary prudence and may be one which creates a situation involving an
unreasonable risk to another because of the expectable action of the other, a third person,
an animal, or a force of nature. A negligent act is one from which an ordinary prudent
person in the actor’s position, in the same or similar circumstances, would foresee such
an appreciable risk of harm to others as to cause him not to do the act or to do it in a more
careful manner. The probability that the branches of a dead and rotting tree could fall and harm
someone is clearly a danger that is foreseeable. As the school principal, petitioner was tasked
to see to the maintenance of the school grounds and safety of the children within the school and
its premises. That she was unaware of the rotten state of a tree whose falling branch had caused
the death of a child speaks ill of her discharge of the responsibility of her position.

In every tort case filed under Article 2176 of the CC, the plaintiff has to prove by a
preponderance of evidence: (1) the damages suffered by him; (2) the fault or negligence of
the defendant or some other person for whose act he must respond; and (3) the
connection of cause and effect between the fault or negligence and the damages incurred.
The fact, however, that respondents’ daughter, Jasmin, died as a result of the dead and rotting
tree within the school’s premises shows that the tree was indeed an obvious danger to anyone
passing by and calls for application of the principle of res ipsa loquitur. The doctrine of res
ipsa loquitur applies where (1) the accident was of such character as to warrant an inference

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that it would not have happened except for the defendant’s negligence; (2) the accident
must have been caused by an agency or instrumentality within the exclusive management
or control of the person charged with the negligence complained of; and (3) the accident
must not have been due to any voluntary action or contribution on the part of the person
injured.

The effect of the doctrine of res ipsa loquitur is to warrant a presumption or inference that the
mere falling of the branch of the dead and rotting tree which caused the death of
respondents’ daughter was a result of petitioner’s negligence, being in charge of the
school. Thus, prima facie negligence may be established without direct proof (as this is also a
substitute for specific proof of negligence). While negligence is not ordinarily inferred or
presumed, and while the mere happening of an accident or injury will not generally give rise to an
inference or presumption that it was due to negligence on defendant’s part, under the doctrine of
res ipsa loquitur, which means that “the thing or transaction speaks for itself”, the facts or
circumstances accompanying an injury may be such as to raise a presumption, or at least permit
an inference of negligence on the part of the defendant, or some other person who is charged
with negligence. Where it is shown that the thing or instrumentality which caused the injury
complained of was under the control or management of the defendant, and that the occurrence
resulting in the injury was such as in the ordinary course of things would not happen if those who
had its control or management used proper care, there is sufficient evidence, or, as sometimes
stated, reasonable evidence, in the absence of explanation by the defendant, that the injury arose
from or was caused by the defendant’s want of care. The procedural effect of the doctrine of
res ipsa loquitur is that petitioner’s negligence is presumed once respondents established
the requisites for the doctrine to apply. Once a prima facie case of all requisites is made out,
the burden shifts to petitioner to explain. The presumption or inference may be rebutted or
overcome by other evidence and, under appropriate circumstances a disputable presumption,
such as that of due care or innocence, may outweigh the inference.

In view of this, was petitioner’s explanation as to why she failed to have the tree removed
immediately sufficient to exculpate her? As school principal, she was tasked to see to the
maintenance of the school grounds and safety of the children within the school and its premises.
That she was unaware of the rotten state of the tree calls for an explanation on her part as to why
she failed to be vigilant. Petitioner contends she was unaware of the state of the dead and rotting
tree because Lerios merely offered to buy the tree and did not inform her of its condition, and
neither did any of her teachers her of such imminent danger. She argues that she could not see
the immediate danger posed by the tree by its mere sighting even as she and the other teachers
conducted ground inspections. Further, even if she should have been aware of the danger, she
exercised her duty by assigning the disposition of the tree to another teacher.

As school principal, petitioner is expected to oversee the safety of the school’s premises. The
fact that she failed to see the immediate danger posed by the dead and rotting tree shows she
failed to exercise the responsibility demanded by her position. Moreover, even if petitioner had
assigned disposal of the tree to another teacher, she exercises supervision over her assignee.
The record shows that more than a month had lapsed from the time petitioner gave instruction to
her assistant Palaña to the time the incident. Clearly, she failed to check seasonably if the
danger posed by the rotting tree had been removed. Thus, her defense of lack of negligence
is unacceptable. However, petitioner is correct in saying that no moral damages is due because
she was not motivated by bad faith or ill motive. Moral damages can be given if the following
exist: (1) an injury clearly sustained by the claimant; (2) a culpable act or omission factually
established; (3) a wrongful act or omission by the defendant as the proximate cause of the
injury sustained by the claimant; and (4) the award of damages predicated on any of the
cases stated in Article 2219 of the Civil Code. Moreover, a person claiming moral damages must
prove the existence of bad faith by clear and convincing evidence for the law always presumes
good faith. Without bad faith or ill motive, moral damages cannot be awarded.

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WHEREFORE, the petition is DENIED. The Decision dated October 18, 2002 and the Resolution
dated March 20, 2003, of the Court of Appeals in CA-G.R. CV. No. 54412 are AFFIRMED with
MODIFICATION such that the award of moral damages is hereby deleted.
Costs against petitioner.
SO ORDERED.

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# 103 Philippine National Railways v. Brunty (2006)

(Liz)
Topic: Negligence
Facts: Rhonda Brunty, daughter of respondent Ethel Brunty and an American citizen, came to
the Philippines for a visit sometime. Prior to her departure, she, together with her Filipino host
Juan Manuel M. Garcia, traveled to Baguio City on board a Benz sedan driven by Rodolfo L.
Mercelita. As Rhonda Brunty, Garcia and Mercelita were already approaching the railroad
crossing Tarlac, Mercelita, driving the car at 70 km/hr, drove past a vehicle, unaware of the
railroad track up ahead and that they were about to collide with PNR Train. Mercelita was
instantly killed when the car smashed into the train; the two other passengers suffered serious
physical injuries. A certain James Harrow brought Rhonda Brunty to the Central Luzon Doctor’s
Hospital in Tarlac, where she was pronounced dead after 10 minutes from arrival. Garcia, who
had suffered severe head injuries, was brought via ambulance to the same hospital. He was
transferred to the Manila Doctor’s Hospital, and later to the Makati Medical Center for further
treatment.

On July 1981, Ethel Brunty sent a demand letter to the PNR demanding payment of actual,
compensatory, and moral damages, as a result of her daughter’s death. When PNR did not
respond, Ethel Brunty and Garcia, filed a complaint for damages against the PNR before the RTC
of Manila. Brunty pointed out that there was no flagbar or red light signal to warn motorists who
were about to cross the railroad track, and that the flagman or switchman was only equipped with
a hand flashlight. Plaintiffs likewise averred that PNR failed to supervise its employees in the
performance of their respective tasks and duties, more particularly the pilot and operator of the
train.
Issue/s: (1)Whether or not PNR was negligent (2) Whether or not Mercelita was guilty of
contributory negligence (3) Whether or not the doctrine of last clear chance is likewise in question
Held: (1) Yes, PNR is negligent. Both RTC and CA found PNR negligent because of its failure to
provide the necessary safety device to ensure the safety of motorists in crossing the railroad
track. As such, it is liable for damages for violating the provisions of Article 2176 of NCC 1 .
In order to sustain a claim based on quasi-delict, the following requisites must concur: (1)
damage to plaintiff; (2) negligence, by act or omission, of which defendant, or some person for
whose acts he must respond was guilty; and (3) connection of cause and effect between such
negligence and damage. All these concur in the case at bar. PNR’s negligence was beyond cavil
as CA held that a vehicle coming from the Moncada side would have difficulty in knowing that
there is an approaching train because of the slight curve, more so, at an unholy hour as 2:00
a.m. Thus, it is imperative on the part of the PNR to provide adequate safety equipment in the
area.

(2) Yes, Mercelitas is liable for contributory negligence (CN). CN 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 conform for his own protection. To hold a person as having
contributed to his injuries, it must be shown that he performed an act that brought about his
injuries in disregard of warning or signs of an impending danger to health and body. To prove
contributory negligence, it is still necessary to establish a causal link, although not proximate,
between the negligence of the party and the succeeding injury. In a legal sense, negligence is
contributory only when it contributes proximately to the injury, and not simply a condition for its
occurrence.

11Article 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.
 

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The court below found that there was a slight curve before approaching the tracks; the place was
not properly illuminated; one’s view was blocked by a cockpit arena; and Mercelita was not
familiar with the road. Yet, it was also established that Mercelita was then driving the Mercedes
Benz at a speed of 70 km/hr and, in fact, had overtaken a vehicle a few yards before reaching the
railroad track. Mercelita should not have driven the car the way he did. However, while his acts
contributed to the collision, they nevertheless do not negate petitioner’s liability. Pursuant to
Article 2179 of the New Civil Code, the only effect such contributory negligence could have is to
mitigate liability, which, however, is not applicable in this case, as will be discussed later.

(3) No, doctrine of last clear chance is inapplicable.The doctrine states that where both parties
are negligent but the negligent act of one is appreciably later than that of the other, or where it is
impossible to determine whose fault or negligence caused the loss, the one who had the last
clear opportunity to avoid the loss but failed to do so, is chargeable with the loss. Stated
differently, the antecedent negligence of plaintiff does not preclude him from recovering damages
caused by the supervening negligence of defendant, who had the last fair chance to prevent the
impending harm by the exercise of due diligence. The proximate cause of the injury having been
established to be the negligence of petitioner, the doctrine finds no application in the instant case.

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#104 Philippine National Construction Corporation vs. CA

(Lyle)

Topic: Contributory Negigence

Facts:

Pampanga Sugar Development Company, Inc. (PASUDECO) transports sugarcane from

Mabalacat and Magalang, Pampanga. When Mt. Pinatubo erupted in 1991, national bridges that
were used by PASUDECO were heavily damaged. This prompted the company to enter into a
MOA with the Toll Regulatory Board (TRB), and which was subsequently approved by the
Philippine National Construction Corporation (PNCC), as operators of the NLEX and SLEX, for its
use of the North Luzon Expressway as a route for the transport of its sugarcane.

In the MOA it was stated that the PASUDECO trucks should move in convoy in the NLEX and
should always stay in the right lane. Further they should have blinking lights and a convoy sign.
The MOA further stated that tollway measures were to be observed and that full responsibility for
stalled trucks were to be with PASUDECO.

On January 1999, security personnel of PNCC saw sugarcane scattered in the middle of the
NLEX. They placed lit cans including lane dividers to warn motorists. Thereafter, they proceeded
to the PASUDECO office and requested the company personnel to clear the NLEX odf such
obstruction. PASUDECO sent 5 men to clear the pile of sugarcane. They placed them in the
side of the road but left flattened sugarcane on the road. The PNCC personnel thereafter
removed the warning devices.

The following morning, Arnaiz and company were traversing the NLEX when their Toyota Corolla
turned turtle when it hit scattered sugarcane. Arnaiz etal filed a complaint for damages against
PASUDECO and PNCC. They alleged that PNCC failed to maintain the safety of the NLEX for
motorists and that PASUDECO negligently spilled sugarcane in the NLEX.

PNCC answered saying the mishap was due to the unreasonable speed at which Arnaiz’s car
was traversing the highway. It claimed that the proximate cause for the accident was the
negligence of PASUDECO and then Arnaiz was guilty of contributory negligence. PASUDECO
on the other hand claimed that it was not only their company who could traverse the NLEX.

The RTC ordered PASUDECO to pay damages. It dismissed the case against PNCC and the
counterclaim against Arnaiz. CA affirmed the RTC decision but modified it ordering PNCC to
jointly and severally pay damages with PASUDECO.

Issue:

W/N PNCC should be held liable for damages

Held:

YES. PNCC is a grantee of a franchise giving it the right, privilege and authority to construct,
operate and maintain toll facilities covering the NLEX. Concomitant with this right is the right to
keep the same safe for motorists.

The elements of quasi-delict are the following: a) damages suffered by the plaintiff; b) fault or
negligence of the defendant, or some other person for whose acts he must respond; and c) the
connection of cause and effect between the fault or negligence of the defendant and the
damages incurred by the plaintiff. Jurisprudence provides that the test for negligence is this:
could a prudent man, in the position of the person to whom negligence is attributed, foresee
harm to the person injured as a reasonable consequence of the course actually pursued?

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In this case, it is clear that PNCC failed to exercise the requisite diligence in maintaining the
NLEX safe for motorists. PNCC removed the warning devices despite the presence of flattened
sugarcane on the road. PNCC cannot escape liability based on the MOA because the MOA
refers to accidents and damages to the toll facilities and not to injuries and accidents to motorists.
PASUDECO’s negligence in transporting the sugarcanes without proper straps, and the PNCC’s
in removing the warning devices, were two successive negligent acts which were the direct and
proximate cause of the injuries to Arnaiz etal.

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#105 VICTORY LINER, INC. vs. GAMMAD

(Majê)

Facts:

Respondent Gammad and wife was on board an air-conditioned Victory Liner bus bound for
Tuguegarao, Cagayan from Manila. At about 3 am, the bus while running at a high speed fell on
a ravine somewhere in Nueva Vizcaya, and resulted in the death of wife and physical injuries to
other passengers. Respondent heirs of the deceased filed a complaint for damages arising from
culpa contractual against petitioner. In its answer, the petitioner claimed that the incident was
purely accidental and that it has always exercised extraordinary diligence in its 50 years of
operation. RTC decided in favor of respondents. On appeal, CA affirmed RTC’s decision.
Petitioner filed MR, which was denied by the CA. Hence, this petition for review.

Issues:
1) WON petitioner should be held liable for breach of contract of carriage.
2) WON the award of damages was proper.
Held:
1) YES.
A common carrier is bound to carry its passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with due regard to all
the circumstances. In a contract of carriage, it is presumed that the common carrier was at
fault or was negligent when a passenger dies or is injured. Unless the presumption is
rebutted, the court need not even make an express finding of fault or negligence on the
part of the common carrier. This statutory presumption may only be overcome by evidence that
the carrier exercised extraordinary diligence.
In the instant case, there is no evidence to rebut the statutory presumption that the
proximate cause of wife’s death was the negligence of petitioner. Hence, the courts correctly
ruled that petitioner was guilty of breach of contract of carriage.
2) YES, but should be modified.
Article 1764 in relation to Article 2206 of the Civil Code, holds the common carrier in
breach of its contract of carriage that results in the death of a passenger liable to pay the
following: (1) indemnity for death, (2) indemnity for loss of earning capacity, and (3) moral
damages.
In the present case, respondent heirs of the deceased are entitled to indemnity for the
death of their mother which under current jurisprudence is fixed at P50,000.00.
The award of compensatory damages for the loss of the deceased’s earning capacity should
be deleted for lack of basis. As a rule, documentary evidence should be presented to
substantiate the claim for damages for loss of earning capacity. By way of exception, damages
for loss of earning capacity may be awarded despite the absence of documentary evidence when
(1) the deceased is self-employed earning less than the minimum wage under current labor laws,
and judicial notice may be taken of the fact that in the deceased’s line of work no documentary
evidence is available; or (2) the deceased is employed as a daily wage worker earning less than
the minimum wage under current labor law.
Here, the TC and CA computed the award of compensatory damages for loss of earning
capacity only on the basis of the testimony of respondent husband that the deceased was 39
years of age and a Section Chief of the Bureau of Internal Revenue, Tuguergarao District Office

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with a salary of P83,088.00 per annum when she died. No other evidence was presented. The
award is clearly erroneous because the deceased’s earnings does not fall within the exceptions.
However, the fact of loss having been established, temperate damages in the amount of
P500,000.00 should be awarded to respondents. Under Article 2224 of the Civil Code, 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 can
not, from the nature of the case, be proved with certainty.
Anent the award of moral damages, the same cannot be lumped with exemplary damages
because they are based on different jural foundations. These damages are different in nature and
require separate determination. In culpa contractual or breach of contract, moral damages may
be recovered when the defendant acted in bad faith or was guilty of gross negligence (amounting
to bad faith) or in wanton disregard of contractual obligations and, as in this case, when the act of
breach of contract itself constitutes the tort that results in physical injuries. By special rule in
Article 1764 in relation to Article 2206 of the Civil Code, moral damages may also be awarded in
case the death of a passenger results from a breach of carriage. On the other hand, exemplary
damages, which are awarded by way of example or correction for the public good may be
recovered in contractual obligations if the defendant acted in wanton, fraudulent, reckless,
oppressive, or malevolent manner.
Respondents in the instant case should be awarded moral damages to compensate for the
grief caused by the death of the deceased resulting from the petitioner’s breach of contract of
carriage. Furthermore, the petitioner failed to prove that it exercised the extraordinary diligence
required for common carriers, it is presumed to have acted recklessly. Thus, the award of
exemplary damages is proper.
The actual damages awarded by TC reduced by the Court of Appeals should be further
reduced.
As to attorney’s fees, pursuant to Article 2208, attorney’s fees may also be
recovered in the case at bar where exemplary damages are awarded.
Moreover, in the instant case, petitioner should be held liable for payment of interest as
damages for breach of contract of carriage. Considering that the amounts payable by petitioner
has been determined with certainty only in the instant petition, the interest due shall be computed
upon the finality of this decision at the rate of 12% per annum until satisfaction, per paragraph 3
of the aforecited rule.

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#105 Lambert v. Heirs of Ray Castillon

(March)

Facts:

Ray Castillon visited the house of his brother Joel Castillon and borrowed his
motorcycle. He then invited his friend, Sergio Labang, to roam around Iligan City. Ray drove the
motorcycle with Sergio as the backrider. At around past 10:00 p.m., after eating supper and
imbibing a bottle of beer, they traversed the highway towards Tambo at a high speed. Upon
reaching Brgy. Sto. Rosario, they figured in an accident with a Tamaraw jeepney, owned by
petitioner Nelen Lambert which was traveling on the same direction but made a sudden left turn.
The incident resulted in the instantaneous death of Ray and injuries to Sergio.

Heirs of Ray Castillon, thus filed an action for damages against the petitioner Nelen Lambert and
driver, Gamot. The complaint was subsequently amended to include the claim by Joel Castillon
for the damages caused to the motorcycle.

RTC ruled in favor of Castillon. CA affirmed. Hence this petition for review under Rule 45.

Issue:
WON Ray Castillon was the proximate cause of his unfortunate death and therefore
Lambert is not liable for damages.

Held:
Liable for damages.

Our examination of the records shows that both the trial court and the Court of Appeals
carefully considered the factual backdrop of the case. No cogent reason exists for disturbing the
following findings of the trial court, which the Court of Appeals affirmed:

… To the mind of the court, this is exactly what happened. When Reynaldo Gamot was
approaching the side road, he slightly veered to the right for his allowance. Ray Castillon, who
was following closely behind, instinctively veered to the left but it was also the moment when
Reynaldo Gamot sharply turned to the left towards the side road. At this juncture both were
moving obliquely to the left. Thus the motorcycle sliced into the side of the jeepney throwing the
driver forward so that his forehead hit the angle bar on the left front door of the jeepney even as
the motorcycle shot forward and the jeepney veered back to the right and sped away.

Clearly, the abrupt and sudden left turn by Reynaldo, without first establishing his right of way,
was the proximate cause of the mishap which claimed the life of Ray and injured Sergio.
Proximate cause is defined as that which, in the natural and continuous sequence, unbroken by
any efficient, intervening cause, produces the injury, and without which the result would not have
occurred. The cause of the collision is traceable to the negligent act of Reynaldo for, as the trial
court correctly held, without that left turn executed with no precaution, the mishap in all probability
would not have happened.

Lambert misunderstood our ruling in Raynera v. Hiceta. That case also involved a
motorcycle crashing into the left rear portion of another vehicle, and we declared therein that
drivers of vehicles “who bump the rear of another vehicle” are presumed to be “the cause of the
accident, unless contradicted by other evidence”. In Raynera, the death of the victim was solely
attributable to his own negligence in bumping the rear of the trailer truck which was traveling
ahead of him at 20 to 30 kilometers per hour. Raynera, being the driver of the rear vehicle, had
full control of the situation as he was in a position to observe the vehicle in front of him. The
trailer truck therein did not make a sudden left turn as in the case at bar. Thus, the theory that
drivers of vehicles “who bump the rear of another vehicle” are presumed to be the cause of the

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accident is, as in this case, sufficiently contradicted by evidence, which is the sudden left turn
made by Reynaldo which proximately caused the collision.

While we agree with the trial court that Ray was likewise guilty of contributory negligence
as defined under Article 2179 of the Civil Code, we find it equitable to increase the ratio of
apportionment of damages on account of the victim’s negligence.

The loss of earning capacity was likewise modified and ruled that n considering the
earning capacity of the victim as an element of damages, the following factors are considered in
determining the compensable amount of lost earnings: (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. Jurisprudence provides that the first factor, i.e., life expectancy, is computed by
applying the formula (2/3 x [80 - age at death]) adopted in the American Expectancy Table of
Mortality or the Actuarial Combined Experience Table of Mortality. As to the second factor, it is
computed by multiplying the life expectancy by the net earnings of the deceased, i.e., the total
earnings less expenses necessary in the creation of such earnings or income and less living and
other incidental expenses. The net earning is ordinarily computed at fifty percent (50%) of the
gross earnings. Thus, the formula used by this Court in computing loss of earning capacity is:
Net Earning Capacity = [2/3 x (80 – age at time of death) x (gross annual income – reasonable
and necessary living expenses)].

It was established that Ray was 35 at the time of his death and was earning a gross
annual income of P31,876.00 as a driver at the Mindanao State University. In arriving at the net
earnings, the trial court deducted from the gross annual income the annual living expenses in the
amount of P9,672.00, broken down as follows: P20.00 a day for travel or P520.00 per month;
P60.00 a month for cigarettes; P26.00 for drinks; and other personal expenses like clothing,
toiletries, etc. estimated at P200.00 per month. The amount of P9,672.00, however, appears
unrealistic, and constitutes only 30.34% of the gross earnings. It even includes expenses for
cigarettes which by no means can be classified as a necessary expense. Using the cited
formula with the net earnings computed at 50% of the gross earnings, a detailed computation is
as follows:

NET EARNING = LIFE EXPECTANCY [2/3 x GROSS ANNUAL - LIVING EXPENSES

CAPACITY (X) (80-age at the time of death)] INCOME (GAI) (50% of GAI)
X = [2/3 (80-35)] x [P31,876.00 -50% x P31,876.00]
X = [2/3 (45)] x [P31,876.00 - P15,938.00]
X = 30 x 15,938.00
X = P478,140.00

As regards indemnity for death, caused by a quasi-delict used to be pegged at P3,000.00

was increased to 50,00based on art. 2206 of the civil code:
ART. 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least
three thousand pesos, even though there may have been mitigating circumstances. In addition:

(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the
indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be assessed
and awarded by the court, unless the deceased on account of permanent physical disability not
caused by the defendant, had no earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of article 291, the
recipient who is not an heir called to the decedent’s inheritance by the law of testate or intestate
succession, may demand support from the person causing the death, for a period of not
exceeding five years, the exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may
demand moral damages for mental anguish by reason of the death of the deceased.

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Hence, amount of damages awarded were accordingly modified.

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#107 Pleyto V. Lomboy

(Marcus)

Facts:

(Phil. Rabbit Bus) PRBL Bus No. 1539 driven by Pleyto, was traveling along MacArthur Highway
one drizzling morning. Right in front of the bus, was the tricycle owned and driven by Esguerra.
According to Orpilla, a witness and one of the bus passengers, Pleyto tried to overtake
Esguerra’s tricycle but hit it instead. Pleyto then swerved into the left opposite lane. Coming down
the lane, some fifty meters away, was a southbound Mitsubishi Lancer car driven by Asuncion.
The car was headed for Manila with some passengers. Seated beside Asuncion was his brother-
in-law, Lomboy, while in the back seat were other passengers. PRBL Bus No. 1539 smashed
head-on the car, killing Assuncion and Lomboy instantly. The others only suffered injuries.

In their Answer, PRBL and Pleyto both claimed that the bus was running slowly at the time of the
accident. They pointed out that Bus No. 1539 had been inspected by Pleyto and examined by a
mechanic prior to the trip, in accordance with the company’s standard operating procedure. It was
found in good working condition. Pleyto claimed that while cruising along the highway, he noticed
Esguerra’s tricycle and followed it at a safe distance after he was unable to overtake it. Suddenly
and without warning, the tricycle stopped in the middle of the road. Pleyto stepped on the brakes
and the bus lost speed. But, since it skidded towards the direction of the tricycle, he swerved the
bus to the other lane to avoid hitting it, only to collide with the Manila-bound Mitsubishi car.

The RTC found Pleyto negligent and lacking in precaution when he overtook the tricycle with
complete disregard of the approaching car in the other lane. The RTC found that Pleyto had
clearly violated traffic rules and regulations, and thus was negligent under Art. 2185 of the CC
because Pleyto failed to present any proof to rebut the presumption. The RTC likewise held
PRBL equally liable under Art. 2180 for its failure to show that it had maintained proper
supervision of its employees notwithstanding strict standards in employee selection. The CA
confirmed.

Issue:

Won Pleyto and PRBL were negligent.

Held: Yes.

Indeed, Pleyto violated traffic rules and regulations when he overtook the tricycle despite the
presence of an oncoming car in the other lane. Art. 2185 lays down the presumption that a
person driving a motor vehicle has been negligent if at the time of the mishap, he was violating
any traffic regulation. As found by both the CA and the RTC, Pleyto and PRBL failed to present
any convincing proof rebutting such presumption.

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.

Under Article 2180, when an injury is caused by the negligence of a servant or an employee, the
master or employer is presumed to be negligent either in the selection or in the supervision of that
employee. This presumption may be overcome only by satisfactorily showing that the employer
exercised the care and the diligence of a good father of a family in the selection and the
supervision of its employee.

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In fine, when the employee causes damage due to his own negligence while performing his own
duties, there arises the juris tantum presumption that the employer is negligent, rebuttable only by
proof of observance of the diligence of a good father of a family. Thus, in the selection of
prospective employees, employers are required to examine them as to their qualifications,
experience and service records. With respect to the supervision of employees, employers must
formulate standard operating procedures, monitor their implementation and impose disciplinary
measures for breaches thereof. These facts must be shown by concrete proof, including
documentary evidence.

No documentary evidence was presented to prove that petitioner PRBL exercised due diligence
in the supervision of its employees, including Pleyto.

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#108 Solidbank Corporation Vs. Spouses Teodulfo And Carmen Arrieta

(Marlon)

Facts:

Carmen Arrieta is a bank depositor of Solidbank Corporation (SBC) under a Checking Account
On March 1990, Carmen issued a SBC Check in the amount of P330.00 in the name of Lopue’s
Department Store in payment of her purchases from said store. When the check was deposited
by the store to its account, the same was dishonored due to “Account Closed” despite the fact
that at the time the check was presented for payment, Carmen’s checking account was still active
and backed up by a deposit of P1,275.20.

As a consequence of the check’s dishonor, Lopue’s Department Store sent a demand letter to
Carmen threatening her with criminal prosecution unless she redeemed the check within five (5)
days. To avoid criminal prosecution, Carmen paid P330.00 in cash to the store, plus a surcharge
of P33.00 for the bouncing check, or a total of P363.00.

Carmen filed a complaint against Solidbank Corporation for damages alleging that the bank, by
its carelessness and recklessness in certifying that her account was closed despite the fact that it
was still very much active and sufficiently funded, had destroyed her good name and reputation
and prejudiced not only herself but also her family in the form of mental anguish, sleepless nights,
wounded feelings and social humiliation. She prayed that she be awarded moral and exemplary
damages as well as attorney’s fees.

In its answer, the bank claimed that Carmen, contrary to her undertaking as a depositor, failed to
maintain the required balance of at least P1,000.00 on any day of the month. Moreover, she did
not handle her account in a manner satisfactory to the bank. In view of her violations of the
general terms and conditions governing the establishment and operation of a current account,
Carmen’s account was recommended for closure. In any event, the bank claimed good faith in
declaring her account closed since one of the clerks, who substituted for the regular clerk,
committed an honest mistake when he thought that the subject account was already closed when
the ledger containing the said account could not be found.1awphi1.n鴼/cite>

The lower court rendered its decision holding that Solidbank Corporation was grossly negligent in
failing to check whether or not Carmen’s account was still open and viable at the time the
transaction in question was made. Hence, the bank was liable to Carmen for moral and
exemplary damages, as well as attorney’s fees.

The CA held that the error committed by the bank employee was imputable to the bank. Banks
are obliged to treat the accounts of their depositors with meticulous care, regardless of the
amount of the deposit. Failing in this duty, SBC was found grossly negligent. The failure of the
bank to immediately notify Carmen of its unilateral closure of her account manifested bad faith.

The CA likewise affirmed the award of moral damages. It held that the bank’s wrongful act was
the proximate cause of Carmen’s moral suffering. The CA ruled that the lack of malice and bad
faith on the part of petitioner did not suffice to exculpate the latter from liability; the bank’s gross
negligence amounted to a willful act. The trial court’s award of exemplary damages and attorney’s
fees was sustained in view of Carmen’s entitlement to moral damages.

Issue: Whether or not Carmen is entitled to recovery of moral and exemplary damages and
attorney’s fees.

Held: Yes.

Case law lays out the following conditions for the award of moral damages: (1) there is an injury --
whether physical, mental or psychological -- clearly sustained by the claimant; (2) the culpable act

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or omission is factually established; (3) the wrongful act or omission of the defendant is the
proximate cause of the injury sustained by the claimant; and (4) the award of damages is
predicated on any of the cases stated in Article 2219 of the Civil Code.

In the instant case, all four requisites have been established. First, these were the findings of the
appellate court: "Carmen Arrieta is a bank depositor of Solidbank Corporation of long standing.
She works with the Central Negros Electric Cooperative, Inc. (CENECO), as an executive
secretary and later as department secretary. She is a deaconess of the Christian Alliance Church
in Bacolod City. These are positions which no doubt elevate her social standing in the
community." Understandably -- and as sufficiently proven by her testimony -- she suffered mental
anguish, serious anxiety, besmirched reputation, wounded feelings and social humiliation; and
she suffered thus when the people she worked with -- her friends, her family and even her
daughter’s classmates -- learned and talked about her bounced check.

Second, it is undisputed that the subject check was adequately funded, but that petitioner
wrongfully dishonored it.

Third, Respondent Carmen was able to prove that SBC’s wrongful dishonor of her check was the
proximate cause of her embarrassment and humiliation in her workplace, in her own home, and in
the church where she served as deaconess. Proximate cause has been defined as "any cause
which, in natural and continuous sequence, unbroken by any efficient intervening cause,
produces the result complained of and without which would not have occurred. It is determined
from the facts of each case upon combined considerations of logic, common sense, policy and
precedent. Clearly, had the bank accepted and honored the check, Carmen would not have had
to face the questions of -- and explain her predicament to -- her office mates, her daughters, and
the leaders and members of her church.

Fourth, treating Carmen’s account as closed, merely because the ledger could not be found was
a reckless act that could not simply be brushed off as an honest mistake. We have repeatedly
emphasized that the banking industry is impressed with public interest. Consequently, the highest
degree of diligence is expected, and high standards of integrity and performance are even
required of it. By the nature of its functions, a bank is under obligation to treat the accounts of its
depositors with meticulous care and always to have in mind the fiduciary nature of its relationship
with them.

SBC’s negligence here was so gross as to amount to a willful injury to Carmen. Article 21 of the
Civil Code states that "any person who willfully causes loss or injury to another in a manner that
is contrary to morals, good customs or public policy shall compensate the latter for the damage."
Further, Article 2219 provides for the recovery of moral damages for acts referred to in the
aforementioned Article 21. Hence, the bank is liable for moral damages to respondent.

Moral damages are not intended to enrich the complainant at the expense of the defendant.
Rather, these are awarded only to enable the injured party to obtain "means, diversions or
amusements" that will serve to alleviate the moral suffering that resulted by reason of the
defendant’s culpable action. The purpose of such damages is essentially indemnity or reparation,
not punishment or correction. In other words, the award thereof is aimed at a restoration within
the limits of the possible, of the spiritual status quo ante; therefore, it must always reasonably
approximate the extent of injury and be proportional to the wrong committed.

The law allows the grant of exemplary damages to set an example for the public good. The
business of a bank is affected with public interest; thus, it makes a sworn profession of diligence
and meticulousness in giving irreproachable service. For this reason, the bank should guard
against injury attributable to negligence or bad faith on its part. The banking sector must at all
times maintain a high level of meticulousness. The grant of exemplary damages is justified by the
initial carelessness of petitioner, aggravated by its lack of promptness in repairing its error.

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The award of attorney’s fees is proper, for respondents were compelled to litigate to protect their
rights.

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#109 Jarco Marketing vs. CA

(Mike)

Facts: Jarco Marketing Corporation is the owner of Syvel's Department Store. In the afternoon of
9 May 1983, Criselda Aguilar and her daughter Zhieneth were at the 2nd floor of Syvel's
Department Store. Crislda was signing her credit card slip at the payment and verification counter
when she felt a sudden gust of wind and heard a loud thud. She looked behind her. She then
beheld her daughter on the floor pinned by the bulk of the store's gift-wrapping counter/structure.
Zhieneth was quickly rushed to the Makati Medical Center where she was operated on. The next
day she lost her speech and thereafter communicated with Criselda by writing on a magic slate.
She died 14 days after the accident. She was six years old.

Thus the sposes Aguilar demanded upon Jarco the reimbursement of the hospitalization, medical
bills and wake and funeral expenses. Jarco refused to pay. Jarco denied any liability for the
injuries and consequent death of Zhieneth. 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. Zhieneth too, was guilty of contributory negligence since she
climbed the counter, triggering its eventual collapse on her. It was 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. Additionally, petitioner Jarco Marketing Corporation
maintained that it observed the diligence of a good father of a family in the selection, supervision
and control of its employees. The RTC favored Jarco. It ruled that the proximate cause of the fall
of the counter on Zhieneth was her act of clinging to it. The CA, however, decided in favor of the
Aguilars and reversed. It found that Jarco was negligent in maintaining a structurally dangerous
counter. The counter was shaped like an inverted "L" with a top wider than the base. It was top
heavy and the weight of the upper portion was neither evenly distributed nor supported by its
narrow base. Also, since Zhieneth was below 7 yrs old, she was absolutely incapable of
negligence or other tort.

Issue: W/N Jarco should be held liable for Zhieneth’s death

Held: Yes, Jarco is liable. The death of Zhienith was no accident and could only be
attributed to negligence. In the first place, a witness who helped bring Zhieneth to the hospital
heard the child tell the doctor that she never went near the counter and that it just fell on her.This
testimony of the witness pertaining to Zhieneth's statement formed (and should be admitted as)
part of the res gestae. It is unthinkable for a child of such tender age and in extreme pain, to have
lied to a doctor whom she trusted with her life. Thus, Zhieneth performed no act that facilitated
her tragic death. Sadly, Jarco did, through their negligence or omission to secure or make stable
the counter's base.

Also, the witness (who was the gift wrapper at the station) already informed the
management that the counter was not stable. Yet, the store din not perform any concrete
action to remedy the situation nor ensure the safety of the store's employees and patrons
as a reasonable and ordinary prudent man would have done. Thus, as confronted by the
situation Jarco miserably failed to discharge the due diligence required of a good father of a
family.

With regard to Zhieneth’s negligence, the SC stated that there is a conclusive presumption
that favors children below nine (9) years old in that they are incapable of contributory
negligence. Nevertheless, even if Zhieneth was negligent, the counter would not have fallen if it
was as sturdy and stable as Jarco claimed. A frail six-year old could not have caused the counter
to collapse.

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Criselda was also not negligent. She momentarily released the child's hand from her clutch when
she signed her credit card slip. At this precise moment, it was reasonable and usual for her to let
go of her child. Further, at the time Zhieneth was pinned down by the counter, she was just a foot
away from her mother; and the gift-wrapping counter was just four meters away from Criselda.
The time and distance were both significant. Zhieneth was near her mother and did not loiter
when the counter fell on her.

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#110 Prudential Bank v. CA and Valenzuela (2000)

(Nere)

Facts:

Leticia Tupasi-Valenzuela opened Savings Account No. 5744 and Current Account No. 01016-3
in the Valenzuela Branch of Prudential Bank, with automatic transfer of funds from the savings
account to the current account. Valenzuela had total deposits of P36,770.41.

Valenzuela issued a Prudential Bank Check in the amount of P11,500.00 post-dated June 20,
1988, in favor of one Belen Legaspi as payment for jewelry she purchased. Legaspi, who was in
jewelry trade, endorsed the check to one Philip Lhuillier, a businessman also in the jewelry
business. When Lhuillier deposited the check in his account with the PCIB, Pasay Branch, it was
dishonored for being drawn against insufficient funds. Lhuillier's secretary informed the secretary
of Legaspi of the dishonor. The latter told the former to redeposit the check, Legaspi's secretary
tried but to no avail.

Valenzuela then returned from the province and was surprised to hear about the dishonor. She
immediately went to the Valenzuela Branch of Prudential Bank to inquire about the dishonor. She
was surprised to see that 300 pesos was debited due to the dishonor. She asked why her check
was dishonored when there were sufficient funds in her account as reflected in her passbook but
one Reyes told her that there was no need to review the passbook because the bank ledger was
the best proof that she did not have sufficient funds. He then abruptly faced his typewriter and
started typing.

Later, it was found out that the check in the amount of P35,271.60 deposited by Valenzuela on
June 1, 1988, was credited in her savings account only after a period of 23 days. Thus the
P11,500.00 check was redeposited by Lhuillier on June 24, 1988, and properly cleared on June
27, 1988. Prudential apologized but this didn’t prevent an action for damages by Valenzuela
because this was not the first time this happened to her.

The RTC dismissed the complaint of Valenzuela along with the counterclaim of the Prudential. On
appeal to the CA, Prudential was ordered to pay Valenzuela the sum of P100,000.00 by way of
moral damages; P50,000.00 exemplary damages; P50,000.00 for and as attorney's fees; and to
pay the costs.

Issue: Whether or not the award of moral and exemplary damages and attorney's fees to be paid
by Prudential to Valenzuela was proper.

Held:

Yes. Even if malice or bad faith was not sufficiently proved in the instant case, the fact remains
that Prudential Bank has committed a serious mistake. It dishonored the check issued by
Valenzuela who turned out to have sufficient funds with them. The bank's negligence was the
result of lack of due care and caution required of managers and employees of a firm engaged in
so sensitive and demanding business as banking.

There is no hard-and-fast rule in the determination of what would be a fair amount of moral
damages since each case must be governed by its own peculiar facts. The yardstick should be
that it is not palpably and scandalously excessive. In our view, the award of P100,000.00 is
reasonable, considering the reputation and social standing of private respondent Leticia T.
Valenzuela.

The law allows the grant of exemplary damages by way of example for the public good. The
public relies on the banks' sworn profession of diligence and meticulousness in giving

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irreproachable service. The level of meticulousness must be maintained at all times by the
banking sector.

The award of attorney's fees is also proper when exemplary damages are awarded since
Valenzuela was compelled to engage the services of a lawyer and incurred expenses to protect
her interest.

The standards in fixing attorney's fees are:

(1) the amount and the character of the services rendered;

(2) labor, time and trouble involved;

(3) the nature and importance of the litigation and business in which the services were rendered;

(4) the responsibility imposed;

(5) the amount of money and the value of the property affected by the controversy or involved in
the employment;

(6) the skill and the experience called for in the performance of the services;

(7) the professional character and the social standing of the attorney;

(8) the results secured, it being a recognized rule that an attorney may properly charge a much
larger fee when it is contingent than when it is not.

In this case, considering that the amount involved in the controversy is only P36,770.41, which is
the total deposit of Valenzuela misposted by the bank, the court find the award of respondent
court of P50,000.00 for attorney's fees, excessive and reduce the same to P30,000.00.

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#111 CASTILEX INDUSTRIAL vs. VASQUEZ

(Ning)

Facts:

Romeo Vasquez was driving a Honda motorcycle around Fuente Osmena Rotunda without a
helmet or goggles (eh?). He was only carrying a student’s Permit to Drive at the time. He was
traveling counter-clockwise which is the normal flow of traffic in a rotunda. At the same time,
Abad, who is a manager of Castilex, drove a company car out of a parking lot but instead of going
around the Osmena rotunda, he made a short cut against the flow of the traffic in proceeding to
his route to Belvic St. Idiot. The motorcycle and the pick-up collided causing severe injuries to
Vasquez. He died in the hospital, where Abad signed an acknowledgement of Responsible Party
wherein he agreed to pay whatever hospital bills, professional fees and other incidental charges
Vasquez may incur.

An action for damages was filed by the parents of Vasquez against Abad and Castilex. The TC
ruled in favor of the private respondents parents of Vasquez and ordered Abad and Castilex to
pay jointly and severally the said spouses moral damages and other amounts. The CA affirmed
the ruling of the TC holding both liable but said that the liability of Castiles is “only vicarious and
not solidary” with Abad.
th
Castilex contends that the CA erred in applying to the case the 5 par. Of Art. 2180 of the CC,
th
instead of the 4 , and that as a managerial employee, Abad was deemed to have been always
acting within the scope of his assigned task even outside office hours because he was using a
vehicle issued to his by petitioner. They also said that the CA erred in ruling that they had the
burden to prove that the employee was not acting within the scope of his assigned task.

Issue: Whether Castilex may be held vicariously liable for the death resulting from the negligent
operation by Abad of a company-issued vehicle.

Held: NO.

Petitioner contends that the fifth paragraph of Article 2180 of the Civil Code should only apply to
instances where the employer is not engaged in business or industry. Since it is engaged in the
business of manufacturing and selling furniture it is therefore not covered by said provision.
Instead, the fourth paragraph should apply.

Petitioner's interpretation of the fifth paragraph is not accurate. The phrase "even though the
former are not engaged in any business or industry" found in the fifth paragraph should be
interpreted to mean that it is not necessary for the employer to be engaged in any business or
industry to be liable for the negligence of his employee who is acting within the scope of his
assigned task.

A distinction must be made between the two provisions to determine what is applicable. Both
provisions apply to employers: the fourth paragraph, to owners and managers of an
establishment or enterprise; and the fifth paragraph, to employers in general, whether or not
engaged in any business or industry. The fourth paragraph covers negligent acts of employees
committed either in the service of the branches or on the occasion of their functions, while the fifth
paragraph encompasses negligent acts of employees acting within the scope of their assigned
task. The latter is an expansion of the former in both employer coverage and acts included.
Negligent acts of employees, whether or not the employer is engaged in a business or industry,
are covered so long as they were acting within the scope of their assigned task, even though
committed neither in the service of the branches nor on the occasion of their functions. For,
admittedly, employees oftentimes wear different hats. They perform functions which are beyond
their office, title or designation but which, nevertheless, are still within the call of duty. The Court

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of Appeals cannot, therefore, be faulted in applying the said paragraph of Article 2180 of the Civil
Code to this case.

Under the fifth paragraph of Article 2180, whether or not engaged in any business or industry, an
employer is liable for the torts committed by employees within the scope of his assigned tasks.
But it is necessary to establish the employer-employee relationship; once this is done, the plaintiff
must show, to hold the employer liable, that the employee was acting within the scope of his
assigned task when the tort complained of was committed. It is only then that the employer may
find it necessary to interpose the defense of due diligence in the selection and supervision of the
employee. It is undisputed that ABAD was a Production Manager of petitioner CASTILEX at the
time of the tort occurrence. As to whether he was acting within the scope of his assigned task is a
question of fact, which the court a quo and the Court of Appeals resolved in the affirmative.

Now on the issue of whether the private respondents have sufficiently established that ABAD was
acting within the scope of his assigned tasks.

The Court had the occasion to hold that acts done within the scope of the employee's assigned
tasks includes "any act done by an employee in furtherance of the interests of the employer or for
the account of the employer at the time of the infliction of the injury or damages."

The court a quo and the Court of Appeals were one in holding that the driving by a manager of a
company-issued vehicle is within the scope of his assigned tasks regardless of the time and
circumstances. The SC did not agree. 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.

The following are principles in American Jurisprudence on the employer's liability for the injuries
inflicted by the negligence of an employee in the use of an employer's motor vehicle:

I. Operation of Employer's Motor Vehicle in Going to or from Meals

It has been held that an employee who uses his employer's vehicle in going from his work to a
place where he intends to eat or in returning to work from a meal is not ordinarily acting within the
scope of his employment in the absence of evidence of some special business benefit to the
employer. Evidence that by using the employer's vehicle to go to and from meals, an employee is
enabled to reduce his time-off and so devote more time to the performance of his duties supports
the finding that an employee is acting within the scope of his employment while so driving the
vehicle.

II. Operation of Employer's Vehicle in Going to or from Work

In the same vein, traveling to and from the place of work is ordinarily a personal problem or
concern of the employee, and not a part of his services to his employer. Hence, in the absence of
some special benefit to the employer other than the mere performance of the services available
at the place where he is needed, the employee is not acting within the scope of his employment
even though he uses his employer's motor vehicle.

The employer may, however, be liable where he derives some special benefit from having the
employee drive home in the employer's vehicle as when the employer benefits from having the
employee at work earlier and, presumably, spending more time at his actual duties. Where the
employee's duties require him to circulate in a general area with no fixed place or hours of work,
or to go to and from his home to various outside places of work, and his employer furnishes him
with a vehicle to use in his work, the courts have frequently applied what has been called the

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"special errand" or "roving commission" rule, under which it can be found that the employee
continues in the service of his employer until he actually reaches home. However, even if the
employee be deemed to be acting within the scope of his employment in going to or from work in
his employer's vehicle, the employer is not liable for his negligence where at the time of the
accident, the employee has left the direct route to his work or back home and is pursuing a
personal errand of his own.

III. Use of Employer's Vehicle Outside Regular Working Hours

An employer who loans his motor vehicle to an employee for the latter's personal use outside of
regular working hours is generally not liable for the employee's negligent operation of the vehicle
during the period of permissive use, even where the employer contemplates that a regularly
assigned motor vehicle will be used by the employee for personal as well as business purposes
and there is some incidental benefit to the employer. Even where the employee's personal
purpose in using the vehicle has been accomplished and he has started the return trip to his
house where the vehicle is normally kept, it has been held that he has not resumed his
employment, and the employer is not liable for the employee's negligent operation of the vehicle
during the return trip.

Whether the fault or negligence of the employee is conclusive on his employer as in American
law or jurisprudence, or merely gives rise to the presumption juris tantum of negligence on the
part of the employer as in ours, it is indispensable that the employee was acting in his employer's
business or within the scope of his assigned task.

In the case at bar, it is undisputed that ABAD did some overtime work at the petitioner's office,
which was located in Cabangcalan, Mandaue City. Thereafter, he went to Goldie's Restaurant in
Fuente Osmeña, Cebu City. 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.
That same witness for the private respondents testified that at the time of the vehicular accident,
ABAD was with a woman in his car, who then shouted: "Daddy, Daddy!" This woman could not
have been ABAD's daughter, for ABAD was only 29 years old at the time (FYI: whore).

Thus, 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 then about 2:00 a.m. of 28
August 1988, way beyond the normal working hours. ABAD's working day had ended; his
overtime work had already been completed. His being at a place which, as petitioner put it, was
known as a "haven for prostitutes, pimps, and drug pushers and addicts," had no connection to
petitioner's business; neither had it any relation to his duties as a manager. Rather, using his
service vehicle even for personal purposes was a form of a fringe benefit or one of the perks
attached to his position.

Since there is paucity of evidence that ABAD was acting within the scope of the functions
entrusted to him, petitioner CASTILEX 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.

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#112 Cerzo v. Tuazon

(Pao)

Facts:

Plaintiff, Tazon alleged that he was in his proper lane when the defendant Foronda,
being then the driver and person in charge of the Country Bus, did then and there willfully,
unlawfully, and feloniously operate the said motor vehicle in a negligent, careless, and imprudent
manner without due regard to traffic rules and regulations, there being a “Slow Down” sign near
the scene of the incident, and without taking the necessary precaution to prevent loss of lives or
injuries, his negligence, carelessness and imprudence resulted to severe damage to the tricycle
and serious physical injuries to plaintiff thus making him unable to walk and becoming disabled,
with his thumb and middle finger on the left hand being cut.

Tuazon filed a motion to litigate as a pauper. Thr RTC issued summons against Cerzo
spuses, owners of the bus.However, the summons was returned unserved. The RTC issued alias
summons against the Cerezo spouses. The alias summons and a copy of the complaint were
finally served at the office of Atty. Cerezo.

After considering Tuazon’s testimonial and documentary evidence, the RTC ruled in
Tuazon’s favor. Atty. Cerezo liable was not liableas Tuazon failed to show that Mrs. Cerezo’s
business benefited the family, pursuant to Article 121of the Family Code. The RTC held Mrs.
Cerezo solely liable for the damages sustained by Tuazon arising from the negligence of Mrs.
Cerezo’s employee, pursuant to Article 2180 of the Civil Code.

Mrs. Cerezo filed before the trial court a petition for relief from judgment on the grounds
of “fraud, mistake or excusable negligence. This was denied. CA affirmed the decision of the
RTC. The Cerezo spouses filed before the SC a petition for review on certiorari which was
denied.

Undaunted, the Cerezo spouses filed before the Court of Appeals a petition for
annulment of judgment under Rule 47 with prayer for restraining order. This was also denied as
well as the motion for reconsideration.

Issue: Whether the spouses Cerzo are liable for the quasi-delict

Held:

Yes. Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even though the former are not
engaged in any business or industry.

The action based on a quasi-delict may proceed independently from the criminal action.
Tuazon chose to file an action for damages based on a quasi-delict. In his complaint, Tuazon
alleged that Mrs. Cerezo, “without exercising due care and diligence in the supervision and
management of her employees and buses,” hired Foronda as her driver. Tuazon became
disabled because of Foronda’s “recklessness, gross negligence and imprudence,” aggravated by
Mrs. Cerezo’s “lack of due care and diligence in the selection and supervision of her employees.

The responsibility of two or more persons who are liable for a quasi-delict is solidary.
Where there is a solidary obligation on the part of debtors, as in this case, each debtor is liable for
the entire obligation. Hence, each debtor is liable to pay for the entire obligation in full.

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